CCP recommends measures to promote efficiency in 10 food commodities' value chain

CCP recommends measures to promote efficiency in 10 food commodities' value chain
31 October 2022
Dunay News in Islamabad reports that the Competition Commission of Pakistan (CCP) has completed a draft study aimed at addressing market distortions and promoting efficiency and competition in the value chain of ten essential food commodities including onion, edible oil and ghee, potato, poultry, wheat, sugar, milk, rice, tomato, and pulses. These commodities constitute 63% of an average household’s monthly expenditure on food items.

The double-digit inflation in Pakistan since November 2021 prompted the Economic Coordination Committee to capture the food inflation and the CCP was tasked by the National Price Monitoring Committee (NPMC) to look into the reasons of price increase in essential commodities.

The report states that the CCP shortlisted 10 major food items from the list of 51 essential commodities in Sensitive Price Index (SPI) for the study, according to a pres release issued here on Saturday.

The above mentioned ten commodities combined showed a 35% increase in price in July 2022 as compared to July 2021. The highest increase in prices of Masoor (92%), Onion (89%), Edible oil (77%) and gram (52%) was observed during the same period.

The study outlines the underlying causes of the price hikes and supply chain issues including the inappropriate policies and regulations distorting the markets, inhibiting competition, and discouraging private investment, besides the least efforts to promote research, innovation, and technology utilization to enhance crop yield and productivity.

The study recommends:
- A shift of the government policy focus from the current major crops of sugar and wheat to equally significant other crops having export potential such as pulses, other cereals, oil seeds and vegetables.
- Taking R&D initiatives in the high yield varieties an intervention by Federal Seed Certification and Registration, Department, provincial Agriculture Extension Departments, Seed Development Departments to develop mechanism for dissemination of high yield seed varieties, R&D on high yield crops, creating awareness about high yield seeds and genetically improved crops and their cultivation.
- A complete overhaul and increase in the number of the currently 345 Agriculture Produce Markets (APM) in Pakistan including both public and private (grain and fruit & vegetables).
- Farmers’ increased access to finance for all types of crops and production areas.
- The government to develop an agri e-commerce ecosystem and educate farmers on the agri e-commerce opportunities.
-  The government to promote contract farming, which will lead to economies of scale and farm mechanization, strengthen the farmers-processor relationship, improve access to finance for both the processors and the farmers, and equally favourable for banks/DFIs by reducing the cost of doing business and post disbursement monitoring.
- The government to make adequate arrangements for storage of wheat, rice, seeds of pulses, and oilseed crops. To avert the crisis of food security and food price volatility amid the flood situation in Pakistan, Strategic Grain Reserves (SGRs) can be a useful policy tool where target disbursement is made to needy people.

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