The government’s ultimatum to reduce the price of potatoes in the markets has fallen on deaf ears, and now the decision to remove import duties has led to a protest by the potato farmers starting from the 5th of May. What is believed to be a mixture of excess exports and hoarding, the apparent shortage in potatoes is leading the masses to purchase one of the cheapest vegetables at double its normal price. Ishaq Dar however, contests the shortage, and stated that the country has around 1.1 million tons of potatoes stored. Where exactly is this vast store, and why is it not being pushed into the market to try and decrease prices?
The situation is murky at the moment, with potato farmers denying any involvement in hoarding, and claiming that the increased price of inputs has led to the rise in prices. They believe that the only way to bring down the prices is through subsidies. The government is neglecting this viewpoint, and is hanging the threat of importing potatoes from India at a lower price to bring the value down for the average consumer. The traders and exporters of potatoes in Pakistan are using Bangladesh to buy potatoes and are sending them on to other countries. The initiative of the traders has a direct impact on the foreign exchange considering that now, the exporters have to import in order to export. For individual exporters this is not problematic, and indeed in some cases they might even be making higher profits than before, but the country as a whole suffers, losing out on the value of the goods that could have been exported to other countries.
The government should have been mindful of the amount of potatoes exported and was supposed to keep domestic supply a priority. Economic sense is always predicated on exporting only that which is surplus, and keeping an eye on traders and farmers to ensure that no hoarding takes place. The government failed to do both, and is now trying to make up for its mistakes by importing the vegetable from India, which will be devastating for farmers because there will be no place in the market for expensive potatoes . If their claims of expensive inputs in genuine, then this could have an adverse long-term impact on potato production, with greatly reduced export capability in the future. The delayed reaction of the government has a part to play in this crisis, but now the country must wait and see if it is able to get us out of this mess.