Mubashar Nadeem

The Punjab government is playing a dangerous game with Pakistan’s food security. In a deeply concerning series of policy missteps, it has not only withdrawn essential support from wheat growers but also dismissed their legitimate concerns as nothing more than melodrama. Just last week, a key provincial lawmaker went on television to argue that the government cannot cater to “a few thousand farmers” at the expense of “millions of consumers.”

On the surface, that logic may seem sound. Economic theory does frown upon price supports, citing their tendency to distort free markets. But in Pakistan’s context—where markets are anything but free or functional—this is a shallow and dangerously lazy argument. It conveniently ignores the complex and deeply dysfunctional structure of Pakistan’s wheat economy, a system made unstable not by farmers but by decades of erratic state involvement.

Wheat Isn’t Just Another Crop

It’s easy to point to maize or rice as examples of deregulated crops that survive without government support. These are grown by the same farmers, sold in the same markets, and suffer similar seasonal price pressures. But the comparison ends there. Wheat is not just another crop—it is Pakistan’s staple food, critical for national food security, and embedded in a uniquely distorted policy environment.

Maize and rice markets, while imperfect, have evolved into semi-functioning systems where private buyers—middlemen, traders, exporters—step in to absorb most of the harvest. In contrast, wheat has historically relied on heavy government involvement. The state has been the primary buyer, often procuring 25–30% of the annual crop and thus setting a price floor that stabilizes the entire market. This government anchor is now gone, and the market wasn’t prepared for the sudden vacuum.

From Policy Shift to Price Collapse

In what can only be described as a chaotic exit, the Punjab government has pulled out of wheat procurement without establishing any transitional mechanisms. No alternative price support structure, no incentive program, no warehousing guarantees. Instead of a carefully managed reform process, the market was flooded with an additional 30% of wheat that the private sector simply cannot absorb.

The result? A brutal crash in prices. Wheat rates have fallen below not only last year’s levels but even below the government’s own cost-of-production estimates from two years ago—despite 20% inflation in that time. Worse still, the drop comes in a year when wheat output is expected to fall by 10–12%, largely due to water shortages and reduced planting area.

Rather than supporting the market, the government has done the opposite. As the harvest began, public sector agencies began dumping old wheat stocks at cut-rate prices, ostensibly to reduce storage costs. In reality, this move was meant to drive down market rates, in what appears to be a cynical attempt to suppress prices and reduce procurement pressure.

This isn’t price discovery—it’s price sabotage.

Disincentivizing Farmers, Endangering Food Security

If the goal of policy is to drive farmers away from wheat, it’s working. The area under wheat cultivation has already dropped by 11%. At current price levels, wheat is no longer a viable crop, especially compared to less input-intensive alternatives like maize or fodder. Many farmers, already burdened by rising costs of fertilizer, diesel, and labor, are seriously considering exiting wheat production altogether.

The long-term consequences of this shift are severe. A shrinking wheat area means future production shortfalls, which will force the country to increase imports at higher global prices. Not only will this widen the trade deficit, but it also puts Pakistan’s food security at the mercy of international markets and volatile supply chains.

For now, carryover stocks and panic selling by farmers are concealing the real cracks in the system. But by the time autumn arrives and mills begin scrambling for wheat, the crisis will become undeniable. With supply lines thinner than expected, prices will spike. Worse still, cheap wheat may leak across borders via smuggling, further straining domestic availability.

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This Is Not Market Failure—It’s Policy Failure

Let’s be clear: what’s happening in Punjab is not a natural market correction—it is a manufactured collapse. And it’s being overseen by a government whose political mandate is tenuous at best and whose policy team seems stubbornly resistant to course correction.

The current wheat policy is not liberalization; it’s abdication. Markets don’t magically become efficient when the state steps back. They need institutional support, transitional safeguards, and policy foresight. In developed economies, deregulation comes with strategic reserves, crop insurance, private storage incentives, and regulated price bands. Pakistan has implemented none of these.

By withdrawing procurement without laying any groundwork for a private-sector alternative, the state has effectively stranded farmers in a marketplace that lacks both liquidity and buyers. This is reckless and unsustainable.

Time to Rethink Wheat Policy—Before It’s Too Late

If this crisis spirals out of control, it won’t be an accident—it will be the direct outcome of deliberate, avoidable decisions. The state must urgently rethink its approach to wheat.

A realistic, phased transition plan is essential. This includes:

• Strategic government procurement: not to dominate the market, but to stabilize it.
• Minimum support prices (MSPs): enforced through regulated buying centers.
• Incentives for private warehousing and storage solutions.
• Better forecasting and data transparency to prevent panic-driven decisions.
• Targeted subsidies or cash transfers for the most vulnerable consumers, instead of across-the-board price suppression that punishes growers.

Punjab’s wheat policy is teetering on the edge of a full-blown disaster—one that could deepen rural poverty, spike food inflation, and further destabilize an already fragile economy. If corrective action isn’t taken immediately, the consequences will be long-lasting and far-reaching.

The government must stop blaming farmers and start listening to them. Food security isn’t just about feeding the cities—it begins in the fields. And those fields are sending a clear message: they’ve had enough of policy neglect disguised as reform.