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How do we ensure food security in post-pandemic Bangladesh?
Md Joynal Abdin
Bangladesh is a service sector led economy, where 52.8 percent of the GDP comes from the service sector, followed by 29.6 percent from industry and 12.6 percent from agriculture. Since independence, the contribution of agriculture to GDP has been decreasing with time. That does not mean that the volume of agriculture production or its significance is reducing, rather that the GDP of Bangladesh is increasing at a faster rate than the rate of growth of the agriculture sector. Currently, the Bangladesh agriculture sector is producing 38.7 million metric tonnes (MMT) of rice and 1.25 MMT of wheat against its annual demand of 32 MMT of rice and 5.5 MMT of wheat. While our rice production is enough to meet local demand, the additional demand for wheat is usually met through imports.
This year, Covid-19 has hit the economy hard. In the over two months of “general holiday” (lockdown), the poverty rate has increased, standing at 35 percent in June 2020, compared to 24.3 percent in 2016, according to the Centre for Policy Dialogue. In the households stricken by poverty during the pandemic, income earnings and savings have come to a standstill. According to a recent study, the Covid-19 pandemic has potentially reduced average monthly income of lower income groups from Tk 15,000 per month to Tk 3,700 per month.
A significant number of expatriate worker’s families have also suffered huge losses in their fixed income from remittances in the last few months, since many expatriate workers are under lockdown in host countries and are not being able to earn, and many more have lost their jobs and have been forced to return home. As a result, the purchasing power of these families have been significantly reduced as well. Therefore, the question of food security in Bangladesh is not a matter of the available stock of food grains in the country, but rather about the ability of the masses to purchase food grains during and after the pandemic.
If the current countrywide floods are prolonged for much longer, they could turn out to be a major threat for the production of food grains in the upcoming agriculture season in Bangladesh. It will have an adverse impact on poultry, dairy, fisheries and livestock production as well. During the lockdown period, farmers had to sell eggs and milk at lower than their production costs in order to survive, but this made them lose their sustainability. Most of the vegetable supply chains were also significantly disrupted and are under extreme stress.
According to a recent study conducted by the Food and Agriculture Organization (FAO) of the UN, farm gate prices in Bangladesh have dropped for eggs (-18 percent), broilers (-15 percent), day-old layer chicks (-75 percent) and day-old broiler chicks (-90 percent), with about 50 percent of eggs and 70 percent of broilers unsold at farms. Moreover, 40 to 50 percent of newly hatched day-old chicks were unsold and destroyed. About 50 percent of broiler farms are thought to be out of business already and are unlikely to risk starting a new crop. As a result, around 70,000 farmers will be affected. Layer farms will gradually shut down if low egg prices persist, and hatcheries and feed mills will face losses as well.
A survey by Khaddo Odhikar Bangladesh found that 87 percent of the poor (50 million) people of Bangladesh are already in a serious food crisis due to the coronavirus situation. Therefore, ensuring food security should be a priority for the government and relevant national and multilateral agencies, especially since overall market activity across the country has already been severely affected due to Covid-19 restrictions and current floods.
The government has already taken certain steps to deal with the challenges of agriculture production and food security in the coming days. The government stimulus package, which was announced at the start of the pandemic in Bangladesh, includes Tk 5,000 crore worth of soft loans with a six month grace period at four percent interest (reduced from 10 percent) to different agricultural sectors, including seasonal flower and fruit, fisheries, poultry, dairy and livestock. However, this excludes the crops and grains sectors.
Other support from the government includes the waiving of advance taxes on feed for fisheries, livestock and poultry and the easing of Letter of Credit (LC) margins for essential commodities. Instructions have also been issued on prioritised customs clearance and movement from ports of food, feed and allied products, and temporary port-side storage facilities have been created. No official restrictions were placed on the transport of food, feed and agricultural inputs and processing accessories across the country, even during the lockdown.
However, there are still a number of possible effects that the pandemic could have on the food supply chain during the upcoming agriculture season. There is a risk of shortage of labour due to travel restrictions and fear of infection, shortage of inputs like seeds, fertiliser, pesticide etc due to disrupted international trade, especially imports, and limited capacity of farmers to store harvested crops. We could also be potentially faced with factory or facility shutdowns, port restrictions and congestion, leading to the spoilage of perishables vegetables and fruits, and increasing food waste due to a a lack of refrigerated storage. Finally, there could also be delays of retrieval in capital investment.
All of these adverse effects may result in reduced incomes for the farmers, the destruction of supply chains due to panic buying, restricted access to food for low income groups and undernutrition of vulnerable groups. However, there are certain policies that can be followed to try and reduce these impacts and ensure food security. The government should immediately focus on increasing coverage of food distribution and supply and enhancing the benefits of country-wide social protection programmes. They should also collaborate with the international community to avert food shortages and price hikes by ensuring free trade and strengthening regional mechanisms for food security. It should be noted that the two to three million deaths in the Bengal famine of 1943 were due to food supply disruptions, not a lack of food availability, so it is crucial that the supply chains continue to function effectively.
Farmers and agricultural workers should also be included in the government’s assistance packages and any social protection programmes that are addressing the crisis. The government’s substantial agricultural stimulus package should start giving loans and grants on an urgent basis, and primary agriculture inputs like seed, fertilisers, pesticide etc should be made available at affordable costs.
In the long run, we should focus on accelerating the movement towards the mechanisation of agriculture, technology-based farming, value chain development and automation. During the pandemic and beyond, we should inspire direct marketing through online platforms to facilitate trading of produce, avoid food waste and mitigate loss of farmers’ profits by reducing multiple layers of intermediaries. Cold chains should be established across districts as well to lengthen the shelf life of fresh vegetables, fruits and other produce. Additionally, the government should strengthen district-level food price volatility monitoring activities to control any unethical hikes of food prices.
It is heartening to see that the Bangladesh government has taken strong steps to protect the economy from the adverse effects of Covid-19, offering recovery packages worth more than a trillion Taka to different sectors. However, more attention is required for the agriculture sector in order to ensure food security for all in post-pandemic Bangladesh. Because of the prolonged floods on top of Covid-19, our farmers and low-income groups could become more susceptible to hunger in the near future.
Md Joynal Abdin is Secretary at Dhaka Chamber of Commerce and Industry (DDCI).
PHOTO:
ANISUR RAHMAN