Food price rise hits the poor
Thursday, 24 December 2009
Sheikh Shahariar Zaman
Prices of food for poor people increased sharply in the last one month, pushing them more on the verge of vulnerability.
Expectation and supply disruptions are the main causes of the price rise, said economists.
Coarse rice price increased by 7.8 per cent, coarse flour by 15.38 and anchor pulse 16.98 per cent in one month.
If income does not go up in proportionate to the existing price, it adversely affects poor people, former adviser Mirza Azizul Islam told the FE.
The price hike affects the welfare of the poor if the income effect is less than the price effect, Mr Mirza said.
"Production sector is not performing well but in absolute figure, implementation of the Annual Development Programme (ADP) is relatively high," he said.
"Import price and expectation play a significant role in price determination," he explained.
Bad weather has hampered production in Bangladesh and India. The neighbouring country is going to import food due to crop loss this year, Mr Mirza said.
"When a big country like India has decided to import, price in the international market has gone up," he said.
"This gives a signal to the market for further price hike," he added.
The government should focus more on income generation activities rather than allocating more resources for lowering the price, he suggested.
Prices of food for poor people increased sharply in the last one month, pushing them more on the verge of vulnerability.
Expectation and supply disruptions are the main causes of the price rise, said economists.
Coarse rice price increased by 7.8 per cent, coarse flour by 15.38 and anchor pulse 16.98 per cent in one month.
If income does not go up in proportionate to the existing price, it adversely affects poor people, former adviser Mirza Azizul Islam told the FE.
The price hike affects the welfare of the poor if the income effect is less than the price effect, Mr Mirza said.
"Production sector is not performing well but in absolute figure, implementation of the Annual Development Programme (ADP) is relatively high," he said.
"Import price and expectation play a significant role in price determination," he explained.
Bad weather has hampered production in Bangladesh and India. The neighbouring country is going to import food due to crop loss this year, Mr Mirza said.
"When a big country like India has decided to import, price in the international market has gone up," he said.
"This gives a signal to the market for further price hike," he added.
The government should focus more on income generation activities rather than allocating more resources for lowering the price, he suggested.