The govt is kicking the wheat deregulation can down the road

The long awaited process of wheat deregulation in Pakistan seems to be kicking off, but it is happening half-heartedly at best.  

This comes as no surprise, since wheat deregulation was not an idea that came from the government itself, but rather has been mandated by the International Monetary Fund (IMF), which has been ruthless in its direction to cut down unnecessary spending by the government. However, it seems the government has found a process with the IMF’s instructions. They accept them, try to get away with doing not even the bare minimum but what looks like the bare minimum, getting reprimanded, and then finally acquiescing – sort of.

The IMF has stated clearly that provincial governments would be barred from setting crop prices as part of its $7 billion bailout package, board approval for which Pakistan secured only a few months ago. It is possibly one of the reasons why the Punjab Government has abolished the provincial food department, replacing it with a new autonomous body.

As of now, the government is mostly just mucking about. They are forming a committee here, and a panel there, and trying to get away with handing wheat over to the free market. The reasons for this are purely political. Actually, the government thinks they are political. Somehow all governments in Pakistan, and particularly those in Punjab regardless of political party (but mostly the PML-N) think they will get votes if they can somehow magically control the price of wheat, both for farmers and end consumers. Historically, the kind of subsidies this has created have not been productive. But how exactly did we get here?