ISLAMABAD: Prime Minister Shehbaz Sharif on Wednesday pledged to lower taxes on farm inputs and boost investment in agricultural technology as part of a sweeping effort to modernize Pakistan’s struggling farm sector and strengthen rural incomes.

Agriculture accounts for about 23% of Pakistan’s gross domestic product and employs nearly 38% of the labor force, according to official data. But the sector has long been held back by water scarcity, outdated methods, poor storage and market access, and rising costs for fertilizer, seed and pesticides.

The reforms come as the government is finalizing its annual federal budget for FY26, with a renewed focus on boosting rural growth, agri-tech innovation, and food security amid stagnant productivity and mounting farmer debt.

“Agriculture is the backbone of Pakistan’s economy, and sustainable reforms in the sector will further boost growth,” Sharif said during a high-level meeting on agricultural reforms, according to a statement from his office.

He directed officials to reduce duties on farm machinery, avoid new taxes on fertilizer and pesticides, and accelerate development schemes that improve storage capacity and modernize irrigation and harvesting practices.

Officials briefed the prime minister on the proposed National Agriculture Innovation and Growth Action Plan, which aims to increase yields, improve access to credit for smallholders, and support value-added exports to boost farmers’ incomes.

Sharif also emphasized the need to support Pakistanis studying agriculture abroad, particularly in China. 

Participants were told that 129 agri-tech startups have been launched under the government-backed Ignite National Technology Fund, focused on smart farming, irrigation efficiency and digital market tools.