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Sustainability of economic development in Pakistan is heavily dependent on sustainable agricultural development. In this report, IUCN-Pakistan, the Sustainable Development Policy Institute and the Pakistan Institute for Development Economics review the achievements of Pakistan's agriculture, and looks into the appropriateness of various policies in terms of sustainable development of agriculture and the health of the rural economy. The Pakistan study is part of an international collaborative research project called Policies That Work for Sustainable Agriculture and Regenerating Rural Livelihoods, coordinated by IIED. The authors discuss Pakistan's experience in sustainable rural/agricultural development, and underlying historical, political, social and economic development along with evolving policy and institutional issues. They then focus on four apparent ‘islands of success’ in the northern mountainous areas, drawing core political and institutional elements which have contributed to success, and discussing alternative policy options available to Pakistan for a self-sustaining process of agricultural development and rural livelihoods.