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Don’t Allow Inflation to Extend Beyond Reach

Don’t Allow Inflation to Extend Beyond Reach

Bangladesh, with its rich cultural tapestry, grapples with a pressing challenge – ensuring affordable living, especially for vulnerable groups. As a new government assumes control, tackling food price challenges becomes paramount.

The months of December and January, marked by the Bangla calendar months of Poush and Magh, usher in the harvest season. Traditionally a period of hope, it presents challenges, particularly for the rural poor and impoverished urban families. Winter brings not only cold temperatures but also food shortages, exacerbated by dry, polluted air. Reports of escalating food prices in domestic markets post-election underscore the gravity of the situation.

One in Five Faces Food Insecurity

Reflecting on the past year, Bangladesh witnessed prolonged double-digit increases in food prices, impacting household budgets. Despite the possibility of inflation deceleration, recent hikes persist, burdening consumers. A study by the Bangladesh Bureau of Statistics (BBS) at the close of 2023 revealed a concerning statistic – one in every five households faced food insecurity.

Proactive Measures Ahead of Ramadan: Anticipating Challenges

With Ramadan approaching in less than two months, the government must be vigilant. Merchants tend to inflate prices before Ramadan to avoid scrutiny during this sacred period. Government intervention is crucial to maintain market stability and counteract potential price gouging, ensuring fair prices for essential commodities.

A recent report from the Bangladesh Trade and Tariff Commission (BTTC) raises concerns about soaring prices of beef and onions despite ostensibly adequate supply. The Ministry of Commerce must implement special initiatives to monitor supply and pricing of essential items. Reduced wheat imports intensify pressure on rice supplies, worsening food insecurity.

The Balancing Act of Budgets

Economics dictates that the cost of food is tied to one's budget. Allocating a significant 70% of its budget to food, the average household struggles for budgetary equilibrium. A study by the World Food Programme (WFP) in November 2023 revealed a 6% increase in average spending on food per person compared to the previous year.

Hunger and food insecurity exhibit variations across regions, seasons, and social classes. Disparities in rice prices across divisions and a steady increase since October 2023 are attributed to high inflation and elevated transportation costs.

Market Monitor's Distress Signal

The Bangladesh Market Monitor-November 2023 report by WFP encapsulates anxiety surrounding high rice prices. Fertilizer and irrigation costs, along with import challenges, contribute to the discrepancy between internal production and retail prices. Despite assurances of no food shortage for the poor, skepticism arises regarding market efficiency.

In addressing the multifaceted challenge of controlling food prices, government initiatives are crucial. Ministries must focus on improving law enforcement in the essential commodities market. Continuity of programs such as Open Market Sales (OMS), Food Friendly, Food for Work, Vulnerable Group Feeding, and Vulnerable Group Development is imperative.

The success of government initiatives pivots on precision and efficacy. Identifying vulnerable individuals, providing targeted support, and implementing a robust monitoring and evaluation (M&E) mechanism ensure efficiency, transparency, and accountability in the distribution chain. This demands a concerted effort to effectively identify those in need, tailor support accordingly, and establish a framework that holds the entire process accountable.

Market Manipulation: A Looming Threat to Stability

Market manipulators pose a formidable challenge, contributing to a supply crisis. Families, facing stagnant wages amid inflation, bear the brunt of sudden jumps in food prices. The impact extends to low-income individuals vulnerable to poverty due to adverse income shocks.

Sayed Hasan Al Manzur
Author

Sayed Hasan Al Manzur

Editor

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