70pc households change food habits for high inflation

As many as 70 percent of the households in Bangladesh changed their food habits involuntarily to cope with the high prices, according to a survey by the South Asian Network on Economic Modelling (SANEM).

"Such a large cut down on food consumption habits puts households at risk of food insecurity," said the think-tank in a press release yesterday.

The survey, which interviewed 9,065 households across Bangladesh between April and November last year, measured food insecurity following the Food and Agriculture Organisation guidelines on the Food Insecurity Experience Scale (FIES).

Between April and November last year, the FIES worsened for poor and non-poor households across all regions.

Among the poor households, moderate food insecurity increased from 25 percent in April to 30 percent in November, while severe food insecurity has increased from 4 percent to 7 percent of the poor population.

Poor from urban areas are more food insecure than rural: 29 percent of the rural poor households and 32 percent of the urban poor households were categorised as moderately food insecure in November last year.

In both rural and urban areas, severe food insecurity was found to be 7 percent among poor households.

As many as 78 percent of the rural households and 76 percent of the urban households cited the unusually high price of essential commodities as a major shock during the 2022-September 2023 period.

Subsequently, 70 percent of the households reported that their expenses had increased.

In addition to the price hike, the incomes of a large proportion of households remained unchanged or fell between April and October 2023.

As such, most households' real income fell sharply during the period, SANEM said in the report.

In response to the price hike, the study found that 70 percent of the households changed their food habits, 35 percent cut back on non-food expenditure, 28 percent resorted to borrowing and 17 percent depleted savings, amongst others.

Rural households also sold their animal stock (11 percent) or changed cropping practices (7 percent).

Using the upper poverty line, poverty was estimated to be 20.7 percent at the national level, 21.6 percent in rural areas and 18.7 percent in urban areas at the end of 2023.

Using the lower poverty line, the incidence of extreme poverty is estimated at 7.9 percent at the national level, 8.9 percent in rural areas and 5.4 percent in urban areas.

At the divisional level, the highest poverty rate was estimated in Rangpur and Barisal: 42.9 percent and 32.5 percent respectively, the study found.

While rural poverty has decreased from 24.5 percent in 2018 to 21.6 percent in 2023, the urban poverty rate has increased from 16.3 percent to 18.7 percent.

The reasons behind the rise in urban poverty are twofold.

Urban areas constitute a large proportion of the vulnerable poor who migrated to the cities out of poverty or due to climate shock, etc.

"Significant shocks, such as the recent price hike, would make these vulnerable people fall below the poverty line," SANEM said.

Besides, the existing social security programmes do not cover urban areas extensively, making many urban households more vulnerable to shocks.

Subsequently, the SANEM study recommended the government undertake alternative and complementary policies to reduce household inflationary pressures.

This should include increased monitoring of the market and liberalising the import tariff on many of the staple foods in Bangladesh.

"An increased supply of essential foods such as dairy, meat, fruits and so on would help Bangladesh to tame down the price level. This should be complemented with supporting fiscal and monetary policies."

The government needs to roll out social security programmes across the nation as stipulated in the National Social Security Strategy. Particular attention must be given to the urban poor and new poor households.