Streamlining wheat market

The federal government's wheat policy for the ongoing year has established a procurement price of Rs3,500 per 40kg and permitted interprovincial movement of the staple crop in a bid to stabilise prices for growers and consumers nationwide. Meanwhile, federal and provincial governments are expected to jointly procure some 6.2 million tonnes of wheat to fend off any potential supply shortages or other market fluctuations, and an oversight committee will prepare weekly monitoring reports for review by the prime minister.

The most notable highlight is the unequivocal endorsement of free interprovincial trade. This decision directly addresses several recent disputes, including the permit regime imposed by Punjab that disrupted supply and drew criticism from other provinces, particularly Khyber-Pakhtunkhwa. By eliminating these barriers, the policy aims to create a unified national market, while also stabilising supply chains and curbing artificial shortages and price hikes caused by hoarding.

While the policy has been broadly welcomed, it is not without its critics. Sindh Agriculture Minister Muhammad Bux Mahar called on the federal government to set the support price at Rs4,200, or a full 20% higher. Mahar's argument is not without merit - farmers may choose to plant profitable non-food crops if they feel the support price is too low, thus increasing food insecurity. However, the argument ignores the economic frailty of the poor, many of whom will struggle to even afford the retail price of packaged wheat processed from crop bought on the Rs3,500 support price.

At the end of the day, the success of the wheat policy will ultimately be determined by its effective implementation. The policy has all the moving parts required for success, but the past has shown successive governments' proficiency at undermining their own stock and price management strategies. This is why we regularly see commodity crises that follow near-identical patterns, even after efforts are ostensibly made to plug loopholes. Only time will tell whether it will be any different this time around.