The Notification

Deregulation by Notification, Re-regulation by Raid

A government office in Islamabad. A file moves across a desk. A notification is drafted. The state will withdraw from wheat procurement. The support price is abolished. The private sector will take over. No storage has been certified. No bank has agreed to lend. No warehouse receipt exists. No aggregator has secured financing. The notification is published. The harvest begins in 45 days.

This is how a market is born in Pakistan. Not through infrastructure. Not through institutional discipline. Through a gazette.

But this is not the first time the state has made this exact mistake. The seeds of the current crisis were sown in 2023, during the caretaker government of Anwaar-ul-Haq Kakar. Between September 2023 and March 2024, the caretaker administration imported approximately 3.5 million tonnes of wheat worth between Rs 250 and 330 billion, just as the domestic harvest was about to arrive in the market. The timing was devastating. Foreign wheat flooded the market just as Pakistani farmers were bringing in their own crop. Prices collapsed. Farmers suffered considerable losses. An inquiry committee was constituted and held four officers responsible for the scandal, but no senior political figure was held accountable. The response was described as evasive. No one was punished.

That was the first warning. The state learned nothing from it.

Analysts have called the current crisis what it is: a bureaucracy created crisis. At the federal level, the bureaucracy implemented IMF conditions to withdraw the state from the wheat market and abolish the support price mechanism. They did so without consulting provincial governments. They did so without consulting the farmers whose crops were already standing in the field. There was no phase out plan. There was no transition architecture. There was a signature, a stamp, and a notification. The farmer learned of his own abandonment through an announcement.

The IMF conditionality was not wrong in principle. Reducing fiscal exposure, retiring circular debt, moving toward a private market: these are legitimate goals. But reform without sequencing is not reform. It is demolition. Markets do not emerge by notification. They are built. They require certified storage, enforceable contracts, reliable financing, and regulatory oversight. The federal government withdrew the anchor before building the harbour, and then expressed surprise when the ship ran aground.

And who was steering the ship?

The Ministry of National Food Security and Research, the federal institution responsible for the staple food of 250 million people, has seen more than a dozen secretaries in six years. At the height of this crisis, the ministry was led by an acting secretary who held the position as an additional charge while his primary responsibility was serving as the Secretary of the Benazir Income Support Programme. The man overseeing the wheat policy of a nuclear armed nation was moonlighting from a poverty alleviation office.

This is not a detail. This is the diagnosis. You cannot build a market with leadership that changes every four months. You cannot negotiate with the IMF, coordinate with four provinces, and design a procurement transition when the chair is always warm from the last occupant.

The federal government set the policy. The provinces were left to implement it. And the implementation collapsed.

In Punjab, the provincial government set a target of procuring 3 million metric tons through private aggregators. This was the centrepiece of the new market led model. Private companies would buy the wheat. Banks would finance them. The state would step back.

By late May, the aggregators had procured 160,000 tonnes. That is roughly 5 percent of the target. Of the 35 pre-qualified aggregators, only 10 were operational. Less than a third. The model did not stumble. It collapsed.

Why? Because the financing was never settled. Banks refuse to lend because the Punjab Food Department insists on retaining authority over the release timing, quantity, and price of the wheat stocks. The banks are being asked to provide the capital while the provincial bureaucracy keeps the keys. No lender will finance a commodity he cannot control. The aggregators, starved of credit, are forced to operate on their own limited equity. They cannot buy at scale. And because their compensation is linked to volume rather than farmer outcomes, they have every incentive to wait for the farmer to become desperate before buying at a lower price.

The system was still being assembled in May. The harvest window had opened in April. The wheat does not wait for a financing negotiation to conclude.

While the federal government deregulated procurement, it centralised imports. He Trading Corporation of Pakistan, a federal entity deeply indebted and operating with bureaucratic overhead, was chosen to handle the new imports. The justification was to prevent private hoarding. But the TCP is the very model of public sector inefficiency. It charges high service fees. It operates with bureaucratic overhead. There is a general perception that government led procurement lacks transparency because bureaucrats manage purchases with taxpayer money rather than their own equity.

The federal government withdrew from buying wheat to save money. It then routed the imports through its most expensive, least transparent, most indebted institution. This is not fiscal discipline. This is fiscal theatre.

And the debt that triggered this entire withdrawal? The food sector circular debt had reached Rs 325.6 billion nationally by September 2025, according to official TCP documents. Nearly three-quarters of that amount was accumulated interest, not original obligation. The state was not paying for wheat. It was paying for the privilege of having borrowed to buy wheat years ago. Punjab alone had carried Rs 560 billion in food-sector debt by 2021. The carrying cost of this debt was bleeding the exchequer at hundreds of millions of rupees per day. The IMF conditionality was designed to stop this bleeding. But the federal government accepted the conditionality over two years ago and still did not build a phase out plan. Two years. Enough time to certify warehouses. Enough time to train aggregators. Enough time to design a liquidity bridge for the smallholder. None of it was done. There was a notification.

The bureaucracy thinks in fiscal years. The farmer lives by the biological clock. The file moves at the speed of a signature. The wheat moves at the speed of the sun. And when the two collide, it is always the wheat that rots.

Deregulation by notification. Re-regulation by raid. The state intervenes only after the damage is done, and then only in ways that punish the symptoms while protecting the architecture that created them.

The harvest began. The farmer stood by the roadside. And the notification was published.