Check Food Inflation

Strong dollar and high oil price
Hint there will be hungry cries.
Stock release,langar,less ethanol production
Could comfort the people in desperation.

International Monetary Fund(IMF) in its latest “World Economic Outlook” depicted a grim future about growth and inflation in the coming months. Inflation may cause further damage to food security, pushing millions of people to starvation like situation. Earlier, World Bank downgraded Bangladesh’s growth forecast from 7.0% to 6.2% for the year 2022-23.

Bangladesh government in its latest draft BBS report officially acknowledged that inflation touched the double digit figure (10). But actually food inflation is much higher than the double digit figure. Both the coarse rice price and flour price rose to Tk 55/kg; a year ago the two items were sold at Tk 40/kg. Eggs are sold at Tk 156/dozen; a year ago a dozen cost Tk 108/102. Milk is sold at Tk 90/liter; a year ago it was sold at Tk 80/liter. A laundry soap,which is used for both washing body & clothes,costs Tk 23; a year ago it cost Tk 18. So coarse rice and flour registered a 37.5% increase. Egg recorded a 44.44% rise while Milk witnessed a 12.5% rise. Meanwhile laundry soap registered a 27.77% increase. Even Nilotica Tilapia registered a 33.33% increase in the span of one year.Even the pangash catfish,which many despise for being cultivated in swear water,registered an increase in price.

This clearly demonstrates how high inflation is pinching people from all walks of life. What is worrying is that high oil price and inflation complicate the ongoing situation. As the anticipation of further Taka depreciation gets stronger, price level may further rise. Government’s focus is on food production, so subsidies for fertilizer production and irrigation during the winter get top priority at the cost of city dwellers who spend more time in the dark.

So far central bank adopted a gradualist monetary policy by raising the policy rate by 50 point basis. It reflects government’s determination to not affect the employment ahead of election year. Another small increase in policy rate is expected.Lending rate,which has not been raised yet,may also rise,making investment more costly.

The prime concern for the ordinary citizens is the food inflation. Checking food inflation should be the top priority. Though govt has taken programs to feed the vulnerable people,such programs are politically biased and not free from corruption. It is not just to keep blaming the war in Ukraine for the hike in food grain price.As the aggregate demand may fall in future due to high interest rate and inflation, ethanol production may also fall. Food grain used in ethanol production could easily be diverted to poorer countries. Many countries could also relax their food grain stock to help friendly countries.

Bangladesh dealt with this kind of situation in the past. When we were kids, we witnessed how school grew vegetables and garrison produced food like the communist countries. Government could instruct army to produce rice, vegetables and fish inside the cantonment where land is aplenty and labor is cheap.

Government in association with businessmen could set up langar(public eatery) at selected urban pockets where 5 million people could take at least one meal daily.

It is important to maintain one cheapest source of protein,one cheapest source of vegetables and one cheapest source of carbohydrate for cash-strapped lower income group. There should be no compromise with protein and calorie intake of individuals.