Rising food prices

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SOURCEThe Express Tribune
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Food price increases have always been a hot topic for discussion in our country, but perhaps never as much as now. The cost of food in Pakistan increased 7.52% in June 2019 over the same month in the previous year whereas it had averaged 4.67% from 2011 to 2019. The downward slide of the rupee against the dollar is being popularly blamed for the food price hikes. However, contrary to the popular belief, the rupee’s depreciation is only a minor factor in the food price increases. There are many other factors at play here that must be addressed if we are to permanently resolve the problem in our country.

Also Read: Weekly SPI inflation up 0.83 percent

The basic, all-important question is: Why do we pay exorbitant amounts of money for food in a country that produces all essential foodstuffs? Firstly, in our present market mechanism, only a small percentage (usually 15-20%) of what we pay the grocer for our food purchases goes to the farmer or producer. The rest is pocketed by middlemen who pay farmers in advance for the crops they grow. These middlemen, then, set the high prices we pay at the market in a wholly undocumented practice. The need, therefore, is to eliminate middlemen and ensure fair competition in a properly documented economy with reasonable profit margins.

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Secondly, it is essential to increase our farmers’ per hectare crop yield to adequately bring down prices. Currently, Pakistan lags behind other South Asian countries in that respect. According to experts, problems of water shortage, the absence of high yield varieties of seeds and lack of research and development must be addressed if we are to increase our agricultural output and bring down prices. Thirdly, the government must facilitate farmers by extending loans to them, introducing modern technology, improving infrastructure and the land ownership system, providing them marketing and storage facilities, and restricting food imports rendered expensive by the rupee’s depreciation.

Published in The Express Tribune, July 10th, 2019.

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