(i) Reduce Transportation Cost. Transport sector should be under strict vigilance; tonnage restrictions should be reviewed, and middlemen/brokers from the loading point, as mentioned earlier, should be eliminated. Distance wise transportation cost could be decided through a tripartite meeting between traders, transport owners and government. The river and railway networks should also be explored to examine the viability of transporting essential items to various parts of the country.

(ii) Rejuvenate the Moribund TCB. The GoB should take necessary measures to rejuvenate the moribund TCB and turn it into a modern corporation in line with the public procurement regulations. Experts and professionals from related disciplines must be recruited with mandate of taking decisions on importing essential commodities as recommended by DMS and acting as a watchdog to monitor the overall market situation. The relationship between TCB's operational procedures and the public procurement regulations needs to be examined carefully. TCB has already taken an initiative to import edible oil and whole milk powder which is a welcome decision to stabilise the price of these commodities in the coming days particularly in view of the sharp rise of global price of these items.

(iii)Restore Business Confidence in the Market. The government may repeatedly transmit the message that the honest business persons and entrepreneurs have nothing to fear and be apprehensive about. The distinction between people who have breached public trust by abusing state power to amass personal wealth and those who indulge in corrupt practices while conducting their business will need to be made. In case of the latter, the thrust will have to be on playing henceforth by the newly instituted rules of the game. The members of the law enforcement will need to play an important role in restoring business confidence in the country.

(iv) Broad-base and Streamline OMS Initiatives. The government should continue its OMS of essential commodities through TCB, Food Directorate, BDR and Ansar and VDP till the food price inflation is checked. Efforts may be made to extend OMS up to the district level. However, the government needs to have an estimate of the direct/indirect subsidy provided through these operations.

The government may also encourage the corporate actors to come forward with direct and scaled-up sale to consumers to help generate a sobering impact on the market. These efforts may particularly be encouraged in the month of Ramadan.

(v) Make Mandatory Display of Maximum Retail Price (MRP) on Product. The CPD would like to strongly recommend that producers/importers/processors area asked to display the MRP on a mandatory basis along with the manufacturing and expiry dates on the packet/container. A massive campaign should be conducted among the retailers and consumers not to sell and buy these products above the specified MRP. However, the MRP may be modified to match the production/import cost which must be subject to public notification. The government may introduce an executive order towards strict implementation of its directive in this regard which will ensure effective use of MRP at the retail level.

(vi) Promote 'Producers' Marketing Association. For domestically produced products, the best option is to remove the existing market imperfections and inefficiencies in the value chain. By establishing producers' cooperative and marketing organisation and by creating a more direct link between producer and consumer it would be possible to have a positive impact at the retail price of essential commodities. This would also be a mechanism to provide reasonable (fair price) to producers. The government may encourage the existing NGO networks/private sectors to take a more proactive interest in this segment of the supply chain i.e. in the area of marketing of agricultural commodities.

The government must urgently identify some suitable locations within and around Dhaka and other big cities to establish new arots so that more options will be available for both producers and retailers. This is expected to reduce the monopoly power of the vested interest groups in existing arots by infusing more competition at this level of the market structure.

(vii) A National Storage Policy. The government needs to formulate a comprehensive National Storage Policy for both public and private sectors. One important consideration in this regard should be public health concerns. Food items and non-food items such as chemical products should be stored separately. Besides, government should allow the private entrepreneurs to use public storage facility and should provide adequate subsidy for storing daily essential commodities. Government of India is providing a subsidy of 25 per cent for such services that was applicable for all agricultural commodities. This will reduce the storage cost and thereby reduce retail prices of these commodities. In the proposed national policy, storage time should also be fixed for essential commodities considering both health and supply issues in line with the recently proposed Anti-hoarding Act of GoB.

(viii) Establishment of an Advanced Agri-Portal. CPD recommends that initiatives be taken to establish an integrated national Agri-Portal titled “Bangladesh Agricultural Information Network Centre (BDAGINC)” under the Department of Agriculture Information Service (AIS), Ministry of Agriculture. All relevant agencies will provide information to AIS to create and update this portal. The information will be publicly available. This portal will provide, at the preliminary stage, region wise national demand, supply and price information for major essential commodities. The global production and price information collected by the proposed DMS will also be integrated in this database. The BDAGINC can follow the initiatives taken by the Indian Agricultural Portal-AGMARKNET which covers market, price, infrastructure and promotion related information for efficient marketing. Information can also include grades, labeling, sanitary and phyto-sanitary requirement, physical infrastructure of storage and warehousing, marketing laws, fees payable, etc. At later stage, this portal will consider other agro-commodities.

(ix) Prepare Markets for Upcoming Ramadan. The government needs to assess the demand, domestic supply and import as well as price situation of essentials for which there is a substantial increment in demand during the month of Ramadan. This is necessary to avoid any possible supply shortage and the resultant abrupt jump in prices. Preparation should be there to launch OMS at an expanded scale during this particular period. Outlets run by the BDR and Ansar/VDP need to be kept operational during that period.

(x) Strengthen Flanking Measures. Social safety net programmes such as "Food for Work" should be expanded to support the worst affected sections of the populace due to the ongoing price hike. It is to be noted that in the budget of FY2006-07, a total of 1057 thousand MT foodgrains (including 849 thousand MT rice and 208 thousand MT wheat) was proposed to be distributed under the non-monetized food distribution programs (Food for Work, VGD, TR, GR etc). The allocation for foodgrains under these safety net programmes should be increased significantly in the upcoming budget for FY08.

The government may also consider providing dearness allowance to government employees and employees of statuary bodies. The allowances could be fashioned in three tiers with 15 per cent for the lower, 10 per cent for the middle and 5 per cent for the higher scale employees (the three tiers could be worked out taking cognisance of relative justice, proportion of income going for food and the fiscal burden of the proposed measure).