Despite rise in production, Pakistani farmers' net income plummets in FY24

The net income of Pakistani farmers has significantly declined in fiscal year 2023-24, largely due to a drop in crop prices.

A presentation by Fauji Fertilizer Company showed that for wheat, the net income per acre plummeted to PKR 13,572 from PKR 88,799 last fiscal year.

This happened despite the cultivation area increasing to 9,632,000 hectares from 9,033,000 hectares and production to 31.4 million tons from 28.2 million tons in FY23.

In addition, the yield increased to 3,264 kg per hectare in FY24 from 3,117 kg per hectare last year.

The company pointed out that the income drop was due to the reduced wheat flour price — as of July, a 20 kg bag costs PKR 1,943, a 31% decrease from PKR 2,818 per bag during the same month last year.

Similarly, cotton farmers' net income dropped from PKR 30,486 to PKR 20,674 per acre in FY24. This decline occurred despite an increase in cotton production to 10.2 million bales, up from 4.9 million bales in FY23 and an increase in the cotton cultivation area to 2,424,000 hectares from 2,144,000 hectares in FY23. Moreover, the crop yield also increased 1.8 times to 717 kg per hectare in FY24.

However, the price of cotton fell to PKR 18,904 from PKR 19,000 per maund, which impacted the net income.

Rice farmers also saw a reduction in net income per acre, which decreased to PKR 72,468 from PKR 91,515 in FY23. However, production rose to 9.9 million tons, up from 7.3 million tons in FY23 with the cultivation area expanding to 3,637,000 hectares from 2,976,000 hectares last year.

The crop yield also increased to 2,714 kg per hectare from 2,460 per kg hectare in FY23.

On the cost side, the average price of urea increased from PKR 2,695 per bag to PKR 4,243 per bag in FY24, while the price of DAP rose from PKR 10,924 per bag to PKR 12,091 per bag over the same period.

Additionally, the average price of high-speed diesel climbed to PKR 286 per liter in FY24, up from PKR 255 per liter in FY23. These rising input costs also eroded farmers' net income.

On the other hand, the income of sugarcane farmers increased to PKR 124,322 from PKR 91,515 per acre despite a decline in production to 87.6 million tons in FY24, down from 88.0 million tons last year.

The cultivation area of the crop also decreased to 1,180,000 hectares from 1,319,000 hectares in FY23. Meanwhile, the yield of sugarcane crops increased to 74,252 kg per hectare in FY24, rising from 66,711 kg per hectare.