Millers Seek Market-Driven Wheat Policy, Targeted Subsidy

Flour millers have urged the government to adopt a market-driven wheat policy and replace untargeted flour subsidies with direct financial help for low-income households. The wheat policy flour millers are calling for would let the market set prices, with help going directly to poor families instead of through blanket subsidies.

The Progressive group of the Pakistan Flour Mills Association (PFMA) made the call in Lahore on Tuesday, saying frequent shifts in government policy had created severe distortions in the wheat market and left both farmers and mill owners uncertain.

Progressive miller Khaleeq Arshad told reporters that policy had swung between rationing, quota systems and changing procurement arrangements, and the uncertainty was hurting everyone in the chain.

Wheat policy flour millers: the price gap at the heart of the problem

Arshad welcomed the fixing of the wheat support price at Rs4,500 per maund as a positive step for growers. The price was set on Oct 23 for the 2027 crop, up from Rs3,500 for the 2026 harvest.

But he said the way the system worked after procurement was the problem. The government buys wheat at Rs4,500 per maund and then releases it to mills at about Rs3,700 per maund, while the market rate is roughly Rs5,400 per maund.

“Procuring wheat at Rs4,500 per maund and subsequently releasing it at a substantially lower price creates deep distortions in the market and leads to severe operational problems,” he said.

Mills are being forced to sell 20 to 25 per cent of the flour made from their own commercially bought, expensive wheat at the lower subsidised rates. Arshad urged an immediate end to that requirement, saying mills should supply subsidised flour only in proportion to the subsidised grain they receive.

He also said wheat releases to mills must reflect the real costs of procurement, storage and transport.

Targeted help instead of blanket subsidy

Instead of blanket flour subsidies that benefit rich and poor consumers alike, Arshad recommended using existing safety nets to deliver direct financial relief to underprivileged households. He named the Benazir Income Support Programme, the Kissan Card and Punjab government initiatives as the channels to use.

He also called for strategic wheat reserves to be kept strictly for emergency shortages, rather than used to hold prices down artificially. Any emergency release, he said, should take place at prevailing market rates.

On the structure of the industry, Arshad questioned why wheat quotas were still being given to inactive mills. The state had no duty to keep commercially unviable units afloat, he said, and quotas should go to active mills on the basis of performance and open competition.

He criticised the government’s approach of partly freeing the market while keeping tight controls on prices and supplies, and urged policymakers to choose a clear direction.

A history of sudden changes

The millers’ complaint has a history. The government withdrew from wheat procurement in 2024, then encouraged mills to buy larger quantities in 2025, only to impose a maximum retail flour price of Rs3,000 per 40kg after the mills had completed their buying.

Arshad recalled that flour bag prices had once fallen from Rs2,800 to Rs1,300 purely because supply improved and competition worked, without state intervention. When prices rose naturally, he said, the government imposed artificial caps and blamed millers for manipulation, ignoring that higher prices encouraged farmers to grow more wheat in the next season.

Feature Pakistan has followed the wheat market closely this month, reporting on the flour crisis averted in Rawalpindi and on the World Bank’s wheat and sugar reforms package. Farmers have also been watching the support price closely, with a fertiliser subsidy of Rs5,000 a bag announced alongside the wheat measures, and wheat imports bringing some relief to flour prices.

The millers’ message is simple: pick a policy and stick to it. Until the government does, they say, farmers, millers and consumers will all keep paying for the uncertainty.

Frequently asked questions

What are the millers asking for?

A market-driven wheat policy, with blanket flour subsidies replaced by direct financial help for low-income households through BISP, the Kissan Card and Punjab government schemes.

What is the wheat support price?

Rs4,500 per maund for the 2027 crop, set on Oct 23, up from Rs3,500 for the 2026 harvest.

Why do millers say the system is distorted?

The government buys wheat at Rs4,500 per maund and releases it at about Rs3,700, against a market rate of roughly Rs5,400, while forcing mills to sell up to a quarter of their flour at subsidised rates.

What do they want done with wheat reserves?

Reserves should be kept only for emergencies, and any release should take place at prevailing market rates, not at artificial prices.

Who spoke for the millers?

Khaleeq Arshad, of the Progressive group of the Pakistan Flour Mills Association, speaking to reporters in Lahore on Tuesday.