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Friday, July 08, 2011

Bangladesh: More urban poor depending on food subsidies

MORE AND more urban Bangladeshis, burdened by rising food prices, are seeking assistance under the government's open market system (OMS).
Under the scheme, rice and other commodities are sold at almost 30 percent less than the market rate, with each household entitled to 5kg of rice and 3kg of atta (wheat flour). The government sells rice, a staple, directly to the poor whenever there is a shortage of supply and prices go beyond their purchasing capacity.

"An increasing number of people are now dependent on the government-run OMS system," Sharifuzzaman Sharif, General Secretary of Citizen Solidarity, a national rights-based campaign group, told IRIN, noting longer queues than last year.
Close to 700,000 metric tons of rice, a staple, was sold under the scheme between January and June 2011, against about 260,000MT for the same period in 2010, according to the UN Food and Agriculture Organization (FAO).

At the same time, 23,369MT of atta was sold between January and June 2011, against none over the same period in 2010.

Urban poorAnd while the government conducts the OMS each year, the programme has taken on added significance in Bangladesh's larger cities, where many urban poor are struggling to cope.

"We know cases in Dhaka where people from the lower middle class and the urban poor are forced to skip a diversified diet or [take out] loans, as well as working extra hours to buy food," Quazi Faruque, president of the Consumers' Association of Bangladesh, said.
"The lives of the urban poor with fixed incomes and even middle classes living in Dhaka city have been exhausted due to the wave of price hikes in food, transport and energy. They are barely managing to survive [and have no] social lives," Citizen Solidarity's Sharif said.

In mid-June the government began trucking subsidized rice and wheat flour to some of the poorest suburbs of the city under the OMS.

The programme deploys 150 trucks a day, each selling 3,000kg of rice at a subsidized price of US$0.32 a kilo in selected poor neighbourhoods, and will continue to do so until food prices fall, according to BD Mitra, secretary for the Ministry of Food and Disaster Management.

To cool domestic prices, the government doubled rice imports to 1.2 million tons for the year ending in June, up from the 600,000MT target set in November, media reports say; three times more than the US Department of Agriculture's earlier forecast.
Yet despite those efforts, food prices remain comparable to peak prices during the 2008 food crisis.

Although the price of rice has declined by 3-4 percent since February, it still costs 10-15 percent more than in June last year - 37 and 41 cents per kg for wholesale and retail respectively, according to the June 2011 Fortnightly Food and Grain Outlook, a UN Food and Agriculture Organization (FAO) publication.

Meanwhile, other food prices have also been rising. "The inflation of non-rice foods has been accelerating, sustaining overall food inflation," added Ciro Fiorillo, FAO's acting country representative. "It has put pressure on the purchasing capacity of fixed income groups."

Mohammad Abdul Mannan's family has been forced to give up its traditional diet due to high food costs. "We usually had a rich diet of pilau rice, meat and vegetables once a week with the whole family, but for the past three months we are simply living on basic meals due to the price hike," he said.

The rate of child malnutrition in Bangladesh is one of the highest in the world, according to the UN Children's Fund and rising costs are now forcing people to trim their diets and work longer hours just to eat.

Mannan earns $100 per month as a messenger for a city textile firm and spends most of his salary on food. "As a father I feel hopeless that I can't feed my children well any more," he said.

This article is written by a contributor and syndicated by IRIN News, 8 July 2011

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