Shrinkage in food stock

Little over two years back, the country's food situation was one of the rare sectors not susceptible to any speculative, let alone surprise shocks. The overall food situation was satisfactory. Two clear indicators complemented each other in the laudable performance. Successive good harvests and then a considerable fall in food grains import. A combination of favourable weather conditions, availability of fertilisers and pesticide contributed to this commendable performance.

The situation pointed to a near self-sufficiency in the country's staple food requirements. While the decrease in food grain imports helped curb depreciation of the taka, it reduced at the same time pressure on the balance of payments (BoP) situation on the one hand and saved a substantial amount of money in the form of subsidy, on the other. Had this not been the case, the government would have to borrow more funds from banking sources with attendant negative implications for the economy.

Of late, however, the situation has changed. It has been reported that the country's food position is at its worst now compared to the past five years. Stock position of food grains has shrunk down to the lowest level suddely. The target set for Boro procurement in the current year has not been fulfilled. Procurement of Aman, set at three hundred thousand tonnes, has reached barely beyond one third of the target. Stock position in government silos during the same period last year was around 1.3 million tonnes as against 0.94 million tonnes now. The shortage is due to less than expected procurement of both rice and wheat.

It has been reported in a national daily that fall in the stock position of rice alone is more than half a million. A report, quoting food ministry sources, states that during the last procurement season the authorities, despite efforts to procure 1.0 million tonnes of rice, could procure little over eight hundred thousand tones. Although the government is still hopeful of fulfilling the Aman procurement target and also expects a good Boro harvest ahead, things at the moment are not rosy, as they were in the past two years. That the food stock at the moment is less than adequate is a cause for concern for yet another reason. The months from January to April constitute the most suitable timing for social security net programmes requiring massive quantities of grains. The correlation between falling stocks and rise in price is obvious. To this has been added the country-wide blockade snapping communications for around two months. This has resulted in the rise of rice price by Tk 1.0-2.0 a kilogram in the open market. Over the last one year, the price rise has been between 12 per cent and 18 per cent.

Economists are of the view that in order to avoid any seriously adverse effect as a result of the low stock, the task for the new government is to increase stocks as quickly as it can. Concerned quarters hold that delayed procurement - a usual feature affecting procurement - has been largely instrumental to the less than desired level of stocks in the government silos. The result is the growing imbalance between farmers and consumers - an undesirable outcome that the government should strive to avoid.