Rethinking our wheat policy

Pakistan is preparing to import one million tonnes of wheat, a move that appears contradictory given recent official assurances of ample domestic supply. The federal government's decision comes despite Punjab, the country's primary wheat-surplus province, also requesting one million tonnes. This situation has ignited serious concerns regarding the credibility of official wheat production figures, the sufficiency of strategic reserves, and the overall effectiveness of Pakistan's wheat supply chain management.

The timing of the import decision, just three months after the harvest, is particularly perplexing. This follows repeated government claims that a domestic production of 29.8 million tonnes, coupled with over 2 million tonnes of carryover stocks, would meet the nation's annual needs. Adding to the puzzle, the poultry sector is not consuming wheat this year due to cheaper maize, and the border with Afghanistan remains closed to formal trade and smuggling. Despite these factors, wheat prices have surged significantly since the harvest, indicating a substantial supply-demand imbalance.

These developments have revived farmers' anxieties about a potential price collapse, reminiscent of fiscal year 2024 when imports led to such a scenario. The core issue appears to be a wheat policy that has struggled to reconcile the interests of farmers and consumers. Pakistan's federal and provincial governments abandoned the long-standing public procurement system without establishing a reliable market-based alternative capable of ensuring fair farmer returns, market stability, and adequate strategic reserves.

Punjab, responsible for 77 percent of Pakistan's wheat output, has implemented three different policies over the last three crop seasons. These included abruptly halting farmer procurement in 2024, introducing the Electronic Warehouse Receipt system in 2025, and shifting to a private sector-led model engaging 11 companies in 2026. None of these initiatives have yielded the desired outcomes. Furthermore, despite claims of market deregulation, the Punjab government has increasingly resorted to administrative interventions, such as district-specific prices, price caps, stock raids, and movement restrictions, primarily to keep flour affordable for urban consumers. While these measures may have temporarily controlled prices, they have done so at the expense of farmers by distorting market incentives.