Pakistan is in the grip of food insecurity and poverty: 21 per cent of its population is undernourished, and approximately 45 per cent of the population is poor according to the World Bank.
Looking at these outcomes together reveals that one is responsible for spreading the other. Poverty breeds food insecurity, and food insecurity in Pakistan is largely due to unaffordability. In the recent budget, the BISP allocation has risen approximately 20 per cent, from Rs592 billion in FY 2024–25 to Rs716 billion in FY 2025–26, increasing the recipients to one crore.
While apparently a raise in funding under BISP and reaching out to more people may help reduce the poverty incidence, measures introduced in the current budget fall short in reducing food insecurity – and it may increase due to several steps suggested in the budget. This makes it urgent to examine how the FY2025–26 budget would impact food systems and the food security landscape of Pakistan.
On June 10, Finance Minister Muhammad Aurangzeb proposed a budget of Rs17.57 trillion for FY26, with a projected inflation rate of 7.5 per cent and an economic growth rate of 4.2 per cent. Food insecurity is a multidimensional matter shaped by policies and budgets allocated to trade, agriculture and taxes. As per the definition of food insecurity, a person is food insecure when they lack regular access to enough safe and nutritious food for normal growth and development and an active and healthy life.
Agriculture is the backbone of food systems and is central to ensuring food security. But due to unprecedented climate catastrophes, political unrest, rising inflation and escalating regional tensions, this sector suffers considerably, making access to affordable food one of the greatest hurdles in Pakistan, more so for the poor.
According to the Pakistan Bureau of Statistics, 37 per cent of the population is engaged in this sector. 8.3 million farming families cultivate wheat, and over eight million rural households are involved in livestock.
So, a significant number of our population depends on agriculture for their livelihood, and any shock to the agricultural economy impacts producers and consumers.
In the recent budget, several trade measures have been proposed to further liberalise trade. In the Finance Committee briefing on June 18, the government proposed to slash customs, additional, and regulatory duties to zero in 5 years. The Secretary of Commerce also stated that it has been proposed to reduce customs duty from 3.0 per cent to zero on 896
tariff lines. Customs duty on 1,023 tariff lines is proposed to be reduced from 11 per cent to 10 per cent, and on 496 tariff lines from 16 per cent to 15 per cent.
These policies reflect the urgency of safeguarding food sovereignty before cheaper imports undercut our farmers. Under these policies, meat, seafood, eggs, wheat, basic vegetables, fruits and pulses are among other items on which tariffs will be slashed from 3.0 per cent to
zero, making imports cheaper. But will that affordability be achievable, consistent, and sustainable for all income groups?
On the surface, slashing tariffs might improve food affordability, but cheap and increased food imports threaten our food systems, sovereignty, and security. Because in Pakistan, farmers must invest considerable amounts into cultivation, as they are burdened with taxes on fertilisers, electricity, fuel, and seed purchases. Yet the returns they get are meagre in comparison, as low-priced imported crops translate into local farmers reducing their prices to compete in the market. Regarding subsidies, the government has allocated Rs15,000 in subsidies on the import of urea fertilizers and a Rs7,000 markup subsidy and risk-sharing schemes under the Kissan Package to support farmers in the recent budget. But unfortunately, several of the small-scale farmers are alienated from these subsidies and relief measures due to bureaucratic hurdles and limited awareness, restricting the benefits they receive. Hence, trade liberalisation would result in financial loss, reduced purchasing power and ultimately push the farmers further into poverty, and accelerate rural-to-urban migration.
Trade liberalisation also makes Pakistan susceptible to international crises. The 2022 wheat crisis is an immaculate example of the said phenomenon. In 2022, Pakistan was importing 60 per cent of its wheat from Ukraine, and after the Ukraine-Russia war, the price of wheat increased by $300 globally, taking our wheat import bill to $1.05 billion.
In 2021, the price of wheat after the minimum support price was Rs 2,200, and it grew to Rs 3,900 per maund in December 2022. Thus, zero tariff on the above-mentioned commodities can repeat something like the wheat crisis. These policies present Pakistan as a viable trade destination and considerably lower the price of imported vegetables, fruits, meat, pulses and many more. While these lowered prices may offer relief to the urban population alone (as the impact on the rural population is discussed above).
This could translate into a larger food shortage and inflation crisis in the coming years, especially amid current geopolitical tensions, making Pakistan susceptible to global price hikes and exposing people to erratic changes in food prices and availability. Our local produce will not be able to sustain us through the crisis, as the outcome of liberalisation aims to ensure that the local produce will come on par with the imports by improving their quality and quantity. However, we cannot equate Pakistan's cost and agricultural conditions to those of a developed country.
Thus, our farmers would not be able to withstand internal import competition and so might crumble, and in times of crisis, not be able to shoulder Pakistan’s agriculture.
However, amid local struggles, an alternative pathway for farmers could be to expand into export markets, but blatant liberalisation might prove to be a hurdle. Fertilisers and pesticides would also have zero tariffs in the coming years. This, combined with no new taxes on fertilisers and pesticides, would increase their use, affecting human and planetary health
and exports too.
Pakistan has failed to comply with residual regulations, and excessive use of pesticides in crop cultivation has led to Pakistani crop exports facing sanctions. For instance, many of our rice export consignments have been flagged by the EU, UK and US due to exceeding the maximum residue limits (MRLs). The same is the case with our mango exports – pesticide residues hinder our fruit exports, impacting our economy significantly.
In the case of fertilisers, adverse impacts mainly result from their release into the environment and their effects on ecosystems, which are largely due to nutrient loss through overuse or inefficient use. Pakistan is already dealing with a reduction in arable land, and excessive use of fertilisers exhausts soils, imbalances soil biodiversity, and pollutes water bodies. So, if we look at tariff cuts on these items from a short-term perspective, we may gain a high agricultural yield; however, in the long term, we will be damaging our environment and ecosystem to an irreversible extent.
Hence, trade liberalisation should not be implemented haphazardly but after holistic research on its impact on food safety, security, sustainability, and sovereignty. As it could rob the people and especially farmers of Pakistan of their food sovereignty and allow international factors to define our food systems.
To avert an unwanted crisis, we need to take preemptive measures to strengthen our local food systems to ensure that we do not crumble under global circumstances and can withstand internal and external setbacks to our food systems.
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