Review of the wheat sector and grain storage issues in Pakistan

Wheat is the largest grown grain crop in Pakistan and a main staple food, representing 40 percent of total cultivated land on 9 million hectares and 3 percent of the country’s gross domestic product in 2009. However, yields remain low due to various constraints faced within the sector. Under the FAO/World Bank Cooperative Programme, the Investment Centre has published a Review on the wheat sector and grain storage issues in Pakistan. The report, which is divided into two chapters and six annexes, provides an in-depth analysis of the sector in the country, including a number of conclusions and recommendations to both public and private actors.  

 This publication highlights the need for better grain storage facilities and an increase in wheat supply in order to meet Pakistan’s growing population’s demand. It looks at the current state of the wheat sector in the country which is heavily controlled by the government through restrictive policies and its 35 to 50 percent procurement market share. The State’s dominant presence in the wheat sector leads to consequent monetary losses, limited private sector involvement, little incentive to use post-harvest financing instruments and a poorly effective fair average quality (FAQ) standard.

The first chapter provides answers to questions on the importance of the wheat sector, wheat production, its structure and potential, milling, consumption, trade, policy, prices, procurement financing and opportunities for utilizing post-harvest financing instruments. The second chapter covers issues regarding wheat losses under the existing bag handling system, general grain storage, wheat quality control and options for temporary wheat storage. The note concludes by recommending a public-private partnerships model of investment instead of a public one and states that until the construction of grain storage facilities, silo bags or other temporary techniques can be considered as alternative solutions. The publication is intended to facilitate discussions of possible investment projects for improving grain storage and providing related technical assistance.