PERSISTENT food inflation, largely caused by a fragmented, inefficient market system, has placed millions of fixed- and low-income people in a precarious situation. Market experts, the consumers鈥� association and independent studies have for long pointed out the issue. Now, the Bangladesh Bank says that an inefficient market system, characterised by supply chain distortion, poor storage management, speculative trading, delayed government intervention and rising input costs, collectively pushes up retail prices. That the inefficient market system and weak oversight have driven food prices is evident in an abnormal increase in prices of products that had adequate production. The Bangladesh Bank report, based on a pilot survey in 14 districts, says that consumers carry the burden of the fragmented market system while farmers benefit only occasionally from high prices. The profits are pocketed by intermediaries and big businesses. The report shows that prices of coarse varieties of rice increased by 18.8 per cent from 2023 to 2024 despite a good harvest while millers took the advantage of low government procurement and delayed import to manipulate the market. Farmers who had to spend more because of high production costs either made very little profit or incurred losses.
Potato producers also suffer because of the inefficient market system. While most farmers cannot afford or manage to keep their produces in cold storage and are forced to sell them early and for low prices, cold storage owners and businesspeople make profits by leveraging their access to storage facilities. Producers of other perishable items, including onions, also either incur losses or make little profit although prices of the items skyrocket in a certain period of the year, especially in July鈥揘ovember. Prices of eggs and broilers are also often manipulated by feed companies and big businesses, leaving small farms to make marginal profits. The Bangladesh Poultry Association says that thousands of small farms have gone out of business because of the dominance of corporate companies in the sector. In January 2024, the Competition Commission fined two poultry farms Tk 3.5 crore for their alleged collusive practices in artificially increasing egg prices. The BB report tersely observes that while farmers often make healthy profits when conditions align, their income is highly unstable. The intermediaries continue to inflate costs without adding much value. An inefficient market system and a manipulated supply chain also lead, as an Agricultural Research Institute report says, to the waste of roughly a fourth of many perishable crops.
The authorities, therefore, need to address a number of issues to stabilise the market system, free it of manipulation, ensure farmers鈥� access to storage facilities and facilitate timely import to help both farmers and consumers.
