& çâÌæÚUæð´ ·¤è ¥ôÚU Îð¹Ùæ ÁæÚUè ÚU¹ð´ ¥ÍæüÌ ¥ÂÙð ÜÿØ ÂÚU ŠØæÙ ÚU¹ð´Ð ãæÚU Ù ×æÙð´, €UØô´ç·¤ ·¤æ× ·¤ÚUÙð âð ¥æÂ·¤ô ©gðàØ ·¤è Âýæç# ãôÌè ãñ ¥õÚU ÁèßÙ ·¤æ ¹æÜèÂÙ ÎêÚU ãôÌæ ãñÐ ÖÜð ãè ÁèßÙ ×ð´ ç·¤ÌÙè Öè ·¤çÆÙæ§ü €UØô´ Ù ¥æ°, çÁ™ææâæ ¥õÚU ©ˆâæã ÕÙæ° ÚU¹ð´Ð ŠØæÙ ÚU¹ð´, ÜÿØ ã×ðàææ ¥æÂ·Ô¤ Âæâ ãôÌð ãñ´ çÁ‹ãð´ ÂæÙð ·Ô¤ çÜ° ÂýØæâ ¥æÂ ·¤Öè Öè àæéM¤ ·¤ÚU â·¤Ìð ãñ´Ð

No more band-aid solution, please

Moazzem Hossain
THE food-grain price spiral has been getting worse day by day, and seems to be heading towards an aU-out crisis. The pinch, so far felt by low-income groups, is now being felt by the middle-class as welL
The Bangla daily. Prathom Alo. reported recently that the middleclass is now queuing up with the low-income groups for buyingfood grains from BDR shops in Dhaka city.
It is certainly painful to see such a picture, which has re-emerged on the streets of Dhaka after many years: YWCW; has been making it clear that the back-to-back floods and Sidr s destruction of crops last year caused the present shortfall in food-grains without warning, and arrangements are being made to meet the shortfall via imports.
While this is fine, the nation provided the government enough time to bring order in grain markets, and the imports have started to arrive from various sources (India, Thailand and Myanmar), unfortunately at a snail's pace.
What is very disturbing to see, however, is that, with all the assurances, there has not been any improvement, rather it is getting worse day by day. Although, lately, the CA seems prepared to coordinate the relevant economic departments to face the looming crisis effectively.
Since the last few weeks, the print and electronic media have ^eeii Inundated with solutioh'after solution put forward by economists in order to contain prices in the short to medium terms. Re-introduction of the "ration card” system was on the cards at one stage, but the commerce advisor dismissed this proposal due to the
costs involved in running such a program. Instead, the advisor is working on a provision for income support scheme to the government employees to the tune of 30 percent of their earnings.
Also, in the meantime, the government increased the OMS allocation in order to maintain supply in the market place.
In this piece, I would like to investigate the income support program (not the WFP measure) theoretically, since such a policy has the potential of turning the present situation into a full-blown crisis if it gets out of hand. Before contemplating an income support st^tegy for a section of the population, one must take into account that food price inflation has been running at double-digit rate in recent months.
It is true that the present price spiral of food grains is due to a shortage in supply from domestic
sources, and not driven by demand. Hence, increased OMS and possible reintroduction of ration cards, regardless of resource constraints, are certainly the right moves. These can be shown via a simple AD/AS analysis.
On one hand, figure 1 presents the reintroduction of ration cards, which has the capacity to contain prices, if not drastically reduce it.
On the other hand, figure 2 shows that income support to a section of the population would certainly increase prices further if supplyside has no effective means (present condition) to meet the additional demand due to the income support with cash handout to the tune of 30 percent of the total income.
The price spiral would end up at
point "c," and will settle there if the cash handout becomes permanent, which will bring more sufferings for the poor.
1 am convinced that there is no reason why the above analysis will be found wrong, since the supply shock in food grain markets, both nationally and internationally, will not disappear soon. Thus, the only way out is to increase domestic
production further, with a view to attaining sustained self-sufficiency regardless of floods or other natural disasters in the future.
Many commentators (me included) in the past warned that if the two giants, India and China, start buying food grains on a large scale from food surplus western nations, \liich is the case now, countries like urs simply won't be able to meet iny shortfall via imports due to । n creased world price.
We have arrived at that point now. I am afraid there is little comfort in having one or two bumper
harvests in potato, boro, or whatever crops. Indeed, the time has come to roll up our sleeves further, and make all-out efforts for achieving sustained self-sufficiency in food grains.
No band-aid solution will be enough, since the world has entered a new era of high food grain prices due mainly to the effects-of drmate change and to the change in land use pattern in developed nations in order to produce crops (green fuel) as a substitute for fossil fuel.
Moazzem Hossain is a freelance contributor to The Daily Star