Issues and Problems in Wheat Policy of Pakistan

Author(s) : Dr. Raja Adnan Razzaq, Muhammad Haroon Hussain

Abstract:

Wheat is a crucial staple diet for Pakistan, constituting approximately 65% of food grain consumption, especially among the rural and urban poor. The strategic importance of wheat has led successive Pakistani governments to intervene extensively in the market, setting support prices and providing subsidies to stabilize both farmer incomes and consumer prices. However, these policies impose significant financial strain on the government, exacerbated by high procurement costs and inefficiencies in storage and distribution. The Punjab government, responsible for a substantial portion of wheat production and procurement, faces mounting financial burdens from subsidies and loans, resulting in large fiscal deficits. Domestic wheat prices exceed international levels, reducing global competitiveness. This study reviews existing literature and examines the financial implications of current wheat procurement policies. It highlights the need for policy adjustments, particularly recommending a shift from price subsidies to input subsidies for fertilizers and seeds.