Md. Ashiq Iqbal

MUCH has been said about the global price-hike of agri-products. People have been using fancy terms. I myself used "riceflation" to talk about rice price (modifying over "agflation") in some other writing. Global production shortage has been blamed; increased demand by some countries were accused; defective domestic supply-chains have been pointed in some countries; we have also heard a lot about potential hoarding by dishonest traders; bio-fuel came as a strong candidate; and of course, natural disasters in countries like Bangladesh were very realistic suspects.

But the fact is rice price grew at a more or less similar pace at domestic markets of both exporting and importing countries. Obviously, reasons would vary between them. It is not difficult to relate supply shortage, increased global demand, production of bio-fuel or natural disasters with global price-hike. Of course, increased opportunity to export rice, also with higher prices, would bring up the domestic price of exporting countries. And in this global community, price-hike in some countries will fuel, to some extent, price-hike in other countries. But even then the growing prices in some importing (at the same time, "poor") countries remain unexplained.

Let us pick the Bangladesh case. 2007 was a hectic year; two floods and then the cyclone. The country was already food deficit. The disasters left bad marks on an important season. The government estimates the loss to be 1.4 million tones of rice, the citizen's staple food. No doubt, this added to the general shortfall. But taking numbers from the previous year, imports constitute only around 2.5 per cent of the total supply (domestic production + imports). Even if the damage by the natural calamities added, it does not exceed 3.0 per cent. Then how does it come that the domestic price is completely aligned with the import price? Hoarding? I personally don't think so.

It is the price that has created the difficulty for the poor, not unavailability. If one is looking to buy rice, it is there in the market, but with high price attached to it, whether or not imported. Defective domestic supply-chain? No way. It is in place for hundreds of years. It may have contributed to pushing the price level higher, but blaming it for faster price-rise would be unrealistic. Obvious question would be - if it was working for so long, what happened now? Inflationary expectations? Now that seems to be a realistic explanation! People are expecting price to grow and the traders are rising to their expectations! But why would people expect a price-hike?

The answer is quite simple for Bangladesh - lack of information regarding demand and supply. Why not? The consumption pattern is not known. Even the size of the population is drawn from the air! The census is decade-old. And lighting the torch, there are the policymakers/economists to fear a famine!

What is the solution to this price problem? Well, this has been the million dollar question. The government of Bangladesh tried almost every way the policymakers/economists suggested. They went after hoarding; they tried selling rice at subsidized rate with expectations to calm down the overall market price; they tried reducing import duties; they also tried with higher imports to bridge any potential supply gap. But the price kept rising completely ignoring the efforts.

The difficulty within is absolutely understandable. What is not is the total disrespect towards the sufferings of the poor and our failure as policymakers/analysts. A growing suggestion in the recent days has been to call for a change in the food habit. We are hearing too frequently the words -- "eat potato instead; it's cheaper and nutritious as well". Aren't we treating them with disrespect? Don't we think the poor is smart enough to use their small amount of money in something else when they are unable to buy rice? Who am I to suggest potato? Do I know how it is to replace my staple food with something else? Isn't it more like saying - "eat potato instead and leave the rice for me"? There should be a limit to policy intervention, particularly when they are not working. This raises the fear that if the poor cannot afford cloths, the suggestion would be "why do you need to wear clothes when the weather's so worm?". And if the country can't provide health facilities, it would be like "you should keep your health and not get sick". It is our failure that they can't afford rice. If we can't do anything about it, may be we should at least stay away from their dinner table. I don't really feel we are invited!

The writer can be reached at

e-mail: ashiq@cpd-bangladesh.org