The agriculture sector remained resilient during the first quarter of FY2026, supported by improved input demand and stronger performance in key sub-sectors. The sector recorded growth of 2.9 percent in Q1 FY2026, marking a notable improvement compared to 1.0 percent growth in the same period last year, reflecting gradual recovery and better underlying conditions.
Important crops, excluding wheat as it is a Rabi crop, registered a contraction of 0.7 percent during the quarter. However, this decline was significantly lower than the sharp contraction of 13.1 percent recorded in Q1 last year. The performance was mainly affected by reduced cotton production, which declined by 1.2 percent. Despite the contraction, the improvement compared to last year indicates relative stabilization in crop output.
Other crops also witnessed a contraction of 6.4 percent during Q1 FY2026, compared to a much steeper contraction of 19.3 percent in the same period last year. The decline was primarily driven by lower green fodder production, which fell by 14.4 percent, alongside an increase in fertilizer input usage of 13.0 percent. While output remained under pressure, the reduced magnitude of contraction suggests easing supply-side challenges.
Livestock emerged as a strong contributor to overall agricultural growth, expanding by 6.3 percent during the quarter, compared to 2.0 percent growth in Q1 last year. The improved performance was supported by a decrease in the value of key inputs, particularly green fodder, which declined by 14.4 percent. The strength in livestock underscores its stabilizing role within the agriculture sector.
Forestry and fishing recorded steady growth of 2.1 percent and 0.9 percent, respectively, maintaining their normal growth trends. These sub-sectors continued to provide incremental support to overall agricultural output without significant volatility.
On the input side, agricultural credit disbursement increased by 11.4 percent to Rs. 1,411.6 billion during Jul-Dec FY2026, compared to Rs. 1,266.7 billion in the same period last year. Higher credit availability reflects improved access to financing for farmers and supports investment in inputs, machinery, and productivity-enhancing activities.
Imports of agricultural machinery and implements also rose by 21.6 percent to $65.8 million during Jul-Dec FY2026, up from $54.1 million last year. The increase signals growing mechanization and investment in modern farming practices, which is expected to support medium-term productivity gains.
During the Rabi 2025-26 season (Oct-Dec), urea offtake reached 2,526 thousand tonnes, registering a significant increase of 26.1 percent compared to Rabi 2024-25. In contrast, DAP offtake stood at 543 thousand tonnes, reflecting a decline of 22 percent compared to the same period last year. The divergence in fertilizer usage highlights changing input dynamics and cost considerations faced by farmers.
Overall, the agriculture sector’s performance in Q1 FY2026 reflects resilience amid structural challenges. Strong livestock growth, increased credit disbursement, higher machinery imports, and improved input demand have helped offset weaknesses in crop production, supporting a more stable outlook for the remainder of the fiscal year.
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