Tuesday, 8 July 2025

Breaking the Wheat Trap: Why Pakistan Must Shift from Price Controls to Productivity

Intro: The Wheat Paradox

Wheat is at the heart of every Pakistani kitchen—and at the center of our country’s economic policy headaches. We grow a lot of it, we eat even more of it, and yet, every few years we find ourselves caught in the same cycle: prices crash or spike, farmers protest, and the government scrambles to fix things.

So why can’t a country like Pakistan—rich in farmland and labor—grow enough wheat to feed its people and export the rest?

Let’s dig into what’s really going on.


What’s the Real Picture?

  • Pakistan eats about 30 million tonnes of wheat every year.

  • We produced a record 31.4 million tonnes in 2023–24.

  • But in 2024–25, that number’s expected to fall to 28.5 million tonnes. Why? Less land was used and the weather didn’t cooperate.

Even when we get a bumper crop, it barely covers our needs. And that’s before we talk about waste—10–15% of our wheat spoils after harvest due to poor storage.


So, Why Don’t We Export Wheat Like India or Russia?

Here’s the hard truth: it’s not just about growing wheat, it’s about doing it efficiently and competitively.

  1. Our yields are low – we grow 2.8–3.2 tons/ha vs. 5–7 tons/ha in places like China or Europe.

  2. Demand is sky-high – 240+ million people depend on wheat.

  3. Government controls the market – price guarantees (MSP), export bans, and unpredictable policies hurt long-term planning.

  4. Bad infrastructure – we lack proper silos, cold chains, and transport.

  5. Water is scarce – wheat is thirsty, and we’re running dry.

  6. Not price-competitive – other countries grow better wheat for cheaper.

  7. Food security trumps exports – the government panics if prices rise and bans exports overnight.


What Changed Recently?

In 2024–25, under IMF pressure, the government removed the Minimum Support Price (MSP). This meant no guaranteed buying price and no wheat procurement by PASSCO.

Short-term result? Prices crashed. Inflation came down. CPI looked good.

But farmers backed off. They planted less wheat. And now, with supply dropping, prices might rise again—bringing back the inflation we thought we killed.


So What’s the Solution? How Do We Break This Cycle?

Simple: stop fixing prices. Start fixing the system.

✅ 1. Help Farmers Grow More Wheat per Acre

  • Introduce high-yield seeds

  • Train farmers in smarter fertilizer and water use

  • Promote machines for planting and harvesting

✅ 2. Make Farming Cheaper

  • Subsidize inputs through Kisan Cards

  • Provide shared tractor and machinery services

  • Offer affordable credit (not through middlemen)

✅ 3. Build Better Markets

  • Create apps/platforms where farmers can sell directly

  • Improve rural roads, silos, and storage

  • Encourage public-private investments in grain warehouses

✅ 4. Replace MSP with Smart Safety Nets

  • Give cash support during harvest season

  • Offer crop insurance and price-loss schemes

  • Support small farmers without distorting market prices

✅ 5. Separate Wheat from Politics

  • Provide subsidies only to the poor, not across the board

  • Let the rest of the market work freely

✅ 6. Export in Good Years

  • Allow limited, clean, and transparent wheat exports

  • Build export partnerships with Central Asia, Afghanistan, and Gulf nations


Is Anything Being Done Already?

Yes—and it’s encouraging.

  • LIMS is helping farmers use satellite data to make better decisions.

  • Punjab’s Tractor & Wheat Support Program is modernizing small farms.

  • Warehouse financing schemes are finally rolling out.

  • Talks on market deregulation are happening with ADB and others.

  • International partnerships (with South Korea, China) are being built for better seeds and agri-tech.

It’s slow. But it’s moving.


The Takeaway: From Crisis to Confidence

Pakistan’s wheat story doesn’t have to repeat like a broken record. If we stop obsessing over price controls and instead build a system that helps farmers grow more, earn more, and sell better, we can meet our own needs and maybe even start exporting sustainably.

This shift won’t be easy—but it’s already underway. Now it needs political will, farmer trust, and smart execution.


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