Affordable food prices and food security
Friday, 17 August 2007
THE prices of basic foods, ata (wheat flour) and rice, are now so high that these are considered to be unprecedented. The soaring high prices of foodgrains would not have been a cause of so much concern had there been no adverse conditions in the country owing to the devastating flood that has shattered standing crops and, in large part, the life of the food producers, the farmers. Given that another harvest of foodgrains is some months away even if successful replanting and post-flood care of surviving crops can be undertaken, the prevalent food availability situation dictates the need for greater concern among the policy makers.
Leaders of 14 local chamber bodies and trade associations drew the attention of the government to the said need through a statement last Wednesday. They advised the government to take urgent measures so that food prices come down within the reach of the poor sooner. The likelihood of a large part of the aman rice crop perishing in the flood, reported underproduction of the last boro rice crop and the government not having comfortable stocks of foodgrains, have all combined to create apprehensions of possible food shortages, provoking relentless rise in the prices of foodgrains. The business leaders have stressed on these developments that call for giving the highest priority attention to foodgrain availability and distribution at affordable prices to people who are very distressed in many cases because of the flood.
Other issues of significance were also stressed by the chamber leaders, such as the enhancement of interest on agricultural loans. The interest rate of the government operated Bangladesh Krishi Bank (BKB) was raised recently from 8.0 to 12 per cent. Thus, when a decrease in the interest rate of such loans from the previous 8.0 per cent was only rationally expected in view of the flood distressed conditions of the farmers, raising its interest rate by 4.0 per cent was actually awkward. Meanwhile, the bank has suspended its rate hike in a praiseworthy move in sympathy towards the flood affected farmers at the instruction of the Ministry of Finance. It may now consider whether the rate can be lowered even below the previous 8.0 per cent. The damage caused by the widespread flood to assets, occupations and income of people, have led to drastic reduction of purchasing power of the affected millions. Foodgrain being basic to human survival, if its price continues to escalate then many of the affected people would be simply unable to buy and consume food. Thus, the possibility of starvation and deaths from it cannot be ignored casually.
To prevent all these grave apprehensions from becoming realities, the government will have to take quick steps to issue foodgrains from its stocks at much subsidized prices to the vulnerable ones. The process of their sale must be incorruptible -- from drawing up the list of beneficiaries down to the actual distribution to them. It may be also necessary to provide foodgrains free of cost for a period to a large number of very distressed people. At the same time, foodgrain imports may be stepped up to build a comfortable stock. Food aid from donors should be sought and arrangements made to build up an aid pipeline of foodgrains. On the other hand, the government must do everything in the post-flood period towards agricultural recovery by ensuring the supply of essential farming inputs to farmers in time, in sufficient quantities and at prices they can afford.
Leaders of 14 local chamber bodies and trade associations drew the attention of the government to the said need through a statement last Wednesday. They advised the government to take urgent measures so that food prices come down within the reach of the poor sooner. The likelihood of a large part of the aman rice crop perishing in the flood, reported underproduction of the last boro rice crop and the government not having comfortable stocks of foodgrains, have all combined to create apprehensions of possible food shortages, provoking relentless rise in the prices of foodgrains. The business leaders have stressed on these developments that call for giving the highest priority attention to foodgrain availability and distribution at affordable prices to people who are very distressed in many cases because of the flood.
Other issues of significance were also stressed by the chamber leaders, such as the enhancement of interest on agricultural loans. The interest rate of the government operated Bangladesh Krishi Bank (BKB) was raised recently from 8.0 to 12 per cent. Thus, when a decrease in the interest rate of such loans from the previous 8.0 per cent was only rationally expected in view of the flood distressed conditions of the farmers, raising its interest rate by 4.0 per cent was actually awkward. Meanwhile, the bank has suspended its rate hike in a praiseworthy move in sympathy towards the flood affected farmers at the instruction of the Ministry of Finance. It may now consider whether the rate can be lowered even below the previous 8.0 per cent. The damage caused by the widespread flood to assets, occupations and income of people, have led to drastic reduction of purchasing power of the affected millions. Foodgrain being basic to human survival, if its price continues to escalate then many of the affected people would be simply unable to buy and consume food. Thus, the possibility of starvation and deaths from it cannot be ignored casually.
To prevent all these grave apprehensions from becoming realities, the government will have to take quick steps to issue foodgrains from its stocks at much subsidized prices to the vulnerable ones. The process of their sale must be incorruptible -- from drawing up the list of beneficiaries down to the actual distribution to them. It may be also necessary to provide foodgrains free of cost for a period to a large number of very distressed people. At the same time, foodgrain imports may be stepped up to build a comfortable stock. Food aid from donors should be sought and arrangements made to build up an aid pipeline of foodgrains. On the other hand, the government must do everything in the post-flood period towards agricultural recovery by ensuring the supply of essential farming inputs to farmers in time, in sufficient quantities and at prices they can afford.