Correction in rice market behaviour
Government's proactive role imperative
CONTRARY to expectations that a bumper boro harvest will bring down cereal prices, these have only increased over the last several weeks. Concurrently, the world prices of rice and wheat have declined but these have not had a commensurate impact in lowering prices at our end. People's purchasing power constantly eroding, the ruling food price is eating up most of the household income.
The hungry and undernourished are an overwhelming number: Those who earn less than a dollar, equivalent of Taka 69, per day, are 40 percent of the population i.e. six crore, according to World Bank estimate. The minimum price of coarse rice in Dhaka is Taka 34 per kilogram while that outside Dhaka is Taka 32. This is enough of a statistic to illustrate abysmally low food or calorie intake. Even the middle class families are being affected.
Two top economists of the country -- Dr Wahiduddin Mahmud and Dr Mahbub Hossain -- have given a recipe for market correction. They have urged the government for speedy procurement of rice from internal sources and release it with subsidy to the local markets and consumers in the end. In other words, emphasis has been laid on effective management of locally produced rice together with vigorous distribution in the open market. But government procurement of rice has been less than expected and there has been considerable hoarding among the rice traders and millers. The manipulative among the traders will be forced to release their stocks once the government's open market releases swamp them, as it were.
There have been two developments we can take advantage of in our efforts to bring down prices. Importantly, a momentum for higher agriculture productivity has been triggered by the boro success. If the government provides agricultural inputs adequately and timely to the farmers they can reach new heights in food production -- of course, with the elements of nature behaving.
The downward trend in international prices has thrown up an opportunity to import rice in adequate quantities. The government may watch the lowering of cereal prices internationally and buy up food at the right time to beef up stocks together with local purchases by way of building a food security structure for the lean season. But timely off-takes and distribution to the open market ought to be the key elements of the overall strategy.
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