Rising flour price

In a bid to bring down flour prices, the govt must eliminate the 60 per cent duty on import of wheat

It has become a familiar problem that no one seems to be able to resolve. Yet again, the country is faced with the possibility of flour shortages over the next six months. And this despite the fact that Pakistan had begun the year with a wheat stock of 27.9 million tonnes which is more than enough to meet the national annual requirement of 25.8 million tonnes. Instead, the country now finds itself importing wheat at a substantial cost. As an immediate measure, therefore, it is essential that the government temporarily eliminate the 60 per cent duty on import of wheat in a bid to bring down flour prices.

But for a long-term solution to the problem of high flour prices, there is a dire need for the government to take certain concrete measures. Firstly, the authorities must move to stop the obvious theft and smuggling of wheat. In Sindh, for example, of the province’s initial wheat inventory of 800,000 tonnes, there are reports that up to 200,000 tonnes are missing. It would simply be impossible to keep prices under control if the government shows negligence in such matters.

Secondly, we must remember that commodity price hikes are being caused largely by unscrupulous middlemen who, in a largely undocumented economy, purchase wheat from farmers at extremely low prices and sell it at the market at exorbitant rates. The Federal Board of Revenue (FBR) must, therefore, continue — in fact speed up — its efforts towards a documented economy to ensure fair competition and proper taxation.

Thirdly, it is crucial for the authorities to concentrate on improving the country’s per hectare wheat yield which currently lags behind both global and regional competitors due to a host of issues, including water shortage, the absence of high-yield seed varieties, lack of research and development, and the use of outdated technology by farmers. All of these issues must be addressed on an emergency basis to increase the supply of wheat.

Unless these measures are implemented, we risk the prospect of a never-ending cycle of increased flour prices year after year.

Published in The Express Tribune, November 19^th, 2019.

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