How to Control Food Inflation in Pakistan

[TeslaCoil]

Either the Government and bureaucracy is incompetent otherwise controlling food inflation is not something impossible. Minor inflation happens everywhere in the world and it is better for framers but double digit inflation means there is something wrong in the management.

1. Mandi Licenses (Immediate Step)

Allow any private investor / or promote private companies to open mandi. The control of mandi licenses is the major issue. That’s why we see hike in all food items price before Ramadan and these cartels allow this because they make huge money through this. City government or provincial government through public private partnerships can also open mandi and make sure that they will not make a cartel (don’t allow them to form a union or association).

1. Cut Middle men (6 months implementation time)

The price hike is because of cartels who exploit farmers and consumers. Let the farmers know what their crop price will be at different locations and let transporters connect directly with farmers to transport their product. The transportation company will get the percentage e.g. 1% or 3% of the total crop price in their truck.
Track the wheat supplied to the flour mills, sugarcanes to sugar factories and rice to rice mills. Make sure these transactions are registered via text message so farmers and consumers will not be exploited. No cash transaction, everyone must has a digital account and all transactions must be verified through a phone call to farmers to protect them. Standardize the sale purchase agreement to counter illiteracy issues (all agreements have 3 parties farmer, transporter and mill / mandi)

1. Digitalize the Agri Sector (12 months implementation time)

Make the seed price, fertilizer price accessible to farmers via text message or call. Register all farmers in their database throughout the country through a simple text message or call. Ask them about their output and advice them on market prices e.g. farmer in Bahawalpur knows what price he can get if he sell directly to mandi in Multan or Lahore or Karachi.
Market information system created for accurate and timely data of crop production, trade and prices and must be monitored and export and import must be allowed based on that data to control prices.

1. Government Reserves (2 years)

Government at provincial level or at country level must keep reserves to deflate the price in case of a hike (especially wheat, sugar, rice, pulses, vegetables). Private companies to build storage houses on BOO (build own operate) basis and government can make payments to them (their agreement will be renewed every 5 years) to allow competition with new technologies at cheaper prices.

 

[Mr Justice]

Good opinion, but our PM can just talk, he cannot implement and deliver results.