Rice prices frequently shoot up every year, and have been a growing concern for the government this year as market prices have remained high despite assurance of government intervention. Seeing the ineffectiveness of negotiating with rice sellers, the government has devised a plan to combat food shortage.
In a recent meeting, the Prime Minister’s Office asked the Ministry of Food to prepare a stock of 1 million tons of food grain as strategic reserve throughout the year.
The meeting took place between the prime minister’s Senior Secretary Suraiya Begum and Food Secretary Md Kaikobad Hossain.
In the meeting, the government noted Bangladesh was facing a food crisis after a decade, and asked the food ministry to implement a set of seven recommendations in their pursuit to find why the Boro crop and wheat collection programs by the ministry failed.
As of October 18, the government had 499,000 tons of grain in stock, of which 396,000 tons were rice, the other 103,000 tons were made up of other grains including wheat.
The procurement, distribution, and target projection will be monitored by a custom-designed software open to stakeholders.
Mixed response
Economists and experts are divided on the strategic reserve. Many are questioning how the government can stockpile 1 million tons of grain in government warehouses. They have also raised the matter of its feasibility. Forecasts predict the stock will be between 600,000 to 800,000 tons between August and November, and no higher.
AB Mirza Azizul Islam, former finance advisor to the caretaker government, criticised the government for not acting sooner when the stocks halved to 400,000 tons in July 2017 from 800,000 tons in July 2016. He praised the government for moving to act.
The former finance advisor also criticised Food Minister Qamrul Islam for boasting about the government stockpiling 1.2 million tons of grain by September.
The food minister had earlier said the government had procured a stock of 800,000 to a million tons of grain by August from domestic and international sources.
Many experts said it will be complicated to stockpile a million ton of grains in government warehouses. They also noted that the actual figures might be between 600,000 to 800,000 tons by November.
The Prime Minister’s Office has also asked a policy be developed to fix the prices of paddy and rice throughout the various seasons.PMO hot on the food ministry
The Ministry of Food has been tasked to explain why the Directorate General of Food failed to procure 700,000 tons of paddy at Tk24 per kilo, and 800,000 tons of rice at Tk33/Tk34 from the last Boro crop. The government had set a target of 1.5 million tons of paddy, rice and wheat to procure from farmers in the last season.
This year’s flash floods devastated around two million tons of Boro crops in April. Later in August, 600,000 hectares of Aman crops were washed away by the flood. Experts estimate around 1.5 million tons of rice crops were destroyed.
Following the disasters, coarse rice prices shot up to Tk47/Tk48 in the wholesale market and Tk54 per kilo in the retail market. The price of fine rice skyrocketed to Tk70. After a series of interventions, like slashing import duties to 10% from 28%, the wholesale price finally dropped by Tk4 in the last week of September.
According to the ministry, domestic rice prices have risen by 39% over the past nine months compared to a 6% increase in the global market.
The Ministry of Food has also been asked to run the VGF (Vulnerable Group Feeding) program.Importing rice from overseas
The PMO also directed the Ministry of Food to immediately import 1.15 million tons of rice under the Government-to-Government purchase, international and domestic tenders.
Bangladesh is currently set to import rice from Myanmar, India, Vietnam and Thailand.
The ministry also expressed its hope of harvesting additional around 400,000 tons of Aman crop by November.
Earlier, the food secretary had announced the government had ensured the import of 900,000 tons of rice with G2G methods and from the international market.
Bangladesh Institute of Development Studies Director General KS Murshid told the Dhaka Tribune: “It is good that the government is doing something about the rice price hikes and food crisis. The flood hurt the market pretty badly.”
He also said the government has to ensure a healthy stock in the lean months between August and November.
“It is not crucial to have one million tons in stock. It just has to be sufficient to tackle any disasters.”
The BIDS DG asked: “How much rice would we need in a worst-case scenario?”
