What is the wheat import scam that took Pakistan and its farmers by storm?

As Pakistan continues to grapple with a major economic crisis, Kissan Ittehad Pakistan announced that thousands of farmers will take part in a nationwide demonstration against the ongoing wheat crisis. The protests are scheduled to take place on May 10 and will start from Multan.

Now the reason behind this protest is the fact that Wheat rates have plummeted in the Pakistani market and reached shocking below the support price of PKR 3,900 per 40 kg. The crisis saw farmers resort to demonstrations which took place in Lahore and several other Pakistani cities, last month.

In response to this, the government launched a crackdown against the protests and arrested several farmers who took part in it. It is important to note that the reason behind this wheat crisis is a mega scam that unfolded while Pakistan was being ruled by a caretaker regime. Here’s a look at what the scam is about:

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What is the wheat import scam? 

In the year 2023, the Pakistani caretaker government allowed private business entities to start importing wheat with little to no regard for the production which was taking place domestically. Documents obtained by several media outlets indicated that the ruling regime granted permission to the private sector to import wheat worth PKR 330 billion from August 2023 to March 2024.

The permission to import wheat was allowed at a time when the prices of the wheat started decreasing in the international market. The data compiled by the Pakistan Bureau of Statistics (PBS), showed that Pakistan’s import of wheat stood a 3.44 million tonnes at an estimated cost of PKR 282.975 billion, equivalent to $1.005 billion, during the July-March period of 2023-24 within the deadline of March 31, 2024.

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However, the import of the wheat continued in April 2024, with the government stating that they were waiting for the vessels to arrive from abroad. Things became complicated after the data regarding the amount of wheat imported in April was not included in the final figures.

While six vessels reached Pakistan on Eid day alone, it was found that Pakistan’s imported wheat went up close to 4 million tonnes. This put a major dent in the national exchequer of Pakistan and the country’s foreign exchange reserves at a time when Pakistan was struggling with a historic economic crisis. The caretaker government doled out hard-earned $1.05 billion in foreign exchange during the crisis situation.

The Opposition alleged that the caretaker government kept on importing wheat, while the country’s foreign exchange was depleting at an historic rate. Not only this, the government’s decision to allow private sectors to import more gave middlemen and corporations an incentive to continue with their exploitation.

The impact

It was alleged that the wheat which was imported by Pakistan was of inferior quality and did not satisfy the country’s consumption standards. Not only this, but the middlemen also imported the products at an extremely cheaper rate and sold them at high prices gaining significant profit.

The whole ordeal came at a time when farmers in Pakistan witnessed a bumper wheat crop production. With the massive amount of import, the procurement of wheat by the Pakistan government was slashed from 7.8 million tonnes in the last fiscal year to 4.44 million tonnes. This was almost a 50 per cent decrease from the last year’s figure.

As a result of this, the domestic farmers have been left in the lurch. While the government fixed the minimum support price of PKR 3,900 per 40 kg, with the shortage of demand the farmers are now forced to sell out their produce at around PKR 2,800-3,000 per 40 kg, Dawn reported. Not only this, the private sector which gained a significant profit before started lowering its prices to compete with the already struggling farmers.

The situation led to anger and resentment among the farmers which triggered the nationwide protest. Former Pakistan PM Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) also accused the erstwhile caretaker government of corruption for allowing wheat imports, which they have not supported with any evidence.

Ex-PM Kakar denies involvement

Amid the chaos, the former caretaker of Pakistan under whose regime the saga played out denied any wrongdoings. He even expressed his willingness to join the investigation into the excessive import of the staple crop.

“I will appear before the wheat [inquiry] committee if it summons me,” Kakar told local Pakistani reporters on Sunday, Geo News reported. Kakar — now became a senator — made it clear that no new law was introduced to import wheat during his tenure and his government only “encouraged the private” sector to import the staple crop.

He also noted that the caretaker regime allowed the private sector to import under the Statutory Regulatory Orders (SRO) that were actually issued during the tenure of the PTI-led government.

The ruling regime remains hesitant to investigate the matter

While the country’s Prime Minister Shehbaz Sharif pledged to “protect the interests of farmers at all costs”, reports are emerging that the federal government appears reluctant to thoroughly investigate the scam.

While PML-N sources told Dawn that the party supremo Nawaz Sharif asked his brother to “indiscriminately investigate” the matter, the Shehbaz Sharif administration did not show urgency to do so. “The government has no such int­ention (to engage the NAB/FIA to probe wheat import scam),” Infor­mation Minister Attaullah Tarar told Dawn.

One of the reasons for this reluctance is the fact that it was Shebaz who played a key role in appointing Kakar as the caretaker PM.

The probe panel discusses the matter

On Sunday,  an inquiry committee, headed by the cabinet division secretary, conducted a meeting on the matter. “The committee worked today on verifying data and documents,” Infor­mation Minister Attaullah Tarar told Dawn. “The report is under preparation and has not been presented to anyone," he added.

Tarar also rejected the reports that Kakar was summoned during the meeting and also dismissed the news about the meeting with Prime Minister Shehbaz Sharif. The fact-finding committee was formed by Shehbaz earlier this week and is led by Cabinet Secretary Kamran Ali Afzal. The committee is appointed to identify irregularities in the import of wheat.

While Shehbaz Sharif ensured that the decision would be taken based on the “interest of the farmer”, the government’s slow investigation has made the farmers impatient. The situation became even more complex for the present government to settle as it cannot afford the wrath of the farmers, who are now being backed by the main opposition PTI.