In May 2019 four people in Muzaffargarh were arrested for hoarding sugar and thus contributing to an artificial crisis; in one go-down had stocked 40,000 sugar bags, another berserk had hoarded 70,000 wheat bags; may thousands must have done the same without getting caught. The punishment for those two, was not reported, obviously it was not enough. During Ramadan 2019, and the rest of that year, people in Pakistan, especially the poor, were hard pressed to buy both sugar and wheat because of expensive prices, this made the profiteers even richer.
After Imran Khan had ordered strict action against hoarding. The Lahore City district government has launched a crackdown on hoarders and stockists of sugar and confiscated 417,350 kilograms of the commodity from different areas of the metropolis. Detention orders for a month against four people in February on charges of hoarding sugar. The hoarders and smugglers of wheat start buying much earlier and at lower prices earlier than the problem-ridden official purchases. In 2019 much of the crop was lifted by such elements because the food minister, the federal secretary of food security and the provincial minister seem to have purposely delayed it. Obviously, hoarding pays back hugely and the laws and punishment for hoarding seem to have no deterring effect.
The sugar producers and wheat traders have often created artificial shortages of those commodities for decades by constraining supplies in the market, this causes a sharp rise in prices. The windfall profits further enriched sugar and flour-mill owners, the hoarders and wholesale dealers working as partners. The upper and middle classes are not much affected by prices of any such commodities but it is the vast majority of the poor trying to make ends meet that have to see their economic situation worsen further. These include families living on daily wages with no savings, and forced to pay more for two essential food items.
Because of the corona crisis Ramadan and another price hike, the coming months will be even more dangerous. That official departments must not be slow to buy sugar and wheat with excuses of lock-down, danger of infection and the like which will give enterprising hoarders and profiteers much opportunity to do the same as last year and the years before. The additional problem is that many more poor people are without money and unable to buy food even at normal prices. If that happens and the poor cannot feed themselves food riots are a distinct possibility with the long-lasting consequences for law and order that will damage our already battered economy and population more.
Even before the corona crisis the government started to take care of the problem by installing a commission headed by FIA DG Wajid Zia to inquire into the reasons for the sugar and wheat crises. The preliminary reports have been submitted, the forensic report for sugar is still awaited. The success of the exercise though will depend on whether the culprits that have been named will be punished in a way that is exemplary so as to deter others to do the same in future. This will be quite difficult given the fact that the sugar barons and wheat cartel members are politically influential, sitting in parliament with some even members of the ruling party.
The Ministry of Law and Justice earlier this month finalised the draft of a Presidential Ordinance envisaging “exemplary” punishment for profiteers and hoarders creating artificial shortage of essential items. Lo and behold, the punishment for profiteering and hoarding in this new law will be the same three years as envisaged under the “Price Control and Prevention of Profiteering and Hoarding Act 1977”, with only minor difference that the draft law has simplified the procedure to make arrests and made easy the confiscation of the hoarded commodities. Unlike the past practice, the new law should empower law enforcement agencies to arrest the man on the top, and not only the middle or managerial level staff. Under whose instructions are they functioning, who were the ultimate beneficiaries?
Despite of all the well-meant hopes of the PM and his law ministry this new law is a toothless paper tiger and that will certainly not create the chilling effect we will need in order to control the situation. It is also incomprehensible why in this country the law, even the first law of the land, the constitution, is applied so unequally. While the hoarders and profiteers of Punjab and Sindh are handled with kid gloves the citizens of the former tribal areas are treated much rougher they are even denied internet access and are bombed and shot at under the terrorism suspicion. Why should there be such a glaring difference in approach?
Under the corona crisis that has made food supply lines vulnerable with the clear and present danger of food riots imminent US President Trump has brought meat production under the “Defence Production Act”. The same “clear and present danger” Pakistan is facing needs to be tackled accordingly. Hoarding and profiteering endangers food security and may endanger national security, cause riots and the death of civilians. Only therefore already, hoarding and profiteering should be categorized as the same terrorism as the one in the former tribal areas. Hoarding and other crimes contribute to profiteering by creating extra money. And then, it is profiteering from these and other illegal acts that create the black money that is laundered through hundi abroad and comes back in the form of reverse transfers to, among others, the madrassahs many of which are connected to the spread of militancy and terrorism.
And by the way, hoarding and profiteering is a menace that is declared “Haram’ in Islam and Pakistan as an Islamic Republic we should keep that in mind as the basis for any judgement. Hoarding of essential items like wheat, barley, rice and sugar etc. With the intention of selling them at higher rates to people who are compelled to purchase them is Harām and a kabira (Greater sin). The Prophet (PBUH) is reported to have said that if a person buys food items and hoards them for forty days so that prices rise in the Muslim markets, he has committed such a serious sin that if he were to later sell all the hoarded material and donate all the income it will not expiate for his sin. One gets hell-fire for it in the next life. So, three years maximum in this life are a joke!
When we went to get money under the SBP Reference Share for payroll, we found that one banker had executed their limit for going out credit. Guess who were the beneficiaries of billion in credit to purchase sugar and wheat. This credit was rushed through in days, not weeks or months, and who even looked at the collateral, if any? Whoever gave the sanction in the Bank needs to be investigated by the NAB, in fact should be held accountable as accessary under the “Terrorism Act”. In one case the lady banker in question wanted to become the President of the Bank.
This Illegal business of money-laundering has been feeding terrorism for decades and if the door to the creation of black money is not closed tightly by deterring people from hoarding, profiteering and consequently, money laundering which feeds terrorism and militancy will never be weeded out. That is why these offences need to come under the “Terrorism Act” that will be able to deal with the perpetrators more decisively. Hoarding and creating artificial scarcities means to terrorize civilian population, especially its vulnerable poor. It is endangering not only law and order but national security of the country. The new options for dealing with these crimes is not three years prison but the maximum punishment, death by hanging.
