Editorial: Beyond fair-price shops

The measures taken by the government to ensure fair prices and smooth availability of essential goods for the upcoming festive season are both timely and commendable. The announcement to open 42 fair price shops from Sept 23 across the country, from Dashain through the Chhath festival, demonstrates a commitment to consumer welfare during a period when demand hits peak and prices become volatile. By leveraging the strengths of three government entities—Salt Trading Corporation, Food Management and Trading Company, and Dairy Development Corporation—the government aims to provide a wide range of essential items at discounted rates. The discounts announced on various products, from rice and lentils to oil and live goats, will undoubtedly provide relief to many households struggling with rising living costs.

While the government has been opening fair price shops ahead of the festive season for the past many years, there has not been any study on the effectiveness of this initiative. Although these shops provide some relief to vulnerable consumers, their impact on overall market prices is limited. The government must complement this initiative with strong market monitoring and regulatory measures to ensure wider market compliance and prevent unscrupulous trading practices. The Industry Ministry’s announcement to conduct 4,000 market inspections is a step in the right direction. The sealing of 100,000 kg of sugar in warehouses sends a strong message to those who might consider hoarding essential goods. These actions, coupled with a pledge to prevent supply chain disruptions and artificial shortages, demonstrate a comprehensive approach of the government toward market regulation. The government's decision to provide a 50 percent customs duty waiver for importing 30,000 tons of sugar is another noteworthy measure. This strategy of increasing supply to stabilize prices could prove effective if implemented efficiently. However, measures must be taken to ensure that these benefits are passed on to consumers and not absorbed by middle-men.

As we approach the festive season, the government’s multi-pronged strategy of opening fair price shops, conducting market monitoring and providing import facilitation is commendable. However, the true test lies in its execution. For example, the price of sugar has climbed as high as Rs 160 per kg during the festive season despite all these initiatives. Strong enforcement, transparent operations and quick response to market fluctuations will be crucial for the success of this initiative. Moreover, while short-term measures like these are necessary, the government should also focus on long-term strategies to boost domestic production of essential goods. This would not only reduce dependency on imports but also ensure stable prices throughout the year.