Govt ropes BRAC into developing alternative marketing channel
Tuesday, 10 July 2007
A Z M Anas
The caretaker authority has assigned the microfinance colossus -- BRAC -- to develop an alternative marketing channel in Dhaka, the capital, to help rein in the rocketting prices of essentials.
The fresh move is a part of the interim administration's three-pronged strategy to stabilise the commodity market and could also be an implicit acknowledgement of the negligible impact of the BDR interventions.
The world's largest non-government group is now carrying out the market study and is expected to begin its interventions from the next month, the sources at the BRAC said.
"Our task is to help narrow down the rural-urban price gap … But we need to closely look at the viability also," an official of BRAC said.
"The BRAC headquarter has already asked the field level staffers to collect the data of prices of essentials. Then, we'll start our work," he added.
The BRAC will receive no subsidy from the government for the future operations, but the authorities will allow it to open a wholesale market in the city, the sources said.
The new initiative to engage the BRAC in the supply chain is believed to be undercutting the clout of middlemen, blamed for the price hike of daily necessities, particularly agricultural produce.
The sources noted that the initiative came following a meeting between Chief Adviser (CA) Fakhruddin Ahmed and BRAC chairman Fazle Hasan Abed where the CA requested the BRAC to shore up the government's initiative to act as the alternative distribution force.
Commerce secretary Feroz Ahmed said if BRAC's intervention makes "an even small" difference, it would help weaken the circle of middle-men active across the country.
"They (BRAC) should be encouraged to discharge their job. It is important that the government, private and non-government sectors contribute to the market stabilisation," Ahmed told the FE.
He expressed the hope that BRAC is well-positioned to build up the alternative distribution channel in view of its nationwide network, own seeds and involvement in agricultural production and marketing.
In his post-budget press conference, finance, planning and commerce adviser Mirza Azizul Islam said the interim government would push ahead with a three-pronged strategy to keep the commodity market stable. The strategies include cutback on import duties, exploring alternative supply chains and support for boosting agricultural production.
The government has withdrawn customs duties on crude edible oil and lentils, while zero-duty imports of other essential commodities such as rice, wheat, onion, pigeon pea, and chic pea will continue.
Neither the BDR interventions, nor the involvement of the state-run Trading Corporation of Bangladesh (TCB) have yielded any tangible results in lessening the woes of consumers and curbing the price spiral.
In a recent report, local thinktank Centre for Policy Dialogue warned the national inflation is unlikely to come down below 7.0 per cent in near future.
The CPD identified lack of institutional monitoring mechanism, collusion of market agents, increased production cost of domestic commodities, enhanced transportation costs and too many market intermediaries are the major reasons behind the creeping inflation, particularly food inflation.
"Relatively high interest rate and bank charges, dislocation in market structure due to anti-corruption drive, and information gap between different stakeholders are also blamed for the price spiral," according to the report.
The caretaker authority has assigned the microfinance colossus -- BRAC -- to develop an alternative marketing channel in Dhaka, the capital, to help rein in the rocketting prices of essentials.
The fresh move is a part of the interim administration's three-pronged strategy to stabilise the commodity market and could also be an implicit acknowledgement of the negligible impact of the BDR interventions.
The world's largest non-government group is now carrying out the market study and is expected to begin its interventions from the next month, the sources at the BRAC said.
"Our task is to help narrow down the rural-urban price gap … But we need to closely look at the viability also," an official of BRAC said.
"The BRAC headquarter has already asked the field level staffers to collect the data of prices of essentials. Then, we'll start our work," he added.
The BRAC will receive no subsidy from the government for the future operations, but the authorities will allow it to open a wholesale market in the city, the sources said.
The new initiative to engage the BRAC in the supply chain is believed to be undercutting the clout of middlemen, blamed for the price hike of daily necessities, particularly agricultural produce.
The sources noted that the initiative came following a meeting between Chief Adviser (CA) Fakhruddin Ahmed and BRAC chairman Fazle Hasan Abed where the CA requested the BRAC to shore up the government's initiative to act as the alternative distribution force.
Commerce secretary Feroz Ahmed said if BRAC's intervention makes "an even small" difference, it would help weaken the circle of middle-men active across the country.
"They (BRAC) should be encouraged to discharge their job. It is important that the government, private and non-government sectors contribute to the market stabilisation," Ahmed told the FE.
He expressed the hope that BRAC is well-positioned to build up the alternative distribution channel in view of its nationwide network, own seeds and involvement in agricultural production and marketing.
In his post-budget press conference, finance, planning and commerce adviser Mirza Azizul Islam said the interim government would push ahead with a three-pronged strategy to keep the commodity market stable. The strategies include cutback on import duties, exploring alternative supply chains and support for boosting agricultural production.
The government has withdrawn customs duties on crude edible oil and lentils, while zero-duty imports of other essential commodities such as rice, wheat, onion, pigeon pea, and chic pea will continue.
Neither the BDR interventions, nor the involvement of the state-run Trading Corporation of Bangladesh (TCB) have yielded any tangible results in lessening the woes of consumers and curbing the price spiral.
In a recent report, local thinktank Centre for Policy Dialogue warned the national inflation is unlikely to come down below 7.0 per cent in near future.
The CPD identified lack of institutional monitoring mechanism, collusion of market agents, increased production cost of domestic commodities, enhanced transportation costs and too many market intermediaries are the major reasons behind the creeping inflation, particularly food inflation.
"Relatively high interest rate and bank charges, dislocation in market structure due to anti-corruption drive, and information gap between different stakeholders are also blamed for the price spiral," according to the report.