Why Are Pakistan’s Wheat Farmers Protesting Despite A Bumper Crop?

Pakistan’s government has decided to reduce the procurement of wheat this year despite record production, due to wheat imports in the prior year. Farmers fear massive losses due to the crash in the essential grain’s price on the open market.

Why Are Pakistan’s Wheat Farmers Protesting Despite A Bumper Crop?

Pakistan has harvested a bumper wheat crop this year, with production exceeding 32 million tons. The country’s wheat farmers are up in arms however, over the government’s decision not to buy their wheat, causing steep pecuniary losses.

The Pakistan Kissan Ittehad (Pakistan Farmers’ Collective) announced that it would begin nationwide protests starting May 10, starting from the southern Punjab city of Multan. The protests were called off after the farmers' collective engaged in talks with officials in the Punjab government.

Other farmers’ groups have also announced countrywide protests scheduled for May 21, with a sit-in planned outside the Punjab Assembly in Lahore.

The farmers claim that the ‘wheat crisis’ – essentially a crash in the price of wheat due to excessive imports in the prior year – has been deliberately manufactured by the outgoing caretaker government and bureaucrats. According to Dawn, Pakistan Kissan Rabita Committee general secretary Farooq Tariq demanded the arrest of former caretaker prime minister Anwarul Haq Kakar, and the bureaucrats, middlemen and importers involved in the authorization of wheat imports. 

Most of the wheat farmers are from the province of Punjab, and are demanding that the government cease wheat imports that have flooded the domestic market with cheap imported wheat, and commit to minimum support prices for wheat and other crops.

Agriculture makes up 23% of Pakistan’s GDP, and employs nearly 37% of Pakistan’s workforce.

How did the wheat crisis begin?

After the devastating floods of 2022, Pakistan faced a shortage of wheat in the first half of 2023. Prices escalated quickly, and the government was forced into giving out free wheat to lower income citizens. The caretaker government at the time authorized the private sector to import wheat to overcome shortages. Consequently, nearly 3.5 million tons of wheat was imported into Pakistan between September 2023 and March 2024, at the cost of nearly PKR 283 billion (approximately $1 billion).

When farmers began their harvest in April 2024, the federal and provincial governments’ food storage departments held nearly 4.3 million tons of wheat reserves. Usually, the government purchases as much as 20% of the wheat crop, or approximately 5 million tons, in a bid to ensure price stability and prevent hoarding in the supply chain for the essential grain. In 2024 however, the government has announced that it only plans on purchasing 2 million tons of wheat, at the minimum support price of PKR 3,900 per maund (1 maund is approximately 40 kilograms).

Farmers’ unions and organizations contend that in a year where the output is 32 million tons, with the government intending to purchase less than 10% of the total crop produced, farmers will have to sell their crop at reduced prices in the open market, almost certainly making a loss in the process.

The government’s purchase of wheat is an important policy tool in Pakistan’s agricultural sector, as it sets a benchmark price that private purchasers must also pay to farmers for their crop. This is referred to as the minimum support price (MSP), but farmers say that they are being forced to sell their crop at much reduced prices, as low as PKR 2,800 per maund (40 kg).

Meanwhile, farmers complain of sharply rising input costs due to persisting inflation in Pakistan’s economy. They complain that the cost of fertilizer, diesel and electricity have all skyrocketed, which has eroded their margins. Losses are expected to be particularly steep for small farmers, who have neither the resources nor the space to store their crop to wait out the price crash in the market. The fall in the price of wheat is also expected to have a non-negligible impact on food price inflation, which is expected to slow due to the lower prices of wheat.

Prime Minister Shehbaz Sharif has ordered an investigation into the decisions that led to the current imbroglio, and a cabinet committee has been constituted to investigate the caretaker government’s decision to authorize wheat imports.

Hamza Hashim serves as an Assistant Editor for The Friday Times, and is an educator. He is an alumnus of Swarthmore College.