The UN Food and Agricultural Organisation (FAO) in its latest evaluation report has expressed concern over the soaring prices of rice in Bangladesh during the past three months.
The report noted that the situation relating to three areas -- food price, access to food and quality of food -- also deteriorated during the period under review.
The worrying situation over rice prices comes in contrast to complacency demonstrated some months back by a section of policymakers over the export of 50,000 tonnes of rice to Sri Lanka. They were beating drums unnecessarily over the country becoming a 'net exporter' of rice.
Ironically, the same policymakers are now moving heaven and earth to buy as much as rice the country can afford. The target is to buy at least 3.0 million tonnes of rice in the medium-term and 1.0 to 1.5 million tonnes in the short term.
So far, the food ministry has managed to purchase a small quantity of rice. The main rice exporting countries have been reportedly demanding more than the market price from Bangladesh. Neighbouring India has also upped its export price. Lately, India reportedly has decided to stop export of rice to Bangladesh for the next two and a half months. Private sector importers prefer rice import from India because of the latter's close proximity and easy access to border points by road. The Indian decision is likely to unsettle the Bangladesh rice market further.
Food prices were maintaining an uptrend for the past few months. But the government, the food ministry in particular, was unconcerned.
The recent flash flood in the country's haor areas had caused extensive damage to Boro crop. And that changed the situation. Food prices shot up to a record level. The situation demanded immediate government intervention in the food market through open market sale (OMS) operations across the country.
But the government could not do so because its own rice stock was too low to engage in any sort of market intervention. People in charge were, allegedly, in deep slumber and did not take notice of the eroding government food stock.
The rise in food prices for the last few months in domestic market is not at all justified if seen in the context of global rice market. The production of rice in major rice producing countries was satisfactory and hence the international rice prices were relatively low.
When the food ministry forgot to replenish its depleting food reserves, the private sector people did import rice during the last financial year but in lesser volume. The hike in duty, from 10 per cent to 28 per cent in the last budget deterred them from buying the usual volume of rice.
Overall, the lower import of rice by the private traders as well as the directorate of food created opportunities for the profit-hungry section of millers and rice importers to make windfall gains.
Not many people would contest the fact that the public sector food management is highly inefficient and most corruption-ridden. It has been traditionally so. But, lately, the situation has turned worse. It is high time that top policymakers took a few measures to infuse dynamism into the food sector.
The Boro output this year has suffered. The prospect of Aman, another major rice crop, is not bright even because of recurrent floods. However, the high rice prices might motivate farmers to make all possible efforts to bring their land under the crop.
The next couple of months are considered the lean period when people in some particular areas of the country usually go without work. It would be really tough for them to have access to food priced so high. So, the government should employ some safety net programmes in those areas in particular.
