The federal government has approved the closure of the Pakistan Agricultural Storage and Services Corporation (PASSCO) by December 2026, ending the operations of the state-run wheat procurement agency as part of efforts to reduce government involvement in commodity markets and lower fiscal costs.

The federal cabinet has also approved a Rs4.18 billion compensation package for PASSCO employees. The corporation currently has around 1,100 regular employees, while damaged wheat stocks affected by floods will be auctioned during the winding-up process.

The decision marks a major restructuring of Pakistan’s wheat sector, where PASSCO has played a key role for decades by procuring wheat from farmers, maintaining strategic reserves, and helping manage supply shortages.

The closure follows sweeping reforms introduced after the 2024 wheat import controversy, which led to scrutiny of government procurement practices, stock management, and market interventions. Since then, authorities have been moving toward reducing direct state participation and expanding the role of private-sector players in wheat trading and storage.

The move is also linked to Pakistan’s broader reform commitments under its International Monetary Fund (IMF) programme, which emphasize reducing losses from state-owned entities, improving fiscal management, and limiting government participation in commercial activities.

Under the approved plan, PASSCO’s employees will receive separation benefits, while remaining assets and wheat inventories will be disposed of according to the government’s winding-up strategy before the corporation is formally closed.