Farm leaders criticise FY27 budget for lack of agriculture incentives

Farm leaders and exporters have criticised the FY2026-27 budget, saying it offers little support to an agriculture sector grappling with rising production costs, water challenges and declining profitability.

Pakistan Kissan Ittehad (PKI) President Khalid Khokhar said the government had failed to incorporate recommendations presented by agricultural stakeholders during a recent meeting with Prime Minister Shehbaz Sharif.

He said growers had expected measures to reduce production costs, particularly electricity tariffs for tube wells, diesel prices and fertiliser expenses, but no meaningful relief was announced.

According to him, farmers continue to face losses on the sale of various crops and remain under financial pressure despite their central role in the agricultural economy.

He also called for subsidies on DAP fertiliser, arguing that rising input costs have made farming increasingly difficult.

Farooq Bajwa, founding president of the Water Council, expressed concern over what he described as inadequate allocations for water sector projects despite growing climate pressures and concerns over trans-boundary river flows.

He said greater development spending was needed to accelerate construction of dams and other water infrastructure projects, adding that rural areas continue to receive insufficient development funding.

Bajwa also raised concerns over withholding tax paid by farmers on electricity bills, saying the tax is not being adjusted against their liabilities.

Progressive farmer Ebadur Rehman criticised the government's handling of wheat and cotton issues, saying growers had suffered losses for three consecutive wheat seasons.

He argued that wheat procurement prices remained below production costs and said authorities had failed to address the underlying causes of declining cotton production, including the Cotton Leaf Curl Virus (CLCV).

Meanwhile, Patron-in-Chief of the All Pakistan Fruit and Vegetable Exporters Association (PFVA) Waheed Ahmed said the agriculture sector had largely been overlooked in the new budget despite facing significant challenges.

He welcomed the reduction in minimum and advance taxes on exports, as well as the Rs88 billion allocation under the Export Refinance Scheme, saying the measures would improve access to lower-cost financing.

Ahmed also appreciated the allocation of Rs1 billion for development funding and the abolition of super tax on income between Rs150 million and Rs500 million.

However, he said exporters had expected a complete removal of certain taxes and expressed disappointment that exports were not included in the fixed tax regime.

He also criticised the absence of incentives for alternative energy, arguing that lower energy costs are essential for improving competitiveness and boosting exports.

Ahmed urged the government to adopt practical measures to support agriculture and horticulture, saying the sectors have significant untapped export potential.