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Two years ago, the Punjab government decided, in principle, to discontinue direct wheat procurement from farmers. This decision was driven by the mounting financial burden of outstanding debt — incurred for wheat procurement but compounded by delayed repayments — which had surged to Rs680 billion by June 2023. Consequently, annual interest payments alone reached approximately Rs110bn in 2023–24. This raised serious concerns about the sustainability of the government-led procurement system.
Aiming to improve the situation, the government last year placed significant emphasis on introducing the Electronic Warehouse Receipt (EWR) system. However, it failed to deliver the intended outcomes. As a result, a new private-sector-led procurement system has been introduced this year.
The initiative seeks to achieve three key objectives: maintaining strategic reserves of three million tonnes, stabilising the wheat market, and ensuring farmers receive Rs3,500 per 40 kg — close to import parity prices, though not fully aligned with rising production costs. However, this marks a clear contrast with last year, when farmers were compelled to sell at Rs2,000–2,200.
