Pakistan rice exports hit record following Indian sales ban

Pakistan is selling record amounts of rice to global markets as it profits from an export ban by India, the world’s biggest exporter. Rice exports from Pakistan, the fourth-largest exporter, surged to almost 5.6mn tonnes in the 11 months to the end of May, up nearly 60 per cent on the same period a year earlier, according to official statistics.


https://www.ft.com/content/88281d0b-4d68-4f96-b499-2d006732b7c7



Pakistan's economy Pakistan rice exports hit record following Indian sales ban Windfall is a boon to country hit by double-digit inflation and anaemic economic growth India continues to be the biggest supplier of rice globally, but Pakistan has increased its share of the market from 7% to about 10% © Arif Ali/AFP/Getty Images Pakistan rice exports hit record following Indian sales ban on x (opens in a new window) Pakistan rice exports hit record following Indian sales ban on facebook (opens in a new window) Pakistan rice exports hit record following Indian sales ban on linkedin (opens in a new window) Save Susannah Savage in London and Humza Jilani in Islamabad49 MINUTES AGO 1 Print this page Unlock the Editor’s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Pakistan is selling record amounts of rice to global markets as it profits from an export ban by India, the world’s biggest exporter. Rice exports from Pakistan, the fourth-largest exporter, surged to almost 5.6mn tonnes in the 11 months to the end of May, up nearly 60 per cent on the same period a year earlier, according to official statistics. The value of Pakistan’s rice exports rose to $3.6bn over the period, up from $2bn in July to May 2022-23. Its previous record for was 4.8mn metric tonnes of rice exports, valued at about $2.5bn in 2021-22. The boom follows India’s decision to impose export restrictions on certain types of rice last year, in an effort to curb rising domestic prices ahead of parliamentary elections after a volatile monsoon disrupted production and spurred fears of a supply shortage. “With India imposing export restrictions . . . Pakistan emerged as a low-cost alternative,” said Elvis John, an associate editor for agricultural markets for S&P Global Commodity Insights. “Many price-sensitive destinations in Africa turned to Pakistan to fulfil demand,” he said, pointing to markets in south-east Asia and the Americas. Pakistan produced almost 10mn tonnes of rice in the nine months to the end of March, compared with 7.3mn tonnes in the same period a year earlier, the Pakistani government wrote in its annual economic survey released on June 11. The 2022-23 crop was particularly low because of the devastating floods in the summer of 2022, said Faizan Ghori, director of Matco Foods, Pakistan’s largest basmati rice exporter. But even compared with the year before the floods, the current export growth “comes to about 20 per cent, which is still very impressive”, he said, attributing the boost to India’s export ban. For Pakistan, the windfall revenues and rebound in production have provided a much-needed source of foreign exchange for the country of 240mn, which is struggling with double-digit inflation, anaemic economic growth and soaring public debt. Global rice prices surged to decade highs after New Delhi implemented export restrictions in July. Poorer countries in Africa, which typically buy large amounts of rice from India, were particularly affected. “Rice prices are still high and I would expect will remain high until India removes the ban,” said Joseph Glauber, senior research fellow at food security think-tank International Food Policy Research Institute.


Despite the export ban, India continues to be the biggest supplier of rice globally, followed by Thailand, Vietnam, and Pakistan, said John, but Pakistan has increased its share in the market to about 10 per cent, up from 7 per cent in the previous year.

Pakistani YouTubers And Praise India Movement in Pakistan - India Today

"Indians love people from abroad lauding their achievements, but seem to derive the biggest satisfaction when Pakistanis gush over India's success. Pakistanis have understood that and have tapped into that, creating an entire industry of YouTubers in Pakistan"

https://www.indiatoday.in/sunday-special/story/praise-india-movemen...

-------

There is a Praise India Movement in Pakistan if one goes by the pro-India videos being churned out by Pakistani YouTubers. If some are praising India's space programme, others are talking about its economic and political successes. Why are Pakistanis creating such YouTube videos, and that too, in such huge numbers?

"India did a big favour to Pakistan. It was also a tight slap for those Pakistanis who said India would deliberately lose to the USA to get Pakistan out of the T20 World Cup tournament. India is the world's number one team, and can never lose to the US," a man in a black salwar kameez states emphatically, looking at the camera. The person isn't an Indian gushing at India's victory over the USA in a T20 World Cup match, but a Pakistani speaking to a popular Pakistani YouTuber at a market in Pakistan.

The video by YouTuber Shaila Khan on her channel Naila Pakistani Reaction has over 3 lakh views in a day.

Indians love people from abroad lauding their achievements, but seem to derive the biggest satisfaction when Pakistanis gush over India's success. Pakistanis have understood that and have tapped into that, creating an entire industry of YouTubers in Pakistan.

There are 5,500 channels and over 84,000 videos just with the hashtag pakistanireactiononindia on YouTube. The number of channels, tracked by IndiaToday.In since November 2023, has grown by 1,000 in a matter of six months. Over 5,000 videos have been added under this hashtag since November.

We are talking about just one hashtag. There are several others with India-related content, some of which every Indian would have come across while scrolling through shorts and videos on YouTube.

This content boom by Pakistani YouTubers has sparked a Praise India Movement in Pakistan.

Seeing is believing, especially if it is about YouTube.

So, just try keying in #Pakistani on the YouTube search bar. The first few results are Pakistani Reaction, Pakistani Reaction on India and Pakistani Public Reaction -- all to do with content related to India.

Such is the rage that even #PakistaniDrama, one of Pakistan's biggest cultural exports, trends below the #PakistaniReaction.

WHAT ARE THE PRO-INDIA VIDEOS PAKISTANIS ARE CREATING
There was a flood of videos by Pakistani YouTubers lauding Team India right after their victory over the USA.

Though cricket is one of the favourites, the range of 'praise India' videos spans from India's economic might to infrastructural developments; from gastronomic delights to space programmes. Then there are videos of Pakistanis describing in amazement their wonderful discoveries during their first visit to India.

You name it, and they have it. There are Pakistani reaction clips to every Top 10 video, featuring India's shopping malls, highways, airports, college campuses, cars, bikes and even golgappas.

Pakistan's fruit exports up 17.85% in first ten months of current fiscal year

https://www.freshplaza.com/asia/article/9629192/pakistan-s-fruit-ex...

Pakistan's fruit exports experienced a 17.85% rise in the first ten months of the current fiscal year compared to the corresponding period of the previous year. This increase is documented by the Pakistan Bureau of Statistics (PBS), highlighting an escalation from 232,700 million dollars to 274,227 million dollars during July-April (2023-24). Furthermore, a significant 29.32% year-on-year growth was observed in April 2024, with exports reaching 8.161 million dollars against the 6.311 million dollars recorded in April 2023.

Despite the annual growth, a month-on-month comparison shows a 58.51% decrease in April 2024 from 19.629 million dollars in March 2024. Additionally, Pakistan's overall merchandise exports saw a 9.10% increase during the first ten months of the fiscal year 2023-24, totaling 25.280 billion dollars as opposed to 23.171 billion dollars in the same timeframe of the previous year.

Pakistan exports first shipment of cherries to China | Article | Fruitnet

https://www.fruitnet.com/asiafruit/pakistan-exports-first-shipment-...


Pakistan has shipped its first consignment of fresh cherries to China marking the opening of Asia’s largest market for the industry.

The Trade Development Authority of Pakistan (TDAP) announced the shipment was dispatched to China on 5 June. It said under the phytosanitary agreement with China over 100 orchards have been registered with China’s General Administration of Customs.

According to a report from Dawn, the first shipment contained 6 tonnes of cherries and was transported by refrigerated truck over the border. The cherries were grown in key the key production region of Gilgit-Baltistan, which produces approximately 5,000 tonnes a season.

Following the initial shipment Pakistan hopes to ramp up supply and send 260 tonnes of cherries to China by the end of the month.

The Pakistan Horticulture Development & Export Company (PHDEC) has been working with the local cherry industry on development, helping to educate growers on producing popular varieties.

PHDEC chief executive Athar Hussain Khokhar said by producing the required varieties of cherries, the country can capture a slice of the China market.

“Proximity and growing demand for the fruit in the Chinese market are a major competitive advantage to Gilgit-Baltistan growers,” Khokhar said.

#Pakistan’s 27% #Stock Rally (in US$ terms) Leads in Asia With More Gains Seen. #India stocks up 8% so far in 2024. The case for more #KSE100 gains is strengthening on the back of one of the cheapest valuations in #Asia #economy #IMF https://finance.yahoo.com/news/pakistan-27-stock-rally-leads-230003...

https://x.com/haqsmusings/status/1805965145941966996

--------

(Bloomberg) -- The bull run in Pakistani stocks looks to have more legs as signs of improving economic conditions bolster the outlook for Asia’s best-performing market this year.

https://finance.yahoo.com/news/pakistan-27-stock-rally-leads-230003...

The case for more gains is strengthening on the back of one of the cheapest valuations in Asia and the budget laying the groundwork to secure a new loan from the International Monetary Fund, according to strategists. A stable rupee and easing inflation boosting the prospect for rate cuts are other positives.

The KSE 100 Index, which has outperformed Asian peers with a 27% surge in dollar terms this year, is likely to further extend gains by 10% by year-end, according to brokerages Topline Securities Ltd. and Arif Habib Ltd.

“There’s a lot of juice left in this rally,” said Ali Hussain, head of research at Dubai-based Frontier Investment Management Partners Ltd. “Cheap valuations, high positive real rates and a fairly valued currency make a very attractive case right now,” he said.

Even while the stocks tested new record highs in recent days, the index remains quite cheap, with a one-year forward earnings-based valuation of 3.8 times, a 50% discount to its lifetime average.

Pakistan earlier this month raised taxes on several industries including cement, automobile and steel to support the government’s finances as it looks to comply with the IMF guidelines. The IMF program is critical for the country to help meet its debt payments of about $24 billion in the next fiscal year.

Still, the beleaguered nation remains exposed to political instability given the split mandate in February this year. The main coalition partner - Pakistan Peoples Party — could easily walk away in the event of a public backlash to austerity measures taken to fulfill the IMF’s conditions for loans, according to Bloomberg Economics. That may even topple the government, BE said.

The KSE 100’s 14-day relative strength index surpassed the 70 level on Thursday. That is typically seen as representing overbought levels, raising the prospect of a correction.

Meanwhile, investors remain bullish. The market momentum over the next two to three years is likely to be driven by foreign buying, earnings growth and robust local liquidity, according to Karachi-based securities firm Arif Habib.

“With the new IMF program spanning the next three years, we anticipate a favorable external position, supporting continued bullish market sentiment,” said Bilal Khan, head of institutional equity sales at Arif Habib.

“There is stabilisation but no substantial growth, which is likely to manifest in slow growth as industry is so dependent on imports,” Safiya Aftab, an Islamabad-based economist, told Al Jazeera. “Employment is not increasing, and bills are becoming unaffordable.”


https://www.aljazeera.com/economy/2024/6/12/is-pakistans-crisis-rid...


Ahead of the country’s budget on Wednesday, inflation is down, forex reserves are up. But analysts warn it’s early days.

The Pakistani government will present its annual budget on Wednesday, seeking to balance domestic commitments to the country’s 240 million people and demands of fiscal prudence from the International Monetary Fund (IMF) – a key source of loans.

Aiming to increase its gross domestic product (GDP) growth rate to more than 3.5 percent from 2.38 percent in the outgoing fiscal year, the country is looking to revive its economy, which has faced a nearly two-year slump following political volatility.


Pakistani authorities have held multiple meetings with the IMF recently. Prime Minister Shehbaz Sharif, who came to power as the head of a patchwork coalition after the February elections, has been at the forefront of these efforts.

Sharif recently travelled to Saudi Arabia, the United Arab Emirates, and China – countries considered Pakistan’s closest allies and key to supporting its economy – to discuss opportunities for driving foreign direct investment in Pakistan.

But is Pakistan’s economy showing signs of revival? Are the government’s measures helping everyday people? And what do analysts think the next budget should prioritise?

Is Pakistan’s economy truly showing signs of revival?
Latest figures from the country’s central bank and international bodies like the IMF paint a cautiously optimistic economic forecast.

Pakistan’s inflation, which had skyrocketed to 38 percent a year ago in May 2023, has slowed down to 11.8 percent over the past 12 months, as reported by Pakistan’s Bureau of Statistics. A kilogram (2.2 pounds) of wheat, which would cost more than 130 rupees ($0.47) last year in May, is down to 102 rupees ($0.37) this year.

Fuel prices have also shown a declining trend, down from 288 rupees ($1.03) per litre (0.26 gallons) in May 2023, to 268 rupees ($0.96) per litre at present.

Pakistan stands as the world’s 5th largest mango producer

https://www.freshplaza.com/latin-america/article/9642058/pakistan-s...

Pakistan stands as the world's 5th largest mango producer, offering 24 unique varieties. The mango season, active from May to August, is centered in Punjab and Sindh, home to the Sindhri and Chaunsa varieties. Despite its global standing, Pakistan exports only 6 to 7% of its mango production, facing challenges in production, processing, transportation, and compliance with international standards.

This year, production declined due to pests and climate issues, yet the country continues to meet domestic demand and export. The majority of exports, about 75%, target GCC countries via sea, air, and land. Efforts to improve air shipment logistics are in progress to maintain quality and competitive pricing.

Enhancing branding and packaging is vital for competing internationally. Unlike Mexico and India, Pakistani mangoes lack a strong global brand, affecting their pricing abroad. Streamlining regulatory compliance and export procedures is also crucial for smoother market access.

Strategic initiatives aim to strengthen marketing, upgrade processing facilities, and explore new markets in Europe, Africa, Iran, and China. These efforts are expected to diversify export destinations and support the sector's sustainable growth.

With targeted efforts to address challenges and seize opportunities, Pakistan aims to boost its mango exports, contributing to economic growth and its global trade footprint.

Pakistan stands as the world’s 5th largest mango producer

https://www.freshplaza.com/latin-america/article/9642058/pakistan-s...

Pakistan stands as the world's 5th largest mango producer, offering 24 unique varieties. The mango season, active from May to August, is centered in Punjab and Sindh, home to the Sindhri and Chaunsa varieties. Despite its global standing, Pakistan exports only 6 to 7% of its mango production, facing challenges in production, processing, transportation, and compliance with international standards.

This year, production declined due to pests and climate issues, yet the country continues to meet domestic demand and export. The majority of exports, about 75%, target GCC countries via sea, air, and land. Efforts to improve air shipment logistics are in progress to maintain quality and competitive pricing.

Enhancing branding and packaging is vital for competing internationally. Unlike Mexico and India, Pakistani mangoes lack a strong global brand, affecting their pricing abroad. Streamlining regulatory compliance and export procedures is also crucial for smoother market access.

Strategic initiatives aim to strengthen marketing, upgrade processing facilities, and explore new markets in Europe, Africa, Iran, and China. These efforts are expected to diversify export destinations and support the sector's sustainable growth.

With targeted efforts to address challenges and seize opportunities, Pakistan aims to boost its mango exports, contributing to economic growth and its global trade footprint.

As climate change threatens Pakistan mango exports, surge in Middle East demand offers some hope

https://www.arabnews.pk/node/2545171/pakistan

ISLAMABAD: The All Pakistan Fruit and Vegetable Exporters Association (APFVEA) said on Sunday that Pakistan might not meet its target of exporting 100,000 metric tons of mangoes this year due to adverse effects of climate change on its production, with officials pinning their hopes on a surge in demand from the Middle East.

Pakistan is the world’s fourth-largest mango producer and the fruit export generates millions of dollars in revenue annually, according to the APFVEA. Additionally, mangoes serve as a cultural symbol and a diplomatic tool that help the government strengthen international connections.

Pakistan has faced mango export challenges in recent years due to adverse weather, and pest and fruit fly infestation, with production declining for the third consecutive year in 2024.

The country produces around 1,800,000 metric tons of mangoes annually, with 70 percent grown in Punjab, 29 percent in Sindh and one percent grown in Khyber Pakhtunkhwa.

“We had set a target of exporting 100,000 metric tons of mangoes this season, but it seems unachievable due to the pronounced negative impact of climate change on Pakistan’s mango orchards resulting in less production and a lack of export-quality mangoes,” Muhammad Shehzad Sheikh, the APFVEA chairman, told Arab News.

Due to the weather this year, he said, mango production was down by up to 40 percent in Punjab and 20 percent in Sindh, reducing the overall production by around 600,000 metric tons.

He said the APFVEA reduced this year’s target because it could not achieve the export target of 125,000 metric tons last year and exported only 100,000 metric tons of mangoes in 2023.

“With the export of 100,000 metric tons of mangoes during the current season, if achieved, a valuable foreign exchange of $90 million would be generated,” Sheikh said.

Expressing grave concerns, the APFVEA chairman said the effects of climate change on fruit cultivation, particularly mangoes, as well as on the larger agricultural sector were intensifying with each passing year.

“Extended winters, heavy rains, hailstorms and subsequent severe heatwaves have altered disease patterns throughout the seasons,” he explained, stressing an urgent need for research-based solutions to mitigate these effects and warning that failure to promptly do so could further jeopardize mango production and exports.

‘Note ban, GST, COVID shocks cost ₹11.3 lakh cr., 1.6 crore informal sector jobs’

India Ratings says in FY23, GVA in the economy by unincorporated businesses was 1.6% below 2015-16 levels; firm estimates 63 lakh informal enterprises shut down between FY16 and FY23

https://www.thehindu.com/business/Economy/note-ban-gst-covid-shocks...

In 2022-23, the Gross-Value Added (GVA) in the economy by such unincorporated enterprises was still 1.6% below 2015-16 levels. Moreover, their compounded annual growth rate (CAGR) was 7.4% between 2010-11 and 2015-16, but slipped into a 0.2% contraction since then, the rating firm reckoned based on the recently released findings of the government’s Annual Survey of Unincorporated Sector Enterprises (ASUSE).

------

The latest data suggests that the real GVA of unincorporated firms in manufacturing, trade and other services (MTO) was ₹9.51 lakh crore in 2022-23, with an 18.2% share in India’s real MTO GVA, falling sharply from 25.7% in 2015-16.

“The shrinkage has been sharper in other services and trade, with the informal sector’s share dropped to 32.3% and 21.2% in 2022-23 from the pre-shock level of 46.9% and 34.3%, respectively. In the manufacturing sector, the share of the informal sector fell to 10.2%, from 12.5% during the same period,” the firm said in its report.


-----

Had the macro shocks not taken place during the post 2015-16 period and the growth in these enterprises followed the pattern between 2010-11 and 2015-16, the total number of such firms would have reached 7.14 crore in 2022-23, with the number of workers employed rising to 12.53 crore, India Ratings concluded.

The unorganised sector contributes over 44% to the country’s GVA and employs nearly 75% of the work force employed in non-agricultural enterprises, as per the 2022-23 Periodic Labour Force Survey.

Nishat’s focus towards corporate farming - Newspaper - DAWN.COM


https://www.dawn.com/news/1844573

Quietly but steadily, corporate money is betting on Pakistani agriculture. One of the country’s largest business conglomerates — Nishat Group — for example, which began to expand into agriculture by setting up a modern dairy farm near Sukheki more than a decade ago is now planning to venture into the manufacturing of “precision” farm machinery in the country.

The growing corporate interest in agriculture is not surprising given the huge business opportunities offered by this sector in terms of its production of some key agriculture commodities like wheat, rice, cotton, meat and milk.

“I am very much excited about the agricultural sector in Pakistan. There are enormous opportunities here for sustainable business growth and exports,” Mian Mohammad Mansha, the chairman of Nishat Group, told this correspondent last week.

The country’s food exports, especially of rice, grew 37 per cent to $8bn in the first 11 months of last fiscal year to May. “The sector’s actual potential remains unexplored. The large productivity gap underscores that agriculture can make huge contributions to economic growth, food exports, and poverty alleviation,” he adds.

Ever since venturing into corporate farming in 2013, his company, Nishat Agriculture Farms Limited (NAFL), has invested consistently and heavily in agriculture. The group owns five farms spread over 1,500 acres of farmland and a large modern dairy farm producing packaged milk and other dairy products in collaboration with a Turkish firm for the large urban market.
“When Nishat Agriculture bought the land, it was water-logged and barren. We have constantly been investing in mechanisation of our farms every step of the way, from seed plantation to irrigation to crop harvest since 2017. This has helped us reclaim uncultivable land and turn it into one of the most fertile pieces of farmland in the country,” Mian Mansha notes.

His efforts to turn his own farms into fertile land have also helped his neighbouring farmers in Thatha Raika village recover their thousands of acres of water-logged farms. Nishat Agriculture is growing four crops — Alfalfa (protein-rich fodder), corn, rice and wheat — at the farm.

“Our lands were almost knee-deep below water when Nishat began reclaiming their land,” a local farmer recalls. “Now the groundwater level has gone down significantly, and we are again able to cultivate our area.”

Mian Mansha argues that Pakistan’s agriculture has enormous potential, but there is a need to improve farming practices, especially replacing the age-old flood irrigation method, by promoting mechanisation to get more out of the land at a reduced cost and less burden on natural resources and land under cultivation.

“The rapid climate change demands that we quickly adopt mechanisation in agriculture to reduce water consumption (around 90pc of available water in Pakistan is consumed in farm irrigation in the country), improve crop output, and cut time spent on sowing and irrigation,” he maintains.

Since Pakistan does not manufacture most of the machines used in farming, the upfront cost of farm mechanisation is quite formidable, especially for smallholder farmers.

“Nevertheless, the long-term benefits of mechanisation in the shape of huge water conservation, significantly reduced input and labour costs, and notable increases in crop yields and product quality can be enormous,” the Nishat Group chairman underscores.

“We are also helping smallholder farmers from the area by educating them in efficient farming practices and new technology.”

“The Pivot Irrigation System that we have installed to irrigate our farms, for example, is extremely efficient and uses 70pc less water compared to conventional flood irrigation, lowers electricity consumption, improves precision application of inputs, and results in time and labour savings due to its uniform uses as against flood irrigation methods.

Nishat’s focus towards corporate farming - Newspaper - DAWN.COM


https://www.dawn.com/news/1844573

“The pivot irrigation system can also be accessed online through a mobile app to perform various functions. The water thus saved could be used by other farmers. This also helps us get much better crop yields even from dry land or sandy soils than other farmers,” he says.

Local Manufacturing: Recently, Nishat Agriculture Farms has imported the Yanmar rice transplanter, the automated seedling picking and planting system, from Japan and aims to manufacture the machine locally.

“We have plans to invest in local manufacturing of agriculture equipment and machines in Pakistan, starting with the Japanese transplanter. We may collaborate with Millat Tractors or may use our own auto assembly facility in Faisalabad,” he asserts.

A hydraulic system for effortless operations and maintenance, the transplanter significantly reduces seedling waste, improves crop spacing and uniformity for optimal growth, controls plant density, and increases efficiency in water and fertiliser usage.

“The use of rice transplanters is estimated to drastically slash the labour costs from present Rs11,000 per acre to less than Rs1,000,” a senior Nishat Agriculture Farms official claims. According to him, the Japanese manufacturer of the machine claims that Bangladeshi rice growers had more than doubled (up to 100-200pc increase) their production by using this machine.

Agriculture is the backbone of Pakistan’s economy, contributing more than a fifth. The sector is the largest employer, employing more than 45pc of the country’s total workforce and is a major source of export earnings.

However, the sector faces multiple challenges: low yield, negligible mechanisation, growing water scarcity, large post-harvest crop losses, absent storage and cold chain facilities, rapidly declining soil fertility, extreme climate events, land fragmentation and so on.

Economic experts are unanimous that Pakistan cannot achieve robust, sustainable economic growth without a boost to its agricultural productivity and rural incomes. That will require intensive efforts to manage energy, water, land, soil and energy more efficiently and sustainably through adaptation to climate change and mechanisation.

It requires substantive policy reforms in agricultural research, extension, seed technology, and input markets, as well as large investments. Corporate participation and investment in agriculture are key to tackling these challenges and transforming agriculture with precision and efficient farming techniques and practices.

With Pakistan’s agriculture at a turning point, corporate participation will go a long way in realisation of the sector’s untapped potential provided policymakers seize this opportunity to execute reforms needed to encourage corporates like Nishat Group to invest in this largely neglected area.

Pakistan clinches IMF bailout deal, to raise tax on farm income | Reuters


https://www.reuters.com/markets/asia/pakistan-shares-hit-fresh-reco...

The new agreement introduced increased tax on agricultural incomes, underscoring the need to increase government revenue and reduce recurrent deficit to win the lender's approval.
The IMF said it had got assurances from Pakistani authorities - provincial and federal - that they would bring taxation on agricultural incomes on par with corporate and other tax rates.
Agricultural income has historically been taxed much lower than other sectors, despite contributing 23% to the GDP, employing 35% of the labour force, and bringing in an annual income of around 9 trillion Pakistani rupees ($32.37 billion).
Under the IMF deal, the highest effective tax rate can rise to as much as 45% from the current 15%. It will be implemented from 2025, a move that was termed "unprecedented" by brokerage and investment banking firm JS Global.
"These changes could contribute to inflation, particularly in food prices, affecting consumers nationwide," said Ghasharib Shaokat, head of product at Pakistan Agriculture Research, adding that larger farmers will be affected more.
Inflation averaged close to 30% in FY23 and 23.4% in FY24, which ended on June 30.
Policymakers have long wanted to do this, but were unable because Pakistani governments do not want to risk their popularity among the rural voter base, said Vaqar Ahmed of the Sustainable Development Policy Institute, a think tank.
"Most of the good reforms for fiscal consolidation, unfortunately, have not come as a result of our own political will and have come as a result of external push," he said.

Prime Minister Shehbaz Sharif's government is also based on a weak coalition and faces political pressure of a popular jailed opposition leader, former premier Imran Khan.
But Sharif says his government is committed to tough but unavoidable reforms.
Pakistan has been struggling with boom-and-bust cycles for decades, leading to 22 IMF bailouts since 1958. Currently the IMF is fifth-largest debtor, owing $6.28 billion as of July 11, according to the lender's data, opens new tab.
The latest economic crisis has been the most prolonged and has seen the highest ever levels of inflation, pushing the country to the brink of a sovereign default last summer before an IMF bailout.
The conditions of the programme have become tougher. The latest bailout is aimed at cementing stability and inclusive growth in the crisis-plagued South Asian country, the IMF said.
A source close to negotiations with the IMF told Reuters that the agriculture income tax was agreed weeks ago, but was deliberately not highlighted by the government because of the sensitivity of the matter.
The IMF has said the SLA agreement is subject to approval by its executive board and the confirmation of necessary financing assurances from Pakistan's development and bilateral partners.
This would include rollovers or disbursements on loans from Pakistan's long-time allies Saudi Arabia, the United Arab Emirates and China.
($1 = 278.0000 Pakistani rupees)