The federal government has decided to withdraw from the wheat procurement process, under pressure from the International Monetary Fund (IMF).
Sources divulged on Wednesday, the centre and provinces will retain only emergency wheat stocks. Together, the centre and provinces will hold 6.2 million metric tonnes of wheat for the year. The purchase of strategic reserves will also shift from the federal government to private companies.
Sources said the centre will keep 1.5 million metric tonnes, Punjab 2.5 million, and Sindh 1 million metric tonnes of wheat. Khyber Pakhtunkhwa will store 750,000 tonnes, while Balochistan will retain 500,000 tonnes. Wheat for both the centre and provinces will be purchased by a private company.
Sources in the Ministry of Industries and Production said the company will be responsible for financing and storage, while the federal government will pay only service charges. Annual savings of Rs570 billion are estimated for the government. The Ministry of National Food Security has allocated Rs30 billion for service charges.
There will be no subsidy on the wheat support price. Prices will be determined in line with the international market. The Ministry of National Food Security will set prices while keeping the global benchmark in view.
The IMF has also barred the federal government from fixing a support price. Previously, the federation provided bank guarantees for wheat procurement, and PASSCO carried out the purchases. Delays in payments to PASSCO have led to circular debt in the food sector reaching Rs270 billion.
