Weather- and climate-related disasters have affected over 75 million Pakistanis in the past three decades, with estimated economic losses of over $29 billion, or roughly $1 billion a year, the latest World Bank report estimated.

The projected temperature extremes will progressively amplify the negative impacts on human health, livelihoods, and ecosystems that Pakistan is already experiencing, said the report titled “From Swimming in Sand to High and Sustainable Growth: A Roadmap to Reduce Distortions in the Allocation of Resources and Talent in the Pakistani Economy”.

The report explained Pakistan’s climate has been changing in recent decades and the country faced rates of warming that are considerably above the global average.

From 1999 to 2002, droughts in Sindh and Balochistan provinces killed two million livestock and required emergency relief to provide drinking water and food to farming communities. Even minimal changes in precipitation patterns over prolonged periods can alter Pakistan’s food production by placing greater pressure on the water resources that the country’s irrigation network depends on.

Except for the northern mountainous region, projected yield declines are widespread, particularly for crops such as cotton, wheat, sugarcane, maize, and rice.

Since 1993, crop yields in Pakistan have increased 78pc.

From a geographical point of view, this increase in yields was driven by increases in Punjab and Sindh, which increased their yields by 95pc and 87pc, respectively. Conversely, yields in KP only increased by 27pc, while those in Balochistan fell by 13pc.

All provinces heavily increased the use of capital like tractors, tube wells, threshers and fertilizer per hectare, while all provinces other than Punjab also increased the amount of labour used per land at a rate higher than yield growth, implying that the increase in yields by hectare was mainly driven by more intensive use of productive inputs rather than by an increase in productivity, the report notes.

Crop district-level analysis of total factor productivity (TFP) revealed a generalised contraction in agriculture TFP in Pakistan, accentuated since the turn of the century. Aggregating the crop district level results at the national level show that TFP declined at an annual average rate of minus 1.2pc. The decline in TFP is explained by performance deterioration since the turn of the century.

Between 1993 and 1998, the TFP for crops grew by 21pc, or an average 3.9pc per year. Since then, TFP has been contracting at an average rate of 2.3pc per year.

Highly diverse regional performance indicates that Punjab and Sindh experienced increases in TFP, but KP and Balochistan experienced large TFP declines. Within Punjab, all agro-climatic zones increased TFP except for the Barani zone, while in Sindh, growth was driven by the cotton-wheat growing areas.

Farm-level analysis of productivity in Punjab also reveals a contraction in the average productivity in wheat, rice and cotton farms, while it shows an increase in sugarcane farms. The results obtained from a systematic analysis of farm-level data in Punjab between 2013 and 2019 show that the simple average TFP across farms declined in wheat, rice, and cotton farms, but increased in the case of sugarcane farms.

The drivers of aggregate productivity growth can shed some light on the extent of the misallocation of resources in crop agriculture in Punjab.

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