Punjab’s wheat procurement policy is facing serious challenges as delays in implementing a new private-sector-led system have exposed farmers to financial risks during the peak harvest season. At the same time, rising wheat prices have made it increasingly difficult for the government to achieve its procurement target.
The provincial government had earlier decided to move away from direct wheat purchases due to the heavy financial burden associated with procurement debt, which had reached nearly Rs680 billion by mid-2023. Interest payments alone placed additional strain on public finances, prompting a shift toward a private-sector-driven model.
This year, the government introduced a new system aimed at maintaining strategic reserves of three million tonnes, stabilising market prices, and ensuring farmers receive a support price of Rs3,500 per 40 kg. However, the delayed rollout of this system meant it was not fully operational during the critical harvest period.
By mid-April, when a large portion of the wheat crop had already been harvested, market prices dropped to around Rs3,000 per 40 kg. This forced many farmers to sell their produce at lower rates, leading to financial losses and widespread dissatisfaction among stakeholders.
The situation later shifted as wheat prices began to rise sharply in late April, crossing Rs3,500 per 40 kg in several markets. This increase was driven by multiple factors, including lower crop yields due to heatwaves, untimely rainfall affecting grain quality, and reduced carryover stocks compared to the previous year.
Additionally, stockists and flour mills increased purchasing activity, anticipating future price hikes. Farmers with storage capacity also limited supply in the market, further pushing prices upward.
With procurement centres becoming operational late and harvest activity nearing completion, the government is now struggling to meet its target of procuring three million tonnes of wheat. The rising market prices have reduced the incentive for farmers to sell to official channels.
The report also highlights concerns over possible administrative actions, such as forced stock seizures, which could create further tensions between farmers and authorities.
Experts suggest that the current situation underscores the need for better planning and data-driven decision-making. Improved forecasting models and timely policy implementation could help stabilise the market and protect both farmers and consumers from future shocks.
The ongoing developments reflect broader challenges in managing food security, agricultural sustainability, and economic stability in Pakistan
