Each year, in Toba Tek Singh, farmer Izharul-Haq prepares his fields with care, investing time, money, and effort into his wheat and cotton crops. But one unseasonal downpour or unexpected heatwave can undo it all. And like millions of others, he has no insurance to fall back on.
“I pray more than I plan,” he says with a resigned smile. “Because when the rain comes at the wrong time, there’s nothing left to do.”
Izhar’s story is far from unique. In fact, it reflects a growing threat to Pakistan’s agricultural backbone, one that combines the unpredictability of climate change with the stark absence of financial risk protection.
Pakistan’s agriculture sector contributes nearly 23% to the country’s GDP and employs over 37% of its workforce. Yet, it remains one of the most vulnerable to climate shocks. The floods of 2022 were a brutal reminder inundating one-third of the country, destroying crops, displacing millions, and causing economic losses estimated at $15.2 billion, according to the Post-Disaster Needs Assessment (PDNA) conducted by the government with UN support.
Despite these risks, only 9.5% of the country’s 8.2 million farmers are insured against disasters, according to the Securities and Exchange Commission of Pakistan (SECP). The vast majority – particularly smallholder, non-loanee farmers are left to fend for themselves when disaster strikes.
Currently, crop insurance in Pakistan is largely linked to agri-loans from banks. Farmers who don’t borrow from formal institutions, and that includes that more than 60% are not even eligible. In rural Sindh, Punjab, and KP, where informal lending and self-financing are more common, many farmers are completely exposed.
“This is not just an insurance gap it’s a food security gap,” says Dr. Hafsa Khan, an Islamabad-based climate policy analyst. “We cannot expect climate resilience from people who have zero cushion to fall back on.”
Experts argue that new insurance models particularlyparametric insurance – could help fill this gap. Unlike traditional insurance, parametric models pay out based on pre-agreed weather events, such as rainfall levels or temperature thresholds, regardless of actual damage reports. This speeds up payouts and reduces bureaucratic hurdles.
One such example is Salaam Takaful, which has rolled out Shariah-compliant insurance tailored for small-scale farmers in Sindh and Balochistan. Early pilots show improved recovery times and better uptake, though national-level scaling remains a challenge.
If Pakistan is to protect its agricultural base and the people who depend on it, experts say a multi-pronged strategy is critical:
1. Expand coverage beyond loan-linked farmers, especially to marginal and self-financed farmers.
2. Promote public-private partnerships to make insurance products more affordable, accessible, and relevant to local conditions.
3. Leverage technologymobile apps, weather stations, and satellite data to verify claims and deliver faster payouts.
4. Raise awareness through community outreach and financial literacy campaigns to help farmers understand and trust insurance systems.
Pakistan’s climate vulnerability is not theoretical it’s lived experience for millions of rural families. With extreme weather events becoming more frequent and more intense, the urgency to act is real.
“Crop insurance is not a luxury it’s a necessity,” says Dr. Khan. “We’re past the point of pilot projects. We need policy action, and we need it now.”
As Izharul-Haq waits for this year’s rains, he does so with a hope – and a fair amount of fear. Unless solutions reach farmers like him, climate resilience will remain a slogan rather than a safety net.
