Building a buffer food stock

FE Team | Published: January 15, 2025 20:05:51

A buffer stock of cereals is part of food policy pursued by governments. With its origin in the Middle East since Biblical times, it was not as successfully practised over a long period of time as it was done in China under the Confucian economic theory. Called the 'ever-normal granary', it was adopted in agro-political thinking in America by then US secretary of agriculture Henry A Wallace following the 1934 drought in the USA. The policy is based on the simple idea of buying and storing surplus commodities by the government for later use in time of crisis. Of course, price stabilisation is also a very important purpose of procuring commodities, agricultural produce---mainly food grains--- to be precise. In case of production shortages, governments have to build a buffer stock by importing the same either directly or through private channel in order to ensure food security.
What the Egyptians could do before the birth of Christ and the Chinese for centuries till before the 1850s when Taiping Rebellion destroyed the granary system, the British colonial power in India and the governments in Bangladesh struggled to make good use of. About the merit of the 'ever-normal granary', however, there is not the slightest doubt. But the infiltration of private parties of the ill reputation of business sharks in the procurement and stocking system has made the time-tested initiative mostly a failure in Bangladesh. Earlier farmers growing paddy were deprived of fair prices because of the machinations by middlemen and millers. That situation has changed somewhat because farmers are now quite aware of the developments such as rice market volatility and refuse to dispose of their food grains at throwaway prices. Right now, the market prices and the government's procurement prices for paddy and rice are almost the same with some varieties enjoying higher prices in the open market.
So, the food adviser's optimism about achieving food procurement target is most likely to be misplaced. According to a report carried in this paper's Tuesday issue, paddy is out of market with millers, traders and large farmers each opting for building as big a stock as possible. The price of Aman paddy in the open market and that of the procurement are equivalent but varieties like 'guti swarna' paddy is priced at Tk 34-35, higher than the government fixed Tk33. So, the procurement drive stands hardly any chance of ending successfully. Clearly the food ministry data speak for themselves. So far, 0.28 million tonnes of rice against a target of 0.65 million tonnes could be procured and in case of paddy it is a paltry 10,000 tonnes against a target of 0.35 million tonnes. But the deadlines for achieving the procurement targets are February 28 and March 15 for paddy and rice respectively.
All this looks ominous for food security in the country. Private importers of rice have their own designs to implement. Together the stockists and importers have enough muscles to hold the people and the government a hostage. So, it would be wiser for the government to directly import rice for building a reasonable buffer stock of the primary staple. The cancellation of 4.0 million TCB cards and abandonment of sale of commodities on its truck fleet at a time when VAT and supplementary duties have been imposed on more than a hundred essentials and services also bode ill of food security. There is no option other than an 'ever-normal granary' for the interim government.