Pakistan’s potato market crashed last week due to a growing supply glut. The previous crop — stored for both exports and domestic consumption — is now being offloaded in vegetable markets by farmers and stockists at prices that do not even cover transportation costs and cold storage rent.

Meanwhile, the new potato crop — mainly from Khyber Pakhtunkhwa and Punjab’s Soon Valley — has now entered the market but is trading at nearly half of last year’s prices.

The trigger is clear: the closure of the Afghan border in October has halted not only direct exports to Afghanistan but also the vital transit trade to Central Asian States and Russia. Historically, Afghanistan has been Pakistan’s largest potato market. In 2023, Pakistan exported 755,811 tonnes of potatoes, worth $140 million, of which 311,798 tonnes (41 per cent) went to Afghanistan. Likewise, in 2024, exports totalled 736,062 tonnes valued at $138m, with Afghanistan again accounting for about 42pc of the volume according to the International Trade Commission’s Trade Map data.

Such heavy dependence on a single, unstable market exposes a chronic structural weakness. While almost all fast-growing countries have pursued export-led development, Pakistan has stuck to an import-driven model over the past 35 years. As a result, the country’s total exports remain limited to just $32 billion in FY25. Notably, Pakistan’s exports-to-GDP ratio has sharply declined from 17.3pc in the early 1990s to 10.4pc in 2024 as per the World Bank. This decline has resulted in a large and persistent trade deficit, which in turn caused a sharp rise in external debt.

The survival of potato farmers hinges critically on the reopening of the Afghan border, since our traditional agriculture sector is ill-equipped to explore new international markets

Such flawed economic policies have left Pakistan with a narrow range of exportable products and markets. In agriculture, the vulnerability is even starker: regular exports are limited to a handful of basic commodities — modest in value and low in volume (apart from rice).

Potato — Pakistan’s largest vegetable by area and production — generates a substantial exportable surplus each year. However, with the government asserting that “war and trade with Afghanistan cannot go hand in hand”, the sector now faces an existential crisis due to a sharp decline in export volumes. While security justifies the closure, economic fallout demands alternatives.

First, reroute exports through Iran to Central Asian States and Russia; theoretically possible but largely marginal in volume, hampered by international sanctions on Iran and sharply higher freight costs.

Second, explore new markets, which sounds appealing, yet our past performance with trade missions offers little reason for optimism. Establishing a presence in new markets and building reliable business-to-business trade relationships takes years. Moreover, countries are increasingly tightening their food safety, sanitary, and phytosanitary standards, and Pakistan’s traditional agricultural sector, with its shrinking farm sizes, is ill-equipped to comply with these stringent requirements.

As potato acreage and production continue to rise — up 14pc and 11.5pc respectively in 2024–25 alone as the Pakistan Economic Survey FY25 shows — the exportable surplus is also expanding. The current standing crop (2025-26) spans even more acreage, with a bumper harvest expected.

Yet, with no realistic prospects of entering new markets this year, the glut is almost certain to repeat in 2026, keeping prices depressed and pushing farmers into deeper losses — a serious concern in a country where poverty already exceeds 44pc. In the given situation, this year, the survival of potato farmers — cultivating around 1m acres — hinges critically on the reopening of the Afghan border.

However, while the border’s reopening could offer temporary respite for farmers this year, long-term sectoral stability necessitates well-planned, strategic government interventions.

First, move toward import-substitution policies within the agriculture sector. Each year, the country faces overproduction and gluts in some crops while experiencing shortages in others — largely because farmers frequently switch crops based on last season’s profits rather than a data-driven assessment — a classic bandwagon effect.

To fix this imbalance, the government must introduce policies and incentives that encourage farmers to expand the cultivation of crops such as canola, chickpeas (gram), and pulses, which Pakistan imports in large quantities, costing billions in foreign exchange.

Many of these crops are already grown in Pakistan on substantial acreage and the country’s agro-climatic conditions are highly favourable. At the same time, acreage under surplus crops that cannot be exported — including potato (after the Afghan border closure) — should be gradually reduced. Otherwise, farmers will continue to incur losses due to recurring oversupply, and the country’s GDP growth will remain suppressed.

Second, promote cluster-based contract farming, where exporters’ associations work directly with farmers to produce crops — such as potatoes — that meet the standards of specific export markets.

Third, value addition — especially for perishable crops — must be prioritised to absorb oversupply, minimise post-harvest losses, and generate employment. In the past, high electricity costs made many value-addition ventures unviable, but the widespread adoption of solar power has now made these businesses financially feasible.

Dr Waqar Ahmad is a former associate professor at the University of Agriculture, Faisalabad, and Khalid Wattoo is a development professional and a farmer

Published in Dawn, The Business and Finance Weekly, December 1st, 2025