Cheap flour: a short glimpse of power of market

Wheat is the main staple for 250 million Pakistanis, which is eaten at least twice a day. All governments have been striving to ensure the availability of wheat since the 1950s and have relied on the minimum support price and the procurement plan for maintaining strategic reserves through the purchase of domestic and imported wheat. Except for a few years, the country has witnessed wheat flour price hikes. During such a crisis, neither wheat nor flour vanished from the market, rather nasty players engineered price surge owing to “protectionism” in the wheat policy. Since the 1950s, Pakistan has spent trillions of rupees and billions of dollars to ensure the affordability of wheat through an inefficient policy. The economic cost of this flawed policy has ultimately been paid by the masses. Protectionism through an indirect subsidy has neither developed the flour industry for competing in the international arena nor helped wheat growers. Consumers have always remained at the mercy of flour millers’ cartel. The real market economy is dormant and the debt related to commodities’ operation is running into billions of rupees. The current economic scenario is a wake-up call for policymakers to opt for policy revamp and stop the huge drain on resources.