Country Report Bangladesh January 1996 Main report

Agriculture: Open-market sales of rice have little impact--

As a result of the poor harvests, the government had already been forced to start open-market sales (OMS) of rice throughout the whole country in August, at Tk10.5/kg (25 cents/kg) in rural parts and Tk11/kg in metropolitan areas (4th quarter 1995). At the beginning of October it was reported that the food ministry had 900,000 tons of rice and wheat in store. The ministry hoped to stop its OMS programme in mid-November, except in districts very severely hit by floods, and restart it again in mid-February.

Critics of the programme said that its impact on rice prices generally was small; the prices of better grades of rice remained virtually untouched by the sales of coarse rice by the government, and even the open-market price of coarse rice only fell a little when OMS began. Some dealers blamed widespread corruption in the food ministry for the sales' lack of impact, while others blamed shortages on hoarders, hoping to make big profits when the price rose.

--and widespread hunger is reported in northern and western districts

By December there were several reports of hunger in the regions most adversely affected by the floods in September. In these areas, much of the land had remained unsown and houses which had been damaged went unrepaired, since many farmers had no crops to sell and therefore no money with which to buy food for their families, seeds for the next crop or to rebuild their houses. As winter approached the cold became another threat. Government assistance consisted of 12 kg of wheat per month for each affected family in November and December and a small grant of between Tk500 and Tk1,000 ($12.50-25.00) for housebuilding in the 15 worst- affected districts. In addition, 4,100 tons of wheat seed and 2,000 tons of boro (dry season) rice seed was made available by the agriculture ministry to those farmers most badly affected. Some poor farmers were able to borrow money from traditional moneylenders or from non-governmental organisations (which in turn receive money from aid organisations), or sold their labour at a substantial discount to larger farmers for work to be done during the boro season (January-April) in return for some immediate cash.

© 1996 The Economist lntelligence Unit Ltd. All rights reserved
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