Procurement and food reserve
Sunday, 15 June 2008
The food situation is still tight at both domestic and international levels. Increased production of food grains in some countries, including Bangladesh, in the last cropping season virtually has had no impact on the availability and prices of the same in the international market. However, this is nothing unusual in a volatile global commodity market where both exporting and importing countries are exercising caution. Bangladesh somehow managed to survive the most critical stage of the ongoing difficult food situation, notwithstanding the fact that higher food prices until now are exacting a heavy toll on the poor and low-income people.
In the backdrop of such a food scenario, a bumper production in the just-concluded Boro season has come as a welcome relief for the administration as well as for the people in general, in spite of the fact that improved supply of rice has had no impact on the prices of the item in the domestic market. Such an unusual behaviour of prices is indicative of greater troubles in the coming months unless the government is adequately equipped to handle the situation. There is no denying that the government does need to build up its own food reserve to face any eventuality. The government, apparently, is very much aware of the situation and it has rightly fixed a procurement target of 1.2 million tonnes of Boro rice this year. But in spite of raising substantially the prices of both paddy and rice at the growers' level, the authorities concerned have been able to achieve only one-third of the procurement target until now.
A serious concern has been expressed by the people at high positions of the government about the slow progress in the procurement schedule that will continue until August 31 next. The chief adviser held a meeting recently with the high officials of the food ministry and asked them to gear up the procurement drive. The gap between the prevailing market price and the government's procurement one, which is not that large like that of the previous years, is cited as the main reason for inadequate procurement. The food ministry has, however, recommended for putting a cap on rice stocks by farmers and millers. Such a measure, which goes against the fundamentals of market economy, if implemented, might prove counter-productive. Since the government has offered better price under the ongoing procurement drive, it should not be that difficult to build up a bigger food reserve if the officials concerned are serious and sincere enough in carrying out their duties and responsibilities.
It would not be out place to mention here that the government does need to have a large food buffer stock particularly when the next harvest of a major rice crop -- Aman -- is more than seven months away. In addition to domestic procurement, the food directorate is required to procure food grains from abroad. But the prohibitive price and the scarcity of the cereals in the global market have emerged as major deterrents in this connection. The procurement of the 0.4 million tonnes at reduced prices under a government-to-government deal signed in April last between Bangladesh and India would be of great help under the prevailing situation. India, reportedly, has so far exported only one-fourth of the quantity of the rice that it was supposed to make available within June 03 last. It is rather unfortunate that India could not supply the rice when Bangladesh needed it most. The government should take up the matter with the Indian authorities and request the latter for the early supply of rice under the terms of the bilateral deal.
In the backdrop of such a food scenario, a bumper production in the just-concluded Boro season has come as a welcome relief for the administration as well as for the people in general, in spite of the fact that improved supply of rice has had no impact on the prices of the item in the domestic market. Such an unusual behaviour of prices is indicative of greater troubles in the coming months unless the government is adequately equipped to handle the situation. There is no denying that the government does need to build up its own food reserve to face any eventuality. The government, apparently, is very much aware of the situation and it has rightly fixed a procurement target of 1.2 million tonnes of Boro rice this year. But in spite of raising substantially the prices of both paddy and rice at the growers' level, the authorities concerned have been able to achieve only one-third of the procurement target until now.
A serious concern has been expressed by the people at high positions of the government about the slow progress in the procurement schedule that will continue until August 31 next. The chief adviser held a meeting recently with the high officials of the food ministry and asked them to gear up the procurement drive. The gap between the prevailing market price and the government's procurement one, which is not that large like that of the previous years, is cited as the main reason for inadequate procurement. The food ministry has, however, recommended for putting a cap on rice stocks by farmers and millers. Such a measure, which goes against the fundamentals of market economy, if implemented, might prove counter-productive. Since the government has offered better price under the ongoing procurement drive, it should not be that difficult to build up a bigger food reserve if the officials concerned are serious and sincere enough in carrying out their duties and responsibilities.
It would not be out place to mention here that the government does need to have a large food buffer stock particularly when the next harvest of a major rice crop -- Aman -- is more than seven months away. In addition to domestic procurement, the food directorate is required to procure food grains from abroad. But the prohibitive price and the scarcity of the cereals in the global market have emerged as major deterrents in this connection. The procurement of the 0.4 million tonnes at reduced prices under a government-to-government deal signed in April last between Bangladesh and India would be of great help under the prevailing situation. India, reportedly, has so far exported only one-fourth of the quantity of the rice that it was supposed to make available within June 03 last. It is rather unfortunate that India could not supply the rice when Bangladesh needed it most. The government should take up the matter with the Indian authorities and request the latter for the early supply of rice under the terms of the bilateral deal.