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Gructure forms Pakistan’s economic backbone, which produces 24 % of GDP and employs half of the workforce. Drill in a vast wheat fields of Punjab or observe the cotton crop in Sindh and the measure of this dependence is made clear. The economies of the entire district revolve around the crop cycle. Rural families usually plan their lives around planting seasons and crops. Pakistan’s foreign exchange reserves also rely heavily on agricultural exports. The country has created its economy on the relief of these agricultural systems. Today, the climate change is eliminating this reliable and threatening not only the fields but also the country’s economic foundation.
This economic base has restored a basic assumption – forecasts. Pakistani farmers have created their lives around the monsoon for generations. 70 % of the country’s rainfall has historically come between June and September. The sample was once so permanently that the elderly farmers could often predict planting dates. Climate change has broken this prediction. When the temperature hit 48 ° C in Gilgit -Baltistan in 2025, meteorologists were recording extraordinary facts. The region has more than 13,000 glaciers. There is more frozen water outside the polar areas. The data from the Pakistan Meteorological Department has now confirmed who the local communities are already talking about: Glaciers are withdrawing at extraordinary rates. Many people have turned the risk of flooding through reliable water sources. The so -called third pole has become unstable, resulting in a new shape of Pakistan’s geography and economy.
The measure of this instability is becoming clear every year. Flood warnings from the department of Pakistan have become a serious routine. Although cities are forced to create new drainage systems and increase back, farmers in many areas face the effects of the weather. In any flood season, take a walk in any farming district and anxiety is clear. Farming family reports look like weather reports like stock traders monitoring markets, knowing that their income is now dependent on climate patterns, which they can no longer predict with confidence.
The floods of 2022 were a weekend. Pakistan is one of the most climate -driven countries in the world. Its agricultural sector bear the heaviest burden of environmental obstruction. International Center for Integrated Mountain Development Researchers have docuted the destruction of 2022 in Sindh. Two and a half million hectares were submerged so that 18 % of the province was under water. Agricultural losses were surprised, which destroyed 1.9 million tonnes of rice (80 % of Sindh production), 10.5 million tonnes of sugarcane was swept away (61 % of provincial production) and 3.1 million cotton bales (88 % of the crop). Thousands of farming families behind these figures saw their tractors disappearing under mud water, and they saw that they had maintained irrigation channels for decades and witnessed the Tappel that helped wash the breeds. After that, many fields have been lacking in water for months, some have permanently damaged their productivity.
Every calamity of climate has reduced the country’s long -term agricultural capacity. This degeneration creates a vicious cycle of poverty.
To break this cycle, there is a need to learn from the models that work somewhere else. Similar climate pressure countries have shown that green financing can turn uncertainty into a flexible sector. Bangladesh is an example of how green financing can help farmers counter climate shock. Many challenges like Pakistan, such as a rising temperature, unexpected monsoon and destructive storms, are attracted to innovation rather than withdrawal of the country’s agricultural sector.
One size fit will not work. Sindh floods, Balochistan drought corridors and Gilgit -Baltistan glacier valleys face unique threats that demand a suitable approach.
The Green Delta Insurance PLC, in partnership with the International Finance Corporation, launched the Weather Index -based Agriculture Insurance Program to protect farmers from weather losses during cultivation. Unlike traditional insurance, which often includes long claims and tough conditions, the program uses climate data and indicators to mobilize high -speed payments. It can be applied to any crop, at any time of the year, and to the entire regions. It provides flexibility and assurance in an unstable climate.
Farmers pay a minor premium, and assure that they will receive compensation if non -seasonal rains, storms or sudden temperature swings damage their crops. In its first three years, the program reached 10,000 farmers of 5,200 acres. 2,200 farmers suffered extreme weather losses, claims to help them recover and recover instead of their livelihood. Beyond the net of financial safety, the program also created confidence between farmers and formal financial systems, which encouraged the risk of avoiding risk -avoiding methods. Bangladesh’s experience shows that with the right structure, the green finance can lead to concrete results from the theory, and strengthen the rural economies, even as the climate becomes more hostile.
Pakistan’s banking system has not yet come up with a comparable solution to help its farmers. Farmers have nowhere to go to the recovery capital. Commercial banks have the requirements of suicide attack that practically exclude small holders farmers. Many of them may own land, but it lacks formal documents that banks are demanding. Financial institutions rate agriculture as a “high risk” as usual. Most have shown little interest in the green financing mechanisms that can reduce these risks. The difference of knowledge makes matters worse.
Many farmers are unaware of the current credit programs. Meanwhile, banks claim that there is insufficient demand for agricultural loans. It forces the restless farming to approach local lenders who receive interest rates that can be trapped in debt to families from generations.
Dishes can be explained by the methodology of demand and logistics market forces. The most affected supply of banks, the green financing products, is quite low due to the dislike and risk -avoiding strategies, which most of the financial institutions resort to. On the other hand, the demand for green financing from the farmers is less than the lack of awareness and the negative stereotypes associated with the formal lending channels. Thus, a low balance is dominant. In order to become popular with green financing, the balance needs to move height. For this, both demand and supply need to be increased. Policy makers need to encourage both lenders and lenders.
Green financing programs are successful worldwide as they provide resources to adopt farmers. The challenge is cost. Most small holder farmers cannot tolerate these technologies without help. Pakistan’s financial institutions have barely begun to remove this gap.
Green financing is not a luxury. This is the difference between adaptation and elimination. Banks and insurers will have to change their view of rural loans, which should not be treated as dangerous lenders, but as essential responsibilities for the country’s food protection. Without this change, Pakistan will continue to lose fields, livelihoods and economic stability with every catastrophe of climate.
The survival of agriculture depends on investment and strategies that are at risk. Modifting farming and increasing access to green finance can give rural communities an opportunity to fight against floods, drought and shift seasons. Credit, insurance and funding for climate -related flexible tools should go towards widely adopted by pilot programs.
One size fit will not work. Sindh floods, Balochistan drought corridors and Gilgit -Baltistan glacier valleys face unique threats that demand a suitable approach. Planning for risk diagnosis and long -term planning is the only way to provide Pakistan’s food and protect the rural economy. Without rapid action, the country’s risk of losing its fields, livelihoods and economic spinal cord goes away from every catastrophe.
Author is Assistant Consultant for Oxford Policy Management and Finance for Finance
