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Views expressed in this section are of the
authors, which may not necessarily be shared by members of ERG.
Economic Research Group is committed to promote professional
exchanges in the field of economics and development issues. This
is the fourth in the series of writings on contemporary issues,
and will hopefully, encourage others to contribute. For query
and contribution to this section, please write to
info@ergonline.org. The
following paper of Dr. Sajjad Zohir reached ERG on
2nd June 2007.
Summary
Managing Food
Security to Sustain Political Transition
Sajjad Zohir
Economic Research Group
<The
paper is a reflection on current situation, and draws upon
information compiled by various agencies. The author
acknowledges supports received from Raisa Afsana at ERG and from
various other people in the government and non-government
agencies. Views expressed in this paper are exclusively of the
author, and do not necessarily reflect the views of other
members of Economic Research Group.>
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Since bad
economics often lead to bad politics with subsequent adverse
affects on the economy, this paper highlights on some recent
economic issues of concern, attempts to provide consistent
explanations of these, and proposes few suggestions to make the
costs of transition bearable.
The paper
identifies several plausible reasons for the increase in food
prices in the recent past:
-
Increase in domestic fuel
prices (effective since 2nd April 2007);
-
Increase in rice price in the
international market;
-
Disruptions in the market, as
a result of the political transition, leading to inadequate
engagements by the marketing agents, which subsequently led to
supply shortfalls; and
-
Presence of syndicate/cartel,
which is currently getting quite a bit of attention in the
media.
The
paper argues that the first two factors - increase in fuel
prices and in the prices of food grain in the international
market – are the major contributors to the recently observed
increase in prices. These are however beyond our reach and we
may only focus on ways to minimize
the cost rather than adding fuel to it. Beyond that, there have
been unintended fallouts of long-desired political transition,
which are suggested to have contributed towards further
increases in the prices. The paper is critical of the
proposition that presence of cartel/syndicate has been a
contributor to price
increase; and raises concerns with possible government responses
on the presumption that cartels are the cause of price increase.
Based on trends in the
international food grain market, the paper predicts difficult
times ahead. With a view to address immediate food security
concerns, the concluding part of the paper suggests several
actions. The noteworthy ones include, putting a stop to
country-wide rice procurement program; review of current OMS
program and making room for traditional players within the
government to play their roles, and few others.
For more information, please mail
info@ergonline.org
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