“Use yogurt instead of tomatoes”, advised a PTI provincial minister last year, when tomato prices skyrocketed to Rs 300 per kg in several cities across the country. If you are a homemaker cautious about the purse strings - that advice may leave you nostalgic for The Martha Stewart show. But for the media, it was tantamount to government admitting failure to control prices of essentials - quite a spectacle.
But when it comes to perishables, is it only the government which has failed to perform its role? Consider that between Nov-19 and May-20, price of tomatoes across the country crashed from a peak of Rs 215 to under Rs 30 per kg. With winters on the horizon, tomato prices are fast approaching another seasonal peak, having charted fresh heights already by mid-October.
Yes, most consumers have some expectation from the government/administration to ensure price stability. But it is hard to fathom that Pakistan’s media-savvy public is so deluded to hope that the government would buy expensive tomatoes from the market and sell them at lower price to end-consumers. Most would probably be wary of sarkar’s expanding role, afraid that excessive political interest may end in another bungled-up vanity project.
Would the public then be better off paying heed to the useful kitchen tip made by the minister? It is not too far-fetched to imagine that the more far-sighted consumers may have stocked up on tomato puree when prices had crashed to below Rs 30 few months ago. But why does individual foresight not translate into collective wisdom?
Pakistan’s market for perishables probably represents a greater failure on part of private sector market players than the administration. Consider that the premium between wholesale and retail price of tomatoes is fairly stable between 1.5 and 2.0 times in- and off-season. Like most other staple vegetables, tomatoes also follow quite a predictable sowing and harvest calendar. Yet, lack of investment in supply chain means there are few processors, paste-producers, or distributors with cold-chain infrastructure.
The result? Extreme price volatility otherwise only witnessed in day-trading of bitcoins. While the populist media may have you believe that it is the public that’s always on the receiving end, fortunately, there are no tomato “hoarders” in Pakistan. It logically follows that the producers, arthis, wholesalers, and retailers must also incur losses from time to time, buying right when the prices have peaked, only to see the fresh harvest crash prices soon after; or selling too low right before the cusp, and losing out on opportunity to make abnormal profits.
Of course, consumers’ taste and preferences matter. When it comes to food, Pakistanis’ penchant for fresh produce – whether it is raw milk, meat, or vegetables – may have played a role in keeping potential investors in value chain infrastructure at bay. But consumer behaviours can be influenced. Afterall, how many families today – at least in urban centres – consume fresh butter instead of processed/branded?
If governance is to be done differently in Naya Pakistan, PTI must not let the allure of price control consume its better sense. Instead, it should incentivize investment in value-chain infrastructure of food commodities, particularly perishables. From farmers who seasonally complain of selling below cost-of-production to consumers frustrated by kitchen tips for tomato-substitutes, Pakistan’s food security challenge is rooted in endless price volatility. Let’s not end up chasing tomato-barons instead.