Govt clamps down on flour mills deemed responsible for artificial inflation

Utility Stores Corporation alleges mills’ misappropriation, flour mill association claims being scapegoated

LAHORE: Following multiple complaints of misappropriation and fraudulent practices by Utility Stores Corporation (USC) staff, a recent crackdown on flour mills supplying wheat to utility stores across the country has left several flour mill owners on the qui vive.

The crackdown, which came upon the directives of USC Managing Director Umar Lodhi, has unearthed discrepancies in stocks and records of more than six flour mills in Punjab. Following which, an audit has been launched and those found guilty stand at the risk of being blacklisted.

According to USC Managing Director Umar Lodhi, a probe has also been launched to verify the weight and quality of the flour being supplied to the stores. “The public made an unusual purchase, i.e. spent over Rs 8 billion at utility stores amid the lockdown this past month. But complying with the Prime Minister’s orders, we are taking every possible measure to ensure food protection and supply to the masses,” shared Lodhi.



Prior to the crackdown, The USC had demanded an additional 2, 00,000 tonnes of wheat from the Ministry of National Food Security and Research. Which had triggered federal and provincial intelligence agencies to look into the possibility of misappropriation of wheat and the several complaints made on account of dubious practices of the USC staff.

According to sources, the complaints highlighted that a few designated flour mills had been involved in selling up to 40-50% of wheat supplied to them by the Pakistan Agricultural Storage and Services Corporation (PASSCO) at exuberant rates in the open market. Upon investigation, the sale, which was being made without confirmation of record by the Punjab Assistant Commissioner, led to the arrest and seizing of flour mill staff members and vehicles.

Addressing the matter, the flour mills association expressed that the government and government departments should avoid pinning flour mills for the artificial inflation created by shopkeepers in the market. “If such allegations continue, although we will still utilise government wheat to make flour but the district management will have to undertake the responsibility of picking flour from the mill gates and supplying them to the shops,” the association warned.

In a bid to stabalise the sale of wheat, Prime Minister Imran Khan had approved supplying 2,00,000 tonnes of wheat to flour mills through PASSCO, two months ago. Until last Monday, the USC had procured up to 1, 21,000 tonnes of wheat from PASSCO reserves and further demanded an additional 2, 00,000 tonnes of wheat from the federal government, which is under deliberation.

The USC management after selecting one or two flour mills has entered into an agreement with them. As per the agreement, the mills upon procuring wheat from PASSCO reserves, will be responsible for grinding and providing 80 kilograms of flour in exchange of every 100 kilograms of wheat, at concerned utility stores.

According to market sources, owing to high prices of wheat in Punjab and Khyber Pakhtunkhwa’s open markets and the fraudulent practices carried out by USC designated flour mill managements, the wheat procured from PASSCO is being sold in the open market. While fabricated statistics about the sale and supply of wheat are being forged in store records, which has aggravated the shortage of flours across utility stores.



Moreover, the National Food Security Federal Secretary shared that assistant commissioner Punjab, instead of taking action against the dealers and shopkeepers involved in the fraudulent practice, has shifted the blame of wheat crisis on flour mills.  Whereas, several shopkeepers selling flour at exuberant rates along with flour mill vehicles supplying flour in the open markets, were arrested on Monday. Upon arrest, officials seated in the vehicles expressed that action against them should only be taken if and when shopkeepers have testified against them and stated that they have been involved in providing flour at a price higher than the ex-mills.

On the other hand, speaking to The Express Tribune, Pakistan Flour Mills Association (PFMA) Central Chairperson Asim Raza, maintained that the government is trying to shift blames of their own negligence on the flour mills. “How are we responsible if a shopkeeper is selling flour at higher prices? We are only accountable for Rs 783 of the ex-mills. And if these allegations persist the government should make its own arrangements of picking up and supplying flour from our mills,” he warned.

Published in The Express Tribune, April 4^th, 2020.