By Azeem Ahmed Khan

Pakistan’s agriculture sector is targeted to grow by 3.6% in the fiscal year 2026-27, up from 2.9% growth recorded during FY26 despite flood damage, according to the Monthly Economic Update & Outlook, June 2026, released by the Finance Division.

The outlook indicates that the government expects a more balanced performance across key sub-sectors of agriculture in the next fiscal year, supported by better input availability, mechanisation, climate-smart technologies, stronger research and extension services, livestock reforms, aquaculture development and improved access to finance.

According to the report, livestock is projected to remain the strongest contributor within the agriculture sector, with a growth target of 3.9% for FY27. Other crops are targeted to grow by 3.5%, followed by important crops at 2.9%, fisheries at 1.7% and cotton ginning at 1.5%.

The report says the agriculture sector registered 2.9% growth in FY26 despite damage from floods, demonstrating resilience in farm-related activity. The sector is expected to improve further in FY27 as policy support and better input conditions help lift production prospects.

The availability of key agricultural inputs for the ongoing Kharif 2026 season has improved, the Finance Division noted. This improvement is important for sustaining crop activity and supporting the targeted recovery in the next fiscal year.

Agricultural credit disbursement also increased significantly during FY26. The report says credit disbursement rose by 18.9% to Rs2,457.9 billion during July-April FY26, compared with Rs2,066.6 billion in the same period last year.

The increase in credit reflects improved financing support for the agricultural sector, which is expected to help farmers access inputs, machinery, and other production needs.

Imports of agricultural machinery and implements also increased during the period under review. According to the Finance Division, machinery and implement imports rose by 24.8% to $123.8 million during July-May FY26 from $99.2 million last year, indicating growing investment in mechanisation.

Fertiliser offtake showed a mixed trend during the early months of Kharif 2026. Urea offtake during April-May stood at 882,000 tonnes, up 31.9% from the same period last year. However, diammonium phosphate (DAP) offtake during the same period stood at 146,000 tonnes, down 24.3% from last year.

The report attributed the reduction in DAP offtake to its high prices. The mixed fertiliser trend suggests that while urea use has strengthened, costly DAP remains a pressure point for crop input use.

Overall, the Finance Division’s outlook presents agriculture as a sector set for improved growth in FY27, with the targeted expansion relying on livestock performance, crop recovery, better credit flows, machinery imports and improved input availability.

Credit: INP-WealthPk