Category: Food Shortage

Food Insecurity and Inflation: Shortage of Food Supply and Policy Gaps in Pakistan

Increase in Food items Prices as per Pakistan Bureau of Statistics:

Pulse moong (19.74%), Pulse gram(18.2%), Chicken (17.53%), Eggs (14.28%), Wheat(12.63%), Besan(12.09%), Fresh vegetables(11.7%), Pulse mash(10.29%), Gur(9.49%), Beans(8.09%), Wheat flour (7.42%), Pulse masoor(7.33%), Condiments and Spices(7.15%), Gram whole (6.68%), Sugar(5.07%), Fresh fruits(3.93%), Mustard oil(2.87%), Wheat products(2.64%), Vegetable ghee(2.18%), Rice(1.2%), Fish(1.19%) and Dry fruits(1.09%). Decreased: Onions (18.37%), Tomatoes (8.36%) and Potatoes (3.69%).

Tomatoes(157.72%), Onions(125.32%), Fresh vegetables(93.6%), Potatoes(87.3%), Pulse moong (79.12%), Pulse mash(48.61%), Gur(43.31%), Wheat(36.13%), Pulse gram(27.31%), Sugar(26.29%), Condiments and Spices(24.43%), Wheat flour (24.06%), Besan(22.94%), Chicken (22.56%), Beans(20.56%), Pulse masoor(19.88%), Wheat products(18.62%), Eggs (18.05%), Vegetable ghee(17.56%), Cooking oil(15.44%), Meat(13.43%), Dry fruits(12.95%), Fish(11.9%), Milk powder (11.43%) and Mustard oil(10.99%).

The other area of concern is the increase of 12% in the price of the staple food, wheat flour (atta). The production of wheat in 2018-19 was lower by almost one million tons as compared to the initially estimated level. Some attempts were taken to export wheat. The export price has averaged Rs 1524 per 40 kgs. Therefore, the risk of a shortage in the availability of wheat in the domestic market is prevalent.

Reasons for Price Hikes in Food Sector:

Population

One of the basic reasons of food crises in Pakistan is soaring prices due to gap in demand and supply of edibles and the pressure resulting from population increase has also worsened the environmental and resource problems.

Devaluation of rupee

Devaluation of rupee against all major international currencies is the one of the basic reasons of weak economy. Increasing dollar against rupee reflects the country’s reliance on imported goods. The rupee is also in a free fall owing to increasing current account deficit, excessive government borrowing, drying up foreign flows, increasing oil imports, and repayments to the IMF.

The persistent depreciation of rupee is also fueling price hikes. The high inflation will not only affect poor but it will also affect all segments of the economy. The poor and the lower middle class find it increasingly difficult to make both ends meet with increasing prices of essential commodities including foodstuff. Soaring inflation has not only raised the credit price but also weakened the purchasing power of the people. However, the solution lies to bring down food inflation with augmenting the supply of food, improving governance and distribution networks.

High utility costs and rise in the international commodity prices

Since 2009, the world economy is facing high inflation. The country’s headline inflation raised to 25 percent in October 2008 due to greater increase in oil prices, political instability and security situation. However, inflation growth reduced to 8.9 percent in October 2009, but rebounded towards higher side on the back of government decisions to increase power and gas tariffs. These high utility costs and rise in the international commodity prices including oil further inflates prices affecting the local consumer prices. Some analysts identify the higher oil prices by government along with higher electricity tariffs due to greater reliance on furnace oil-based power plant as basic reason behind higher inflation in last three years.

Structural issues

Certain structural issues in the economy such as hoarding and artificial price increase of essential commodities by cartels and smuggling have also been responsible for high inflation in the country especially in case of food items. The county’s strife-battered economy, combined with higher than usual prices for staples such as sugar due to alleged hoarding by producers, has drastically reduced the purchasing power of the country’s largely impoverished population of 170 million.

Import duty

To reduce food import and boost local industry, the government has imposed sizable duty on imported goods and has also amended the import policies according to which the ingredients must be clearly mentioned on imported items and should be accompanied with a Halal certificate. Resulting in difficulty for many restaurants that rely heavily on imported food items to operate under the new tax regime. From importer to consumer, the whole food chain has been affected. Prices have gone up considerably which is hurting the food culture.

Conclusion

First, there has been reduction in imports but exports have yet to contribute significantly, as healthy quantum gains are not supported by price trends. Second, the announced documentation-related steps must be implemented in order to bring the needed diversification in the revenue base. This is important to rebalance the country’s fiscal revenue structure, which is currently over-reliant on very few sectors. Third, the government must resolve the supply chain issues e.g. hoarding practices Finally, inflation is a multi-source issue. It has been high, but manageable, in Pakistan. But because it affects the poor greatly, the government must continue to take structural measures to keep it low, and to compensate the poor via lifeline tariffs and cash transfers for any temporary surges. The surging debt is a burden for Pakistan because its Gross Domestic Product (GDP) growth rate is not faster than the rate at which debt is serviced. The cost of external debt is incurred in foreign currency, hence a surge in the debt burden reduces foreign reserves, triggers devaluation and increases the cost of debt.

Role of Company Zambrero and Mexican Cuisine in Fighting against World Hunger

Intro:

Zambrero launched its first store and ‘Mexican with a mission’ in 2005 when entrepreneur Sam Prince realised that Australia lacked a healthy choice of Mexican cuisine. Sam was motivated to start ‘Mexican with a mission’ after being raised by both his parents and hearing what life was like for them while living in Sri Lanka. Through these experiences, it drove him to create an idea that helped the less unfortunate, also known as ‘Mexican with a mission’ or also known as ‘Plate 4 Plate’. This meant that for every burrito or burrito bowl bought from Zambrero, a meal is given to someone in need. https://www.zambrero.com.au/our-story

Ethics and social responsibility

Ethical marketing is less of a marketing strategy but more like a set of rules/regulations or limits that keeps marketing activities from crossing any lines that they shouldn’t. Ethical marketing mainly exists to promote fairness, responsibility and honesty throughout all advertisements. It is very hard to know whether or not a business is behaving ethically or unethically because of individuals and their judgment of ‘what is right? Or what is wrong’ (Janice Cain, 2019). For example, a company’s product rarely meets what is expected of it but due to over-exaggeration and unverified claims. They trick their consumers into buying their products without ever ensuring that their products will ever work to a certain extent. This type of marketing is very unethical and that’s why ethical marketing exists to keep this kind of unethical behaviour from reoccurring. (Bohat, Ala. 2019)

Zambrero believes in ending world hunger and for this to happen the business needs the full trust of its consumers. They need to prove to their consumers that their plate 4 plate program is used for the sole purpose of ending world hunger and not for profit-gaining purposes. Zambreros has done just that, despite not gaining profits from their plate 4 plate program, they still donate a plate of food every time a burrito or bowl of food is bought from Zambrero. They promised that their product and business would do its purpose to a certain extent, that purpose includes helping end world hunger. This proves that Zambrero has not failed the ethical side of their business because they promised their customers that to end world hunger, they would need their help. Every time a customer buys food from Zambrero, they directly contribute to helping end world hunger. Zambreros with the help of its customers has managed to donate over 34 Million Meals to developing countries that aren’t as fortunate as us. (Zambrero, 2019)

Comparison and Recommendations:

Stakeholders are defined by Freeman (1991) as, “any group or individual who can affect, or is affected by the activities of the organisation.” Stakeholders are divided into two groups – external and internal stakeholders. External stakeholders include governing and regulating bodies, trade unions, local communities and the media.[1] Internal stakeholders refer to customers, suppliers, employees and shareholders.[2]

The stakeholder theory (Freeman & Reed, 1983) suggests that a business’s business is not only to make a profit, but to consider the responsibilities if any stakeholders were to be affected by the business’s trading activities. Stakeholders must be taken into consideration as they determine whether a business will thrive or not. The responsibility of marketers is to ensure that the product or service means something to its customers in order to sustain a long and happy customer relationship.[3]

Zambreros marketers have created a positive relationship between the business and it’s customers by giving customers a sense of purpose and accomplishment by donating a plate to someone in need every time a customer purchases food from it’s stores. Zambreros have not only made it their mission to beat world hunger but have made it their consumers mission too! This has created an incentive to purchase and continue purchasing products, therefore showing ethical responsibility by helping those who are less fortunate than others, whilst still advertising and distributing their product in order to make a profit. Since ‘Mexican with a mission’ started, over 33,203,922 meals have been donated to someone in need and each day is continuing to grow more.[4]

[1] Textbook – pg. 647

[2] Textbook – pg. 649

[3] Textbook – pg. 646

[4] Zambrero’s website

There are minimal recommendations that can be made toward Zambrero. Their process of work is very effective and helps a very large number of people who would otherwise struggle to find a meal. If Zambrero were to change the way in which they operate, they could lose their reputation as being a company who strongly and directly fights against world hunger. If Zambrero were to change or add anything, they could potentially aim to start helping to feed to homeless as well as children in 3rd world countries. In doing this Zambrero would be taking on an additional responsibility but would be feeding many more people across the globe. This would also show that Zambrero as a company are aiming to help everyone in need and do not want to leave anyone hungry. With all, feeding the homeless could potentially be too much for the business and it could damage Zambrero unless they were to open many new stores in order for purchases to increase.

Another recommendation that can be made toward Zambrero is to advance their current advertisement strategies. Although Zambrero is successful, the advertisement that is currently being used is not very effective in getting the brand name out there. Adding advertisements to T.V. or radio would benefit Zambrero greatly and would aid in the increase of consumers.

The way in which Zambrero work and function is beneficial of all current stakeholders and there are not many changes that could be made to improve the company any further as they are already very successful.

As a company Zambrero are, in short, trying to beat world hunger. It is the main goal of the entire company and has been since the beginning. Zambrero have successfully created the Plate 4 Plate initiative in order to do this. This initiative has so far meant that over 34 million meals have been donated to those who are in desperate need of food, showing that the action of Zambrero have been extremely effective toward all stakeholders. Following on from the stakeholder theory presented previously, Zambrero are honest and trustworthy when it comes to their products and stakeholders. The company has products that customers can be satisfied with as they meet all legal requirements/standards. Zambrero started up in Canberra and also holds strong relationships with other countries across the globe. The strongest relationships are with those that receive meals from the Plate 4 Plate initiative. Zambrero show to be following quite strongly with the points shown in the stakeholder theory resulting in the company being ethical in its business operations.

References:

1. Hospitality Magazine 2016. Zambrero’s: Mexican with a mission – Hospitality Magazine, viewed 27th September 2019
2. Sharp, B. (n.d.). Marketing. 2nd ed. 253 Normanby Road, South Melbourne, Victoria 3205, Australia: Oxford University Press, p.646.
3. Zambrero 2017, Zambrero’s 2017 Vision Trip to Vietnam, video, YouTube 6 December, viewed 27 September 2019, .
4. Zambrero, 2019, ‘Zambrero Mexican with a mission’, Zambrero, viewed 16 September 2019, .
5. [bookmark: _Hlk22545225]Marketing schools, 2019, Ethical Marketing, What is Ethical Marketing?, Viewed 3 October 2019, < https://www.marketing-schools.org/types-of-marketing/ethical-marketing.html >.
6. Marketing, R. (2019). Report on Ethical Marketing – Bohat ALA. [online] Bohat ALA. Available at: https://bohatala.com/report-on-ethical-marketing/ [Accessed 21 Oct. 2019].
7. Zambrero.com.au. (2019). Zambrero | Mexican Restaurant | Mexican With A Mission. [online] Available at: https://www.zambrero.com.au/ [Accessed 21 Oct. 2019].