Pakistan's urban middle class is subsidised by the farmer

The claim that reframes the whole conversation

Muzamil opens with a claim most urban Pakistanis would instinctively reject: it is not the farmer who is squeezing the city, it is the city that is squeezing the farmer. “ہمارے شہری لوگ… وہ بدکاری کو سبسڈی دے رہا ہے”, our urban lives are being subsidised by the farmer’s suffering, he says. The frame he wants viewers to hold for the rest of the episode is that cheap food in Lahore, Karachi and Islamabad is not a natural feature of the economy. It is the outcome of a political choice to keep food prices artificially low so that students do not protest and the middle class does not spill onto the streets.

Muzamil ties this to a first-principles view of money. Money, he argues, is a representation of value. If food is genuinely the most important thing a society consumes, its price should reflect that. Instead Pakistan does the opposite: cars, clothes and services get more expensive year after year, but food is held down by force. “آپ کا کھانا ہمیشہ مستحکم ہوتا ہے کیونکہ یہ جان بوجھ کر چھڑی کے ساتھ مستحکم رکھا جاتا ہے,” he says, your food stays stable because it is deliberately kept stable with a stick.

Why price controls are a zero-sum game

Muzamil splits Pakistan’s intellectual class into two camps: a liberal secular one that reads Western economists and understands why free markets tend to lift economies, and a religious camp that rejects that entire tradition on principle. He then uses a hadith to close the loop between them.

Citing Sunan Abi Dawud 3451, he retells the moment where companions came to the Prophet ﷺ complaining that prices had risen and asked him to fix them. In Muzamil’s reading, the reply is that only Allah controls prices, and that the Prophet ﷺ did not want anyone to come to him on the Day of Judgement with a claim of injustice over blood or property. Muzamil’s conclusion is direct: “اگر آپ کسی کے ساتھ بھلائی کرنے کی کوشش کرتے ہیں۔ یہ ایک صفر رقم کا کھیل ہے۔ کسی کو ڈالنا ہے بل.” Price controls are a zero-sum game, and in Pakistan the bill has been dumped on the farmer.

The numbers behind the “small farmer” story

Muzamil then grounds the argument in structural numbers. 97% of Pakistan’s farmers hold less than 12.5 acres. According to a Gallup Pakistan dataset he cites, farmers with more than 25 acres, the class he calls big zamindars, are only about 1.4% of farmers, but they control roughly 16% of farmland. This tiny class, he says, is who forms the sugar mafia, blocks agricultural tax, and captures subsidies.

The retail data is even sharper. Muzamil cites an average Punjab government figure that of every ₹100 a shopper pays for produce, only about ₹20 reaches the farmer. Around 40% is retained by the retailer at the last mile, and the rest is absorbed by mandis and transporters. Above that sits the arhti, the informal financier who lends against the crop.

The arhti, the loan shark and the 78% rate

Muzamil is careful here. When he last covered arhtis, the industry pushed back and told him the market was more formalised than he suggested. So he lays out the numbers they themselves gave him. Bank rates in Pakistan sit around 12–15%. Arhtis add a 7–8% margin because farmers often default, then a 4% commission on top. That takes the effective rate to somewhere between 22% and 25%, which he calls the “good” case.

At the extreme, he says the rate can climb to 78%. A farmer borrowing ₹1 lakh has to return ₹1.78 lakh at year-end. “اور اگر آپ قید ہیں۔ چلا گیا یا سیلاب آیا تو اس سال آپ ظاہر ہے کوئی پیسہ نہیں بنایا.” If there is a flood, if the crop fails, the interest rolls into the next year. Eventually the arhti takes the land. The farmer becomes, in Muzamil’s phrase, effectively a slave working his own field to pay off a debt.

His fix is specific. Instead of interest-bearing debt dressed up in Arabic names by what he calls Pakistan’s “so-called Islamic banks,” farmers should be funded on an equity basis, real risk-sharing where the financier only makes money when the crop sells. A fair split he describes: farmer keeps 30%, financier takes 70% after the sale, but only after the sale.

The tax reform that collected almost nothing

Muzamil then turns to the 2024–25 agricultural tax reform pushed through under IMF pressure. On paper, agriculture is a $96 billion sector, roughly 24% of Pakistan’s GDP. The IMF projected that a genuine agricultural tax would yield somewhere between ₹400 billion and ₹1 trillion.

The actual figure, he says, was around ₹5 billion, roughly 0.3% of reported agricultural income. He points to why: 62% of the Punjab assembly and 66% of the Sindh assembly are landowning families. “ظاہر ہے کہ وہ اپنے اوپر ٹیکس ادا کرتا ہے۔ لاگو نہیں ہوگا.” They are not going to tax themselves.

What they did instead, he argues, was progressively squeeze the salaried class first, the group already visible to FBR, already documented, already unable to hide. Salary tax slabs were lowered, petrol was fully taxed, and only when there was nothing left to extract from the urban working population did the state turn, half-heartedly, toward agriculture.

The frozen licence at the centre of the sugar cartel

The centrepiece of the episode is sugar. Muzamil is precise about the mechanism. To build a new sugar mill in Pakistan you need a licence. For roughly the last 20 to 25 years, he says, no new licences have been issued. Existing mills, owned by what he lists as the Zardari family, the Sharif family, the Tareen family, and the Chaudhry brothers of central Punjab, simply expand their existing footprints. New entrants cannot come in.

That licence freeze is the entire game. Because cane loses sugar content quickly after cutting, growers are forced to sell to whichever mill sits inside their designated zone. A colonial-era Sugar Commissioner, Muzamil notes, still legally allocates cane to specific mills and can even tell farmers which crop to grow.

The federal government, under IMF and military pressure, tried to deregulate sugar last year. The Sindh government blocked it. “شوگر اس کے دل اور مرکز میں ہے,” Muzamil says, sugar is at the heart and core of that provincial government’s economy. He is blunt about the contradiction: a state that can freely rewrite constitutional amendments, jail political opponents and manage elections cannot, or will not, touch a sugar cartel.

Why sugar is eating cotton, wheat and cooking oil

Muzamil then draws out what this cartel does to the rest of Pakistani agriculture. Sugar consumes an enormous share of the country’s water, around 17% by his earlier estimate. It offers no nutritional value in a country where he says 30% of adults have diabetes. And it earns no dollars.

Cotton does earn dollars. Muzamil cites a November 2025 article on Rahim Yar Khan showing cotton acreage in the district has collapsed by 99.35%. What was once an 800,000-acre cotton belt has been almost entirely converted to sugarcane, feeding six large sugar mills producing 135,000 tonnes daily, roughly 40% of national milling capacity. National cotton output, he says, is down 34% this year. Total cotton acreage has fallen from around 2.96 million acres to roughly 1.7 million.

The consequence is that Pakistan now imports cotton, dollarised, expensive cotton, to feed the textile mills that used to be its export engine. Muzamil cites 150 textile mills shut over the past year and 187 units closed across Faisalabad and Multan. He estimates the cotton switch alone is costing Pakistan around $1.6 billion a year. Wheat, lentils and oilseeds are also being displaced by cane, forcing more imports of staples the country used to grow itself.

The absurdity is compounded at the border. Landed imported sugar sits at roughly ₹50–60 per kilo in Karachi. Domestic sugar retails at around ₹150. Imports are banned to protect the mills. In past years, he notes, mills have exported sugar with subsidies, watched domestic prices spike, then re-imported sugar to plug the shortage they created. “لین دین میں رقم ضائع ہوگئی,” he says, money simply lost in the round trip.

What deregulation would actually look like

Muzamil narrows to a specific policy proposal. Deregulate sugar. Open imports. Let a market of 250 million consumers pull in competition. Let cane farmers sell to more than one buyer. But do it gradually, he warns, not the way the wheat market was deregulated last year, where imports were let in on top of an existing support price, collapsing the price farmers received from around ₹3,500 per maund to ₹2,200, and setting up the farmer protests he expects in December.

His broader structural idea is more controversial. Pakistan has historically believed that land should be broken up and distributed to small farmers. But small farmers, he argues, have no capital to invest in yield, no ability to install technology, no bargaining power against arhtis. He suggests the opposite direction: corporate farming structures listed on the PSX, that ordinary Pakistanis can own shares in. Not concentration in the hands of a single seth or wadera, but institutional ownership that is transparent, taxable and capable of investment.

He extends the same logic to the middle of the supply chain. If a startup can aggregate produce from farmers, cut out the 50-middleman chain, and deliver to cities at scale, the retail margin collapses and both the farmer and the consumer win. He references a promising Pakistani startup that attempted this and has since disappeared, without naming it, and says the model was right even if that particular company failed.

The closing warning

Muzamil ends the episode with a warning about who will push back on this argument. “میں جانتا ہوں کہ اس کی ایک ویڈیو ہے۔ وہ تیار بیٹھی ہے,” he says, someone from the establishment will show up with a ready-made rebuttal. Anyone who raises these questions, he argues, gets harassed enough that they eventually stop. His response is to keep making the videos anyway. The bottom line he leaves the viewer with is simple: deregulate the market, let price discovery work, and stop pretending that a country running on cheap urban food and captured sugar licences is a functioning agricultural economy.