Daily Times

Pakistan’s agricultural sector, long considered the backbone of the economy, has found itself caught in a cycle of strategic missteps and flawed policies, particularly in managing the export and import of staple crops like wheat and rice. Over the years, the country has witnessed a troubling pattern: exporting surplus crops during favourable seasons and then reimporting the same commodities at higher international prices due to local shortages. This cycle not only undermines national food security but also leads to colossal financial losses and demoralizes the domestic farming community.

In 2020, wheat was exported in the name of surplus inventory and favourable forex prospects. By 2021, Pakistan was importing wheat at significantly higher prices, spending millions in foreign exchange. This trend has continued through successive governments, irrespective of political affiliations, exposing a systemic failure rather than isolated errors. The wheat import scandal of 2024, under the caretaker regime, has become one of the most cited examples of this failure, costing the country over Rs. 300 billion and fueling public outrage. While the rationale was to stabilize prices, the reality was grim: local wheat was sidelined, procurement processes bypassed, and private importers enriched at the expense of the national exchequer. This policy not only affected fiscal discipline but also de-incentivized farmers, who found themselves at the mercy of falling prices just as their crops were ready for harvest. Similarly, Pakistan’s rice sector, once flourishing with global demand, found itself under pressure due to policy unpredictability and stiff competition. In October 2024, India lifted its rice export ban, resulting in a significant dip in global prices and a severe blow to Pakistani rice exporters. Having earlier relied on India’s absence in the market, Pakistani traders suddenly faced a price war they were unprepared for. This reveals how vulnerable the country’s export strategy is to global policy shifts. Pakistan, despite being one of the top rice producers, lacks a cohesive, long-term export sustainability plan, which leaves it exposed whenever international competitors adjust their strategies.

These miscalculations are not merely bureaucratic blunders-they are exacerbated by the deeply entrenched role of middlemen and mafias within the agricultural value chain. These actors stockpile crops, manipulate prices, and create artificial shortages, especially when imports are anticipated. Government officials, often under pressure from lobbying groups or personal interests, have historically facilitated such actors either through silence or by designing policies that benefit a select few. The procurement system itself is riddled with inefficiencies, with federal and provincial food departments often working in silos, lacking transparency or real-time data to justify import needs.

Exporting what we need and importing what we have is a policy paradox we must fix.

To understand the current breakdown, it is important to recall that Pakistan was once largely self-sufficient in wheat. In the post-Green Revolution period, strategic planning, government procurement, and targeted subsidies allowed Pakistan to stabilize its food reserves and control inflation. However, starting in the 1990s, structural adjustment programs and donor-driven liberalization encouraged deregulation, reduced government storage, and weakened coordinated procurement. As food departments were politically fragmented, a new era of speculative trade, private profiteering, and export-import contradictions began taking root. Another critical factor is climate volatility. Changing rainfall patterns, erratic monsoons, and rising temperatures are reducing the predictability of wheat and rice yields. Floods like those in 2022 destroyed ready crops, while dry spells have hurt winter sowing patterns. Yet national trade decisions continue to ignore these environmental factors. Export permissions are often based on yield estimates without climate correction. This lack of climate-integrated forecasting results in over-commitment to foreign buyers followed by emergency imports when domestic shortages arise.

Beyond the rural economy, trade mismanagement in staple crops has direct inflationary consequences for urban households. Increases in wheat import prices, hoarding-induced shortages, and price speculation have contributed to double-digit food inflation in major cities. Urban middle and lower-income families are increasingly unable to afford staples as wheat flour, rice, lentils, and vegetables spike in cost every time a poor policy triggers panic buying or logistical bottlenecks. In 2024 alone, wheat flour prices surged over 30 per cent within weeks of public announcements on imports-demonstrating how speculation driven by state confusion hurts everyday citizens. Poor management has also damaged Pakistan’s credibility in the international market. Frequent bans, abrupt reversals, and politically driven trade restrictions make Pakistani exporters appear unreliable to global buyers. This unpredictability results in fewer long-term contracts, higher insurance costs, and loss of market share to more stable suppliers like India, Thailand, or Brazil. Buyers in Gulf countries and East Africa have reduced their exposure to Pakistani rice due to past instances where contracts were cancelled, delayed, or disrupted by sudden domestic policy shifts.

Multilateral lenders have also played an indirect role in shaping this landscape. IMF-led reforms encouraged deregulated food markets without ensuring the necessary governance architecture to support free trade. While subsidies were cut and procurement streamlined, no investment was made in institutional transparency or buffer stock resilience. Under WTO compliance, Pakistan eased export regulations without first developing a national reserve strategy or protection framework for domestic consumers. As a result, liberalization occurred in isolation-leaving the sector vulnerable to both internal inefficiencies and external shocks.

There is a dire need for a centralized agri-intelligence system that can predict yields using real-time satellite data and sophisticated supply-demand modelling. Such a system could act as an early-warning mechanism to prevent unnecessary imports or ill-timed exports. A robust forecasting mechanism, tied to weather patterns, crop diseases, and market trends, would empower policymakers to take proactive, rather than reactive, measures.

Pakistan must also invest in a smart import-export trigger system-an AI-powered dashboard at the Ministry of National Food Security that tracks yield estimates, consumption data, strategic reserves, and global price movements. This system can signal when it is safe to export or when a temporary import is justified. Such an automated, data-backed mechanism would eliminate the guesswork and prevent opportunistic manipulation by import-export mafias.

Additionally, a digital procurement app linked to farmers’ NADRA profiles should be launched, allowing them to register their produce, view procurement schedules, and receive guaranteed Minimum Support Prices (MSPs). This move would also reduce corruption and eliminate delays that force many farmers to turn to exploitative middlemen. Alongside this, the introduction of smart subsidy cards for farmers-again linked with landholding data-can ensure targeted delivery of fertilizer, seeds, and irrigation subsidies without leakage.

There is an equally pressing need to modernize Pakistan’s grain storage infrastructure. Climate-controlled silos and digitized inventory tracking must replace leaky warehouses that lose hundreds of thousands of tons to spoilage and pilferage each year. Monthly public disclosure of wheat and rice reserves, similar to how the State Bank discloses foreign reserves, would build confidence and transparency. Such a move could also help avoid panic-driven imports or politically motivated exports.

To prevent the recurrence of wheat and rice trading blunders, a licensing scorecard should be developed for exporters. Only those who meet transparency standards, have traceable supply chains and have no past violations should be eligible to trade in strategic commodities. Furthermore, the establishment of an independent Agricultural Trade Regulatory Authority is essential. Much like NEPRA regulates electricity or OGRA oversees oil and gas, this body would be tasked with reviewing all import and export decisions, penalizing manipulation, publishing food security bulletins, and protecting long-term national interests over short-term private gains.

Learning from India, Egypt, and Vietnam, Pakistan must also invest in export diversification and value addition. Instead of sending raw basmati rice to global markets where others repackage and rebrand it, the government should support exporters in building international-standard branding and processing capacity. The promotion of high-value, organic, and speciality rice varieties can open doors to premium markets and lessen the dependence on volatile price-based trade. A focus on export diversification beyond the GCC and Afghanistan-into Central Asia, East Africa, and Europe-can insulate the country from sudden shocks.

Finally, the country must adopt a structured roadmap to avoid falling into the same trap again. In the short term, all new import and export deals should be frozen pending a third-party audit of procurement records and warehouse stockpiles. The government should activate anti-cartel task forces to raid hoarders and disclose current reserves on a public dashboard. Within six months, the digital farmer procurement app and smart subsidy cards should be launched with pilots in Punjab and Sindh. By the end of the first year, Pakistan must operationalize its AI-based agri-forecasting system and begin publishing monthly food balance sheets. Over the medium term, within two years, the Agricultural Trade Regulatory Authority must be legislated and made functional with oversight powers. At the same time, the food security stress test mechanism should be developed and incorporated into all economic planning exercises. Long-term measures must focus on building climate-resilient strategic reserves, strengthening high-tech storage infrastructure, subsidizing export-oriented farmer collectives, and finalizing bilateral food security agreements with key markets.

If there’s anything this recurring crisis teaches, it is that Pakistan cannot afford to keep subsidizing its own mistakes. Exporting what we need and importing what we have is a policy paradox we must fix-urgently, intelligently, and collectively. The time to act was yesterday. The cost of further delay is one the nation simply cannot afford.

The writer is a financial expert and can be reached at jawadsaleem.1982@ gmail.com. He tweets @JawadSaleem1982