Twin cities flour millers allege unfair treatment by Punjab govt

LAHORE: Flour millers in the Rawalpindi-Islamabad region have warned that more units may shut down unless the Punjab government changes its wheat and flour policy, after claiming that nearly 40 per cent of mills in the area have already closed because of sustained losses.

The warning was made in an appeal addressed to Punjab Chief Minister Maryam Nawaz by Chaudhry Afzal Mahmood Advocate, a former vice chairman of the Pakistan Flour Mills Association (PFMA) Punjab. The appeal, which circulated in flour millers’ WhatsApp groups, said the industry in the twin cities had been pushed into severe difficulty by what it described as inconsistent official policies, unequal wheat distribution and administrative intervention.

According to the appeal, two flour mills owned by the former PFMA office-bearer had already ceased operations after facing continuous losses over the past two years. It further claimed that around 40pc of flour mills in the Rawalpindi-Islamabad region had shut down, and said the remaining units were also at risk if the current policy framework remained unchanged.

Millers cite transport costs and pricing issues

The appeal said millers in southern Punjab were benefiting from their location in a wheat-producing region, while operators in Rawalpindi and Islamabad had to purchase wheat from private sources and bear additional transport expenses of Rs200 to Rs250 per maund. It also alleged that flour supplied from Punjab mills was being sold in the twin cities at lower rates through the food department and local administration, causing losses to mills operating in the area.

The document stated that flour prices were being set through administrative measures and that mills were being forced to sell below their cost of production. The official wheat price was Rs4,100 per maund, while flour prices were being fixed at Rs4,000 per maund. After including electricity charges, salaries and other operating costs, the appeal claimed, losses were reaching as high as Rs600 per maund.

The appeal also said mills in the region were receiving permits for only 40 tonnes, or about 400 bags of wheat, every four days, which the millers described as too little to keep operations viable.

Industry seeks consultation and uniform policy

In the appeal, the former PFMA office-bearer said large investments in the sector had effectively been wiped out. The government was also losing millions of rupees in electricity-related taxes and income tax because of the closure of mills.

The document accused the food department bureaucracy of exercising excessive control over the flour trade and criticised what it called a WhatsApp-based policy system, saying fresh instructions and policy changes were being issued daily without long-term planning.

It further claimed that the closure of mills had left thousands of workers unemployed and reduced collections under social security contributions, workers’ welfare funds, professional taxes and other revenues linked to the industry.

The appeal urged the Punjab government to frame policy in consultation with what it called genuine representatives of the flour milling sector. It also called for equal wheat distribution across regions, wheat quotas for closed mills to help restore jobs, and a uniform flour pricing mechanism throughout Punjab.

It additionally proposed replacing administrative controls with a market-based system, arguing that if low-markup loans had been given directly to flour mills for wheat procurement, consumers could have obtained cheaper and better-quality flour through open competition.