Sudden shift in policy
HOW a sudden shift in government policies can cause turbulence in the market is quite obvious from the recent upheaval witnessed in the price of wheat flour and its shortage in many parts of Sindh. After having implemented a ‘liberal’ policy of releasing unlimited quantities of the grain to anyone and everyone from its stocks for several weeks, the Sindh food department suddenly reverted to quotas for flour mills. Apparently, the aim of the curtailment of supplies was to stop misuse of the liberal policy for hoarding and smuggling ‘subsidised’ wheat. But, the millers allege, the food department did not stop supplies to traders and exporters responsible for smuggling and hoarding the commodity. Little wonder then that the shift in policy has resulted in the shortage of flour across a large part of the province, including Karachi and Hyderabad, and a substantial rise in its price, mainly at the expense of the urban poor whose food security is at risk. The fixation of inadequate daily quotas for mills is a signal to hoarders and profiteers to raise their price, making it difficult for mills to buy the grain from the market and sell flour at the officially fixed price.
The millers want the Sindh food department to both increase their supplies from its stocks, as under the liberal release policy, to meet their capacity requirements and stop sales to traders and exporters. The government has apparently promised to meet their demands, but it remains to be seen if it will act on its pledge. Without the earlier policy firmly back in place, millers are unlikely to sell wheat flour at the official price. While it is advisable to provide sufficient quantities of the grain to mills, measures should also be taken to ensure the smooth supply of flour to consumers at the official price. At the same time, the department must move quickly to bring wheat to Karachi where its stocks have already been exhausted. A flour price or supply crisis in any part of the province in spite of ample stocks meant to last till April will only be a manifestation of bad policies and misgovernance.