The federal government has reached a landmark agreement with the International Monetary Fund (IMF) to eliminate the Minimum Support Price (MSP) system for wheat. As part of the agreement, the government will not announce an MSP for wheat for the 2025-26 crop year.
Following this decision, the Ministry of National Food Security and Research has instructed provincial authorities to develop wheat food security plans tailored to their population needs. These plans will guide wheat distribution and ensure adequate supply at the local level.
Additionally, the ministry is considering the closure of the state-run Pakistan Agricultural Storage & Services Corporation Ltd (PASSCO), citing ongoing irregularities in wheat distribution and financial management. PASSCO, which holds a significant storage capacity of 1.2 million metric tons, plays a vital role in managing the country’s wheat reserves and supplying the provinces based on their needs. The potential shutdown of PASSCO could have far-reaching consequences for the wheat market, especially with regard to supply chain stability and pricing.
Previously, the government had procured wheat from farmers after setting an MSP, then distributed it to flour mills. However, the IMF’s demand for ending the MSP system was a key condition of the bailout package, marking a significant shift in the country’s agricultural and food security policies.
The move is expected to have a notable impact on wheat prices and market dynamics in the coming months.
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