The federal government has decided to withdraw from wheat procurement and discontinue the support price mechanism from the next crop season, in line with a condition agreed with the International Monetary Fund, The Express Tribune reported, citing official sources.
Officials said that under the new system, both the federal and provincial governments will limit their role to maintaining emergency and strategic wheat reserves. Collectively, the federation and provinces will hold 6.2 million metric tonnes of wheat annually.
According to the new allocation, the federal government will maintain 1.5 million tonnes, Punjab 2.5 million tonnes, Sindh 1 million tonnes, Khyber Pakhtunkhwa 0.75 million tonnes, and Balochistan 0.5 million tonnes. Private companies, rather than government agencies, will carry out procurement of these reserves.
Under the revised framework, the federal government will also no longer set a guaranteed minimum price for wheat, and domestic prices will instead be determined in line with international market benchmarks. The Ministry of National Food Security and Research will notify indicative prices based on global trends rather than announcing a fixed support price.
The wheat support price has traditionally been used to protect farmers from sharp price fluctuations by guaranteeing government purchases at a fixed rate during the procurement season. If market prices fell below the support price, the government would intervene to buy wheat; if prices were higher, farmers could sell freely in the open market.
Sources said private firms will be responsible for purchasing, financing, and storing wheat on behalf of the federation and provinces. The government will pay service charges for these functions but will not provide procurement financing. The Ministry of Industries and Production estimates annual savings of around Rs570 billion under the new arrangement, while Rs30 billion has been allocated for service charges.
Earlier, the federal cabinet had approved the wheat policy for 2025–26 on October 20, setting a procurement price of Rs3,500 per 40 kilograms. However, sources said the latest move effectively reverses the procurement role outlined in that policy, aligning wheat pricing and procurement with IMF-mandated reforms aimed at reducing fiscal pressure and limiting government intervention in commodity markets.