Budget 2026-27 agricultural storage allocation raises concerns among experts

The federal government's decision to allocate Rs7.1 billion for agricultural storage infrastructure in the Budget 2026-27 has sparked concerns among agricultural experts and industry stakeholders

The federal government’s decision to allocate Rs7.1 billion for agricultural storage infrastructure in the Budget 2026-27 has sparked concerns among agricultural experts and industry stakeholders, who argue that the amount is insufficient to address a long-standing crisis that causes Pakistan billions of rupees in annual crop losses.

With inflation and the depreciation of the rupee significantly increasing the cost of infrastructure development, experts believe that the allocated funds fall short of the investment required to modernise the country’s outdated storage network. They warn that post-harvest losses, particularly in wheat, fruits, and vegetables, continue to place a heavy burden on farmers, consumers, and the national economy.

Aamer Hayat Bhandara, Co-Founder of Agriculture Republic, described the country’s storage system as one of the most vulnerable areas of the agricultural supply chain. He said Pakistan faces serious challenges due to inadequate warehouse capacity, obsolete storage facilities, a lack of efficient cold-chain systems, poor handling methods, and losses caused by pests and moisture.

Although wheat receives comparatively better attention through government procurement and storage mechanisms, several other crops, including maize, pulses, fruits, and vegetables, remain exposed to significant losses after harvesting.

Mahmood Nawaz Shah, Vice President of the Sindh Abadgar Board, said that when losses occurring before harvest, after harvest, and during storage are collectively considered, the overall wastage in agriculture reaches an alarming level.

He explained that different crops experience varying levels of losses, but overall, nearly 35 percent of agricultural produce is wasted at various stages of production, handling, transportation, and storage.

The problem is especially severe in the horticulture sector. Pakistan produces around 30 million tonnes of fruits and vegetables every year, but the country possesses less than one million tonnes of cold-storage capacity, making it difficult to preserve highly perishable commodities.

Similarly, the grain sector faces a shortage of modern storage facilities. Despite producing nearly 29.6 million tonnes of wheat annually, Pakistan lacks sufficient advanced storage capacity, resulting in considerable losses and quality deterioration.

Experts say the issue extends beyond infrastructure and is closely linked with the country’s agricultural marketing and financial systems. Many farmers do not have the financial resources to store their produce after harvesting and are forced to sell immediately when market prices are low.

The lack of widespread post-harvest financing from banks and financial institutions further contributes to distress sales, reducing farmers’ earnings and limiting their ability to benefit from favourable market conditions.

Farmers also face challenges within wholesale markets, including high commissions, questionable weighing practices, and additional market charges. For perishable crops, post-harvest losses can range between 20 and 40 percent depending on the type of crop and region, affecting food security and weakening Pakistan’s ability to compete in international markets.

Agricultural stakeholders have welcomed the government’s newly announced financing initiative for storage infrastructure, saying it reflects an understanding that improving food security requires not only increasing crop production but also reducing wastage through stronger supply chains.

Ahmad Jawad, Chief Organiser of the Pakistan Business Forum, said that if the initiative is supported by effective electronic warehouse receipt regulations, commodity market reforms, and greater private-sector participation, it could help modernise Pakistan’s agricultural value chain while creating new opportunities for agricultural financing.

However, experts stressed that constructing additional warehouses alone would not solve the crisis. Pakistan’s storage system remains divided among government departments, private traders, commission agents, millers, and farmers, resulting in weak coordination, poor inventory management, and limited access to reliable market information.

Bhandara recommended comprehensive reforms, including a nationwide warehouse receipt system, digital stock management, commodity tracking, stronger public-private partnerships, and better integration between storage facilities, financing services, and crop insurance schemes.

He said storage facilities should be transformed into strategic financial and marketing assets rather than being viewed merely as places to keep agricultural commodities.

Experts also highlighted the role of proper storage in maintaining price stability. When farmers cannot store their crops or secure financial support, they are compelled to sell during peak harvest periods when prices are low. Later, consumers often face shortages and higher prices due to poor stock management and market distortions.

This pattern has repeatedly been witnessed in essential commodities such as wheat, maize, onions, and potatoes.

Shah acknowledged that the government has introduced measures in recent years to encourage private investment through electronic warehouse receipt systems and financing schemes. However, he noted that investors would only enter the sector if storage operations offered a financially sustainable return after considering purchase, storage, and financing costs.

He also criticised the lack of a comprehensive agricultural roadmap in the federal budget, saying that despite references to agriculture in official statements, the budget did not provide a detailed strategy or major programmes aimed at resolving the sector’s structural problems.

Energy shortages remain another significant hurdle, particularly for cold-storage facilities that require uninterrupted electricity. Rural areas continue to experience lengthy power outages, making the storage of perishable goods extremely difficult.