As Pakistan faces mounting challenges in its water, energy, food and environment systems, there is a growing need for thoughtful and innovative agricultural planning. Solutions require more than guesswork or short-term fixes to ensure sustainable progress. The International Water Management Institute (IWMI) and the International Food Policy Research Institute (IFPRI) work to address the interconnected challenges of water scarcity, energy deficits, food insecurities and ecosystem degradation through the CGIAR Policy Innovations Program launched by CGIAR earlier this year which builds on the CGIAR Initiative on NEXUS Gains.
Stakeholders work together to enhance decision-making
Recognizing the need for long-term, system-level planning, Pakistan’s Ministry of Water Resources is prioritizing evidence-based natural resource management. Aligned with this, IWMI and IFPRI explored potential synergies and trade-offs in cropping systems by employing the Computable General Equilibrium-Water (CGE-W) model. This model simulates economy-wide feedback loops, making it particularly relevant for evaluating trade-offs in resource-constrained settings like Pakistan.
Following CGIAR’s co-development approach, the IFPRI-IWMI team organized a series of workshops and training sessions throughout 2024. These practical sessions built a solid understanding of the CGE-W model and enhanced stakeholders’ capacity to apply it effectively. Participants learnt how to set up and work with the CGE-W model, identify policy-relevant scenarios and address practical challenges arising in real-world decision-making contexts.
To further support these efforts, a Community of Practitioners was established to strengthen the capacities of government officials from academia and Pakistan’s Department of Irrigation, Agriculture, Planning and Development for evidence-based policy decisions using hydro-economic models. Additionally, the IFPRI-IWMI team has developed a user-friendly dashboard that translates complex model outputs into visual insights for policymakers, facilitating easier understanding and application.
Modeling for decisions
IFPRI and IWMI researchers have focused on advancing the understanding of hydro-economic modeling and trade-offs in the agricultural sector, using integrated approaches to achieve water security in regions facing growing resource constraints. The hydro-economic modeling framework assesses the risk of over-exploiting water resources and explores how strategic allocation, primarily through changes in agricultural production, can support sustainability goals.
The team used the CGE-W model to assess the impacts of policy instruments, such as commodity taxes on agricultural water use. Through scenario-based analysis, the researchers have identified how shifts in cropping patterns, particularly reductions in water-intensive crops, can yield significant water savings and drive land reallocation toward more sustainable and higher-value alternatives. For example, the CGE-W model results indicate that reducing rice cultivation can prompt transitions toward less water-intensive crops, like fruits in Sindh and the reallocation of land to cotton in Punjab.
Climate change is a key factor in the modeling process. Results indicate that increasing water scarcity due to climate variability will intensify pressure on irrigation systems, highlighting the urgent need for adaptive and proactive water management strategies.
Stakeholder co-design solutions
“Managing our declining water resources is crucial. The new definition of agroecological zones will help us monitor these resources effectively. We must adapt water allowances to changing cropping patterns and develop a dynamic, rule-based system to respond to climate change. There are significant risks if we don’t act promptly,” said Abid Bodla, former member of the Planning and Development Board, Lahore Government of Punjab, Pakistan, during an engagement with stakeholders that was organized to validate analytical results and inform future directions.
During the consultation, participants highlighted the benefits of scenario analysis in evaluating policy options, supporting long-term planning, managing climate-related risks, and promoting inclusive decision-making. The discussions also pinpointed key policy questions around crop diversification, sustainable water use and economic resilience.
Stakeholders proposed several indicators for future monitoring tools, including tracking climate change impacts on agriculture, promoting crop diversification and reducing reliance on water-intensive crops. Suggestions for dashboard parameters included groundwater levels, water pricing, cropping patterns, economic impacts, poverty metrics and zone-specific crop acreage. These indicators will help ensure the dashboard provides actionable insights for policy decisions.
“The CGE-W model is a fascinating tool for trade-off analysis. Our focus will be on running additional scenarios to evaluate groundwater reduction strategies and comparing their impacts on resource allocation, household income, expenditures and food security across different scenarios,” said Tariq Yamin, Deputy Chief, Water Resources Zone, Punjab.
Data alone is not enough
Hydro-economic models like the CGE-W are valuable tools, but their success hinges on high-quality data, transparent assumptions and decision-makers’ willingness to integrate them into long-term strategies.
Pakistan stands at a crossroads, facing accelerating climate change, declining water tables and mounting economic pressure on farmers. The CGE-W model offers a pathway to a more sustainable future; but realizing that future depends on decisive action today.
By integrating science, policy and local knowledge, Pakistan can transition its agriculture toward a more resilient, efficient and equitable future. The CGE-W model plays a crucial role in this effort, offering insights into the impact of land and water use changes, resource management policies, trade, subsidies and taxation on sustainable resource use. By analyzing economy-wide effects of policy choices, the model helps decision-makers identify trade-offs and synergies, informing policies that balance productivity, water conservation and economic resilience.
Turning these insights into action will be critical to ensuring agriculture supports livelihoods while safeguarding natural resources for future generations.