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Tuesday, March 22, 2016

3 Years of Government: Sustained growth in agriculture sector ; Better food management helped tackle price spiral

The government's policy support for farm sector along with better management of public food distribution system (PFDS) helped the country achieve a sustained growth in agriculture sector over the last three years.
Taking office right after the 2007-'08 period of high volatility of global food prices, the AL-led grand alliance government put food security high on its agenda. And soon it was manifested in various steps the government took.
The steps include price cut of non-urea fertilisers, providing free irrigation during the Aman season and rebate on electricity charges for farmers, increased supply of quality cereal seeds in the market through state-run agencies, and special rehabilitation schemes for farmers of cyclone-hit and haor areas to recoup previous losses.
But a particular initiative by the agriculture ministry, in a way, revolutionises the livelihood of an 18 million-strong farming community. They were provided with farm input cards that helped them open bank accounts and get access to the benefits of farm inputs and subsidies directly through banking channel.
In tandem with such initiatives by the agriculture ministry, the government also made sure food grains in the market were available thereby containing already high food prices from further rise.
To cushion the poor and vulnerable ones from the effects of high prices of rice, the government significantly enhanced its allocation of rice for subsidised open market sale (OMS) from less than 2 lakh tonnes in fiscal 2008-09 to nearly 9 lakh tonnes in the last fiscal year (2010-11).
It is to the credit of the food ministry that when as many as 20 private bidders, even after winning the bids, failed to import rice and wheat to supplement the domestic production over the last two years, the government cancelled those bids and signed three-year to five-year long bilateral import deals with Vietnam, Thailand and Ukraine so that a sustained import line remains open under public sector.
That smart move helped the government keep its food reserve at an optimum level creating the confidence that any domestic crop failures would not be a major problem.
Ensuring availability of food in the market was the main thrust of the government's efforts to cope with a lot of balancing jobs in the volatile food front.
The efforts were to be made to ensure that import shipments are on schedule to meet the gap between domestic cereal output and the rising demand, to reign in surging food prices and also to infuse food and cash flows in the rural economy so that one-third of the population living below the poverty-line do not go hungry.
Other than OMS operation, the government also increased food supply through various other year-round public food distribution mechanisms including VGD, VGF, Fair Price Card programmes, and thereby made food available and accessible to both rural and urban poor.
Before this government's takeover, the annual food distribution was somewhat around 1.3 million tonnes under the PFDS whereas it was raised to 2.7 million tonnes in the last fiscal year and the projected distribution for the current fiscal now stands at 2.9 million tonnes.
Social safety net programmes (SSNPs) expenditure was around 1.5 to 1.8 percent of the national gross domestic production (GDP) before the present government took over. The government expanded the SSNPs, many of which are food-aided, to 2.5 percent of the GDP in the current fiscal year.
Bangladesh Bureau of Statistics cites this as a major factor in reducing poverty rate from 40 percent in 2005 to 31 percent now.
However, as the number of SSNPs and quantity of food grains being dished out through PFDS increased over the last three years, concern about the quality and fairness of such activities also surfaced.
Although law enforcers detained many unscrupulous traders, officials and grassroots level political activists for misappropriation of food grains meant for distribution among the poor, there still remains some systemic lacunae that need to be mended.
Food officials also admits flaws in monitoring and political pressure at times.

Source:  The Daily Star, 08 January 2012