Beyond PASSCO: Pakistan’s wheat policy at a crossroads

Pakistan’s decision to import up to one million metric tonne s of wheat has exposed a contradiction at the heart of its food-security policy. The country has harvested one of its larger crops, yet it is again preparing to spend scarce foreign exchange on imported grain. At the same time, PASSCO – the federal institution that traditionally procured wheat and maintained strategic reserves – is being wound down, while its proposed successor, the Wheat Stocks Management Company, has yet to establish a clear public operational record. The issue, therefore, is not simply whether Pakistan has grown enough wheat. It is whether the state can accurately count, procure, store, and release what its farmers produce. According to the Pakistan Economic Survey 2025–26, wheat production rose by 4. 3% to 29. 605 million tonnes, compared with a revised 28. 396 million tonnes a year earlier. This was close to the official target of 29. 7 million tonnes. By any reasonable measure, it was not a failed harvest. The longer trend tells a similar story. Pakistan produced about 25. 75 million tonnes in 2016–17, 25. 08 million in 2017–18, 24. 35 million in 2018–19, 25. 25 million in 2019–20, and 27. 46 million in 2020–21. Output then stood at roughly 26. 21 million tonnes in 2021–22, 28. 16 million in 2022–23, a record 31. 81 million in 2023–24, 28. 40 million in 2024–25 and 29. 61 million tonnes in 2025–26. The latest Economic Survey figures should be preferred where earlier provisional crop estimates have subsequently been revised. Production has therefore increased by about 15% over the decade. Pakistan’s farmers have not stopped producing. The problem is that the number of consumers has risen even faster. Pakistan’s population increased from 207. 68 million in the 2017 census to 241. 49 million in the 2023 census – growth of more than 16% in six years. The result is a narrowing per-capita wheat cushion. A crop that appears large in absolute terms becomes much less comfortable once seed requirements, feed use, industrial consumption, post-harvest losses and a rapidly growing population are taken into account. That still does not fully explain why imports are required immediately after harvest. The missing link is public procurement. National production is not the same as wheat available to government. Unless PASSCO (Pakistan Agricultural Storage and Services Corporation) or provincial food departments purchase the crop, most wheat remains with farmers, traders, millers and private stockholders. Pakistan can consequently produce close to 30 million tonnes and still find that public warehouses do not contain enough grain to stabilise the market. PASSCO’s own historical figures illustrate the limited size of the federal buffer. It procured about 780, 000 tonnes in 2016, 900, 000 tonnes in 2017 and 2018, 679, 000 tonnes in 2019, 1. 18 million tonnes in 2020, 814, 000 tonnes in 2021, 1. 27 million tonnes in 2022 and 1. 13 million tonnes in 2023. These were PASSCO purchases alone, not total procurement by all provincial agencies. Even so, they show that the federal institution generally controlled only a small share of the national crop. In 2023, for instance, PASSCO procured roughly 1. 13 million tonnes against national production of 28. 16 million tonnes – about 4%. The remainder did not disappear; it simply remained outside PASSCO’s direct control. That distinction has become more important as the government winds PASSCO down. The corporation was created to procure wheat, maintain strategic reserves, supply deficit regions and intervene when markets became unstable. It also accumulated substantial debt, carrying costs, storage losses and ageing inventories. Reform was necessary. But reforming an inefficient institution is not the same as ensuring that its essential functions continue without interruption. The government’s proposed answer is the Wheat Stocks Management Company (WSMC). WSMC has been discussed as a new public-sector vehicle for managing federal strategic stocks under a more market-oriented system, with greater private-sector participation in procurement and storage. In principle, this could reduce fiscal losses and improve efficiency. In practice, the transition remains insufficiently explained. The government should publish WSMC’s legal status, ownership, board, capital structure, procurement mandate, storage arrangements, audit framework and authority to release stocks. Until these details are clear, it would be premature to describe WSMC as a fully functioning replacement for PASSCO. The timing of the transition is particularly troubling. Earlier this year, the government approved the disposal of large quantities of PASSCO wheat to reduce carrying costs and clear stocks. By July, official discussions acknowledged that the combined requirements submitted by provinces exceeded the wheat available with PASSCO, and the government began exploring an import of about one million tonnes. There may be legitimate explanations. Some stocks may have been old, deteriorating, expensive to carry or located far from deficit markets. But the sequence demands explanation. How did Pakistan move from disposing of stocks to arranging imports within a matter of months? The provinces have reportedly indicated a combined requirement of approximately 2. 2 million tonnes. The proposed import of one million tonnes would cover only 45. 5% of that figure, leaving an apparent gap of 1. 2 million tonnes. The government must clarify whether the remaining requirement will be met from provincial stocks, domestic private purchases, residual PASSCO inventories or further imports. It is also important not to confuse a 2. 2 million-tonne requirement with a proven national production shortfall. Provincial demand may represent a shortage in government-controlled stocks, a geographic mismatch or an intervention requirement rather than an absolute physical deficit in the country. Only a national wheat balance sheet can settle that question. Nor is one million tonnes as large as it sounds. It equals one billion kilograms, or 25 million maunds, but represents only around 12 to 14 days of national consumption. It may provide temporary breathing space; it cannot substitute for a coherent wheat policy. The price signal is equally serious. Market reports indicated that wheat moved from about Rs125 to more than Rs150 per kilogram over a short period – a rise of at least 20%. Separately, national flour-price data showed a steep year-on-year increase, with some markets reaching Rs150 per kilogram. These are different measures and should not be confused. But both point in the same direction. Whether driven by limited public stocks, delayed releases, speculative holding or poor coordination, such an abrupt movement reflects a serious failure of market management. The foreign-exchange cost will depend on tender prices, wheat quality, freight, insurance, port handling and inland transportation. The food-security minister has indicated a possible imported cost of around Rs4, 200 to Rs4, 300 per 40-kilogram maund. For one million tonnes, that implies roughly Rs105 billion to Rs107. 5 billion. At an exchange rate near Rs280 to the dollar, the broad foreign-exchange requirement could approach $375 million to $385 million, although the final amount cannot be known before contracts are awarded. This may still be necessary to protect consumers. The government cannot allow flour prices to spiral. But emergency imports should not become a substitute for institutional competence, particularly when Pakistan’s own farmers have produced nearly 30 million tonnes. Responsibility cannot be blurred. Provinces manage local procurement, food departments, flour-mill releases and market enforcement. The federal government remains responsible for national coordination, strategic reserves, import policy and interprovincial balancing. Winding down PASSCO does not extinguish that federal responsibility. Pakistan now needs a publicly available, monthly National Wheat Balance Sheet. It should show opening stocks, verified production, procurement by each public agency, private commercial stocks, imports, expected consumption, seed and feed use, losses and projected closing stocks. It should distinguish between wheat that exists physically, wheat that is fit for consumption, wheat under government control and wheat that can be released immediately. Without that transparency, officials can describe the same market as being in surplus in January and in shortage by July. PASSCO may have outlived its existing structure. But food security cannot be secured merely by changing the name of a warehouse. WSMC will be credible only if it delivers better stock visibility, independent audits, lower carrying costs and faster intervention than its predecessor. The one-million-tonne import may be a necessary bridge. It is not a wheat policy. Pakistan’s real test is whether it can build a system that protects both the farmer who produces the crop and the consumer who must be able to afford it. The country has produced 29. 6 million tonnes. The question is no longer whether the wheat was grown. The question is where it is, who controls it, and who is accountable for ensuring that it reaches the market.

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