WHAT is unfortunate in the prevailing circumstances is the irresistible greed of a section of Pakistani traders to sell food crops abroad simply because the higher prices there would bring higher profits. How disastrous the consequences of such an attitude can be for the country and the marginalised population already in the grip of aggravating food crisis is hardly their concern. And, often, the bureaucracy too lets it happen.

A case in point is the situation with regard to common man’s access to rice which appears poised to revisit the ugly scenario created by wheat’s disappearance in winter last year. It is quite puzzling to observe that at a time when all the major rice exporting countries such as Vietnam, Thailand and even India have clamped a ban on the export of rice to beef up stocks of the commodity for bad days that many can see coming, Pakistan is reluctant to do so.

The prices of rice of popular varieties in the country’s markets have almost doubled in a few months and are likely to rise further if there is no intervention by the government which is showing caution in dealing with the traders community. But rice traders are too anxious to use this rare opportunity to make huge profits. In fact, the importers abroad are scrambling to buy Pakistani rice and willing to accept any price because it is a scarce commodity. The country is expected to have an exportable surplus of about three million tonnes from a crop of an estimated 5.5 million tonnes in the year to June if nothing goes wrong.

But there are apprehensions that the traders would ultimately succumb to the greed for lucrative profits by selling too much of the precious commodity and, thus, create conditions of shortages at home. This would, then, impose the ugly option of importing the same or more quantity at a higher price, like in the case of wheat. Pakistan produced 23.3 million tonnes of wheat in the 2006/07 crop but began exporting a large amount of it (about one million tonnes) on a wrong assumption of a higher estimate and, as a result, had to buy back 1.7 million tonnes at a double price to overcome severe shortages which it has not been able to recover from so far.

The prices of most of the rice varieties –– although there is no shortage –– have already gone up too high. It looks as if the prices are being skilfully manipulated by some investors and speculators who have managed to get control of large stocks. They are playing with the commodity the way they do with shares in the stock market. Not only rice, they appear to be enjoying a strong grip on the wheat trade as well, as evident from Federal Food Committee’s report to the government. The report indicated that arrival of 1.7 million tonnes of wheat, scheduled by March 15, has been delayed by the Pakistani importer in a ‘pre-planned manner.’ The contracts, the report says, have been awarded to traders who would not care about timely delivery. The FFC also wants an investigation into smuggling of 1.5 million tonnes of wheat which was one of the reasons for the shortages and the price hike. So, both wheat and rice face an uncertain future and their smooth distribution to the population at an affordable price cannot be ensured. The state, whose effective role in managing food security and ensuring common man’s easy access was decisively taken away and handed over to the free market operators after it succumbed to the dictates of IMF-World Bank-WTO combine, seems helpless at this hour. The new government, being a democratic one, can regain its old role of a benevolent state but would not choose to anger the multilateral agencies.

However, the Punjab government, in a bid to prevent the repeat of December crisis, has done things in its own way. It has placed curbs on the purchase of new crop by the private sector and flour mills have been asked to restrict their purchases to three days of milling requirements. The middlemen have also been forbidden from making purchases for flour mills; only those holding licences can procure wheat. This decision of Punjab reverses a five-year old policy that anybody can procure wheat from anywhere.

In case of rice, it looks certain that even another record crop, expected in September, may not offer an affordable price to the consumer. The hike that has set in has, in fact, come to stay. The prices of Irri-6 have already soared to Rs42 per kg from Rs36 and $800 from $700 per tonne in the world market. Last week, 15,000 tonnes each of Irri-6 rice were loaded on PNSC ships Hyderabad and Sibi to sail for Africa. More ships will be leaving soon. So, the big exporters are ruling the roost.

A report in this newspaper says that in the wake of the unfolding scenario, small and medium traders and exporters have almost been driven out from the market, with their companies lying closed. Keeping in view the growing appetite for quick and lucrative profits of the investors, the stocks of rice meant for export are likely to run out by the end of May which otherwise take the whole year to last.

Reports say that the representatives of Rice Exporters Association of Pakistan (REAP) met the new finance minister, Ishaq Dar, last week to obtain his nod for export of the commodity. There was no official word on it but they reportedly assured the minister that they would not upset the applecart by exporting too much (their quantity would not exceed 2.8 million tonnes) and hence the government should not ban rice export as done by many rice-producing countries.

They agreed to maintain a stock of 700,000 tonnes, out of which 200,000 tonnes would be set aside for the utility stores and the remaining 50,000 tonnes to be kept as strategic reserves in their association’s godowns, not in the TCP or PASSCO warehouses. The REAP chairman said, they were in no hurry to throw their rice in the open market at cheap prices.

The Economist, in its current issue, calls the developing food crisis “a silent tsunami” and says: “For the first time in 30 years, food protests are erupting in many places at once. Bangladesh is in turmoileconomist:doc-id=20080419/FJ8FOKL, even China is worriedeconomist:doc-id=20080419/FJ8FOKT. Elsewhere, the food crisis of 2008 will test the assertion of Amartya Sen, an Indian economist, that famines do not happen in democracies.”

And it is amazing to note that food riots, which took place in half a dozen countries in recent months, have resulted in toppling the government of one. Early this month, Haiti’s premier Jacques-Eduard Alexis was ousted in a no-confidence vote after more than a week of violent demonstrations over rocketing food and fuel prices that left at least five people dead.

Robert Zoellick, the World Bank chief, says the best way to help the poor consumers in the prevailing circumstances is to provide them cash. Some Pakistani economists have also advocated the same saying offering the poor subsidised food at utility stores was no remedy. Mexico also runs a similar programme which transfer cash to poor farmers, rather than subsidised food.