Wheat procurement plan fuels fresh dispute

A new wheat procurement mechanism introduced by the Punjab government has triggered strong opposition from flour mill owners and drawn criticism from farmers, who allege that the policy unfairly favours a group of private companies at the expense of both growers and consumers.

The Punjab government has authorised 11 large private companies, designated as "aggregators", to procure wheat directly from farmers under a government-backed arrangement.

The scheme reportedly grants the companies access to government storage facilities free of charge, subsidised finance and official guarantees on their profit margins.

Critics have likened the model to the Independent Power Producers (IPPs) framework, arguing that it extends similar financial guarantees to the wheat sector while transferring the financial burden to the public.

The controversy follows the Punjab government's decision in 2024 to withdraw from direct wheat procurement. Acting on recommendations from the federal Ministry of National Food Security and Research, and with the approval of the provincial cabinet, the government announced its withdrawal from the wheat trade in an effort to curb alleged large-scale irregularities and corruption within the Punjab Food Department.

However, officials familiar with the matter claim that the department has continued to play a significant role in wheat procurement despite the policy shift.

They further argue that the government's withdrawal initially stabilised flour prices and eased concerns over shortages. However, after the Food Department resumed procurement operations in September 2025, citing flood-related concerns, flour prices rose sharply despite there being no reported shortage of wheat in the country.

The latest procurement policy has further intensified concerns. Under the scheme, aggregators are required to purchase wheat at a fixed rate of Rs3,500 per maund. However, with open market prices reportedly reaching around Rs4,000 per maund, critics claim the companies have struggled to procure wheat at the official price.