New food policy

Under pressure for many weeks over the dramatic increase in food price inflation which was recorded for January at 14.6 percent, the prime minister has announced a new plan which is to be approved by the federal cabinet. Just as schemes involving the sale of poultry, cattle or the setting up of shelters were announced earlier, this time Prime Minister Imran Khan envisages a Rs15 billion package to provide relief to consumers. This relief will be offered by diverting funds from the Ehsaas programme to offer relief through Utility Stores. The Ehsaas programme has a budget of Rs191 billion but so far the utilization has been Rs50 to Rs60 billion. This gives the government some margin to divert funds from it, although longer-term repercussions of this will need to be considered given that welfare requirements and development projects cannot be totally abandoned for the future.

The government has also accepted that it is concerned about allegations from the opposition that mafias working within the PTI are responsible for the wheat flour and sugar crisis. A Special Focus Group of Essential Food Items is to be set up under the Ministry of National Food Security to coordinate the demand for essential food items, assess supply of these items and look into reports of wrongdoing by certain individuals. It is possible as some economic analysts have pointed out that on a temporary basis this would push CPI-based inflation to around 13 percent from February 2020. The cabinet will no doubt clarify whether loans to set up retail stores and offer jobs to persons as originally mentioned by the PM are still under consideration. There have been doubts expressed about whether further subsidies given on food can have a long-term impact on boosting the economy and controlling inflationary trends. Just as ‘langars’ cannot be a permanent solution to hunger, subsidies on food cannot be provided indefinitely by a resource-starved government, which is working under an IMF philosophy which opposes subsidies in general.

There have been too many schemes and suggestions. We need more focus and a definite sense of direction. Only higher levels of employment can help people bring into their homes enough money to feed their families. The increase that has been created in joblessness through the closure of textile mills as utility bills rise, the massive drive against encroachments destroying small kiosks run by vendors and the high interest rates which deter persons from obtaining loans and setting up new businesses all work against this. Essentially, it is too late for short-term measures. We need a focused and definite policy on the economic situation combined with stability. We hope there will indeed be an investigation into the wheat and sugar crisis and that alongside subsidized flour and other items long-term policies to reform and rebuild our economy will become the focus of the government’s economic and planning team.