farm inputs, including fertilizers and p | April 04, 2011 00:00:00
higher had not the government provided some amount of subsidy Anu Mahmud Against a looming global food crisis apprehended as a result of a seven per cent shrinkage in world cereal stock, as predicted by the Food and Agriculture Organisation (FAO), how are we bracing ourselves for the uncertainty over availability of adequate food grains for the nation? The "Food Outlook" report prepared by the FAO estimates that the food import bill of the countries deficient in food production could well surpass the one trillion US dollar mark by the end of this year. Worse, for the poorest nations this bill could go up by 11 per cent and for the food-deficit ones it could mark as high an increase as 20 per cent. That does not place Bangladesh, still in need of importing three millions tons of food grains annually, in an enviable position. We would be in the comfort zone if the government moved fast and had by now arranged for import of cereals from rice exporting countries. Only recently did the authorities direct its focus on this issue and took a decision not to launch an Aman paddy procurement drive. Instead, they would like to import rice with the aim to avoid food inflation. It surely is a delayed response and may prove very costly. This happened in 2007 and 2008 when many governments, sensing the shortfall in cereal production, finalized negotiations for import of rice and wheat well ahead of the actual crisis. We may find ourselves in a sticky situation where no country wants to export cereals or the little that is available on the international market is forbiddingly priced. Also, the decision not to procure Aman rice for building a buffer stock may prove wrong because hoarders and mill owners may take full advantage of the lack of the government drive. More so because farmers had a bumper Aman harvest this time. Clearly the implications of this bumper crop may be both positive and negative depending on the measures the government takes. The danger of allowing a food crisis to precipitate further is if middlemen and hoarders are allowed to control the supply line and use the global food shortage as a ploy to fuel price spiraling. Artificially created crises rather than the genuine ones have often been responsible- as was the case during the great Bengal famine of 1943- for famines. Not before another three more months will there be the next Boro harvest. Since we have missed out on a timely import drive, the option before us is clear; we have to raise production to its optimal level and thus the negative impact can be somewhat offset. The agriculture sector has always been in the national limelight because of its important role in the economy. This sector was the largest contributor to the economy not long ago. But over time it has been pushed back to the third position with the services and industries sectors securing the first and second positions respectively in terms of their share in the country's gross domestic product (GDP). The share of the farming sector has now declined to 18 per cent from more than 45 per cent in the mid-sixties. However, with the deregulation of the economy in line with the fast pace of globalization, particularly during the last couple of decades, such a development is considered a natural outcome. Then again, the Bangladesh farming sector has also been liberalized, at least, partially. The Human Development Report for 2009, prepared by the Pakistan based Mahbubul Haq Centre and launched in Dhaka by the Centre for Policy Dialogue (CPD) at a function recently, opposed the process of the farming sector liberalization saying that the free-farm policy would affect the cost of agricultural inputs and food prices. The report has suggested Bangladesh to undertake institutional reforms, including land reforms, and to make the farm loan disbursement process easier. It also pointed out that the share of the manufacturing sector in output and employment did not rise in tandem with the fall in the share of agriculture sector in the GDP. More importantly, the report has observed that the agriculture sector liberalization has worsened the overall food security status in South Asia. Whether the partial liberalization has contributed to food insecurity or not remains a debatable issue. But there is no denying that the prices of farm inputs, including fertilizers and pesticides, have increased in recent years. The prices of the same would have been much higher had not the government provided some amount of subsidy. This fact remains that the country's food production has more than doubled over the past two decades and food imports are now made primarily to maintain a reserve stock for the sake of price stability in the domestic market and for distribution of food grains among the vulnerable section of the population under different public safety-net programmes. No deregulation means greater provision of subsidy on farm inputs. But the government can hardly afford to make the subsidy component bigger because of resource constraints. Besides, it cannot overlook the element of possible abuse of higher subsidy elements. The problem here relates largely to the low income level of the hardcore poor who remain vulnerable to food insecurity. Their lower-than-subsistence level income is not enough to match the prevailing prices of food. So, solution to that problem can be found in a reasonable hike in the income of the poor. Unfortunately, despite a respectable level of annual growth of the economy for the last two decade, generation of new employment opportunities and rise in the income level of the people at the bottom have been much below the expectations. Thus, the distribution of the incremental national income, in terms of per capita, has been somewhat skewed, to be precise. The policymakers, instead of seeking a solution in the so-called socialistic strategies, do need to put in place programmes and projects at the grassroots level that would help augment the income of the poor, side by side with efforts to reform the institutions involved, directly or indirectly, in the farming sector. It is also imperative for the government to spend a greater amount of money on agriculture research and development. Past achievements suggest that the country's agricultural scientists are capable of delivering results. What they need is necessary state support and patronization. The writer can be reached at email : [email protected]
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