Wheat: the illusion of reform comes undone

The federal government has reportedly approached the IMF to seek approval for reinstating the Minimum Support Price (MSP) for wheat, citing production shortfalls and rising market prices. This move is not just a policy reversal. It is a wholesale collapse of credibility, a demolition of the reform narrative, and a self-inflicted admission that nothing was built after dismantling the old.

For over two years, the state has peddled the illusion of wheat market deregulation. It staged the withdrawal of public procurement and declared its exit from price-setting. The rhetoric was loud; the preparation, non-existent. No floor price insurance mechanisms were created. No real-time, independent price benchmark was introduced. No meaningful credit access was extended to farmers. No transparent offtake markets were established. No storage liquidity channels were activated.

Instead, wheat market “reform” was used as a political sleight of hand to engineer short-term disinflation. By offloading public stocks pre-harvest and blocking export pathways, the state depressed domestic wheat prices, using farmers as sacrificial pawns to hold down inflation at the headline level. Now that wheat is showing signs of regaining its pricing power, the government seeks to reimpose MSP under the guise of food security.

This is not policymaking. It is stagecraft. The state exited too soon, without sequencing or scaffolding. And now, in an act of full-circle dysfunction, it is resurrecting the same rotten patronage apparatus it declared obsolete. This pivot does not just harm farmers or confuse markets. It wrecks the state’s reform credentials at a time when Pakistan can least afford policy incoherence.

The argument for deregulating wheat was never about abandoning food security. It was about transitioning from blunt procurement to market-based tools that allow both producer viability and consumer protection. Options contracts, warehouse receipt-based liquidity, targeted income support, and real-time tradeable benchmarks, all tools that require institutional design and political will, were never deployed. Instead, the withdrawal from MSP and procurement was executed like a fiscal maneuver, not an economic transition.

In effect, the reform was never real. It was a cost-cutting tactic dressed as structural adjustment. And now, with the fiscal space regained and the inflation suppression effect reversing, the government finds itself in a bind: either risk political backlash from farmer protests and production decline, or beg the IMF for permission to reimpose the very tool it claimed to be reforming.

The Fund must not allow this reversal to pass without consequences. Pakistan has wasted two years doing nothing to build the rails and roads of a deregulated wheat market. No enabling ecosystem exists. And now, in the face of a difficult season ahead, the state is dusting off the same old MSP files and pretending it never left.

This is not about saving farmers. It is about saving face. And it sends a chilling signal to all sectors and all stakeholders: reforms are reversible, commitments are fragile, and political convenience trumps economic logic.

If the government proceeds with reinstating MSP without any institutional transition plan, and without a credible path to long-term liberalization, it will not just be reversing a reform. It will be institutionalizing volatility. It will be legitimizing price control as policy default. And it will ensure that no private buyer, financier, or trader trusts future reforms in the sector.

Pakistan’s wheat market needs stability, sequencing, and stewardship. What it is getting instead is panic, improvisation, and political short-termism. If this reversal is allowed to proceed, it will mark not just the failure of one reform, but the death of reform credibility itself.