EDITORIAL: The prime minister’s congratulatory tweets about inflation dropping to 5.7 percent this January against eight percent in December 2020 did not resonate as loudly as he would have expected or liked only because the trend of falling prices, appreciated though it is, has not yet taken the sting out of food inflation. That must be why he made such a big deal of it while presiding over a meeting of prices and supply/demand of food items recently and directed provincial governments to take responsibility for displaying price lists at all essential-item shops as well as ensuring strict action against concerned assistant commissioners in case prices surprise to the upside. He reiterated this call while presiding over a meeting in Lahore to review measures being taken for increasing the number of fruit and vegetable markets in the Punjab and reducing the price of wheat flour.
In fact, he went a step further and dismantled market committees in Punjab and Khyber Pakhtunkhwa (KP), where the Pakistan Tehreek e Insaf (PTI) is in power, because they were either incompetent or complicit, or both, as prices of edibles spiraled out of control through almost all of last year. Instead, he is for setting up new bodies manned by ‘people with good reputations’ to keep everything in check. These are welcome steps, of course, because they show that the government is not going to use the dip in overall inflation to brush the problem of food prices under the carpet, but they do raise a number of important questions.
One, the committees that now stand dissolved were also tasked with doing pretty much the same things that the prime minister wants from his new bodies. And if making people with integrity call the shots will make a difference, as he clearly believes, then perhaps it would have been more efficient to route such people to already existing committees instead of standing the whole thing on its head; that too in such demanding times. Two, prices are a result of interaction of forces of demand and supply, and there is precious little anybody’s reputation or integrity can do if there are artificial strains and bottlenecks in supply chains, which naturally make market prices move up a few notches from the stipulated prices on lists. And punishing the concerned assistant commissioner might not be the fastest way of overcoming such problems.
And three, most of the food inflation encountered last year, particularly in wheat and sugar, had its roots not in price manipulation at the retail level but rather the government’s paralysis when it comes to announcing support prices of important crops. There’s only so long farmers can wait for the government to come to a decision, after all, and most opt for other crops after a while. There are also other administrative oversights that played a part, like shocking miscalculation of available sugar supply before exporting the commodity only to import even more eventually and the near-criminal delay in dealing with the locust threat that destroyed much of the wheat crop. Only later did cartels, middlemen and mafias come into the picture and cause even more damage.
The most important lesson to learn from last year’s food inflation, therefore, is that much of it was easily avoidable. Not only was the government pretty much asleep at the wheel when prices were being distorted but it also failed to rein in elements, like the cartels, middlemen and mafias, that added insult to injury and also made fat profits for themselves. The PM has promised to use all the state’s might to deal with them about as many times as he has vowed to bring down prices of kitchen items, yet the people still see their money losing value every day for no fault of theirs while all those responsible continue to evade justice.
This abnormal situation has gone on too long and simply must come to an end now. Hopefully, senior officials including the PM didn’t leave Wednesday’s meeting thinking that strict orders have been issued so the job is more or less done. Ensuring compliance will be the hard part and it’s not as if the government has much time in which to control food inflation. After all, the poorer sections of society that are suffering the most from it also form the biggest part of the vote bank because of their sheer size. So it is in everybody’s interest to tame prices of all essential items immediately.
Copyright Business Recorder, 2021
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