Farmers in Punjab are seething after what they describe as twin blows within the span of a week: the federal budget followed by the provincial one. They say neither addressed their most pressing concerns — rising production costs and market manipulation. It deepened their fears over the viability of farming as fiscal policy continues to overlook the sector’s core pressures.

At the heart of this second wave of anger is the provincial budget, which farmers say fails to acknowledge these structural constraints. On its part, Punjab this year allocated Rs92 billion specifically for agriculture as part of a broader Rs132bn package covering agriculture, livestock and fisheries. It also spared Rs61bn for irrigation. The document emphasises climate-smart farming, subsidised mechanisation and the ongoing distribution of state land to landless farmers. However, it remains silent on the two issues farmers have been agitating over the most.

This policy gap, farmers argue, is compounded by what they see as active market distortion by the state itself. Feeling increasingly unsupported, many are now arguing that the government, armed with vast financial resources and administrative power, is actively manipulating markets to their disadvantage.

One of the most vocal supporters of this view is Khalid Khokhar of Pakistan Kissan Ittehad, who echoes this sentiment: “Instead of helping farmers by containing these twin menaces, Punjab is, as a matter of policy, aggravating them.”

‘The budget is notably silent on fundamental issues such as marketing, fertiliser prices, energy costs and water management’

He cites this year’s wheat trade as a recent example. Although the government stayed out of procurement this year, it still fixed a support price of Rs3,500 per 40kg. Wheat initially traded at around Rs2,800 per 40kg because official claims of a bumper harvest shaped early trends. However, as market behaviour belied those claims, prices began to recover. By the time it reached Rs3,200 per 40kg, an estimated 60 to 70 per cent of the crop had changed hands.

As doubts about the official figures deepened, prices surged further, approaching Rs4,000 per 40kg. According to Mr Khokhar, the government at this stage used its administrative machinery to push prices back toward its announced price of Rs3,500 per 40kg. “Simple and pure manipulation,” he asks, “First depressing prices through exaggerated yield estimates and then using state power to bring prices down. The same policy approach has previously inflicted heavy losses on potato growers as well.”

Farmers contend that this pattern is reinforced by recent fiscal measures. The budget replaces the existing crop-based abiana system with a flat-rate regime, under which water charges have gone up to annual Rs2,500 per acre. It also proposes a uniform agriculture tax of Rs1,000 per acre for farmers holding more than 12.5 acres. Previously, rates ranged from Rs300 per acre for holdings between 12.5 and 25 acres to Rs500 per acre for holdings above 50 acres. By farmers’ calculations, this amounts to a 233pc increase in their burden under these two heads.

To farmers, this increase only adds “insult to injury.” Even if these measures can be justified on fiscal grounds, they argue that the timing could not be worse, coming at a time when the sector is already grappling with sharply rising costs and severely shrinking returns.

“Even if justified, the timing of such steep increases could not be more wrong. It is both harmful and an added source of frustration for farmers,” says Abad Khan, a farmer from central Punjab, echoing a sentiment widely shared across the farming community.

“The budget is notably silent on fundamental issues such as marketing, fertiliser prices, energy costs and water management. “The only area where it speaks on clearly is taxation — and there it speaks loudly,” he says. “Its subsidised farm mechanisation plans have come under heavy criticism for their limited impact on the ground, yet the government persists with them while refusing to listen to farmers’ concerns. “No one knows how climate-resilient farming is possible without balanced fertiliser application, which has now become unaffordable,” says Mr Khan.

The increase in abiana, however, is not without its supporters. Farmers such as Mohsin Leghari argue that reasonable water charges are essential to maintain the ageing infrastructure. “Civil paraphernalia typically requires annual maintenance spending equivalent to 2-3pc of its value. Punjab’s irrigation network is worth an estimated $20–25bn, which means it needs roughly Rs180bn a year for upkeep. What the government currently spends is not even 5pc of that requirement. How can such a system remain sustainable? Can agriculture survive on a crumbling irrigation network?”

Rejecting the notion that canal water should remain virtually free, he argues that cheap water is a myth in modern agriculture. Even after the increase, he says, canal water remains significantly cheaper than alternatives such as diesel- or electricity-powered groundwater pumping.

“Land, seed and water are the essential ingredients of agriculture; all other inputs are supplementary,” he argues. “If we want water to keep flowing through the system, we must also be willing to pay for its maintenance.”

In final words, as Punjab finds itself caught between emerging policy preferences and ground realities, life is becoming increasingly difficult for farmers. The combined impact of rising production costs, higher taxes and mercurial markets has only heightened their expectations of meaningful policy support in a sector that remains highly vulnerable. Instead of cushioning shocks, they argue, the government policy is increasingly transferring them onto farmers and farming.

Published in Dawn, The Business and Finance Weekly, June 22nd, 2026