Essential prices soaring

During Ramadan, Eid and Puja, government had intervened in the market to keep the essential prices in check under a high demand situation. The strategy was to promote import on which our market for essentials is critically dependent, keep supplies from the wholesale to the retail markets steady and oversee retail market behaviour. At the same time, open market sales (OMS) operated by BDR rather extensively with TCB sale outlets at designated places helped prevent prices spiralling out of control. But now, things appear to have changed as the 'seasonal arrangements' are being cut back on.
Prices of rice, soyabean oil, onion, ata, potato, powdered milk, broiler chicken have all shot up by wide margins from before. Onion prices rose by 32.5 percent, soyabean by more than 5 percent, powdered milk by Tk 15 to 20 per kg over a month. The pressure on the rice price remains high as food import was less than in the last fiscal against the backdrop of a shortfall in production amounting to 2.93 lakh tonnes. Add to this flood-affected aus and aman crops accentuating food deficit. With some countries putting a freeze on cereals import, we have to go for diversified sources to build up adequate food security as we reinvigorate our domestic productivity against the background of alluvial deposits brought on by the floods.
The lessons learnt from this government's price control initiatives are worth recalling. The BDR operations succeeded in catering to demands of a large number of consumers in urban areas by keeping the middle men at bay. The latter's tyrannical grip over the market made things change too many hands to raise their prices at the consumer level. The growers have been the most shortchanged people in the process. The lesson we draw here is that the market mechanism should place the growers in direct contact with the traders so that both the consumers and the producers are benefited. For this, we need dispersal of wholesale market centres. Secondly, procurement of essentials cannot be left to a handful of importers wielding an absolute sway over the supply side. We need to promote a greater number of importers to come on to the scene with bank credit. There should be specific import planning, not just a policy enunciation, that will be responsive to international market variables. The government would do well to engage the private sector on a continuing basis to find sustainable solutions to the problems of imbalance in demand and supply that arise from time to time.