Pakistan’s economy is primarily agro-based and is the largest employer; absorbing almost 43% of the total population and contributing 19.82 % to the country’s GDP. In it, Punjab plays a vital role as it contributes 55% to the national economy.
For overall economic growth, Punjab plays a vital role as agriculture is a mainstay for the province’s economy. According to leading economist Dr. Hafeez Ahmed Pasha, “70% of Punjab’s industry is agro-based, 50% of the wholesale and retail trade is based on agricultural commodities. Similarly 60% of the transport movement relates to agricultural commodities. So, overall the agriculture has a 45% role directly or indirectly in Punjab economy.”
As per the ESP 2015-16, the agriculture sector provides employment to 42.3 % of the country’s total labor force while in Punjab it provides employment to 43.5 % of the people in the province, and to more than 61 % in the rural areas.
Moreover, 68% of Punjab’s population is rural based according to the Punjab Development Statistics of 2016. Hence growth in the agriculture sector is a necessary precursor both for the economic growth in the province and for rural development. This is according to Punjab Economic Report 2017 (PER) which was launched by the Punjab Economic Research Institute (PERI).
The report states that, “recent performance of the sector has not been encouraging. Between 2010 and 2015, per hectare yield of wheat in Punjab has dropped, whereas the yields of rice and cotton have not shown any significant improvement (Punjab Development Statistics, 2016). As compared to 2014-2015, all crop subsectors in Pakistan (important crops, other crops and cotton ginning) registered negative growth rates in 2015-2016 whereas the textile sector, which constitutes majority of the country’s exports, registered a negative growth rate of 8.2 % in 2016 as compared to the preceding fiscal year (Pakistan Economic Survey, 2015). This reflects poor performance in Punjab’s agriculture sector that had a production share of more than 50 % in all major crops (with that of wheat being 76.9 % and of cotton being 73.6 % in 2015). The total cropped area in Punjab has also dropped between 2004-2005 and 2013-2014.”