Sindh seeks clarity on cost-sharing as Centre moves toward private sector wheat procurement

The Sindh government has raised strong reservations to the federal government’s proposed Interim Wheat Policy 2025–26, which shift wheat procurement from the public sector to a private sector–driven model under the ‘Pakistan Storage Facility’ (PSF) system, documents available with The News reveal.

While Sindh has “concurred in principle” with the notified support price of Rs 4,000 per 40kg for the coming Rabi season, it has sought explicit financial guarantees before implementation, particularly on who will bear the procurement-related costs, including storage charges, payment liabilities, and administrative oversight.

According to official correspondence exchanged between the Sindh Agriculture Department (19 Sept 2025) and the Sindh Food Department (02 Oct 2025) with Islamabad, the province has asked the federal government to clarify whether provinces will assume full or partial financial liability for PSF operations, whether the Centre will subsidize storage and reserve management, or pass the cost to provinces, who will ensure timely payment to farmers if private players delay or default and whether regulatory power will remain with provinces, or shift entirely to Islamabad and PSF.

Sindh has also conveyed that it cannot implement the model without clear fiscal safeguards, citing a risk that growers might face payment delays similar to past procurement crises.

The federal government summary estimates that item cost value of 1.0 million metric tonnes of wheat at import parity of Rs85 billion and annual storage and reserve management cost of Rs20 billion per million MT. Under the interim mechanism, this financial burden may shift to provinces if no federal cost-sharing arrangement is notified.

The documents explicitly state that the policy is aligned with Pakistan’s IMF programme conditionality, which require ending quasi-fiscal wheat operations by provinces, eliminating politically motivated procurement, reducing public sector footprint in grain markets and allowing private players to manage trade and storage. The new policy direction by which procurement to be carried out by government-licensed private sector through PSF, provincial role could be limited to supervision and targeted subsidies only, provinces barred from fixing wheat, flour or roti prices, Centre had to decide after consultation with the provinces.

As per official correspondence, to ensure transparency real-time tracking portal has to be launched and the ‘National Wheat Policy 2026–2030’ followed within two months.

A national Wheat Oversight Committee headed by the federal minister for food security will supervise implementation and meet weekly to track compliance.

Sindh has extended cautious support in principle, but not without safeguards. Officials in the provincial Food Department told The News that Sindh’s conditional approval is meant to “protect growers from delayed payments and financial exposure” at a time when the government is shifting from state-led to market-led wheat governance.

The Interim Wheat Policy is expected to be formally announced by the prime minister in third or fourth week of October, 2025, after consultation with all chief ministers and federal stakeholders.