Government has miserably failed to regulate the wheat price maintaining high profile despite harvesting a near bumper crop of the size 21.1 million tons during the cropping season 2004-05.
The major wheat growing provinces procured wheat stock of around 3.01 million tons but the question remain to be answered as to where the rest of crop has gone? Either it is lying with the growers or purchased by the market forces, including the flour mills that were given free hand under market economy policy with institutional support and credit facilities at low mark-up rates to purchase wheat from growers.
According to sources close to grain trade, major portion of the wheat crop is lying with private sector, which includes flour mills. According to these sources, a flour mill in Punjab alone was maintaining a stock of 6,000 tons yet demanding release of the government subsidised wheat.
The Federal Finance Ministry, according to knowledgeable sources, without going into detail attributed the price hike to the increase in Guaranteed Minimum Price (GMP) as an incentive to farmers to grow more wheat. The ground reality is that the wheat prices started showing upwards trend following the shortfall in production during the cropping season 2003.04 due to water stress and massive illegal trading of government wheat by the food distribution officials of the Food Department much before the announcement of enhancement in GMP.
The misinterpretation of the situation led to introduction of free import policy of food item to regulate the prices of most essential food item and also by allowing import of wheat to private sector.
The first ship carrying Russian wheat is about to touch Karachi port but the news of arrival of imported wheat had no impact on price structure, which can be judged by the fact that wheat flour prices quoted in open retail markets quoted between Rs 15 to Rs 16.50 at Karachi and Rs 13.60 to Rs 14.50 elsewhere in urban Sindh, which means that Karachiites are paying the highest price of wheat flour in the country.
HEFTY PROFIT: The director Food, Government of Sindh, held series of meetings and during all these meetings the millers had given an understanding that wheat flour would be sold to consumers at an affordable rate but that understanding or promises were never honoured and the millers continue to earn hefty profit.
A survey carried out established that the Karachi millers are earning an added profit of around Rs 35 million per month with the connivance of corrupt food officials, who are visibly living beyond their means of earning and enjoying full immunity from Service Conduct Rule 1946 section 16-B under which all those who are living beyond their means of earning or amassed huge assets have to be taken to task. But unfortunately, the Service Conduct Rule or its clause was never activated.
FLOUR MILLS' ROLE: The role of flour mills in price hike or commercial exploitation of government-subsidised wheat cannot be ignored. The government claimed for providing a subsidy of Rs 5 billion plus annually to make wheat flour available at an affordable price to consumers but the question remains to be answered as to where this subsidy has gone? As it has never been passed on to consumers.
The situation called for a change in policy with regard to flour mills. The Food Department should gradually withdraw from nursing flour mills and allow them to stand on their feet and buy wheat from open market for their requirement as the Food Department is under no obligation to provide the subsidised wheat to flour mills or small grinding units under food law. The operational stock maintained by the Food Department should be used to overcome the shortage in the market and to regulate the price structure.
This would not only help to check the commercial exploitation of government-subsidised wheat but bring to an end the unholy alliance of corrupt food officials. The procurement of wheat by the Food Department in huge quantity is not only expensive but also a source of loot and plunder.
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