Distribution Spreads – Business – DAWN.COM


The functioning of Sindh food department is once again under a cloud. The division of wheat by department between roller mills and chakkis owners has been hit with discrepancies, placing an additional financial burden on consumers in these times of endless inflation.

The department allocates wheat quota harvests between mills and chakkis in accordance with its policy that disadvantages mills. Flour Mills get a bigger chunk of Wheat. The atta chakkis are small and medium enterprises and depend on the department for wheat. Due to the insufficient quota, they claim, they have to source grain from the market to meet the demand after being roughed up by the food department.

This highlights issues of food security and economic cost to consumers since wheat is a staple food. The rural population has always consumed flour produced by chakkis, but over the years the trend of consuming flour produced by chakkis has increased significantly in urban areas since health experts claim that it contains fiber and less sugar and carbohydrates, which is beneficial to health.

Chakkis exist in both rural and urban areas and sell smaller quantities of flour to consumers. Mills source in bulk, given their province-wide trade stakes. Consumer incomes do not increase proportionally when taking into account the rise in inflation.

Wheat is supplied by the government to millers at Rs 58.25 per kg, but its shortage forces chakki owners to buy it on the open market at Rs 86 per kg

The food department’s wheat allocation policy puts them under an economic burden as they buy expensive flour from the chakkis, leaving them dry. “The food department must listen to the concerns of chakki owners,” Hyderabad Chamber of Commerce and Industry Chairman Adeel Siddiqui said.

According to the Vice Chairman of Sindh Abadgar Board (SAB), chakki ventures should not be discouraged. “The demand for chakki flour is increasing because everyone appreciates the importance of whole wheat for its ingredients. But insufficient supplies of wheat raise flour prices, undermining the food security of poor consumers,” he said. He said chakkis serve consumers locally for one to two kilograms of flour, which mills do not.

“The performance of the food service has never been satisfactory and it remains the least affected by these problems. I don’t understand why the food department doesn’t start wheat release even in June. Why didn’t the department increase its stockpiling of wheat stocks instead of leaving it exposed to contamination? It showed how effectively it deals with this strategic culture which is also the domain of the Ministry of Food Security and Research,” he remarked.

The district administrations set the price per kg of flour, but the chakkis find it difficult to maintain the supply of flour at the official rate given the price of buying wheat in the market and the overhead costs of producing flour.

Inflation-bloated consumers, including the elderly, line up to buy subsidized flour at fixed points whose numbers remain insufficient. Instead, the exercise remains merely cosmetic. In the case of Hyderabad, the administration had set a flour price in March and since then no official flour price has been set, angering chakki owners who were protesting this.

They were questioning the assignment of the food manager to Hyderabad, where the price of chakki flour was only set in March at Rs 72 per kilo at retail. Since then, the administration has avoided fixing it due to the ongoing feud between the food service and chakki owners. Sindh Food Secretary Raja Khurram did not respond to Dawn’s questions when contacted.

The food department, which has been hit by back-to-back multi-million rupee corruption cases, could not bring about policy change on quota-based wheat sourcing for chakkis and flour mills . Food officials with tainted records were posted in violation of Supreme Court guidelines. No one knows why the Sindh government has avoided making the supply and distribution of wheat transparent.

The food service processes a single crop of wheat 365 days a year, and that too has been hit with documented financial malfeasance and anomalies. Due to the insensitivity of the Provincial Food Service, adulteration and contamination of wheat in godowns has become the norm.

The department only purchases a specific amount of wheat produced by Sindh. In recent years, even this quantum has not been achieved due to favoritism and money-minting by those at the helm. The department could not meet the target of 1.4 million tonnes of supply for the current season despite the fact that the supply, for the first time, started in March this year.

According to chakki owners, consumers in Hyderabad, the largest urban center after Karachi, were faced with the dilemma of buying expensive flour as no tariff has yet been set for flour.

“We mainly depend on the supply of wheat on the open market, and that obviously remains expensive. Its financial impact in terms of overhead in flour production per kilo of wheat is passed on to consumers,” said Haji Mohammad Memon, Chairman of the Chakki Owners Welfare Association.

The Sindh Food Department has procured wheat in the 2021-22 season at a support price of Rs 5,500 per 100 kg bag from farmers. Wheat was supplied to chakki owners for Rs 5,825 per 100 kg (Rs 58.25 per kilo) in October and November 2022. However, the open market price of wheat stood at Rs 86 per kg or 8 Rs 600 per 100 kg bag until 3 November, indicating a significant difference in the price of wheat.

Insufficient wheat stocks available in Hyderabad godowns were running out. It was feared that the supply of wheat to the chakkis in the coming days would become difficult, leaving them at the mercy of the market.

“Free market rates have changed everything for us. As we are not getting the required amount of wheat from food service warehouses, we are ultimately turning to the open market,” another association representative argued.

The food service provided each chakki with 117 kg of grist. However, each chakki grinds 200 kg of wheat per stone in one hour to produce approximately 170 kg of flour and 30 kg of choker (animal feed). If a chakki works eight hours, it requires 1,600 kg of wheat per day with an overhead of Rs 22.30 per kg. The huge difference between demand and supply is what created the outcry.

The food department remained quite generous in the supply of wheat to roller mills, whose flour is mainly consumed in hotels and restaurants. The bread lacks flavor. Millers extract granulated wheat and super fine flour as wheat by-products.

Pakistan imports 300,000 tons of wheat from Russia. Large tracts of land in Sindh are still under water due to floods of catastrophic proportions during the July-August period. Producers are not ruling out a smaller wheat acreage in the 2022-23 season, which would hurt wheat production. The price of flour will go up again.

Posted in Dawn, The Business and Finance Weekly, November 7, 2022


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