Federal Government Proposes Complete Dissolution of PASCO Amid Concerns Over Corruption and IMF Agreement

The federal government of Pakistan has presented a plan to completely dissolve Pakistan Agricultural Storage and Services Corporation (PASCO), an essential agency responsible for wheat procurement, storage, and supply chain management. The proposal has been sent to provincial governments for their feedback, following instructions from the Cabinet and the Prime Minister’s austerity committee.

**Why is the Federal Government Looking to End PASCO?**

The dissolution of PASCO is being largely driven by concerns over corruption within the agency. According to the Finance Minister, PASCO is one of the most corrupt institutions in the country, and the sooner it is shut down, the better it will be for Pakistan. The Minister further mentioned that the Prime Minister is in agreement with this move.

The reasons behind PASCO’s closure also align with the conditions set by the International Monetary Fund (IMF) for Pakistan’s ongoing loan program. Among the key IMF demands was the removal of the government from the wheat procurement process and its control over wheat support prices.

**Impact on Farmers and Concerns Over Wheat Procurement**

Farmers, particularly in Punjab, have expressed strong opposition to the proposed closure of PASCO. Khalid Hussain Baath, President of the Pakistan Kisan Ittehad, has criticized the move, highlighting that PASCO played a crucial role in ensuring wheat procurement, especially when provincial departments failed to do so. Baath fears that without PASCO’s involvement, farmers may abandon wheat cultivation altogether, worsening the country’s agricultural crisis.

**What Will Replace PASCO?**

In light of the dissolution proposal, the government is seeking alternative models for wheat procurement and storage. A third-party assessment of PASCO’s operations will be carried out in collaboration with the Trading Corporation of Pakistan to determine the best course of action. This will include evaluating privatization, emergency reserves, or potentially closing down PASCO entirely.

**Economic Experts Back the Decision for Dissolution**

Dr. Farrukh Saleem, an esteemed economist and former member of the Prime Minister’s austerity committee, has supported the government’s decision. He argued that PASCO’s policies had caused billions of rupees in losses and that the government should distance itself from wheat procurement to reduce corruption and inefficiencies. Saleem suggested adopting a model like the successful Canteen Stores Department (CSD), which operates a well-run open tender policy, directly benefiting farmers by eliminating middlemen.

**Global Examples of Shifting Away from State-Controlled Food Procurement**

Many developing countries, including Bangladesh, India, Ethiopia, and even China, have moved away from state-controlled food procurement models in favor of market-based systems. The success of these countries in improving food security and supporting farmers has been attributed to a more efficient and transparent system.

In conclusion, while the dissolution of PASCO may create short-term uncertainty, the government’s focus is on creating a more efficient and corruption-free system that benefits farmers, consumers, and the country’s overall food security.