Assuring mechanism of price control

Assuring mechanism of price control

Addressing a press conference at PID Islamabad, Federal Information Minister Shibli Faraz admitted that after coming of Inquiry Commission report on sugar shortages, the cartel of this commodity has abnormally increased its price. However, he made it clear that government will not cave in to the pressure of sugar mafia and a mechanism of strict price control shall be put in place to bring uniformity in the prices of food commodities in all provinces. He said that first ship of imported wheat will reach Karachi by August 24 and supply situation in the market will improve, leading to fall in the price of wheat flour.

Notwithstanding the firm resolve of breaking the cartels, the ground reality tells a different story. A news report few days ago stated that in recent cabinet meeting  elected members of the cabinet had questioned the rational of exemption given to certain importers of wheat, who have been found involved in hoarding of the commodity, which led to its shortage and snowballing the price rise. The findings of Inquiry Commission report against the sugar and flour millers have exposed their monopoly, hoarding and Cartelisation tactics to increase prices.  If the same exemption is given to members of sugar cartel to import sugar, then mechanism of administrative price control will not work. The elected members of the cabinet should have greater say in decision making instead of unelected members, who always remain on the payroll of International Monetary Fund and other multilateral donor agencies.

The success of mechanism of uniformity and stability of prices of food commodities will depend on supply augmentation measures in the short run by way of imports through honest importers and in the long run by boosting productivity of agriculture sector, for which implementation of a comprehensive plan is required. The helplessness of federal and provincial governments to protect standing crops from the recurring locust attacks on Rabi and Kharif crops shows that even short term strategies of agriculture development are not in place. The minimum support price of cereals crops is much lower than the input cost and farmers are compelled to grow cash crops. Hopefully, a long term plan will be worked out for agriculture development.

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