Reports have it that the state trading body TCB (Trading Corporation of Bangladesh) is set to start selling essential commodities from the second week of this month-for the all important purpose of keeping prices stable during the month of Ramadan. The items that are mostly in high demand during the month of fasting - onion, edible oil, sugar, lentil, dates etc - are to be sold at subsidised prices to consumers. This is a regular annual phenomenon, and as the ritual goes, the TCB every year appoints thousands of dealers to procure the products from its godowns for sale at different parts of the country at prices set by it. Beside the dealers, the TCB also runs its own outlets in the capital and divisional headquarters.
No wonder, because of the price spiral even before the advent of the month of Ramadan, the TCB figures regularly in the media-- sadly for the wrong reasons. It seems, ironically though, that there is a correlation between its open sale of the aforementioned items and the shooting up of market prices. In other words, what is being deemed as market intervention does not work. Or, one may say, the arrangement to intervene in the market is so ill-conceived and botched up that it merely looks like a month-long routine exercise with virtually no strength inherent in its methods to tame the market.
There is, however, no reason to confine the role of the TCB in the month of Ramadan alone. The important issue that should be looked into is whether the government wants it to function as a strong, capable market restraining force. As a state trading body, this should be its principal objective, but the reality is that it is not at all equipped with the capability to bring some semblance of stability in market prices by way of its seasonal interventions. As a state trading organisation, it was neither groomed nor empowered with the resources and freedom to do miracles as the successive governments have vainly tried to project it.
Given that the TCB is a public sector enterprise, there has not been any mechanism in place so far to see it emerge as a business entity-an essential character it was to assume long back. A quick reference to similar organisations in neighbouring India will reveal the lacunas embedded in TCB's opertations since its very inception. The reason why similar agencies there, numbering in all a dozen, are strong enough to neutralise undesirable price instabilities lies in the basics-freedom of operation and financial and professional resources. Although initially provided with endowment funds by the government, they operate entirely on their own income just like a private sector business house, engaged throughout the year in bulk imports and exports, and intervention of the market, when necessary. To provide the much required dynamism to the operational challenges, the CEOs of these agencies often come from the private sector.
With the month of Ramadan ahead, the usual rhetoric has surfaced once again, namely arming the TCB with monetary and legal facilities to put a tab on the skyrocketing prices of essentials. Understandably, the government has barely any choice but to extol the virtues of its lone instrument in a bid to assuage the perils of price hike that are visibly in sight.
The key issue is the strength to effect successful market intervention. Strength does not come from the word of mouth. It needs to be inherent in a well planned and calculated process. The very capacity to do so calls for strong legal, institutional and financial backups. Market syndicates will obviously be the big rivals and breaking the oligopoly and monopoly of organised market syndicates will require the state trading agency to be a thoroughly professional one in the first place. In this, allowing it to function independently is a foremost prerequisite.
In trying to strengthen the TCB, the government does not need to start from the scraps. Unlike many state owned agencies, it has resources in terms of unused land and structures that can be made use of as a starter. There is reportedly a dearth of human resource. It could be learnt that a good number of professionally sound personnel have either left or gone on retirement. Something should be done in this regard. With competent manpower and a sizable endowment fund added to its existing financial resources, it can be expected to operate in small-to-medium scale trading round the year, and intervene in the market when necessary. The government (ministry) can put a monitoring device in place but not with the intention of unnecessarily interfering with its functioning.