FLOOD OF PRICE HIKES ENGULFING ENTIRE NATION
Aug 23 - 29, 2010
Food prices have skyrocketed throughout the country (as always Islamabad seems to be the worst hit) with the start of Muslim fasting month of Ramadan in the midst of the worst ever floods that hit the country in the last week of July.
The prices of food grains, fruits, vegetables and other essential items of daily use have almost doubled during the last about one month. The prices of some of the basic items in the category of vegetable such as tomatoes, onion, potatoes, ginger, and lemons have quadrupled in recent days because of short supply as vast tracks of standing crop were destroyed by the floods.
The prices of beef, mutton, and poultry have also scaled significantly. The rising prices of such items of basic needs are amplifying the miseries in the country where almost half of the population is living under poverty.
During the week ended August 15 prices of 53 essential items covered under sensitive price index increased by over 25 per cent compared to last month. Inflation target for the current fiscal year is 12 per cent but these are indications that actual inflation would be much higher. There are multiple reasons for this scenario.
The floods that have affected about 1/5th of the entire country's land devastated the agriculture base. Hundred of thousands livestock heads have perished. Food crops were washed away and road transport network collapsed. Above all, the intermediaries, as always during such tragedies, have also raised their margin of profits. That is why the people living in urban areas spared by the floods also continue to experience frequent increase in prices of such essential kitchen items.
According to the latest figures of the federal bureau of statistics, the wholesale prices index has shown an increase of 18.75 per cent as compared to last fiscal year. This does not include the inflation caused as a result of flood damaging standing crops.
The prices of essential commodities have already gone too high for even the middle-income group consumers. There are apprehensions that any further rise may bring people to the streets, a scenario that is frightening the government.
There is a growing realisation amongst the concerned circles that besides the essential demand of supply formula the absence of any price control mechanism has been quoted as the foremost reasons of this never-ending price hike. Price control committees have been established by the district administration to control unjustified price like. But, this step has been taken by the government half heartedly without involving the important stakeholders i.e. consumers and producers.
Under the price control and Prevention of Profiteering and Hoarding Act, 1977 government can appoint a controller-general for:
a) Controlling the prices at which any essential commodity may be bought or sold in any area;
b) Regulating the production, treatment and keeping of any essential commodity by licenses, permits or otherwise, the transport, movement and distribution between the provinces of an essential commodity;
c) Prohibiting the withholding of sale of an essential commodity ordinarily kept for sale;
d) Requiring any person holding stock in a province of an essential commodity to sell in another province the whole or a specified part of the stock at such price, to such persons or class of persons and under such conditions as may be specified in the order;
e) Fixing the maximum quantity of any essential commodity which may at any time be processed by a producer or dealer;
f) Collecting any information or statistics with a view to regulating or prohibiting any of the matters aforesaid;
g) Requiring persons engaged in any of the matters aforesaid in respect of any essential commodity to maintain and produce for inspection such books, accounts and records relating to their business and to furnish such information relating thereto, as may be specified in the order;
h) Requiring every importer, producer and dealer to mark the essential commodities with the prices and to exhibit on his premises a price list of the essential commodities held by him for sale; and
The act, therefore, gives comprehensive powers to the controller against all manner of devices that the traders could employ to increase their profits and raise the prices of essential items. But, the government instead of resorting to this law is using ad hoc measures which have not been effective in the past and will fail again this year in keeping prices under check.