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April 7, 2021

The price of fasting

Business

April 7, 2021

LAHORE: Controlling prices during Ramazan is an uphill task for the government as it is a month of high food consumption and a spike in demand sends prices through the roof unless the state has arranged extra supplies.

A government that has failed to check price hike generally cannot be expected to control the prices in the fasting month, particularly when no planning is in sight. Even in the past most governments failed to fully control the price hike in this month. There are few instances when the rates of few items like gram flour (baisen), wheat flour (aata), edible oil and ghee, sugar, dates, onions, potato (vegetables with longer shelf life), and some branded items were largely maintained at pre-Ramazan level. This was not done overnight. The planners assessed the consumption trend of these items in the previous Ramazan three to four months before the advent of fasting month.

In 1997, for instance, the Punjab government after assessment arranged additional stocks of some items from its own resources and supplemented the shortages on a daily basis in scores of special bazaars established around the province. Dates and gram pulse were imported in large quantities. The government provided a huge subsidy on wheat flour and flooded the market with 10 and 20 kg bags to create oversupply of the commodity. The government negotiated the reduced prices of edible oil and ghee with the mills in Punjab assuring only their brand would be allowed in hundreds of special (sasta) bazaars. This assured them bulk sales. When the Punjab based mills refused to go beyond a discounted price, the planners contacted mills in Khyber Pakhtunkhwa (KP) that offered lower rates. Finally mills matching the lowest rates from Punjab and KP were allowed to supply their oil and ghee to these bazaars. The sugar mills were similarly approached and requested to reduce their rates. Those that agreed were able to sell their commodity in large quantities.

The manufacturers of popular summer drinks were asked to come up with reduced rates for supplies in these sasta bazaars. Onions and potatoes were stocked by the government and released at lower rates to match the supplies with demand. The governance at that time was excellent.

The bazaars were well maintained and inspected many times a day by the government officials. Complains of overcharging were addressed by the officials on the spot. The head of the province was a tough task master and kept an eye on prices.

These bazaars were a complete solution for the daily use needs of the citizens. Special vegetable shops provided vegetables at the government announced rates. In many instances however some vegetables that were in short supply were not available in these bazaars. In the same way fruit shops provided some relief in few fruits but generally the prices were higher than pre-Ramadan level.

This was understandable. Fruits and vegetables are perishable items and cannot be stocked in large quantities. The demand for both particularly fruits increased much beyond the supplies of these items. The prices therefore fluctuated according to the difference between supply and demand. Chicken meat shops provided the meat in these bazaars at rates notified by the government. Same was the case with mutton and beef.

This concept was carried with lesser vigilance by the military government and in a slightly better way by the PML-Q government. The PML-N government that ruled for the next 10 years tried to revive the concept to the 1997 level but partially succeeded. Other provinces also tried to duplicate this model. Some succeeded and some failed. The decline in general governance level hampered ideal implementation of price control. Still there is no denying the fact that people did get appreciable relief in these bazaars. The present government seems to have lost total grip as far as controlling prices are concerned. Its Ramadan bazaars failed to provide meaningful relief to the consumers.

Though the Prime Minister has assured that the essential items would be available at lower rates in Ramadan but there is no planning in sight. The prices could be controlled by the provincial governments; the federal government has a limited role in this regard.

The provinces have failed even to control the sugar prices. The sugar mills association has flatly refused to supply sugar at rates notified by the state. In fact sugar has vanished from many outlets a week before the start of the holy month of fasting. The rates of other edibles are also rising. It is going to be the toughest month for the consumers.