Artificial inflation hits raw food items

Consumers face 100% price hike despite recommended 15-20% gap between auction rate and retail cost, sparking concerns

LAHORE:

Despite all the claims and announcements made by every new government, the laws and administrative structures devised to prevent an artificial increase in food prices, self-imposed shortage and illegal profiteering have proved unsuccessful in Punjab.

The gap of up to a 100 per cent between market and retail prices continues under the outdated system of price control implemented at the district level, which has proven to be a complete failure while opening up new avenues of corruption, all under the nose of the Punjab Food Department, Agriculture Department and the Industries, Commerce, Investment, and Skills Development Department.

Recently, Punjab Chief Minister Maryam Nawaz set up the Department of Price Control and Commodities Management for the supply of food items, monitoring of prices, and regulation of related industries in Punjab. The department will be responsible for monitoring flour procurement, sale, storage and transportation alongside monitoring the demand and supply of food grains. Interestingly, two days after the formation of the new department, the government has once again issued a notification in Lahore to give the powers of price magistrates to 73 officers belonging to different departments. What remains unchanged is the plight of the masses, who have no option but to buy basic food items at sky-rocketing rates.

“The highest inflation is observed in the prices of vegetables and fruits. If one shop is selling a vegetable for Rs50 per kilogram, the same vegetable will be sold for Rs70 a few meters away at some other shop. However, if one visits the wholesale market, the vegetable would be available for just Rs30,” said Salman Khalid, a customer at a shop.

Concurring with Khalid on the fluctuations in prices, Tasleem Arshad, another customer, believed that the rate list issued by the market committee was just a piece of paper.  “Shopkeepers demand high rates for produce on the grounds that they too have bought the food items at a high price from the market. The government should either remove the rate list or ensure its 100 per cent implementation,” riled Arshad.

Looking at the past two decades, many experiments have been done for price control and monitoring including the formation of price control committees and magistrates, which have all proven fruitless. Economists agree that the executive district magistrate system prevalent till the 1990s was the most effective system to control inflation, but when the higher judiciary separated the executive and the judiciary, price magistrates were brought in to prevent inflation. However, the officers, holding special powers, failed to visit the fields due to their busy schedules.

Talking to The Express Tribune, Former Finance Minister, Dr Salman Shah was of the opinion that it was not possible to eliminate inflation through artificial and demonstrative methods. “The rate list issued by government departments is unrealistic while the auction of agricultural commodities in the wholesale markets has not been made an effective system till date. There should be a difference of 15 to 20 per cent between the auction rate and the consumer price, but consumers are charged many times more. Instead of giving magisterial powers to officers of different departments, if the dedicated officers in the new department are given the responsibilities of magistrates, whose only job is to control the price, then better results will be achieved,” claimed Dr Shah.

Dr Shah further opined that in today's era of free trade, the government should let the market work according to the supply and demand with strong and effective monitoring, “Cartels, artificial inflation and shortages should be prevented through effective and modern laws,” he added.HL: Artificial inflation hits raw food items

Shoulder: In the absence of stable price control, suppliers charge a variety of rates for the staple ingredients Rizwan Asif Lahore Despite all the claims and announcements made by every new government, the laws and administrative structures devised to prevent an artificial increase in food prices, self-imposed shortage and illegal profiteering have proved unsuccessful in Punjab.

The gap of up to a 100 per cent between market and retail prices continues under the outdated system of price control implemented at the district level, which has proven to be a complete failure while opening up new avenues of corruption, all under the nose of the Punjab Food Department, Agriculture Department and the Industries, Commerce, Investment, and Skills Development Department.

Recently, Punjab Chief Minister Maryam Nawaz set up the Department of Price Control and Commodities Management for the supply of food items, monitoring of prices, and regulation of related industries in Punjab. The department will be responsible for monitoring flour procurement, sale, storage and transportation alongside monitoring the demand and supply of food grains. Interestingly, two days after the formation of the new department, the government has once again issued a notification in Lahore to give the powers of price magistrates to 73 officers belonging to different departments. What remains unchanged is the plight of the masses, who have no option but to buy basic food items at sky-rocketing rates.

“The highest inflation is observed in the prices of vegetables and fruits. If one shop is selling a vegetable for Rs50 per kilogram, the same vegetable will be sold for Rs70 a few meters away at some other shop. However, if one visits the wholesale market, the vegetable would be available for just Rs30,” said Salman Khalid, a customer at a shop.

Concurring with Khalid on the fluctuations in prices, Tasleem Arshad, another customer, believed that the rate list issued by the market committee was just a piece of paper.  “Shopkeepers demand high rates for produce on the grounds that they too have bought the food items at a high price from the market. The government should either remove the rate list or ensure its 100 per cent implementation,” riled Arshad.

Looking at the past two decades, many experiments have been done for price control and monitoring including the formation of price control committees and magistrates, which have all proven fruitless. Economists agree that the executive district magistrate system prevalent till the 1990s was the most effective system to control inflation, but when the higher judiciary separated the executive and the judiciary, price magistrates were brought in to prevent inflation. However, the officers, holding special powers, failed to visit the fields due to their busy schedules.

Talking to The Express Tribune, Former Finance Minister, Dr Salman Shah was of the opinion that it was not possible to eliminate inflation through artificial and demonstrative methods. “The rate list issued by government departments is unrealistic while the auction of agricultural commodities in the wholesale markets has not been made an effective system till date. There should be a difference of 15 to 20 per cent between the auction rate and the consumer price, but consumers are charged many times more. Instead of giving magisterial powers to officers of different departments, if the dedicated officers in the new department are given the responsibilities of magistrates, whose only job is to control the price, then better results will be achieved,” claimed Dr Shah.

Dr Shah further opined that in today's era of free trade, the government should let the market work according to the supply and demand with strong and effective monitoring, “Cartels, artificial inflation and shortages should be prevented through effective and modern laws,” he added.