FOOD SECURITY: Great initiative by Govt 

The government has taken a number of actions to protect the weak from rising staple prices.

The government seeks to shield the low- and middle-income people from the price shock in the market as the annual inflation rate increased to over 7% in June of this year, the highest level since July 2013.

In addition to guaranteeing 10 kilogrammes of rice at a reasonable price for 1 crore Trading Corporation of Bangladesh (TCB) family cardholders, the government would offer rice and wheat to 4.4 lakh families each day through extending open market sales (OMS).

Initiatives are also being made to import rice from a number of nations, including Vietnam and India, in an effort to improve the supply of rice in the nation.

The National Board of Revenue has received a letter from the Cabinet Division requesting that the existing import duty and tax of 25.75% be completely removed in order to ensure that the country receives enough imports of rice to meet its food needs.

In addition, the government intends to lower the cost of diesel used for irrigation in order to mitigate any impact that a rise in fuel costs may have on the production of Boro the following season. The agriculture ministry, the energy division, and the finance ministry are in conversation about this.

The conflict between Russia and Ukraine set off a series of circumstances that caused supply shocks to reverberate around the world. Food costs increased at the same time as sea freight rates. The taka’s sharp decline against the dollar coincided with an increase in the domestic market’s prices for goods.

All of these developments could be dangerous for citizens’ access to food, especially for the poor and lower middle class.

Economic experts have been warning that if the situation is not controlled, a significant percentage of people will become poor.

In light of this, Prime Minister Sheikh Hasina instructed the food ministry to guarantee the public’s access to food.

According to Md Ismiel Hossain, the food secretary, the government is currently providing low-cost lentils, sugar, and soybean oil to 1 crore families through the TCB. He added that they were now told to supply the 10 kg of rice.

Although the PM is anticipated to soon finalise the price of rice and make an official announcement about it, the price of rice has not yet been set.

Other calculations, including those for time, required subsidy amount, and financing source, are now being made.

The government will also make the ultimate decision over how often to distribute the rice to cardholders—once a month or a few times a year.

The rice will be distributed through TCB dealers of the Food Directorate, for example, although nothing has been decided yet, according to the food secretary.

 

OMS has grown and now offers more

The food ministry will begin distributing rice on September 1 for Tk15 per kg under OMS, up from Tk10 before. 50 lakh cardholders would receive rice, with each having access to 30 kg of rice each month.

Additionally, the OMS coverage is being expanded throughout the nation. Currently, 800 OMS vendors across the country sell rice and flour. To reach 2,013, there will be more dealers. Every day, 4,44,000 people will be able to purchase rice and flour at OMS stores.

 

More rice, lower cost

The government is proposing to import rice on a government-to-government (G2G) basis despite having a considerable supply on hand, according to representatives of the Ministry of Food, in order to expand the food-friendly programme and shield the poor from the impacts of inflation.

According to them, a G2G initiative to import rice from Vietnam has been taken, and the ministry will get in touch with the Bangladesh Embassy in Vietnam to take the necessary action.

The existing rice supply, according to the food secretary, is adequate, but more will be imported as needed.

The battle between Russia and Ukraine, he claimed, caused a decline in wheat stocks, but a procedure to import wheat from Russia is in the works and would be completed soon.

In order to assure the import of the 10.10 lakh tonnes of rice that was authorised for the private sector, the ministry also wrote to the Cabinet Division to explain why all current customs taxes and VAT on rice should be removed.

According to representatives of the food ministry, there is currently a customs duty of approximately 25.75% on imported rice. The ministry thinks that removing it entirely will boost imports and guarantee food security. Additionally, it will bring down the price of the staple.

The Cabinet Division has written to the National Board of Revenue following receipt of the letter from the ministry.

A concerned NBR officer acknowledged receiving the letter, but said no decision had been made on the duty withdrawal at this time.

Sayema Haque Bidisha, a professor at Dhaka University and the research director of SANEM, applauded the government’s efforts to maintain food safety and advocated for greater transparency in the determination of social security programme beneficiaries.

According to Bidisha, owners of private industrial facilities should take action to ensure that their employees have access to affordable meals in the current economic climate.

For instance, a business owner of clothing may choose to provide some funding for his employees while receiving government assistance. If employers and the government provide subsidies, workers will be able to purchase food items for affordable prices, she claimed.

She agreed with the idea of eliminating import taxes on rice and argued that the current taxes on sugar, oil, and other necessities should also be eliminated.

According to Shahidur Rahman Patwari, an importer and vice-president of the Bangladesh Auto Major and Husking Mill Owners Association, rice imports have begun, despite the fact that the volume is small, as a result of the decline in the price of the dollar.

If the levy is eliminated, imports will begin in huge quantities, and the market price of rice will also decrease. The price of rice could decrease by Tk 6-7 when the dollar value declines and if duties are lifted.

He did, however, express concern since after the Russia-Ukraine war started, India stopped selling wheat.

Since 90% of wheat imports came from India, a repeat of the restriction would only make matters worse.