A belated investigation

According to a BR report, a judicial commission set up by the government to investigate 'sugar price scam 2009' has now started its proceedings. It is unlikely to resolve anything at this late date. The PML-N had demanded the formation of the commission back in '09, when the sugar prices assumed crisis proportions. But as the present report shows, it took almost two years to materialise.
It may be recalled that the retail price of sugar had suddenly jumped up from about Rs 30 to Rs 60-65 and later to Rs 125 to 135 per kg, causing a huge public outcry. The newly proactive Supreme Court had taken suo motu notice of the issue, and fixed the price at Rs 40 per kg, directing the government to implement that decision. The court's intercession though did not help. The government was unable to intervene in the market forces and ensure the sale of this important item of daily use for Rs 40 per kg.
The sugar industry was accused of market manipulation through hoarding, which, of course, the Pakistan Sugar Mills Association (PSMA) strongly denied, pointing a finger in the direction of Ministry of Finance and the Planning Commission, saying they were responsible for the crisis, as both had opposed import of raw sugar.
Our report notes that foreseeing an 8-10 percent shortfall in sugarcane production, the industries ministry had informed the government well ahead of time, ie, in December '08, that there would be 550,000-770,000 tons shortage of sugar in the coming days.
It had also submitted a proposal to the Economic Co-ordination Committee of the Cabinet (ECC) for import of 0.4 tons of raw sugar to be refined and marketed before the impending shortage. The proposal was turned down. The then finance advisor Shaukat Tarin was to express the regret at an ECC meeting that raw sugar was not imported when it was cheaper.
The truth of the matter is that the steep rise in sugar price was not unavoidable. The public may be right in suspecting that the mill owners manipulated the market to make quick money. But then the government could have averted the situation by importing raw sugar when it learned of an impending shortage from the relevant ministry. Yet it makes little sense to probe the affair at this point in time.
Even if it was an artificially created crisis that allowed some people to walk away with tidy sums of money at public expense, there is no way to recover the money. Nor is it going to provide any relief to the consumers. The probe may offer some instructive lessons, and enable the government to better deal with similar situations in the future. But then it is reasonable to assume that the crisis itself must have served that purpose.