Maintaining stable rice prices

The ministry of commerce, as reported by the FE on Monday, has taken a pre-emptive step to examine why prices of rice have, of late, recorded a rise in domestic markets. Most private millers, who have so long survived on high lending rates on bank credits, have downed their shutters because of imported rice in the markets. The government's latest step is thus a welcome move as any irrational spurt in prices of rice at consumers' level might trigger unease among the common people. High prices might even disadvantage a number of programmes already in operation to help alleviate poverty.  The government's future course of action will now be based on its findings of the reasons for the recent hike in prices of rice. Continuing high rice prices, despite bumper harvest at home and lower international prices, are somewhat baffling.

Bangladesh is lucky on account of bumper food production at home. Another blessing is price of rice that is projected to remain weak through much of 2015, according to the World Bank's latest issue of Commodity Markets Outlook. Good crop has contributed to a weakening of its prices. Rice-prices have been falling since their highs in 2012 and this trend is anticipated to continue through 2015. The prices of rice and wheat, according to the forecast, will drop by 16 and 9.0 per cent respectively. Against this background, the price rise is quite intriguing. A development such as this should be looked into. The early it is the better.

Ensuring food security and agricultural development in Bangladesh are almost synonymous, as income and livelihood of the vast majority of its population depend directly or indirectly on rice production. Investment in research has been rewarding. This has also a direct bearing on productivity. This ultimately influences availability of, and access to, food. Bangladesh has made some commendable progress in this regard. Production has gone up -- from 10 million tonnes in 1971 to nearly 35 million tones now. This, to a large extent, has helped in overcoming the supply-side constraints.

It is now time for the government to build a safe buffer stock of rice by constructing more silos across the country so that occasional shortages that might occur due to disruption in supply-lines or any other factor/s can be met. The country can also earn a substantial amount of foreign exchange if it is in a position to export some quantity of rice, on a sustained basis, without affecting its reserve. But while doing so, it will be pertinent for the authorities concerned to ensure that paddy growers get fair prices - at a cost-plus level - for their produce. Tough actions against manipulators are also needed to counter any mischief on their part behind hiking the prices of rice in the market.