The International Monetary Fund (IMF) has expressed concern over Pakistan’s newly approved wheat policy, which initially appeared to include a minimum support price (MSP) mechanism — a move the Fund viewed as potentially market-distorting.

According to sources within the Ministry of National Food Security & Research, the IMF sought immediate clarification after the policy’s approval, asking whether the government had introduced a price guarantee for wheat procurement.

However, the ministry quickly clarified that the new wheat framework only sets an indicative price rather than a fixed support price, effectively resolving the issue with the global lender.

Policy Misunderstanding Clarified

Officials explained that the term “indicative price” in the policy is meant to guide provincial governments, farmers, and private buyers — not to impose a binding procurement price. “The objective is to stabilize expectations and provide a benchmark reference for market participants,” said an official familiar with the matter.

The ministry also assured the IMF that the government remains committed to market-based agricultural pricing in line with ongoing structural reform commitments under the Fund’s program.

Following the clarification, the IMF was reportedly satisfied, though it requested the ministry to submit a more detailed implementation framework to ensure that the indicative pricing does not evolve into a subsidy-like mechanism.

Background of the Policy

The new wheat policy was approved earlier this month to address issues of hoarding, price volatility, and supply chain inefficiencies. It also aims to encourage private sector participation in wheat trading, improve grain storage capacity, and reduce post-harvest losses.

While the policy provides flexibility to provincial governments in managing procurement, the IMF’s concern was that a fixed MSP could distort market signals and increase fiscal risks through subsidy-based interventions.

IMF-Pakistan Coordination Remains Strong

A senior finance ministry official noted that coordination between Pakistan and the IMF remains “smooth and constructive,” emphasizing that the Fund’s feedback is part of ongoing technical consultations.

“The IMF continues to engage closely on agricultural reforms to ensure price transparency and fiscal sustainability,” the official said.

With the clarification now issued, no disruptions are expected in the upcoming IMF review cycle. The government has reaffirmed its commitment to maintaining agricultural sector efficiency while ensuring that farmers receive fair market returns through transparent and competitive mechanisms.