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May 12, 2021

Prices win

LAHORE: The government has failed to rein in the ever-increasing prices of daily use items and now mutton, beef, and chicken have also gone out of the reach of millions after wheat flour, sugar, and edible oil.

This is happening at a time when the entire bureaucracy and scores of ministers are single-mindedly making efforts to keep the rates stable during Ramadan. Increase in the prices of vegetables, fruits, and some pulses is a yearly routine as demand for these items exceeds supplies during this month.

However the consumption of animal protein reduces substantially during the fasting month.

The ban on indoor dining in restaurants and iftar parties in hotels and marriage halls also drastically reduced the consumption of all kinds of meats. Still their prices increased sharply at a time when the federal, provincial and district administrations were closely monitoring prices in the markets.

What worries consumers is what will happen when the monitors go back to their cozy offices after Ramazan? Generally once the prices go up unfairly the reversal to normal is not possible in our country. Rates of sugar and wheat are recent examples. The extra efforts made by governments to control prices during the fasting months routinely fail as the prices continue to increase; though governments made efforts to provide edibles at reduced rates through special bazaars to a small section of the population.

In fact Ramazan is the month that clearly points out the absence of the writ of the government as it fails to control prices despite deputing half the bureaucracy on price control. Prices could only be controlled by increasing supplies and this has been proved this month when the rates of onions and tomatoes declined sharply on excessive supplies.

The demand for these two items increases during fasting month substantially. Fortunately the rich harvest of onions and tomatoes reduced the rates of these two commodities to Rs20-25 per kg in Lahore markets. Last Ramadan the rates of both crossed Rs100 per kg. Another factor that reduced the prices was the farmers were allowed to dispose of their produce directly in retail markets. This is also a reminder to the government that the prices of vegetables could be reduced by eliminating middlemen from the process. The farmers usually part with their produce at a very low rate by selling it to the middlemen that have arrangements to sell the commodities in cities.

The farmers are not allowed to come into the cities with their carts and tractor trolleys during the day because it would clog the city roads. The solution to this problem is to allow the farmers to set up bazaars at designated spots during night from 11 pm to 5 am. They would bring fresh vegetable and fruits and could sell at double the price they get from the middlemen.

Even then the price to the consumers would be substantially lower than what they get from routine markets. The administration has only to ensure that the market times are strictly observed. Moreover the place is properly cleaned an hour after the night market closes. There should be no permanent structures or encroachment at that place. The prices would come down sharply as consumers would flock to these markets even at night because they would get fresh items at lower rates. Every economic expert has pointed out that elimination of middlemen is the only solution to lower the rates of agricultural edibles and increase farmers’ earning.

All this is subject to a transparent and competent administration that we unfortunately lack. We might see mess in these bazaars after a few weeks with filth all over the place if the administrators were not made accountable. A rent seeking culture could also develop with auctions of best selling spot taking place. This again leads to the importance of good governance. In fact the price hikes would not have been possible had the governance level been high in the country.

It is because of bad governance that we experience and as a result not only we have to pay high unjustified price but also get low quality or substandard edibles. We get foods adulterated with cheaper substances. The weight and measures are manipulated. The capacity and capability of regulatory institutions has been compromised.

These institutions have incompetent and corrupt staffs that even let the retailers off the hook that tinker with weights and measures. A consumer paying for one kg of an item might end up with 10-20 per cent less because standard weights are not used. Adulteration in milk, red chili powder, and other such items could only be checked if the regulatory institutions are strong and transparent and have competent and honest staff.