Another IMF Condition: Government Decides to Exit Wheat Procurement Process

Islamabad:In order to meet another condition set by the International Monetary Fund (IMF), the government has decided to withdraw from the wheat procurement process.

According to sources, the federal and provincial governments will now only maintain emergency wheat stocks. A total of 6.2 million metric tons of wheat will be stored nationwide for the entire year. The procurement of strategic reserves will no longer be carried out by the federal government but will instead be handled by a private company.

Sources said the federal government will retain 1.5 million metric tons of wheat, Punjab 2.5 million metric tons, Sindh 1 million metric tons, Khyber Pakhtunkhwa 750,000 metric tons, and Balochistan 500,000 metric tons. Wheat for both the federation and provinces will be purchased by a private company.

According to the Ministry of Industries and Production, the private company will also be responsible for financing and storage of wheat, while the federal government will only pay service charges. The move is expected to result in annual savings of Rs570 billion for the government.

Sources added that the Ministry of National Food Security has allocated Rs30 billion for service charges. There will be no subsidy in the form of a wheat support price, and wheat prices will be determined in line with international market rates. The Ministry of National Food Security will set prices while keeping global benchmarks in view.

The IMF has also barred the federal government from fixing a support price for wheat. Previously, the federal government provided bank guarantees for wheat procurement, while PASSCO carried out purchases. Due to delays in payments to PASSCO, circular debt in the food sector has risen to Rs270 billion.

The decision marks a major shift in the government’s wheat policy, aimed at reducing fiscal pressure and aligning domestic policies with IMF requirements.