NOW it is more than manifest that profiteers are gradually taking over –– much of it if not wholly –– the sale, supply and price-fixing of staple commodities at a time when the food crisis is aggravating fast. The new, democratic regime’s managers are visibly in a fix and losing grip over the management of what can be described as the most essential and sensitive commodities. Any major lapse can lead to unthinkable consequences.

One can recall, for reference only as one of the worst examples, how profiteers were engaged in hoarding and exporting a huge quantity of staple commodities when Ireland was struck by a horrible famine in 1840s and tens of thousands were seen dying of hunger on the roads.

In recent days, our profiteers succeeded in collecting a big stock of wheat by offering a price up to Rs800 for 40kg bag to growers against the government price of Rs625.The growers are not obliging the government which raised the procurement price only to help them and encourage them for a bigger crop next time.

For speculators, it is not a bad bargain as they expect the market price to go up higher (more than Rs800) in near future because excluding Punjab, the entire country is facing a shortage of wheat even after the arrival of new crop. The government has missed this year’s production target. The 23.3 million tonnes target has been missed by 1.5 million tonnes.

Sindh suffers from a serious deficit. It needs 4.8 million tonnes but is short of 1.35 million which can be covered by diverting most of imports to this province. The NWFP faces a shortfall of 2.22 million tonnes. The province could produce only 1.16 million tonnes, its need being 3.38 million tonnes. It looks to Punjab for its needs for it lacks storage facilities.

Balochistan produced only 0.86 million tonnes but needs 1.2 million.

It is interesting to observe Prime Minister Gilani pointing his finger at some “honourable figures,” without naming them, being in the group of profiteers and hoarders as revealed by intelligence reports. He formally warned action against them if they did not desist from this unbecoming behaviour. However, in case, the government is unable to weed out these elements from the wheat business and effectively stem the growing menace of hoarding, the prime minister assured what could be the only way out –– import more wheat.

Currently, import of 2.5 million tonnes is in the process and the consignment should arrive by November. Will the private sector traders also being allowed to import the grain on their own sell the commodity at affordable prices? It is doubtful. The Federal Board of Revenue (FBR) has already waived 10 per cent customs duty on the import of wheat to encourage the private sector to buy red wheat whose prices have of late been showing declining trend but are now on the rise as more countries are scrambling to purchase it to build up their stocks.

As the procurement drive began, the authorities concerned had banned the movement of wheat and flour between the provinces to ensure success of the exercise but without seeking consent of the ministry of food, agriculture and livestock which incidentally was against the ban. The ban, it was feared, would increase the price of flour in the NWFP, tribal areas and Balochistan which it did, and also encouraged speculators. Now bringing down the price, if at all, would take longer than expected.

Hoarding is taking place at such a high scale that the food minister felt it necessary to offer rewards for information about the nefarious activity. He did not say what rewards informers would get. Flour prices have soared in recent weeks on weak supplies, and have fuelled inflation which rose to 17.2 per cent in April, the highest level in 30 years.

Minister for food and agriculture Nazar Mohammad Gondal, who went to Rome to attend the world food summit last week did not miss the opportunity of seeking, as our tradition demands, help from Americans in wriggling out of the food crisis. He told secretary, USDA , Mr Shaefer that Pakistan’s immediate worry was the shortage of wheat by a couple of million tons (it is one million, his ministry earlier told the ECC) and that the US could provide commodity assistance in the form of wheat either through World Food Programme (WFP) or on bilateral basis.

The WFP had last month shown anger over Pakistan’s refusal to sell wheat to it which it wanted to send to Afghanistan as aid. It though Pakistan had enough stocks. Now profiteers are even using WFP trucks, to be on the safe side, to smuggle flour to Afghanistan. Early this year, paramilitary troops were guarding trucks carrying wheat after some supplies went missing.

In an effort to appease the US secretary, minister Gondal even went to the extent of seeking his help in securing hybrid seeds technology. It is not clear from the official press release in what context the minister wanted it. But the US would be too happy to oblige him. This is so because current food crisis has created rare opportunities for big agribusiness, particularly of the US, to increase the spread of genetically modified foods.

Countries which need food aid and seeds are being pressured to accept them in a genetically modified form. It is a matter of good fortune for the GM business that grain shortages are almost compelling many governments, food companies and consumers to relax their longstanding resistance to genetically engineered crops.

No wonder, in Japan and South Korea, some manufacturers for the first time have begun buying genetically engineered corn for use in soft drinks, snacks and other foods. Until now, to avoid consumer backlash, the companies paid extra amount to buy conventionally grown corn. But with prices having tripled in two years, it has become too expensive to be so finicky. In Europe, where opposition to what the Europeans call Frankenfoods has been the fiercest, imports of genetically modified crops is being favoured. In Britain, the National Beef Association has asked cattle farmers to end resistance to GM crops immediately to meet the challenge of declining domestic animal production.

The Economist, London says that “the food crisis of 2008 may become a challenge to globalisation.” One can say the world is ripe for a big change. Two weeks ago, the International Assessment of Agricultural Science and Technology for Development (IAASTD) report on world agriculture, on which 400 scientists and agricultural experts worked for three years, came to conclude that “if we are to feed the world we need to re-localise markets and return to sustainable farming systems.” The report is, however, being undermined by the countries whose industries reap the most benefits from globalised trade and who are pushing the use of genetically modified crops, which the scientists rejected.

The World Bank, IMF and WTO are apparently on the defensive these days. It is a great moral and credibility setback for them to see those economies that they have been effectively running having become very disturbed. During the last decade some countries had already begun looking for alternative sources of funding to avoid the stranglehold conditions the IMF imposes in exchange for receiving its loans. In fact, business has been so bad for the IMF of late that it may liquidate some of its enormous gold reserves to plug its own funding shortfalls.