KARACHI: Pakistan’s cotton output, now down by more than half from its peak, is costing the economy an estimated $2-3 billion a year in additional imports and lost export earnings.

A report titled ‘Seeds of Growth’ released on Wednesday by the Overseas Investors Chamber of Commerce and Industry (OICCI), said that regulatory delays and inconsistent policy rather than a lack of technology or investment are the main reasons Pakistan’s agricultural output continues to trail regional competitors, despite the sector contributing about 23 per cent to GDP and employing 37pc of the workforce.

Cotton output has dropped from around 14 million bales at its peak to an estimated 6.85m bales in FY26, which is 34pc below the government’s own target of 10m bales, the report highlights, attributing the decline to climate shocks, pest infestation, poor seed quality and a blanket ban on certain pesticide ingredients that was imposed without a science-based transition plan.

Report pinpoints execution, not technology, as key obstacle

Since the textile sector relies on domestic cotton and accounts for 60pc of export earnings, the report says restoring output to 8-9m bales would ease pressure on foreign exchange reserves.

A similar pattern is holding back maize, the report argued. Hybrid seed has already tripled per acre yields over three decades, but the National Biotechnology Policy, approved last month by the federal cabinet, is yet to be implemented. The report said this is delaying the introduction of biotech corn hybrids that could unlock what it describes as a “potential $1 billion” in maize grain and silage exports.

OICCI Secretary General M. Abdul Aleem welcomed the cabinet’s approval of the biotechnology policy but said its impact would depend on what happens next.

“The cabinet’s decision on biotech maize is progress, and we recognise it,” he said. “However, until the policy is notified and rolled out, the yield gains, the export potential, and the investor confidence it is meant to unlock remain on paper.

Less than 5pc of potato output comes from certified processing-grade seed, the report said, while Pakistan’s average yield of 20-23 tonnes per hectare remains well below the 30-35 tonnes achieved elsewhere.

In dairy, only 10pc of milk is processed, and roughly 20pc of total production is lost due to inadequate cold chain infrastructure, despite Pakistan ranking among the world’s top five milk producers.

Tobacco production costs have more than doubled over three years, the report says, while an undocumented segment of the industry, concentrated in Khyber Pakhtunkhwa and Azad Jammu and Kashmir, continues to operate outside the tax net.

On fertiliser, it said nitrogen-based urea continues to dominate farmer use, while potash offtake, needed for balanced soil nutrition, stood at just 7,000 tonnes in March despite a year-on-year rise of nearly 40pc.

Published in Dawn, July 23rd, 2026