Food inflation: Strict measures needed
It is undeniable that the price hike of food items has pushed the poor and low-income people to the edge. Despite some individuals experiencing rapid wealth accumulation, a significant portion of the population remains impoverished and marginalised. The critical question lingers regarding the government's initiatives to address this situation and the effectiveness of these measures.
The World Bank recently released a list categorising countries based on food inflation. Bangladesh finds itself in the 'red' category, indicating inflation between 5 and 30 per cent. Countries with inflation rates between 2 and 5 per cent are labeled 'yellow,' while those with less than 2 per cent inflation fall into the 'green' category. 'Purple' is assigned to countries with over 30 per cent food inflation.
According to the World Bank report, rising food prices remain a concern to 71 per cent of households in Bangladesh.
Before the covid situation, inflation was more or less five per cent in Bangladesh. For two years, price hike has pushed the food inflation to 12.6 per cent. To make it clearer, the people have to spend Tk 112.6 for food items they would buy at Tk 100 a year ago. The poor and lower income cannot spend additional amounts. So, they either become dependable on borrowing or cut other expenses.
The situation has reached such a state that selling goods in the open market through TCB or selling essential items including rice, pulse and oil at a subsidised price to 10 million families are not even sufficient to stabilise the market. Meanwhile, people are being deprived due to the policy that TCB has taken for selling food items at subsidised prices.
According to a Prothom Alo report, TCB trucks went to a total of 172 spots in Dhaka city in the last 24 days. The TCB trucks went to Motijheel and secretariat areas the highest number of days.
Among South Asian countries, only Pakistan has higher food inflation than Bangladesh. Inflation is 8 per cent in India, 8.4 per cent in Nepal and 5.2 per cent Bhutan. The food inflation is 28 per cent in Pakistan and 3.6 in Sri Lanka.
Sri Lanka had much higher inflation even a year ago. The country also experienced an economic meltdown. If Sri Lanka could bring down its inflation to less than 5 per cent in a year, why couldn't Bangladesh? The reasons behind decrease in inflation in Sri Lanka are drop in prices of energy, electricity and food items.
According to Bangladesh Bureau of Statistics (BBS), 21.91 per cent people of the country are experiencing food insecurity while 0.83 per cent are facing extreme food insecurity. In Rangpur division, 29.98 per cent people are experiencing food insecurity.
Policymakers in Bangladesh reason that food prices are increasing in Bangladesh due to global issues. But it should be assessed as to how much the prices hiked in the international market and how much in the local market. Weaknesses in our market management and unscrupulous syndicate are to blame for the situation in Bangladesh. The ministers admit the presence of syndicate but unfortunately they cannot take any steps against these.
To drop the inflation, alongside taking strong steps against unscrupulous syndicates, the food supply through TCB should be increased and more people should be brought under the social safety net.