The Punjab wheat deregulation policy, once hailed as a step toward a free market, has turned into a major policy failure. Introduced just before the harvest season, the reform ended the government’s decades-long role in wheat procurement and support pricing. However, the move quickly exposed serious gaps — there was no plan for imports or exports, no system to control hoarding, and no protection for farmers or consumers.
At first, the private sector welcomed the new policy. Flour mills, traders, and a multinational company purchased over one million tonnes of wheat, preventing an initial price collapse. But as floods hit southern Punjab, supply chains broke down and wheat prices soared from Rs2,300 to Rs4,000 per maund. Without a price monitoring system, profiteering grew unchecked, worsening inflation and sparking public anger.
READ MORE:Punjab Imposes Section 144 to Stop Use of Wheat in Poultry Feed
In response, the government reversed course. It imposed a price cap of Rs3,000 per maund under the Essential Commodities Act 2024 and banned inter-provincial wheat movement. Millers now needed permits for transport, while authorities raided private warehouses and seized stocks. These sudden changes created panic among investors who had followed the government’s own deregulation policy.
Farmers also suffered. Low prices and market uncertainty discouraged wheat cultivation for the next season. The government has now ordered cultivation on state-owned land to avoid a production shortfall, reflecting growing concern rather than effective planning. Experts warn that inconsistent policies have shattered investor confidence and may lead to future food insecurity.
READ MORE:Punjab extends wheat ban in poultry feed
The Punjab wheat deregulation experiment highlights the dangers of liberalizing essential food markets without proper safeguards. Economists say deregulation requires strong institutions, clear trade rules, and reliable monitoring systems — all missing from Punjab’s plan. As investors and farmers lose faith, the province risks returning to old inefficiencies and rent-seeking that reforms were meant to eliminate.