Islamabad: The IMF has imposed a new major condition, prohibiting federal and provincial governments from setting support prices for all agricultural crops, including wheat and sugarcane.
This condition will affect cash crops such as wheat, sugarcane, and cotton. Additionally, due to restrictions on subsidies for fertilizers, farmers will have to purchase expensive imported fertilizers.
Sources say that the IMF’s restrictions on support prices and subsidized fertilizers will take effect from the current crop season (Kharif season) and will need to be fully implemented by June 2026.
The Punjab government has already begun implementing these conditions, as it did not purchase wheat this season.
This led to a 40% drop in the prices of both wheat and flour, bringing inflation down to single digits.
The IMF has also imposed conditions on provincial governments, stipulating that they will not provide any subsidies for electricity and gas during the IMF program (37 months).
The Finance Ministry conveyed this message from the IMF to the Punjab government last week.
Previously, a report by Express Tribune was denied by Punjab government spokesperson Azma Bukhari.
Sources indicate that according to IMF conditions, provincial governments will not set support prices for sugarcane, nor will they be able to instruct mills to start the crushing season.
It is noted that mill owners attribute the high cost of sugar production to the expensive sugarcane.
Last season, the government set the sugarcane price at 425 rupees per maund, but mills bought it at 425 to 480 rupees per maund.
The IMF Executive Board has yet to approve the program for Pakistan, but it has already imposed conditions and is keen on their implementation.
The federal government primarily purchases grains for military purposes and special regions like Gilgit-Baltistan.
The IMF has instructed that even this limited purchase be made at market prices.