The farmer has finally been given a number. He still needs to know whether anyone will pay it. Prime Minister Shehbaz Sharif’s announcement on 23 October of an indicative wheat price of Rs4,500 per 40 kilograms for the 2027 harvest deserves a welcome. The Rs1,000 increase acknowledges the rising costs farmers face as they prepare their fields. But those who sold below last season’s Rs3,500 benchmark will judge this announcement against what happened when their grain was ready. Another number cannot erase that memory.
I farm in South Punjab. At the last harvest, I could afford to hold my wheat when the offers were poor. Many farmers could not. Their debts had matured, labour needed payment, and household expenses continued. The price might improve in June. The creditor wanted his money in April. That difference explains much of our wheat economy. A farmer compelled to sell and a trader able to wait do not enter the market on equal terms. Announcing a price changes neither man’s circumstances unless financing and buying arrangements change with it. Pakistan has spent successive seasons arguing about whether government should purchase wheat. The old system carried heavy costs, accumulated debt and distributed access unequally. Its reform was necessary. But its withdrawal left functions that somebody still had to perform. Seasonal buying needed finance. Grain needed storage. Deficit provinces needed supplies. The farmer needed a purchaser when repayment fell due.
The private sector could perform much of this work. It could not acquire the necessary capacity merely because government assigned it the task. Buying wheat at harvest requires money available at harvest. Banks need enforceable claims over the stocks they finance. These arrangements must be settled before grain reaches the market. Otherwise, the grower pays for the delay through the price he accepts. The Rs4,500 announcement should therefore be followed by a published purchasing plan. Government must explain what the figure represents and what, if anything, it commits public agencies to do. If public buying is intended, the quantities, eligibility and payment arrangements should be announced before farmers commit further expenditure.
A fixed timetable would make these promises testable. Financing should be agreed during winter, with storage and buying arrangements ready before harvesting begins in the earliest districts. Once purchasing opens, district reports should disclose quantities bought, prices paid and overdue payments. Farmers should know where to take their grain and whom to approach if payment fails. Elected representatives should question missed deadlines while there is still time to act. Investigating procurement failure after the harvest is an expensive form of oversight.
My preference is for a limited public backstop during the transition. Private buyers should handle normal trade. A designated public agency should intervene when independently reported prices fall below a published threshold during peak harvest arrivals. Its budget and purchasing ceiling must be approved beforehand. If that threshold is Rs4,500, government should say so and finance it. A capped backstop cannot guarantee every sale at Rs4,500. Government must disclose both the protection it offers and its limits. An indicative price must never be presented as a guarantee that nobody is obliged to honour. Public purchases should count towards a declared strategic reserve, with audited stocks and published release rules. Access must accommodate growers selling small quantities, without paperwork or travel costs that defeat the benefit. Otherwise, the strongest sellers will again reach the public buyer while the weakest accept whatever the village trader offers.
The farmer also needs room to wait. Extending formal wheat loans through the marketing period would help those already borrowing from banks. Most small growers, however, depend on the arhti who finances their inputs and expects repayment through the crop. A banking concession that never reaches them cannot cure their distress. Storage linked to bank credit offers one practical option. A farmer should be able to deposit grain, borrow against a verified receipt and meet seasonal obligations while retaining ownership. That requires dependable inspection, clear responsibility for damaged or missing stocks, and an enforceable bank claim if the loan goes unpaid. Begin where facilities can be supervised and charges make the service worthwhile for growers, then expand. A receipt that the bank will not accept is another promise the farmer cannot spend.
Buyers receiving public financing should also be required to pay growers promptly. Public support should be judged by the prices growers receive as well as the quantities buyers procure. Financing purchases that occur only after farmers have sold cheaply defeats the purpose of supporting procurement. Even a credible selling price leaves the immediate cultivation bill unpaid. Fertiliser and diesel must be purchased months before wheat earns anything. Government should identify which input taxes and charges it can afford to reduce, with assistance reaching cultivators, including tenants, when purchases are made. Reliable seed supplies and canal schedules also matter. A grower may sow wheat but reduce phosphate, use poorer seed or miss an irrigation. The target survives on paper; the yield does not.
Imports require equal discipline. Pakistan may genuinely need foreign wheat when domestic production and usable stocks fall short of consumption. Better procurement cannot manufacture the missing grain. It can, however, secure available domestic supplies and prevent an avoidable scramble for reserves. Imports should follow a published national wheat balance, with their timing explained to growers and traders. Grain needed to cover a real deficit should arrive predictably, rather than policy lurching between prohibitions and emergency tenders. That balance must serve the whole federation. Punjab’s surplus supplies people beyond its boundaries. Strategic reserves need a clear federal custodian, whether a reformed PASSCO or a successor capable of performing the function. Provincial restrictions cannot become the routine answer whenever flour prices rise. They unsettle commerce precisely when dependable movement matters most.
The poor consumer deserves protection throughout this transition. Higher farm prices alone cannot answer his predicament. Nor should cheap flour depend on an indebted grower accepting a loss. Many rural families experience both sides: they sell wheat to clear debts and buy food later at higher prices. Targeted assistance through BISP should respond to food-price shocks, with temporary increases linked to a published food-cost measure. Broad flour subsidies may provide emergency relief, but targeted support gives scarce public money a clearer purpose. Consumer assistance and the procurement backstop should have separate, visible budgets so neither obligation disappears into the other.
Small farmers must have a voice in settling these arrangements. Payment delays and the cost of reaching a purchasing centre can undo a scheme that looks sound in Islamabad or Lahore. Their experience should shape the plan before the harvest exposes its weaknesses. For months I have argued that government should learn from the last harvest before asking farmers to finance another. The new announcement creates an opportunity to do so. Farmers will now make spending decisions with Rs4,500 in mind. By the time harvesting begins, they should encounter arrangements already operating, rather than another negotiation about who will buy. The state has named the price. It must now make the price mean something.