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Monday, April 21, 2014

Sunday, July 6, 2008
Editorial

Editorial

The new rise in food prices

Steps need to be taken to ease pressure on consumers

PRICES of essential commodities, much to our discomfort, are on the rise again. A rather convenient and plausible explanation is being offered now for such a development. The recent rise in the prices of fuel, say traders, have led to this new enhancement in prices. One cannot quite dismiss such explanations, for these price rises are inextricably linked with the costs involved in transportation of food items among the different regions of the country. At the same time, though, there is the good question of how a section of traders may actually be taking advantage of the fuel price rises to augment their income by sinking their hands deep into consumers' pockets.

We have consistently argued, and over the months, that mechanisms must be developed to enable the market to function in a rational manner. Market monitoring of prices should by now have been in place. What we have experienced, though, in the form of security forces raiding shops to check prices is something that a market economy does not support. Fear may work for a while, at least as long as the security men are around. But once they leave, things are back to square one. And that precisely is what has happened in the past. Which is why we think that purposeful, well thought out measures must now be undertaken to ensure a couple of things. In the first place, the role of the middlemen along the route between collecting produce and depositing it at its final destination needs to be drastically reduced. It has generally been observed that traders have to cough up money at different points and eventually end up hiking prices to an exorbitant level. In the second place, direct accessibility to markets must be ensured for producers, a step that will significantly reduce the risk of prices going through the roof at the point where the goods are sold.

The new rise in prices quite naturally raises a few crucial questions, one being that despite a bumper rice production this year rice has continued to be expensive. No rational explanation has been offered here, though there is a constant emphasis on the fact that food prices have gone up globally. The other reality is that the purchasing power of the Bangladeshi consumer has not simultaneously gone up. There is worse news. The BDR outlets that sold food items have shut down. In such grave conditions, it makes sense to suggest that introducing a ration card system to help the middle and poor classes buy food at subsidised prices be considered. In the longer term, a concerted strategy must be devised toward creating a food bank for the population through a systematic setting up of buffer stocks. Clearly, there are all the options to be worked on where food is concerned.

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