To tackle food inflation, Tarin announces cash subsidies for low-income segment

In a bid to tackle food inflation, the government would now give cash subsidies for the purchase of essential food items for the low-income segment from this month, announced Finance Minister Shaukat Tarin on Tuesday.

Addressing a press conference, while sitting alongside State Minister for Information and Broadcasting Farrukh Habib, the finance minister said that the government was previously giving targeted subsidies on electricity and gas.

The finance minister said that utilising the data accumulated through the Ehsaas programme, "we now know the low-income groups and we will target them for cash subsidies".

The finance minister stressed that in the medium to long term, commodity warehouses, cold storage, and agri malls will be established with the aim to eliminate the role of the middle man and ensure that the farmers get due price of their products. “Nowhere in the world a middleman charges 400-500% profit and exploits farmers,” he said.

He said strategic reserves of major commodities are also being built in order to ensure smooth supplies in the market.

Better economic policies will pave way for investment: Tarin

The finance minister said that the price of wheat, currently at Rs1,900 per 40kg, will come down drastically in the next few days. He said that the release was stopped in May but has now been resumed.

He said that the increase in prices of food commodities in the international market in recent years was largely due to high demand, and supply-chain disruption caused by the Covid-19 pandemic. “The production of food commodities has declined, as people worked less on the fields due to Covid-19,” said Tarin.

The finance minister said that Pakistan was also affected by economic slowdown.

“Going to the International Monetary Fund (IMF) led to rupee devaluation from 104 to 166 against the dollar, which increased the inflation rate,” he said.

He highlighted that Pakistan's discount rate was also increased, whereas economic activity slowed that led to a decline in incomes.

Tarin said Pakistan’s food inflation in July 2020 stood at 15.1% in urban and 17.8% in rural, which has declined to 10.2% and 9.1% , respectively.

Volatile global energy prices: Tarin asks MoE to adopt 'forward planning'

“We always said that our farmers should get international prices, so they can increase their productivity and income. But now, through a convoluted way, it has occurred as we are now importing sugar, pulses, ghee etc. Because of this we are now linked with international prices,” said Tarin.

Tarin stressed that the present government would prioritise increasing agricultural production. “For the past 15-20 years no attention was given to the agriculture sector, which led to the downfall of farmers. We didn’t increase our agricultural production and became food importers.”

Price stability: Tarin sees big role of provinces

Elaborating on the government's action plan, the minister said that we must first evaluate the profit margins from farmers to retailers. "The farmer does not get as much profit as the retailer does. Scientific processes are being re-engineered to make the process transparent.

“We are conducting a scientific study of the profits being taken by all the elements involved, and we will squeeze those who are making exorbitant profits.”