Pakistan’s poverty crisis is deepening. The World Bank’s Pakistan Poverty and Equity Brief: October 2026 reports that the national poverty rate rose from 21.9pc in 2018-19 to 28.9pc in 2024-25, based on the government of Pakistan’s national poverty line of just Rs8,484 per adult per month. Worse still, 47.9pc of Pakistan’s population lives below the World Bank’s US$4.20-a-day international poverty line for lower-middle-income countries.
The situation is particularly alarming in rural areas where agriculture remains the principal source of livelihood, providing self-employment and wage employment to 35.1pc of the national labour force. The nature of the agriculture sector and its disproportionately large share of employment, compared with its 23.44pc contribution to the gross domestic product (GDP), leaves the rural population highly vulnerable to external shocks and at greater risk of falling into poverty.
Agricultural policy shifts, including the withdrawal of subsidies and support prices for crops, geopolitical developments—particularly the closure of the Pakistan-Afghanistan border and the war in Iran—and climate change are placing severe pressure on farm economics. Rising input costs and increasingly uncertain market prices have eroded farm profitability. Consequently, wage rates of farm workers (daily-wagers, seasonal, tenured) have remained stagnant in many areas over the past three years, despite record-high domestic inflation.
Adding to these pressures, a deeper structural change is taking place: the rapid mechanisation of agriculture across major crops. It is reducing demand for manual labour and directly threatening the livelihoods of millions. For instance, the harvesting of Pakistan’s largest crop — wheat — is already extensively mechanised through combine harvesters. The sales of traditional wheat threshers – the decades old technology requiring substantial labour to operate—are declining, as the combine harvesters rapidly replace them. Similarly, rice—the country’s second-largest crop, which provides seasonal employment to millions—is undergoing rapid technological substitution. Self-propelled transplanters are increasingly replacing manual rice transplanting. An imported used transplanter costs around Rs2.5m and can transplant 10 acres daily, replacing over 60 workers. On the harvesting front, combine and half-feed harvesters have almost entirely displaced manual farm labour across major rice-producing areas. Mechanisation is also gaining momentum in the sowing and harvesting of maize – Pakistan’s fourth-largest crop. Farmers are rapidly adopting tractor-driven planters and self-propelled harvesters, replacing highly labour-intensive manual operations.
Rapid mechanisation is reducing demand for manual labour, directly threatening the livelihoods of millions
Recent years’ import figures for new and used farm machinery illustrate how rapidly machines are displacing manual labour. Locally manufactured machinery is accelerating this transition as well. For instance, sales of potato graders, which reduce manual labour for sorting by 80pc, continue to rise.
Despite all these adverse impacts on rural employment, one thing is for sure: mechanisation in the agriculture sector has become inevitable, due to three key imperatives. First, increasingly erratic weather conditions, particularly rainfall, compel farmers to complete sowing and harvesting within narrow time windows that can only be met through mechanisation. Second, shrinking profit margins—caused by rising electricity, fertiliser, pesticide, and diesel costs alongside depressed commodity prices—force farmers to minimise production costs. For most farm operations, using machines, even rented ones, is cheaper than employing manual labour. This is partly attributable to the low productivity of farm workers and their poor work ethic. Finally, farmers are under intense pressure to maximise returns from their land. Mechanisation helps improve productivity and crop yields. For instance, manual labourers rarely achieve the recommended rice plant density of 80,000 hills per acre. Mechanical transplanters have helped address this chronic labour deficiency. This allows growers to boost yields and raises overall national production with the same level of inputs.
In countries undergoing structural transformation, displaced farm workers are absorbed by expanding industrial and service sectors. Pakistan, however, faces a serious constraint in industrial growth. Consequently, industry fails to generate sufficient employment opportunities to absorb surplus farm workers, who are mostly illiterate or school dropouts.
Interestingly, rental services for farm machinery have emerged as a new business opportunity that has attracted deep-pocketed investors, including a large bank. Such service providers are expanding their geographic coverage. However, as mechanisation advances, the rural workforce faces a growing risk of unemployment or underemployment.
In countries undergoing structural transformation, displaced farm workers are absorbed by expanding industrial and service sectors. Pakistan, however, faces a serious constraint in industrial growth due to uncompetitive energy tariffs, heavy taxation, and high policy rates. Consequently, industry fails to generate sufficient employment opportunities to absorb surplus farm workers, who are mostly illiterate or school dropouts.
Pakistan has a large youth bulge, with 66pc of its population under 30. They mostly reside in rural areas. Ironically, the country faces a looming rural employment crisis that could intensify poverty, widen inequality and fuel social instability. Addressing this challenge requires a comprehensive strategy to generate non-farm employment, expand the livestock sector, and scale up agro-processing. Without timely intervention, millions of poor farm workers risk bearing the high social cost of technological progress in the agriculture sector — widespread unemployment and deepening rural poverty. n
Khalid Wattoo is a development professional and a farmer.
Dr Waqar Ahmad is a former associate professor at the University of Agriculture, Faisalabad.
Published in Dawn, The Business and Finance Weekly, November 9th, 2026
