ISLAMABAD – The International Monetary Fund (IMF) has imposed another major condition, barring the federal and provincial governments from setting support prices for all agricultural crops, including wheat and sugarcane, said the media reports.
The reports said that the condition will affect cash crops like wheat, sugarcane and cotton while restrictions on subsidies for fertilizers will force farmers to buy expensive imported fertilizers.
The implementation of IMF’s conditions regarding support prices and subsidized fertilizers, according to the media reports, will begin with the current crop (Kharif season) and must be completed by June 2026.
The Punjab government has already started implementing these conditions.
In the current season, the Punjab government did not purchase wheat, causing the price of wheat and flour to drop by 40%, bringing inflation down to single digits.
The IMF has also imposed conditions on provincial governments that they will not provide any subsidies on electricity and gas during the 37-month IMF program.
The Ministry of Finance conveyed this message to the Punjab government last week. The sugar mill owners attribute the high cost of sugar production to the high price of sugarcane.
Last season, the government had set the sugarcane price at PKR 425 per maund, but mills purchased it at rates ranging from PKR 425 to 480 per maund.
Furthermore, the IMF’s Executive Board has not yet approved the program for Pakistan, but conditions have not only been imposed but the IMF is also insisting on their implementation.
The federal government primarily purchases commodities for military purposes and special regions like Gilgit-Baltistan. The IMF has directed that even this limited procurement should be done at market prices.
