【世界银行 (WBG) 】2025巴基斯坦小麦产业现代化路线图 (英文版) (22页) .pdf

A Technical Paper for DiscussionDecember 2025 Executive Summary The wheat sector in Pakistan is undergoing significant changes due to the end of public procurement and ashift toward deregulation. This Wheat SectorModernization Roadmap has been developed in response tothe recognition that traditional policies such as minimum support prices have resulted in inefficiencies, highfiscal costs, and limited incentives for diversification and private sector growth. The goal is to create a moreproductive, resilient, and market-driven wheat sector that better supports rural livelihoods, nutrition, andthe broader economy. To modernize the wheat sector, the roadmap recommends focused interventions infivepriority areas:i)closing the productivity gap between Pakistan and other comparable wheat producers, ii) increasedinvestment in agricultural research and development, iii) empowering the smallholder farmers so that theycan reach their full potential and iv) improvinginstitutional coordination and transparency to ensure marketstabilityv)managing strategic grain reserves efficiently by moving away from large, costly storagefacilities.These targeted actions aim to stimulate private sector investment and redirect resources towardcore public goods for greater returns, increased farmer incomes, and job creation. The brief is structured to first provide background on the sector's evolution and the rationale for reform. Itthen details the recommended priority areas for intervention, followed by a discussion of policyimplications and opportunities for modernization. Readers can expect a concise analysis of past challenges,current opportunities, and practical guidance for advancing the wheat sector in Pakistan under a new,market-oriented framework. Background Pakistan wheat sector is at a crossroads.Wheat remains the cornerstone for rural livelihoods,nutrition and the economy in Pakistan.Wheat accounts for 8.2 percent of value added in agriculture andcontributes 1.9 percent to GDP, the highest of any crop cultivated in the country1.Wheat is cultivated bynearly 80 percent of farmers, at least 9 million hectares, which is approximately80percent of theRabiseason’stotal cultivated land.For over six decades, the government set a minimum support price (MSP)and procured up to 25 percent of the national wheat harvest through a government-owned entity responsiblefor procuring wheat, storing it, and selling it to flour mills at subsidized rates The Government of Pakistan has historically played a central role in the wheat sector andhasconsistently acted as a market player.From independence to late 1950s, Government used to procureallthe wheat produce and distributed it through rationing system or private distribution depots.It was onlyafter 1959 whenthe government decided to end the monopoly in wheat sector andprivate sector wasallowed to procure wheatin a highlyregulated environment.For decades, the government set a minimumsupport price (MSP) and procured up to 25 percent of the national wheat harvest2throughFood Departmentsin the provinces andPakistan Agricultural Storage and Services Corporation (PASSCO)for Islamabadandautonomous regions. The Food Departments and PASSCO wereresponsible for procuring wheat, keepingit in strategic reserves, and selling it to flour mills at subsidized rates. Wheat market reforms have evolved only slowly over the decades, and remained largely unsuccessfuldue to shifting political priorities, food security concerns, and structural inefficiencies.Until mid-1980s, wheat remained a heavily regulated sector. Reform efforts began in the late 1980s under World Bankand IMF-led structural adjustment programs, aiming toabolish wheat ration shops,reduce subsidies,improve market efficiency, and promote private sector involvement. However, these reforms were onlypartially implemented due to institutional resistance and food security concerns.With the 18thConstitutional Amendment in 2010, agriculture became a provincial subject, but devolution led tofragmented policymaking and weak coordination between federal andprovincial governments. The wheatshortage crisis in 2020 as a consequence of export restrictions around the world, along with hoarding andprice spikes, prompted renewed focus on reform. Digital tracking systems were introduced, private sectorwheat imports were allowed, and there were discussions around reducing public procurement. However,reforms remain limited by political resistance, institutional weakness, policy inconsistency, and concernsover price volatility. Despite dedicated public support, the objectives of the wheat procurement policy have been partiallyachievedbut with unintended consequences.The policy objectives of the wheat procurement policy,initiated in the late 1950s included: (i) incentivizing productivity and output increase to achieve self-sufficiency in wheat and rice, the main staple food at that time; (ii) enhancing smallholder farmers’ income;(iii) ensuring availability of wheat