FOOD INFLATION OMEN OF POLITICAL, SOCIAL UPHEAVAL

CAMOUFLAGE UNDER GLOBAL FOOD CRISIS BE TRANSPARENT

TARIQ AHMED SAEEDI (tariqsaeedi@hotmail.com)
Apr 21 - 27, 2008

Controlling turbulent price hike has become a daunting task for the elected government just settled in the ruling benches of lower and upper parliaments to which people have pinned glaring hopes of getting themselves relieved from the ubiquitous price escalation. As the new government claims of its high share in bringing solace into common public life the density of public expectations has already been plentiful. However galloping inflation that gained its pace due to instinctively apathetic overlooking of all past governments requires pinpointed diagnosis of administrative deficiencies, immediately government should restrain food prices from further rise. Failure in this could anytime cause eruption of public wrath against the government.

Many counties have recently experienced turmoil like situations due to the uncontrollable inflation. Government of Haiti was toppled for its failure to check on rising prices of foods. Similarly, Egypt, Indonesia, India, and several other countries are beleaguered with the inflation predicament. In their reports, United Nations Food and Agriculture Organization and World Bank have prognoses about impending political upheavals that may be triggered by the rising food prices. The reports seek financial assistance of world leaders to arrest the crisis at earliest however they do not present sustainable and long term solutions particularly that can lead food security in Pakistan; where supply of food in proportion to production can ease the intensity of food inflation.

PAKISTAN IS LISTED IN 36 COUNTRIES FACING FOOD CRISIS

Food inflation in Pakistan in this March ballooned to 20.61 percent and that was year on year basis. Sadly, the decimal points are continuously added to the index after every market price review. The fluctuation in prices of food items impact directly on the masses. Perhaps, few people could not badly be affected with a price rise of food but in Pakistan majority of people spend over 50% of their monthly incomes on purchases of kitchen commodities like flour, rice, milk, vegetables, meat, edible oil, fruits, etc. These are commonly consumable sources of food. The moving trend of prices in these items has been upward for decades. While price hike in food items is not a new issue and inherited to every new government from its predecessor, afresh global food insecurity and shortages may be harnessed to camouflage conspicuous deficiencies of administrative system.

Globally, food security of people has unrolled draconian episodes of tough policy making for nations. Since to ensure supply of food countrywide is a state responsibility in enlisted countries confronted with the food crisis, series of corrections in food plans are focused in priority. There are numerable natural tendencies and genuine drivers that result into the shortage of food worldwide and that are somehow affecting on Pakistan's landscape. One and utmost important is surge in price of oil that is the main input in production process. The most vulnerable commercial sector of this price surge is agriculture. The cost on farm produce automatically increases at par with the high cost of consumption of tractor or water pump as well as rupees plus in price of fertilizer or diammonium phosphate (DAP) pulls up price range of wheat or sugar. Alongside, dry-out water storages, run-out canal and distri systems, and outdated water channels have worsened the scarcity of water to hit down productivity vigorously.

People raise a valid point that Pakistan being the agrarian society should have better averted problem of food scarcity and maintained balance between demand and supply. They also contend complete ban on exports of food commodities from Pakistan in order to meet the supply demand shortfall and keep price at its low level. Arguably they are justified yet peasants [and mostly middlemen] sell out produces to earn maximum profits unconcerned of its being consumed locally or across the border. Value disparity of domestic procurement with export normally makes local produces exportable. Prices of many products like crude oil and DAP remain uniform internationally. And, margin on profit is only out of comparative advantage. For instance, re-export or export of DAP and wheat procured at government subsidized rates is a lucrative business in Pakistan. Therefore, wheat smuggling (export) continues despite government's meddling.

The alternative ways for generating fuels through farm produces also intensify food scarcity. Bio fuels aka ethanol distilled out of Soya bean and maize cut short their worldwide supply and subsequently fuel price hike of food. Compounded with the problem, climate change (Mother Nature) is revenging in full action against human wilderness in exploiting natural resources. Cultivatable lands start succumbing to the rising sea level. Concurrently in Pakistan, transformation in people economic condition and rapid urbanization has induced psychographic shift of population world over. Now, consumption of dairy products including meat increases in masses proportionally demanding large numbers of [e.g. cattle and cow] breed; which in turn consume grains allocated for human consumption earlier. Equally essential root cause of demand and supply gap of food items in Pakistan is antipathetic population shift towards urban areas. On one hand, unneeded urbanization is eroding out arable lands and confiscating citizenry rights of local populous on the other. Certainly, access to basic needs becomes difficult if numbers in people vying from fixed production keep multiplying. Reasonably, new Government should not dither in taking pragmatic measures to rein in food inflation if it wants to stay a little longer than 100 days.

The food inflation (crisis) in Pakistan is a subsequent effect of more human errs than natural shivers. Unfettered free market economy has limited the scope of government prudence and regulation only to adjust fiscal and monetary policy as well as to introduce change in value of exchange rates while it is senseless to raise regularly interest rate in the wake of spiraling inflation that is itself perverse. Whereas it is proven that unvigilant state control over profiteer and cartelization has been engendering sequels of price escalation especially in food items for decades. Most of the farm produces are tagged high price rates because of cruel some lengthy channel of distribution formed in between farmers and end consumers. Indeed, hoardings instead of lack in supply causes price hike in foods and food inflation nationwide. While that is an open secret, the unfair practices from the market have yet to be curbed. Generally, buying-on-less-cost-and-selling-on-high-price approach increases prices when actually increase is not needed. The approach is not out of need rather greed; both of which seduce corruptible elements. Global food crisis will not confer a bargaining chip to new government elect in its pleading in public but the government ought to realign its erstwhile direction of win-win.