Govt mulls trimming food subsidy with programme integration

The government is considering options to reduce its subsidy from the Food Friendly Programme (FFP) by cutting two-thirds of the volume of rice provided to beneficiaries, according to sources.
Besides, there have been recommendations for the amalgamation of TCB's sales drives of daily essentials and Food Friendly Programme into a unified selling point for more efficient administration.
In this regard, the Prime Minister's Office (PMO) is expected to sit today (Thursday) to find and implement a solution.
Food Minister Sadhan Chandra Majumder, Senior Commerce Secretary Tapan Kanti Ghosh and Food Secretary Md Ismiel Hossain are expected to join the meeting, which will be presided over by Principal Secretary to the prime minister M Tofazzel Hossain Miah.
The commerce ministry has already proposed integrating the existing Trading Corporation of Bangladesh (TCB) and FFP programmes into a single selling point for streamlined management.
The ministry has also suggested reducing the rice allocation from 30 kg to 10 kg, along with TCB's three key essential items, by cross-referencing the information of TCB cardholders with the FFP or 'Khaddo Bandhob Karmasuchi' database, according to an official.
These suggestions were made during a recent commerce ministry meeting chaired by Senior Commerce Secretary Tapan Kanti Ghosh, which was also joined by the Director General (DG) of Food.
Regarding the issue, Senior Commerce Secretary Tapan Kanti Ghosh said that there has been no firm decision to integrate the TCB and FFP programmes. A recent meeting recommended consolidating both programmes at a single centre, but this is not a final decision.
"We need to scrutinise the details, as implementing the recommendation involves various issues, including subsidies," he added.
On September 1, 2022, the government launched the FFP or 'Khaddo Bandhob Karmasuchi' programme for low-income people nationwide. Besides, Open Market Sales (OMS) of food items for low-income households have also been going on in key cities.
Currently, the 'Khaddo Bandhob Karmasuchi' is being implemented among 5.0 million cardholder families at the grassroots level, including districts, upazilas, and unions.
Under the programme, rice is sold at Tk 15 per kg to low-income cardholder families for five months in a year. The government provides a subsidy of Tk 28 per kg of rice, totalling Tk 7.15 billion in subsidies annually.
On the other hand, the Open Market Sales (OMS) programme operates only in urban areas, including Pourosavas, for five days a week. Beneficiary families can purchase 30 kg of rice at Tk 30 per kg every month.
The government purchases rice at an average price of Tk 43 per kg and provides a subsidy of Tk 13 per kg. The total subsidy amount is Tk 9.5 billion annually, as mentioned in a document.
According to a source, if the TCB and FFP cardholders' sales drives are consolidated under one umbrella, the number of beneficiaries will exceed 10 million.
Currently, the subsidy burden amounts to Tk 21.0 billion due to the sale of 30 kg of rice at Tk 15 per kg among cardholding families. If the proposal to provide 10 kg of rice instead of the existing 30 kg at Tk 15 per kg is implemented, the government's subsidy burden would be reduced to Tk 14.25 billion.
A TCB source expresses concern that the volume of TCB's subsidy will increase proportionately if the proposal is implemented through combined management.
There are currently 10,282 dealers under the FFP programme and 8,000 dealers under the TCB programme nationwide.
When contacted, Director General of the Directorate of Food Md Shakhawat Hossain said, "We will sit on May 25 (today) at the PMO to determine whether to operate the FFP and TCB programmes in an integrated system from a single centre or not."
He explained that in the meeting, the food minister and food secretary are expected to be present. No final decision has been made regarding the integration of the selling systems between TCB and FFP.
As of May 23, 2023, the government's total food grain stock is over 1.62 million tonnes, consisting of around 1.2 million tonnes of rice, 0.4 million tonnes of wheat and 9,001 tonnes of paddy, according to the food ministry.

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