Regulatory delays and inconsistent policies are costing Pakistan's agriculture sector billions of dollars annually, according to a new report from the Overseas Investors Chamber of Commerce and Industry (OICCI). Titled 'Seeds of Growth,' the report argues that the main obstacles to agricultural growth are not technological or financial, but stem from poor execution and slow policy implementation. Main Developments Pakistan's cotton output has plummeted from a peak of around 14 million bales to an estimated 6.85 million bales in FY26, a decline of more than half. This has forced the textile industry to spend $2-3 billion annually on cotton imports, squeezing foreign exchange reserves. The government's own target of 10 million bales now stands 34% above actual production. The report attributes the cotton collapse to climate shocks, pest infestation, poor seed quality, and a blanket ban on certain pesticide ingredients imposed without a science-based transition plan. Since textiles account for 60% of Pakistan's export earnings, restoring output to 8-9 million bales would significantly ease pressure on the economy. Read also: PSX Falls Below 175,000 as Middle East Tensions Rattle Investors Background Agriculture contributes about 23% to Pakistan's GDP and employs 37% of the workforce, yet the sector consistently trails regional competitors. The OICCI report highlights similar patterns across other crops. Hybrid maize seed has tripled per-acre yields over three decades, but the National Biotechnology Policy—approved by the federal cabinet last month—remains unimplemented, delaying biotech corn hybrids that could unlock $1 billion in exports. In potatoes, less than 5% of output comes from certified processing-grade seed, and average yields of 20-23 tonnes per hectare lag behind the 30-35 tonnes achieved elsewhere. Dairy production, where Pakistan ranks among the world's top five milk producers, sees only 10% of milk processed, with roughly 20% lost due to inadequate cold chain infrastructure. Why It Matters The cumulative impact of these delays is measured in billions of dollars of lost export earnings and additional import costs. Tobacco production costs have more than doubled in three years, while an undocumented segment in Khyber Pakhtunkhwa and Azad Jammu and Kashmir operates outside the tax net. On fertiliser, nitrogen-based urea dominates usage, while potash offtake—critical for balanced soil nutrition—stood at just 7,000 tonnes in March, despite a year-on-year rise of nearly 40%. The report underscores that addressing these issues is not about new technology or large investments, but about executing existing policies and ensuring science-based transitions. For a country facing foreign exchange constraints, unlocking even a fraction of the sector's potential could provide substantial relief. What's Next OICCI Secretary General M. Abdul Aleem welcomed the cabinet's approval of the biotechnology policy but stressed that its impact depends on notification and rollout. Until then, yield gains, export potential, and investor confidence remain theoretical. The report calls for immediate implementation of the biotechnology policy and a science-based approach to pesticide regulation to reverse agricultural decline.