05/10/2007 (The Daily Star) - If there is anything that disturbs and unnerves people as much as political violence, it is unbridled price hike of essentials, especially food items. And if there is anything challenging to the administration, it is controlling it. The country now faces a daunting list of problems that is a legacy of the past alliance government. Corruption has eaten away at the basic processes of administration.

Taking for granted that the vagaries of Bangladeshi weather, or natural calamities like drought and flooding, might have played havoc with the crops, the weather or rains were not the only reasons for the shortfall. As culpable, perhaps, was a sleeping bureaucracy, which failed to anticipate the shortfall for whatever reason.

In a bid to bring down the prices, the caretaker government has taken some measures like cutting import duties and launching OMS of essential items by BDR in different parts of the city, but still the rise in prices of most foodstuff, including fish and vegetable, tends to defy prognosis.

Other issues that the present administration faces pale into insignificance against the inflation that accompanies the price spiral. Family budgets in urban homes have seen expenditure on food and groceries going up by as much as 60 percent. While the vocal urban consumers, mostly fixed income groups, have raised their voices of anger and frustration, it is the rural folk, who spend almost 80 percent of their income on food, who are the worst hit.

Expectedly, with the new caretaker government taking over the reins of administration in the most turbulent period of the nation's history, instituting some bold measures, and ushering in various reforms within a very short time after its take over, the people were bubbling with hope for a resurgence of national spirit, and reconstruction and development in all sectors of public life. But, with prices of essential items soaring every day, the citizens are afraid that their hopes might be shattered again. As for containing the price spiral, two policy measures or suggestions seem pertinent: containing inflation and improving the supply situation. Inflation, as one might understand, is defined as too much money chasing too few goods. With remittance flow from expatriate Bangladeshis and export earning increasing every year, the capacity to absorb this money flow in industrial or agricultural sector expansion is gradually shrinking or losing direction, and it is not surprising that inflation has touched 8.5 percent and may even cross the double digit figure.

Presumably, there is a growing feeling in government circles that the economy is growing because of the increasing remittance flow and increased export earnings, mainly from garments and shrimp export. It means that income has increased and put money in people's hands to pay more for goods and services that are in short supply.

The real story is that a combination of supply side bottleneck, resulting from low productivity, and arbitrary increase in transportation costs due to fuel price hike has fuelled a sustained rise in prices of primary goods -- food grains, vegetables and pulses. Unhappily, the rise in prices of food items and vegetables that are carried by trucks from the remotest places in the country has not been consistent and proportionate with the fuel price hike. Some say it is the truck owner's syndicate's arbitrary decision that rules the day.

In such a context, as capacities are created and supply situation improves, competition will drive inflationary pressure down and prices will even out.

One might accept inflationary trend in a growing industrial economy, but this is not so with Bangladesh economy. The most important factor causing a rise of around 30 to 40 percent in prices of primary goods like food grain and vegetables may be market manipulation by interested groups, mostly middlemen and vested quarters in the business circle. Now the effort of the joint forces in monitoring the market situation has had the salutary effect of curbing the influence of these middlemen, or dalals, as evidenced by the decreasing trend in the price spiral of vegetables over the last few days.

Apart from market manipulation, there is another factor contributing to such price spiral almost every year, the advent of the holy month of Ramadan. Undeniably true, consumption of certain food items increases during the month of Ramadan. But really speaking, we do not produce enough for the population that is growing every day.

For over two decades now there has been little focus on agriculture, and the country's production of rice, wheat, onion and pulses has been stagnant; this when per capita income is growing and population pressure continues to mount up. With fish and meat going out of reach of the common man, the consumption of pulses has grown steadily, but the production level has remained static.

At the same time, imports are limited as few countries produce pulses. In such a perspective, we need to increase pulse cultivation or invest in technology that would deliver higher yields.

As reports reveal, there has been no breakthrough in output efficiency, even though the population has swelled from 750 million in 1971 to 140 million in 2007. Neither is there any attempt to move farmers away from crops that add to water stress towards produce that we necessarily import. We must devise mechanisms to combat the price hike of essential item like edible oil that we have to import per force.

The crisis is compounded by the fact that in the south western region of the country vast chunks of agricultural land are being used as shrimp farms. Shrimp farming might be a source of export earning, but such earnings remain confined to only a few hands, and the benefit does not circulate among the burgeoning poor population who have no access to land holdings.

On the other hand, even in places where agriculture practices are intensively followed, over a third of the vegetable and fruit harvest gets wasted in the fields or storage sites due to lack of modern storage facilities, or in the process of transportation from the production field to the city markets because of delayed or slow movement. In that perspective, a long term plan is necessary to avert such periodic crises year in and year out.

There is an urgent need for restructuring agriculture with investments, new technology and new direction. Simply put, if production goes up, there will be competition, which, in turn, will drive prices down. Precisely speaking, it is not so much a "grow more" issue as it is a "grow right" issue. Even though agriculture delivers a substantial amount of GDP, investment in this sector has been abysmally low.

And, this is in a sector that employs two-thirds of the people in the country. To boost agricultural production, one of the major factors is the availability of land. But farmers in the country are realising with growing despair that it is a finite resource.

In the last one decade, there has been a major diversion of land meant for agriculture to commercial purposes. Rapid urbanisation, road and bridge construction, and river erosion caused by frequent flooding have swallowed up vast chunks of arable land. Speaking about Satkhira, the place I visit at least once a year, I can see vast chunks of agricultural land being turned into bustling townships and housing complexes on one side and shrimp farms on the coastal zones on the other.

If the previous governments had either failed or ignored the most vital aspect of increasing agricultural productivity, this government, having no political goal or agenda and imbued with the spirit of stemming the rot accumulated over the years, can make a beginning by framing new policies like investment in irrigation, new technology and quality seeds to enable the farmers to go for multiple crops and higher yields.

Sadly true, only about 10 percent of the farmers have access to bank funds. Farmers these days, because of the vagaries of nature like drought and frequent flooding, also need advice and even orientation to enhance productivity and combat the crisis situation. In a bid to boost agricultural production, the caretaker government may ensure, among other things, a big assistance plan to rural farmers.

The price rise of perishables like fruits and vegetables may be attributed, as said earlier, to lack of effective storage facilities and efficient delivery systems. Thanks to the absence of distribution links and processing, several thousand tons of vegetables and fruits are wasted, which obviously adds to losses and prices. The answer lies in the fact that the traditional distribution chain, from field to fork, is too long and cumbersome.

It involves too many middlemen, forcing consumers to pay as much as four times what the farmer gets paid for his produce.

Every crisis in the country brings about a spate of reforms proposal that are laid down on paper and seldom implemented. The problem with the policy making body in the country is that there is endless debate as long as the crisis lasts. Ironically the authorities go back to "business as usual" mode as problems even out.

Precisely true, food security is not an issue that a nation of 140 million people, mostly dependent on agriculture, can take lightly. What is needed is a long- term view on needs, and engineering of solutions that survive the test of price cycles.

Md. Asadullah Khan is a former teacher of physics and Controller of Examinations, BUET.