World food prices and situation in Bangladesh

Although riots caused by spiraling food have been reported from Egypt, Cameroon, Ivory Coast, Mauritania, Ethiopia, Madagascar, the Philippines, Indonesia, Haiti, Burkina Faso and Senegal prices, the government of Bangladesh has efficiently managed the situation through a concerted effort, and averted any untoward incident.

The number of OMS centres and BDR outlets, and per head quota, has been increased. Vulnerable Group Feeding and Vulnerable Group Development cards for the rural destitute have been increased. Besides, the allocations for Food for Work Programme, Test Relief and Gratuitous Relief have been increased to strengthen the social safety net.

The government allocated Tk one billion to generate immediate employment for the rural poor, which had an effect on the market, and the low-income families and fixed-income groups got great relief.

In contrast, lines in the OMS shops in Philippines, Thailand, Vietnam and many other countries are getting longer every day. The Food and Agriculture Organisation estimated that the world has four to five million tons of cereal stocks that could feed the global population for only 8-12 weeks. A UN study group said that prices of staple foods such as rice, maize and wheat are expected to rise. Since March 2007, prices of rice have soared 76%, for wheat 130% and soya beans 87%.

Unicef says that the impact of higher food prices is particularly marked in poor countries where 75% of a family’s revenue goes on food, compared to rich countries where just 15% of a household’s income is spent on meals. IMF warned that the price hike of food items could trigger social and political upheavals and security risks.

World Bank experts say that food price hikes have an effect on poverty in poorer countries, posing challenges in terms of nutrition and hunger. This might make it difficult to attain the targets for human development in the MDGs.

Thanks God, Bangladesh, being a member of the poor group, has escaped from the forecasted risks for the next 4-5 months at least. The increased potato production and expected bumper Boro (one of the two main rice that grows in Bangladesh, the other is Aman) and maize production, if no natural calamities occur in the next two weeks, gives strength the country to say “no” to the international forecasts.

The government has taken a good number of steps to sustain the comfortable situation in food production and supply.

Expecting a record 17.5 million tons of Boro rice this year (previous highest was 16.2 million tons in 2006), harvesting of the crop has started in the haor areas of Sunamganj, Kishoreganj and Netrokona districts. As ensuring fair price at the growers’ level is the best way to raise the morale of the farmers to grow more in the next season, the government has been acting promptly and properly. It has already started procuring Boro rice and paddy from April 16, beginning from Sunamganj district.

The procurement price for rice has been set at Tk 28 per kg, up from Tk 18 a year ago. It has set a target of procuring 1.2 million tons of rice during the drive and, if needed, it will procure more. During the drive, the government will also buy 0.3 million tons of paddy from growers at Tk 18 per kg. Farmers across the country have been expressing their happiness over the procurement price, as they could make a profit at that price.

The government considered five aspects in fixing the procurement prices. These are cost of production, farmers’ incentives, consumers’ interest, enhancement of government food stock and market price. The government estimated the production cost at Tk 19.23 and Tk 13.19 for a kg of rice and paddy respectively, which is close to the production cost, Tk 20.80 for a kg of Boro rice on an average, estimated by the Centre for Policy Dialogue.

According to the government’s estimates, the cost of Boro production went upto Tk 68,928 per hectare this year from Tk 46,115 last year, mainly due to increase in the prices of fertiliser, seeds, irrigation and insecticides. It is expected that the government could achieve procurement targets this time as the prices have been fixed considering 40% profit on production costs.

Apart from procuring rice and paddy from the local markets, the government has a plan to buy another 1.7 million tons of rice from the global market to build a safe stock, keeping in mind the growing demand and the import in the year as the government imported 1.7 million tons during the first eight months of the current fiscal year. The government warehouses have the capacity to store 1.2 million tons of rice, which could be raised to 1.4 million. The government is planning to utilise vacant warehouses owned by other government departments for food storage.

The preliminary report of the Agriculture Ministry revealed that a record amount of 8 million tons of potato has been grown this season. It can be used with rice as 100 grams of potato contain 19 grams of carbohydrate. Similarly, it can be used as a vegetable as 100 grams of potato contain 2 grams vegetable proteins, 0.6 gram mineral salts and 2.2 grams dietary fibre.

A field report says that maize production will also increase by 30%, to 1.20 million tons this year from the last year’s production of over 0.70 million tons. Maize can be used as a substitute for wheat, although western countries are using huge amounts of maize and soya beans for making bio-fuels.

Due to bumper outputs of Boro, potato and maize, Bangladesh will be an exception in the least developed world upto the next monsoon so far as food is concerned. It will be a Herculean task to sustain this as 1%, that is 80,000 hectares, of agricultural land is being reallocated every year to non-agriculture sectors — rather, we can say, unproductive sectors — and some 5,500 new faces are being added everyday to the country’s population. Steps should be taken to convert country’s 3 million hectares of fallow land into agricultural land.

Agricultural practices will have to change radically to better serve the situation. For that, investment in agriculture should be enhanced to increase productivity and maintain soil fertility. On-farm resear ould be strengthened. New varieties should be developed to grow crops in saline and drought-hit areas. Products should be diversified on the basis of needs. Farmers should be trained on-the-field regularly. They should be provided with huge incentives, and fair prices of their produce should be ensured. Agriculture should be elevated to a commercial activity from the present sustenance stage through optimum use of land and other resources. Everyone should come forward to achieve this goal.

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