Curb on food price hike during Ramazan urged

LAHORE: The federal budget was presented on Friday on the eve of Ramazan – a month when the prices of particularly edibles go up because of higher demand than the supplies. 

The provincial governments have made efforts to ensure adequate supplies of edibles consumed in this month at reasonable rates. They have set up discount bazaars in all parts of the country. They have established fair price shops in collaboration with private sector. Their approach to control rates has been adopted in the past years and met with little success and so, the results would be the same this year as well.  The provinces would try to control the prices through administrative measures instead of market-based principle of increasing supplies.

The provincial administrations know very well that the most consumed items during the month are wheat and gram flour, sugar, edible oil and concentrated soft beverages. These are mostly non-perishable items and could be stocked much ahead of Ramazan to supplement the short supplies. Then there are some vegetables as well that have long shelf life like potato, onion, ginger and garlic that could also be stocked by provincial administration ahead of the month. 

After years of experience, the district administrations very well know the regular usage of the edibles daily and growth in their consumption during Ramazan. Since the government would be making bulk buying, every edible oil, flour and sugar mill, date wholesaler and soft beverage producer would willingly quote much lower rates on guaranteed bulk sales.

This arrangement looks ideal on paper, but many would say that it is not practicable. However, two decades ago this arrangement was successfully practiced in the Punjab under the same Chief Minister who is heading the provincial government now. Under the arrangement, the provincial and district administration entered in to contract with certain manufacturers for the bulk supplies of numerous edibles at concessional rates. Daily Ramazan bazaars were planned and established in every locality of big cities and supplies were made available to the retailers at lower than the wholesale rates.

The Punjab government, for instance, first asked the ghee and edible oil mills of Lahore to supply one kilogramme of pouch at Rs2-3/kg less than the open market retail rate and on their refusal contacted ghee mills in other provinces. Finally, the local mills succumbed to the pressure and assured uninterrupted ghee supply at the government prescribed rates.

The price control committee of the Punjab Chief Minister evaluated the supply of several items during Ramazan: e.g. gram that is widely used in different dishes in the month. When the committee found that the availability of gram might be a problem it arranged supplies from other provinces that had excess supplies. The committee also recommended the provincial government to request the federal government to import certain items well ahead of Ramazan to ensure stability in rates and availability.

The discount bazaars were well-organized and placed under the supervision of capable and efficient bureaucrats. Sugar availability was assured at lower than the pre-Ramazan rates. The administration, at that time, knew that they had to take care of those essential commodities whose consumption was up in the fasting month.  They did not waste their energies on controlling the fruit rates.  The consumption of fruits like guava, apple and banana also increase substantially during Ramazan.