15pc increase in wheat flour price troubles the poor

June 03, 2020

LAHORE: As people faced a 15 per cent increase in wheat flour price in just a month, a new wave of inflationary pressure may push the poor strata of the society to starvation if immediate remedial...

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LAHORE: As people faced a 15 per cent increase in wheat flour price in just a month, a new wave of inflationary pressure may push the poor strata of the society to starvation if immediate remedial measures are not taken by authorities.

Amid the coronavirus pandemic, the buying power of most people has already been eroded due to salary cuts, layoffs and lack of work for daily wagers due to about two-month long lockdown. The Covid-19-induced restrictions have hit hard the poor as they are facing immense difficulties in meeting even their basic food needs.

On top of it, rising inflation put further strain on their ability to buy affordable food as wheat and flour prices have started to inflate in the middle of harvesting season when grains are abundantly available in the country.

According to official market rates, average wholesale wheat price in the province hovers around Rs 1538 per 40 kg against the procurement rate of Rs 1,400. The price of grain never surpassed the official rate during the wheat procurement drive. The rising trend of wheat continues unabatedly and touches Rs 1,700 to 1,800 mark in the provincial metropolis. So much so, the wheat surplus district of Rahim Yar Khan also faces high prices of grains as they surged to over Rs 1,600 in the wholesale market. The price of flour, which multiplied to Rs 920 per 20 kg bag from Rs 805 in about a month may go further up by Rs 50 to 100 in the next three to four months if the present trends continue unchecked.

Similar pathetic state of affairs are seen in the flour market. “We are facing challenge of bullish trend in flour price at the onset of the wheat year, which is a bad omen,” said Abdul Rehman of Atta Chakki Owners Association. He said the flour price has started to move upwards and this trend is bound to continue in the same trajectory in the short to medium term at least.

“I have never seen such a high jump of Rs 120 in the price 20 kg bag during my whole experience of several decades,” said Majid Abdullah, member of Progressive Flour Millers. “Honestly speaking, I am appalled and demoralized while foreseeing potential negative impact of such price trends. If these high prices are seen at the end of this year, it could be justified one way or the other but for sure these are unacceptable for all of us. The costly flour will hit poor badly for at least next four months before the government starts releasing wheat to flour mills at controlled rates.”

According to an insider, the unabated upward trend in the grain market will not let wheat flour accessible for the poor. In order to arrest the rising trend in grain prices and keeping rates of flour bags relatively low for the poor, the Punjab Food Department should launch a targeted flour subsidy scheme as soon as possible. It will be a sort of utility store type scheme but only flour-specific at the provincial level.

A customer should only be allowed to buy only one bag at a time at weekly sale points. As many as one lakh ton wheat should initially be provided to mills for grinding cheap flour for the poor on a monthly basis. This quota could be increased keeping in view the demand of subsidized flour. However, strict regulation of flour mills and monitoring of entire chain of cheap flour scheme must be ensured to give real benefits to needy persons. Otherwise, like past practices, only influential flour mill owners will snatch benefit of subsidy with much ease.

Launching of this scheme is indispensable as the provincial government has nothing to offer in the ongoing period of unprecedented flour prices. To meet this challenge, there should be a targeted subsidy scheme for the poor as it is only viable option left with the provincial government if it really wants to ensure provision of flour to people at reasonable prices. Launching of a targeted flour scheme for the poor will open a window for shielding the poor from rising trend in flour price.

This scribe interacted with the highups of the Punjab Food Department successively for several weeks on issues related to sustainable availability of cheap flour for the poor. On Tuesday, in such an interaction, a senior official hinted that the provincial government is contemplating to initiate a targeted flour subsidy programme. “As a matter of fact, we are working on it as we speak,” he observed.

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