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Govt must right wrong policies to contain goods prices

Published: 00:00, Jan 28,2021

 
 

FINDINGS of a study that the government earlier commissioned appear to have corroborated the public perception that prices of essential goods such as rice, potato and onions often go through the roof because of the manipulation of the market, by way of hoarding that creates an artificial shortage, by millers, wholesalers and traders in the absence of proper government intervention and because of flawed policies that the government often takes. The minister for agriculture at a workshop at the Bangladesh Agricultural Research Council where the excerpts of the study was made public on Tuesday squarely blamed rice millers and wholesalers for price manipulation by way of stockpiling and blamed the government for failing to take up timely measures to contain rice prices. The depletion of the government rice stock — which declined on January 20, when it was last updated, to a little more than half a million tonnes that is said better not to fall below 1.25 million tonnes while a kilogram of the coarse variety of rice sold for prices about 40 per cent more than what it sold for almost a year ago — is also blamed for the volatile rice market. A Rice Research Institute economist says that millers and wholesalers stockpiled 95 per cent of the boro rice in three months of harvest to control and manipulate the market. But about 40 per cent of the millers did not supply the government with the agreed amount of boro in the procurement season in 2020.

The failures that the government has successfully displayed with price issues of potato and onions are almost similar. Potato production was in excess of 350,000 tonnes in 2020, yet prices increased, by more than 100 per cent compared with prices the year before, as traders and wholesalers used the excuse of prolonged flooding. The study says that potato production has increased by 6.5 per cent every year since independence and the actual price has decreased by 2.4 per cent. The government intervention was merely limited to open market sales of 215.5 tonnes through the Trading Corporation in 2020 while the annual demand hovered over 10 million tonnes, rendering government efforts to contain potato prices meaningless. While an excessive dependence on a single-source import has constrained the domestic onions market, meeting 90 per cent of the demand with import from India, the study shows that onion supply was greater than the demand in 2019 and 2020, yet prices increased, by up to 50 per cent overnight, in the past two years as India ordered an onion export ban. An Agricultural Research Institute scientific officer says that the prices increased on the domestic market and remained very high although the international market has largely been stable since 2017. All inadequacies in policies and the inefficacy of market intervention have been exacerbated by the government’s decision to import the items appearing to be in short supply or to allow more import by private-sector operators much later than the crisis period when it was time for new harvest.

The study that the agriculture ministry commissioned has put the blame down to other agencies and managers, which people have so far largely believed to be true. This now warrants that the government should attend to the inadequacies and inefficacy to become pro-people, shrugging of its bias towards millers, traders and wholesalers — the rich, in other words.

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