Less than three months after the wheat import scandal that rocked the federal government and caused serious fissures within the ruling PML-N, it seems the government has decided to quietly bury the matter by dismissing and shuffling around a few bureaucrats.
Like so many other wheat and sugar scandals that have been polluting the country for decades, the government has fixed responsibility on irrelevant officials to save the real beneficiaries of the scandal.
The wheat crisis hit the PML-N led government around mid-April 2024 when the farmers of the Punjab started violent demonstrations and protests for not procuring their wheat produce by the Punjab Government on support price.
Prime Minister Shehbaz Sharif ordered an inquiry regarding the import of excess wheat in Pakistan during the food year 2023-2024. The member federal public service commission led committee conducted an enquiry and declared wheat import in the country an “institutional failure”. However, it did not fix any particular person responsible. Now, it seems the government wants to quietly bury the matter.
What happened with the wheat scandal
The origins of the wheat scam go back to an amount of 1.2 million tonnes of wheat more than what was necessary to import. Back in 2022, devastating floods ruined Pakistan’s domestic wheat production. As a result, in 2023, the government decided to import more wheat to make up for the shortfall. The shortfall was around 2.4 million tons, but the government instead allowed the private sector to import 3.6 million tonnes.
The accusation is that the caretaker government took kickbacks to allow this. As a result, there was an extra billion dollars tagged onto the import bill at a time when the economy was facing a dire shortage of foreign reserves. The problem was that earlier this year the chickens came home to roost, but the owner of the barn was different.
The government of Pakistan and its provincial governments have a strange relationship with its farmers. Before the 18th amendment, the federal government would set the wheat support price. Now, the provincial food departments and PASSCO procure wheat in harvest months at the government’s announced price. The provincial food departments release wheat in lean months at the ‘issue price’. Until recently, issue price was the same throughout the year and now the government has introduced a cascading price mechanism to smooth out seasonal variation and cover the transaction cost. The public sector procures on average about six million tons of wheat, or nearly 24% of total production.
But this year there was a surplus of wheat because the government had allowed the import of extra wheat last year. As a result, the Punjab government announced it would not be commencing or buying its regular amount of wheat. This was at a time when wheat had seen a bumper crop in Pakistan. The farmers protested, the Punjab government brought down the lathi on the protesting farmers, and negative sentiments prevailed.
The typical response
The response was as one might expect.The prime minister formed an inquiry committee. At the same time, a lot of talking heads on television and social media started bringing up how the extra import had come during the caretaker setup.
But the wheat import scandal was going to cause political problems within the ruling party. Tensions rose within the PML-N on how to handle the billion dollar wheat import scam. The spats were quite public, with the party’s senior leadership making decisions, taking them back, and painting an overall picture of complete disarray.
In private, the situation is even bleaker. Mian Nawaz Sharif has publicly stated that he supports strict action against the preceding caretaker government, which is a key suspect in the wheat import scandal that has taken hold of the country’s news cycle. But it seems his younger brother the prime minister is more reluctant to involve Anwar ul Haq Kakar’s caretaker setup in any sort of federal criminal investigation, especially since the Punjab CM from the caretaker era, Mohsin Naqvi, serves as interior minister in his cabinet.
Mian Nawaz keen to hold the previous government accountable because the wheat scam is proving to be the first major challenge for his daughter Maryam’s government in Punjab. The ire of farmers over the scandal has been directed largely towards the Punjab government because of its failure to purchase the wheat from the farmers. The initial response has been heavy handed and could cause future political damage. The prime minister, the head of a weak coalition in Islamabad, is afraid of the consequences of taking on the caretakers who are thought to have been very close with the country’s establishment, according to one high ranking source within the PML-N.
How did all of this unfold?
Mian Nawaz immediately wanted to take strict action. “The inquiry committee was set up but the response was not strong enough for Mian Sahib’s liking,” explains one source privy to the information. As a result, Mian Nawaz called a party meeting on the 6th of May. The meeting was to be attended by Punjab’s Minister of Food, secretary food and other concerned officials. The elder Sharif directed that this very provincial level committee would deliberate on the findings of the federal inquiry committee. It seemed that Mian Nawaz had essentially sent a message to his younger brother that he was taking charge on this particular matter. It was decided that the prime minister would present the inquiry committee’s report to Nawaz Sharif who will decide the matter pertaining to the wheat issue.
Within a day, however, reports started filtering in that Nawaz Sharif had chosen to take a step back and allow the prime minister to handle the matter as he sees fit. Party sources claimed that Mian Nawaz decided it would be appropriate to not give any direction on the matter. But then his younger brother the prime minister hesitated in taking the necessary steps.
According to sources, the Shehbaz Sharif led federal government is allegedly not willing to take action against the caretaker premier Anwaarul Haq Kakar and his federal cabinet. However, the members of the Shehbaz cabinet and bureaucracy have suggested to the Prime Minister to solve the issue of wheat import scandal in a “better way”. In fact, after the first meeting of the fact finding committee, information minister Atta Tarar said that no one had been called or interviewed by the committee in this regard including former caretaker prime minister Anwaarul Haq Kakar, ex-finance minister Shamshad Akhtar, and incumbent Interior Minister Mohsin Naqvi (ex-CM of Punjab).
The inquiry committee and its happenings
Later the premier constituted Mr. Kamran Ali Afzal, Secretary Cabinet led four-member another inquiry committee with the terms of reference “To ascertain the responsibilities for opening of LCs and allowing import of excess wheat than ascertained demand after February 2024.”
According to reliable sources, Mr. Kamran Ali Afzal, was given names of three irrelevant officials (two of them were not holding any relevant official position during the relevant period and even one was without even any official position during relevant time and one was neither member of wheat board nor mandated for import of wheat) to include in the inquiry report by some influential bureaucrats in order to cover and remove names of Capt. Retd. Muhammad Mehmood, who remained secretary MNFSR from August 2023 to 25 January 2024 and who initiated wheat import summary on 10 October 2023 without capping on quantity and time of wheat import and pressed for import of wheat through only private sector, caretaker prime minister who approved the wheat import summary, Dr. Kosar Abdullah Malik, Ex-Federal Minister of caretaker government who as chairman wheat board approved import of 17 excess wheat vessel in Pakistan till 31st March 2024 after import of 2.4 million tons shortfall wheat in January 2024 and Waqas Ali Mehmood, Ex-Additional Secretary-I of MNFSR for proposing import of 17 vessel bringing in surplus wheat in Pakistan even after knowing this fact that 2.4 million tons shortfall wheat estimated by MNFSR have been arrived in Pakistan.
The inclusion of irrelevant officials in the inquiry report further prompted their suspension on 17 May, 2024 along with Capt. Retd. Muhammad Asif, who was made Acting secretary MNFSR, (for one and half month). Among the four officials suspended so far, only Mr. Imtiaz Ali Gopang FSC-II, may be considered one responsible accused official for wheat crises being a member of wheat board and involved in wheat import process from start till the crisis emerged.
According to insiders, the nomination of irrelevant officers, who have been suspended, has puzzled another OSD BS-22 officer (former secretary Commerce Saleh Farooqui) tasked with completing the inquiry as an authorized officer and submitting a report with complete findings and recommendations.
Understandably annoyed, these officials in their replies to the charge sheets said they could not be held responsible for surplus import of wheat after February 2024 because they were holding any relevant official position.
Dr. Waseem ul Hassan, Food Security Commissioner-I (suspended) was dealing with minor crops whereas wheat is a major crop in the government of Pakistan’s inane categorisations. As such, wheat import would not fall within his job description and mandate of FSC-I. It rather falls within jurisdiction of FSC-II. Further, on 12 October 2023, Dr. Waseem ul Hassan was made OSD by Capt. Retd. Muhammad Mehmood, ex-secretary MNFSR and ordered to report to Admin Section-I of the MNFSR. Later, he was posted as Managing Director, Pakistan OilSeed Board where he remained posted till 19 March 2024 and thereafter, he was again transferred and posted as Food Security Commissioner-I. Dr. Mohsin Saleem remained posted as Food Security Commissioner-I from 12 October 2023 to 19 March 2024 during the most relevant period of wheat import but he was not included in the accused officers list if FSC-I was considered responsible for wheat crises in any way by first or second inquiry committee. Meanwhile Muhammad Asif was performing duties in MNFSR as Deputy Food Security Commissioner-II from 2nd January 2024 to 31st March 2024, peak surplus wheat import period.
Mr. Sohail Shahzad, Director Technical of Department of Plant Protection (DPP) had been on attachment from DPP to MNFSR from 04-05-2023 to 06-05-2024 and was OSD and reporting to Admin Section-I from 25-09-2023 to 06-05-2024 was not holding any official position or relevant positing during relevant period of import of excess wheat in Pakistan. During peak wheat import period from 22 December 2023 to 6 March 2024, Dr. Muhammad Qasim Khan Kakar, Director Admin on deputation in DPP from Agriculture Research Institute of Agriculture and Cooperatives Department of Balochistan was holding the charge of post of Director Quarantine granted to him by the former secretary Mehmood and was regulating import of wheat in Pakistan.
Another suspended official, Allah Ditta Abid, Director General of the DPP was neither member of the wheat board nor mandated to decide quantity and time for import and export of wheat or ban in the country. He as DG DPP was responsible under rules of business to prevent entry of exotic and alien biosecurity risks associated with the import of wheat in the country. During the entire wheat import period, wheat cargoes after ensuring complete freedom from pests were allowed biosecurity clearance.
The wheat board
The Federal Government has notified a “Wheat Board” consisting of one chairman and 26 members in the MNFSR to monitor demand and supply of wheat in the country and decide import of wheat foreseeing shortage in the country to ensure food security. The Federal Minister for MNFSR acts as chairman of the board.
According to notification, Plant Protection Adviser and Director General DPP and the farmers are not members of the wheat board. The premier chairing meeting of the wheat board on 11 July 2024 ordered reconstitution of the composition of the wheat board and instructed to include farmers in it.
It is pertinent to point out that there was neither any restriction nor any ban nor levied any regulatory duty on import of wheat in Pakistan during food year 2023-2024 in accordance with import policy order 2022. Thus, the private sector was at liberty to import wheat without any further concession from the federal government. Finally, realizing this fact that excess quantity of wheat in Pakistan can only be regulated and restricted by incorporating condition of ban on import of wheat in Pakistan in import policy order, the Ministry of Commerce with the approval of the Federal Government has issued notification vide dated 11 July 2024 for imposing ban on import of wheat in Pakistan by making relevant amendments in SRO.
Details of the scandal
Sources earlier informed Profit that despite surplus domestic stocks, the import of more than 35,87,373 metric tons of wheat from September 2023 to March 2024 has allegedly caused loss of $1 billion of foreign exchange to the country. They said that the Ministry of National Food Security has facilitated the import of wheat allegedly in league with flour mafia and wheat importers and defrauded the country of more than one billion dollars of foreign exchange. They said this import has inflicted a loss of above Rs 300 billion to the farmers and Rs 104 billion to the government exchequer, according to sources privy to the development.
Sharing details, the sources said wheat stocks with PASSCO and provincial food departments were 43,65,220 metric tons on April 1, 2024 and there was no need for private import of wheat. They said as the private sector and flour millers imported wheat, PASSCO and provincial food departments could not sell their stocks of 43,65,220 metric ton and have incurred average incidental charges of Rs 950 per maund/40 kg, and total loss to government because of incidental amounted to Rs 104 billion which has allegedly indirectly gone to the pockets of flour millers, traders and bureaucracy. They said due to unnecessary and unwanted import, prices of wheat have crashed to Rs 2800-3000 per maund against government price of Rs 39,000/maund and the farmers will be forced to sell 50 percent i-e 16 million metric tons out of estimated 32 million metric tons of total produce as government is allegedly purchasing very little wheat. Thus, more than Rs 300 billion will allegedly be looted from the farmers and will go to the pockets of flour millers, import traders and bureaucracy, according to our sources.
The import was kept uncapped and ships continued to dock at Karachi even during the entire month of March, 2024 when wheat from Sindh province was coming to market, sources added. It is also learnt from the sources that 71 cargos of wheat were imported from Russia, Ukraine, Bulgaria and private importers continued the import of wheat till March 31 instead of March 15. They said that over 3.5 million tons of wheat was imported under the pretext of importing one million tons of wheat. They said live insects were found during the inspection in 26 cargoes of wheat out of 71 cargoes of wheat imported from September 2023 to March 2024. Inspection of imported wheat was done by a subordinate department of the Ministry of National Food Security, said sources.
