“Pakistan, just like the rest of the world, is facing the most severe food price inflation in its history. The January food prices soared to above 18 percent — the highest ever monthly increase — from over 14 percent in October. Higher food price inflation meant that the poor, vulnerable and low-income groups, who make up almost two-thirds of the population, had to either cut their non-food expense to make room for spiking food budgets or consumed lesser calories than required.
The situation demands that the economic managers re-think their strategy to fight food inflation. In the short run, they should take measures to prevent sudden jumps in prices due to artificial or real shortages, subsidize, as in the case of wheat, imported food like raw materials for edible oils, and abolish or scale down taxes on such essential items. In the long run, it must remove supply side constraints to check artificial shortages and support agriculture to boost food output. At the same time, the poor to low-income people should be shielded from the harsh effects of rising food prices now, by expanding the network of utility stores and making the ration card scheme that has been launched recently effective.”