Private companies participating in the Punjab Government’s Wheat Procurement program are struggling with financing problems, pricing disputes, and strong resistance from farmers, reported Dawn .

Under the 2026 wheat procurement strategy, the Punjab government planned to procure 3 million tonnes of wheat through 11 private firms instead of relying on the traditional state-led procurement model.

To support the transition, authorities facilitated bank financing arrangements, offered to cover 70 percent of markup costs, provided free storage facilities in Food Department warehouses, and assigned nearly 400 experienced officials to assist companies during procurement operations.

Despite these incentives, the system has struggled to gain traction. According to industry sources, financing negotiations between banks and participating firms failed to produce workable agreements. One company representative said firms had expected financing based on KIBOR plus 1 percent, but talks with banks collapsed, forcing companies to arrange funding under less favorable terms.

Officials said the proposed financing structure involved markup charges of around 9 percent until September, with an additional 1 percent increase every subsequent month until repayment, raising concerns over mounting financial risk for companies holding large wheat stocks.

However, the biggest challenge has emerged from market pricing. While procurement firms are offering the official support price of Rs. 3,500 per maund, wheat is currently trading at nearly Rs. 3,700 per maund in the open market, reducing farmers’ willingness to sell to participating companies.

As a result, many farmers have either held onto their wheat in anticipation of higher prices or sold directly to traders and arhtis in the open market. Industry sources said at least nine of the eleven participating firms have so far failed to procure any meaningful quantity of wheat, effectively stalling the government’s procurement drive.

Authorities have meanwhile intensified enforcement operations to stop what officials describe as illegal interprovincial transportation of wheat from Punjab to other provinces.

Food Department teams and Punjab Enforcement & Regulatory Authority officials have reportedly intercepted wheat consignments and redirected them to state-linked storage facilities.

According to officials, confiscated wheat is being purchased at the official procurement rate of Rs. 3,500 per maund. In Rahim Yar Khan alone, around 800 tonnes of wheat have reportedly been collected through such actions, triggering concerns among farmers and traders regarding forced sales and market intervention.

In another incident, a wheat consignment belonging to a Rawalpindi flour miller was allegedly confiscated in Sargodha despite the industrialist possessing a valid transport permit. Sources said the seized wheat was unloaded at a procurement center.

Farmer groups have strongly criticized the government’s handling of the wheat market. Pakistan Kisan Ittehad President Khalid Khokhar said many farmers in South Punjab had already sold nearly half their wheat crop earlier at rates between Rs. 2,800 and Rs. 3,200 per maund due to market pressure.

He argued that the Minimum Support Price mechanism is intended to protect farmers during periods of falling prices rather than suppressing prices when the market improves.

Khokhar also alleged that procurement centers were deducting around 15 kilograms from every 100-kilogram wheat bag on the pretext of impurities and claimed that weighing machines were functioning against farmers’ interests.

Meanwhile, another farmer leader, Mian Umair Masood, rejected official claims regarding the distribution of Rs. 6 billion worth of gunny bags and alleged widespread irregularities in the support scheme.

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