ISLAMABAD, PAKISTAN: What began as a bold economic reform has turned into a deep crisis for Pakistan’s wheat sector. The government’s decision to deregulate the wheat market — a move pushed under the IMF’s reform agenda — was expected to bring efficiency and private sector innovation. Instead, it has left farmers struggling, markets unstable, and the country’s food security at risk.
The policy shift dismantled decades of state intervention — ending minimum support prices (MSP), halting government procurement, and lifting restrictions on private trade. The plan, officials said, would modernize the wheat economy by attracting private investment, expanding warehousing, and improving supply chain efficiency.
However, the reality has been far from the promise. Wheat prices have plummeted since the start of harvest season, leaving farmers in Punjab and Sindh unable to recover production costs. Many are selling their crops below market value, as private buyers exploit the lack of oversight and absence of a state-backed support price.
Experts argue the crisis was inevitable. The government withdrew too quickly, without ensuring a functioning storage system, transparent procurement process, or financing facilities to support farmers during the transition. Initiatives like the Electronic Warehouse Receipt (EWR) system — meant to help farmers store grain and access credit — remain underdeveloped and out of reach for small producers.
Adding to the chaos, the reduction in state-held strategic reserves poses a serious risk to national food security. Without public stocks to stabilize supply and prices, any future climate shock or crop shortfall could lead to sharp price spikes and potential shortages in urban markets.
Analysts warn that deregulation without safeguards is pushing Pakistan toward a vicious cycle — where farmers abandon wheat cultivation due to losses, leading to higher dependence on imports and vulnerability to global price fluctuations.
The wheat deregulation experiment was intended to reform a bloated, inefficient system. Instead, it has amplified existing inequalities, disrupted rural livelihoods, and shaken confidence in agricultural policymaking. Policymakers now face a tough choice: either recalibrate the reform with proper protections or risk further collapse of the country’s most critical crop sector.
This story has been reported by PakTribune. All rights reserved.