Food crisis ahead?
With all signs of a food crisis up ahead, how does the government plan to tackle the situation?
by ANWAR PARVEZ HALIM
The price of rise is on a steady rise. The coarse rice eaten by the poorer majority now sells at 40 taka per kg. The finer rice like nazirshail, miniket or lata, costs around 50 to 55 taka per kg. The price of other essentials in the market is also on an upward spiral. In other words, the market is out of control.
TV talk shows are replete with rhetoric about the cost of living, but none of that 'wisdom' really benefits the common consumers. As for the government, it presents two reasons for the rise in food prices. One is that the prices of food in the international market have gone up; the other is that the price of food items in the local market is being artificially manipulated. They claim that certain quarters are intentionally hiking up the prices of food. Prime Minister Sheikh Hasina has said that in order to keep the price of food in control, the government will hold up its development programmes if necessary and use those funds to import food grains.
In the meantime, the Food Department has reportedly drawn up a master plan for food security. It is obvious that the government has attached top priority to the food problem. The Prime Minister's statement, after all, cannot be taken lightly. The question hovering over the nation now is, is a food crisis imminent? Will the country be caught up in the web of food politics?
Vicious cycle of prices and poverty
Climatic calamities have seen a fall in food production in several food-producing countries. The forest fires in Russia and floods in Australia are prime examples. These countries have not as yet declared that they will withhold food export, but there is all possibility that they will do so. Fall in production has pushed up food prices in the international market. This is leading to a fresh wave of poverty.
In a report of the World Bank published on February 16, it was stated that due to the rice in food prices alone, there has been an increase of extreme poor by 4 crore 40 lacs (44 million) from June last year till January this year. World Bank President Robert Zoellick has said, "The increase in food costs is pushing hundreds of thousands of people into poverty and placing immense pressure on the vulnerable." Bangladesh is not outside of this. It is felt that the number of poor in the country is on a rise along with the price of market prices. Till recently it has been estimated that 40% of the population lived below the poverty level, but now this has risen to 44%. Income has not risen proportionately with the cost of living.
Meanwhile, in an interview with BBC television on February 16, the World Bank Managing Director Ngozi Okonjo-Iweala spoke about the increase in poverty due to the abnormal rise in food prices, and cited Kazakhstan and Bangladesh as examples.
The United Nations Food and Agriculture Organisation (FAO) recently expressed concern that there will be a food shortage throughout the year 2011. They state that, "Food prices, unemployment and the gradual increase in poverty is likely to lead to demonstrations, violence and unrest in several African and Latin American countries."
The staple diet of half the world's population is rice. The 16 crore (160 million) people of Bangladesh depend on rice for their food intake and so this statement of FAO bears relevance to this country too. One cannot easily dismiss the severe impact this is likely to have on Bangladesh. With soaring food prices in the international market, there is no way food prices back home can fall anytime soon. The government must take preparatory measures to tackle the oncoming crisis.
No impact of bumper crop
Agriculture is said to be one of the main successes of the incumbent government. Subsidy is being provided for electricity to ensure adequate irrigation of croplands. Seeds and fertiliser are being timely distributed. The line ministry's website gives regular update on the amount of fertiliser being supplied to each district. Credit certainly goes to Agriculture Minister Motia Chowdhury.
The Agriculture Minister claims there has been a bumper harvest of the Aman rice crop, If so, why hasn't this been reflected in the market? Why does coarse rice sell at 40 taka per kg? There seems to be no logical explanation.
Farmer Narayan of Chatmohar in Pabna district says, "In Rajshahi where one bigha of land is supposed to yield 20/25 maunds of rice, the yield has been merely 10 to 12 maunds. The power crisis has hampered irrigation, leading to decreased production." In Chalan Beel, drought has cracked the parched earth and there are instances of one bigha yielding only one maund of paddy. The farmer says, "The way the government is publicising a bumper crop is an exaggeration. However, the Aman crop has been relatively good."
Narayan goes on to say, "Farmers this season have sold paddy at an average price of 1000 taka per maund. One maund of paddy yields about 30 kgs of rice, at the most. Then there is the cost of par-boiling the rice, transportation, and other overhead costs. So it takes about 37 taka to produce one kg of rice. In the retail market this is being sold at 40 taka."
The Prime Minister has said that certain quarters are hoarding rice and artificially inflating the prices. If that is so, then it is the government's responsibility to filch out the responsible persons and take action against them. Observers say, the Prime Minister may be sincere and committed, but certain members of the cabinet encourage the hoarders. Recently Commerce Minister Col. (retd) Faruk Khan stated, "Products are sold for much less in Bangladesh than in any other country of the world." This may be true, but then so per head income of the people is also much less than most countries of the world. Such statements merely encourage the market manipulators.
Master plan for food security
Given the increase in food prices and the fall in food production, FAO has expressed its fear that a food crisis may emerge and continue throughout 2011. Back home, the Food Department has drafted a master plan to provide 4 crore (40 million) people with rice at eight taka per kg and wheat and six taka per kg. According to the plan, these prices will be in place for the ultra poor for half of the year. Persons consuming less than 1650 calories per day are considered to be in the ultra poor bracket.
Other than that, there are plans for a crash programme to step up food imports for the sake of food security. This plan is presently under government consideration.
According to Food Department sources, upon taking over power in 2009, the government had considered providing food at nominal prices to 25% of the people living below the poverty line. However, this was not possible as more stress had been laid on implementing development work. In the meantime, the price of food crept up steadily. To bring the situation under control, the government adopted several programmes such as open market sale of rice, fair price cards, rations for government employees, etc. But none of these initiatives could rein in the price hike, perhaps obliging the Prime Minister to issue such a statement.
Economist Dr. Mahbub Ullah, Professor of Development Studies at Dhaka University, says, "Sheikh Hasina perhaps issued this statement in apprehension of a crisis looming large ahead of us. But development projects actually generate employment and enterprise. If development work is halted, the economiy will come to a standstill and the number of poor will rise. The immediate situation may be addressed by stopping development projects, but this will do immense harm to the economy."
Dr. Mahbub Ullah says, "With the global fall in food production, it has become increasingly difficult for a densely populated country like Bangladesh to ensure food security. After all, no country can simply provide food instantly upon request. Under the circumstances, even the shortage of five to ten lac tonnes can lead to a serious crisis."
If the coarse rice selling in the market at 40 taka per kg has to be imported, the price may go up to 50 taka per kg. Finer rice may go up to 70 taka per kg. The Prime Minister at one point had said that if BNP had been in power, the price of rice would have risen to 60 to 70 taka per kg. Critics say that the Prime Minister had been predicting the future as the price of rice was indeed going up in that direction.
The Boro crop of IRRI rice is being sown presently. This will take at least one and a half to two months to grow. The new rice will come to the market from April 15 to May. So the one and a half months from March to mid-April is a crucial time. There are fears that the price of food grains will hit the ceiling in this period and the food crisis will be acute.
Market manipulation and food politics
Food and politics have always been interrelated the world over. During World War II when the Japanese had reached up till Rangoon, the British deliberately created a food shortage by sinking all vessels to stop food supply. Additional food had been stocked for American troops in India. The British had deftly handled food politics at the time.
It is said that local and outside forces had also been responsible for the catastrophic famine of 1974 in Bangladesh. Unprecedented floods left the land bereft of crops and 40 million people of their hearths and homes. And the US delayed in providing Bangladesh with the food grain it was to send under the PL480 programme. The country fell into a deep crisis and the famine accelerated the fall of the Mujib government.
The country is not facing the situation of 1974, but as the Prime Minister pointed out, the market was being manipulated to create an artificial price hike. There are the illegal hoarders. There is the vested politics of local and outside quarters who are embroiled in food politics. When prices are artificially hiked, the solution is to increase supply. The government, if necessary, will have to take initiative to import food to address the problem.
Food Minister Dr. Abdur Razzak recently returned from a trip to India and stated that he had been given reassurance there regarding food supply. However, during the caretaker government when Cyclone Aila struck, India had committed to provide Bangladesh with food grain, but then went back on its word. They finally did provide the food grain, but much less than committed. Bitter experience makes the people wary of such reassurances. On top of that, India's own food position is not all that good either.
The government has to keep close watch on the international market while also monitoring market manipulations and hoarding back home.
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