Flour millers demand wheat policy should follow market principles

Flour millers have urged the government to adopt a market-oriented wheat policy, promote healthy competition among flour mills

LAHORE:   Flour millers have urged the government to adopt a market-oriented wheat policy, promote healthy competition among flour mills and replace blanket flour subsidies with targeted financial assistance for low-income households.

They expressed these views Tuesday, in a meeting with delegation of Agriculture Journalists Association (AJA).
Leader of the Progressive Group of the Pakistan Flour Mills Association (PFMA), Khaleeq Arshad said that frequent changes in government policies, ranging from the rationing system to the quota system and different wheat procurement and release arrangements, had created uncertainty in the market and adversely affected both farmers and flour millers.

Referring to past market trends, he said the price of a flour bag had fallen from Rs2,800 to Rs1,300 when wheat became readily available. This reduction was not the result of government intervention but of improved supply and healthy competition among flour mills.
He maintained that when wheat prices began rising, the government imposed a cap and initiated speculation-related proceedings against flour mills and traders, accusing them of manipulating market prices. Had the market been allowed to operate, higher prices could have provided farmers with an incentive to cultivate more wheat in the following season.
He appreciated the government’s decision to fix the wheat support price at Rs4,500 per maund, describing it as a positive incentive for farmers. However, he stressed that wheat should be released to flour mills at prices reflecting its procurement cost, storage, transportation and other associated expenses.

“Buying wheat at Rs4,500 per maund and subsequently releasing it at a substantially lower price creates distortions in the market and leads to operational problems,” he observed.
Arshad advocated replacing blanket flour subsidies with targeted support for people living below the poverty line and households with limited purchasing power. The government, he said, could utilise existing databases and social protection programmes, including the Kissan Card, Benazir Income Support Programme and various initiatives introduced by Punjab Chief Minister Maryam Nawaz Sharif, to identify deserving families and provide them direct financial assistance.

He argued that subsidising flour for everyone meant that both low-income labourers and affluent consumers benefited equally. Public resources, he said, should instead be directed towards those who genuinely needed assistance.
The government, he suggested, should obtain flour from mills strictly in proportion to the quantity of subsidised wheat supplied to them. Flour mills were prepared to meet the required delivery obligations, but should not be forced to bear an additional financial burden.