Call for a separate commission to stabilise supply-chain, prices
Khandaker Golam Moazzem, Research Director at CPD, has proposed the establishment of an integrated food supply chain development and monitoring commission to ensure the stability of supply and prices for daily commodities.
Speaking at a policy conference titled Reasonable Price of Food Products: Searching for Strategies for Market Supervision, organised by Banik Barta at a hotel in Dhaka on Sunday (February 2), Moazzem emphasised that this commission would differ from existing reform commissions and should be established permanently to maintain market equilibrium.
Need for a dedicated commission
Moazzem explained that while similar commissions exist in other countries, Bangladesh requires a specialized body to address its unique challenges. "This commission is not the current reform commission but a dedicated entity tasked with ensuring stable supply chains and controlling prices," he said. He stressed that such a body would provide long-term solutions rather than temporary fixes.
Addressing market regulation challenges
During his presentation, Moazzem highlighted the shortcomings of current market regulation strategies. "Initiatives are being taken to regulate the retail market, but these efforts fail because they do not address the root causes," he stated. He argued that the government must focus on gathering comprehensive information and data about businesses operating in the market, including mandatory licensing requirements.
Moazzem advocated for legal reforms to prevent monopolistic practices. "In the current system, there are no barriers to how large a business can grow, leading to undue influence over the market," he noted. He suggested that distributors should not exclusively market products from a single entity and called for changes in the distribution model to enhance competition and transparency.
Breaking the vicious cycle of policies
The economist criticised the interim government's approach to controlling rising prices, noting that it mirrors previous administrations' ineffective strategies. "When traders raise prices, the media exerts pressure, prompting the government to intervene hastily. This cycle repeats endlessly," he remarked. Moazzem termed this phenomenon a "vicious circle of policies" and urged the creation of a robust infrastructure for the food market, where only registered agents operate under strict accountability measures.
He further pointed out that the government lacks sufficient market information and data, which hampers its ability to regulate effectively. "While annual production and supply figures may be known, daily production and supply data remain elusive," he said. He warned that without this granular data, the government cannot exert meaningful control over the market.
Expanding market oversight
Moazzem observed that as the market expands, oversight diminishes, resulting in reduced transparency and efficiency. "The lack of an accountability framework weakens the market structure," he added. To rectify this, he recommended integrating comprehensive and accurate information systems within the government's operational framework.
Food inflation: A symptom, not the problem
Describing food inflation as merely a symptom of deeper issues, Moazzem argued that even when production levels are adequate, crises persist due to improper demand calculations. "Demand forecasting must become a core function within the government's structure," he insisted. He emphasized the need for holistic and interconnected data collection mechanisms to better understand and manage market dynamics.
Expert opinions and recommendations
The conference featured discussions from various experts, including:
Sabbir Hasan Nasir, Managing Director of ACI Logistics Limited (Swapn), suggested that the government focus on soybean oil and rice ahead of Ramadan. He also noted improvements in Brazilian sugar supply and expressed optimism about chickpea availability.
Farid Ahmed Russell, Acting President of Karwan Bazar No 2 Raw Material Store Traders' Multipurpose Cooperative Association, advocated for incorporating price receipts into policy frameworks to make prices more tolerable.
SM Nazer Hossain, Vice-President of the Consumers Association of Bangladesh (CAB), criticised the ineffectiveness of recent duty reductions on 31 products. He highlighted how VAT increases directly led to overnight price hikes despite prolonged low global wheat prices.
The event was moderated by Dewan Hanif Mahmud, Editor of Banik Barta, and attended by Commerce Adviser Sheikh Bashiruddin, National Board of Revenue (NBR) Chairman Md Abdur Rahman Khan, economist, writer, and former professor of Jahangirnagar University Anu Muhammad, Bangladesh Competition Commission Chairperson AHM Ahsan, Bangladesh Trade and Tariff Commission Chairman (Secretary) Dr Mainul Khan, Director General of the National Consumer Protection Department Mohammad Alim Akhtar Khan, and Trading Corporation of Bangladesh Chairman Brigadier General Mohammad Faisal Azad.
SM/NMA
