Subsidised food supply shrinks despite poverty fears

Although inflation has remained at elevated levels for over two years, the sale and distribution of essential food items by public agencies showed a year-on-year drop until May of fiscal year 2024-25, raising fears that many vulnerable people in the country could be left contending with food insecurity.

For nearly one and a half months, the Trading Corporation of Bangladesh (TCB) has suspended sales of essentials, including edible oil, lentils, and sugar, at prices below market rates in urban areas, including Dhaka.

Explaining why, Mahbubur Rahman, secretary of the Ministry of Commerce, said that approval for selling essentials through TCB trucks needs to be obtained from the advisory council.

"The proposal for approval will be placed in the upcoming meeting. Once we get approval, sales will resume," he said.

Before the suspension, the state agency sold essentials to around 400 people from each truck on six days of the week.

Additionally, the TCB provides essentials at subsidised rates to 49 lakh families each month. The list was slashed from the one crore families that received support during the tenure of deposed prime minister Sheikh Hasina, after the interim government found anomalies in the beneficiary selection process.

Until May 9 of this fiscal year, public agencies — including the food and disaster management and relief ministries — distributed about 26.32 lakh tonnes of cereals, down 4 percent year-on-year, owing to a sharp fall in distribution under the Food for Work (FWP) programme, which is primarily run in rural areas.

Food ministry data show that the distribution of food among poor and low-income people also dropped under the Vulnerable Group Feeding (VGF) and Vulnerable Group Development (VGD) programmes, implemented by the Department of Disaster Management.

Significantly, the drop in the overall distribution of food under various social safety net programmes is being recorded at a time when overall inflation has remained above 9 percent for 26 consecutive months.

Amid persistent inflation, job losses, and a slowing economy, the World Bank last month projected that overall poverty in Bangladesh might rise to 22.9 percent in 2025, up from 18.7 percent in 2022.

The ratio of people living in extreme poverty — those earning below $2.15 a day — is expected to nearly double to 9.3 percent, pushing an additional 30 lakh people into this group, it said in its Bangladesh Development Update.

"This is deeply puzzling," Selim Raihan, executive director of the South Asian Network on Economic Modeling, said in reaction to the decline in public food distribution.

He said the condition of many middle-class families had worsened due to high inflation over the past two years.

Food inflation has been easing in recent months, but despite this slight decline, prices remain significantly high, he added.

Raihan said, given the overall situation, the government should have expanded food distribution and continued subsidised sales through TCB trucks.

"It is surprising that this has not been done," he said.

Food ministry data show that distribution under the FWP programme dipped 63.20 percent year-on-year to 59,736 tonnes as of May 8 in FY25.

Under the VGF programme, distribution fell 11.56 percent to 1.53 lakh tonnes. In the case of the VGD programme, food distribution slumped 40.26 percent year-on-year to 1.87 lakh tonnes.

Mustafa K Mujeri, executive director of the Institute for Inclusive Finance and Development, said the amount of subsidised food an individual can now purchase does not significantly contribute to their household's food security.

In this context, reduced distribution — and in some cases, suspension of distribution to a large number of cardholders — is quite alarming, he said.

Amid high inflation, people living near the poverty line are now at risk of falling into poverty, while those already poor have become even poorer, he added.

Therefore, both the distribution and sales of subsidised food should be increased, he said.

Food Adviser Ali Imam Majumder said the distribution of 150,000 tonnes of rice and wheat by the Ministry of Women and Children Affairs is currently stalled. Despite repeated reminders, they have failed to carry out the distribution, he said.

Had that been distributed, the total amount would have been much higher, he added.

The Daily Star also tried to contact Sharmin Shahin, deputy director of the VWB at the Department of Women Affairs, but she did not respond.

Under the VGF programme, food is usually distributed to flood-affected areas. Additionally, during the two Eids, around 200,000 tonnes of food are distributed, he said.

Of that, 100,000 tonnes for Eid-ul-Azha have yet to be distributed. Hopefully, it will be dispatched within the next two to three days, he added.

Besides, the Food Friendly Programme, which previously operated for five months a year, will be extended to six months starting from the next fiscal year, he said.

The interim government plans to raise its food subsidy allocation by nearly 12 percent to Tk 8,100 crore in the upcoming fiscal year, aiming to expand food distribution programmes and offer greater support to low-income groups.