Rising global food prices have put pressure on the Awami League government to make swift moves to procure a larger supply of staple foods. Perhaps fearing nation-wide protests that might well last for sometime–if organizers plan on modeling their grievances on the protest movements in the Middle East– the government has sworn to buy more grain, quicker without causing long-term harm to the domestic grain market.
The Food Price Index has outstripped the 2008 high on the heels of the political unrest in North Africa and the Middle East, a less bountiful winter harvest in the United States and a ginned up global economic recovery. There is simply more demand for consumption, and smaller supply to satisfy those consumption demands. And given Bangladesh’s economic-inequality profile, no doubt the government is worried about the fluttering talk of political and social unrest.
Indeed, according to the Daily Star, the price of rice rose at least 33% compared to prices this time last time. Much of the trouble has been that amidst charges of hoarding and other problems in the supply chain, Bangladeshi farmers have not produced enough rice to satisfy domestic demand. Hence the price of rice has risen readily. In order to not put more pressure on the domestic price of rice by buying at the highest domestic prices– indeed to drive down the domestic price of rice– the government has had to look into the global markets, already reeling from record prices. It is noteworthy that this move, designed to benefit Bangladeshi consumers, will push up government expenditure of food purchases at least 42%.
The store of grain and other foodstuff is part of government intervention programs to supply the poor with staple foods. This is certainly a laudable program; it has always been so. However, the strain on the domestic budget that the rising price of food is causing is itself a cause for alarm. Strain the budget a bit more, start off a sustainable anti-government protest movement and watch as what had been considered a sustainable governance program falls like a house of cards
