Agriculture Reference
In-Depth Information
5
Public Food Distribution System in Bangladesh:
Successful Reforms and Remaining Challenges
A. M. M. SHAWKAT ALI, ISHRAT JAHAN,
AKHTER AHMED, AND SHAHIDUR RASHID
Despite beginning its journey with a war-torn infrastructure in 1971, haunting
experiences of a famine in 1974, and repeated bouts of floods and other natu-
ral calamities, Bangladesh is now widely recognized for successfully trans-
forming its grain market structures. Behind this success is a series of reforms,
which included, among others, dismantling the food rationing system and eas-
ing restrictions on both domestic and international trade of grain in the early
1990s. Available studies suggest that the policy reforms have produced all the
desired outcomes—that is, increased private-sector participation, reduction in
food subsidy bills, higher food availability, and increased stability of grain
prices (Ahmed, Haggblade, and Chowdhury 2000). Furthermore, unlike many
other developing countries, the reforms did not provoke popular protests. How
did it all happen? Clearly, a host of factors contributed to the success, but the
answer to the question in large part lies in the government's commitment to
changing the old set of policies and redefining its role in the grain markets.
1
By the late 1980s, evidence on the ineffective, or even counterproductive,
nature of the old set of policies was mounting, and the government and its de-
velopment partners were convinced that the country's food policies had to be
changed. Both food rationing and public procurement were found ineffective;
and none of the then-existing public distribution programs were reaching the
poor. However, given the level of food insecurity, as well as vulnerability of the
country to natural calamities, it was also clear that complete government with-
drawal from the cereal markets was not a feasible reform option.
This chapter is a combination of two papers, “Public Food Distribution System (PFDS) in Ban-
gladesh: Successful Reforms and Remaining Challenges” by A. M. M. Shawkat Ali and Ishrat
Jahan and “Grain Market Liberalization and Social Safety Nets: Lessons from Bangladesh” by
Akhter Ahmed and Shahidur Rashid. In effect, elements of the latter were integrated into the for-
mer. The papers were presented at a workshop titled “Agribusiness: From Parastatals to Private
Trade—Why, When, and How?,” jointly organized by IFPRI; the Centre for Economic and Social
Studies (CESS), Hyderabad, India; and the Institute of Economic and Social Research (LPEM),
University of Indonesia, which took place December 15-16, 2003, in New Delhi.
1. Other significant factors include the defusing of various stakeholders, changes in politi-
cal regimes in the country, reforms in Indian agricultural trader policy, as well as declining food
prices in the country. For a detailed discussion of the political economy of reforms in Bangladesh,
see Chowdhury and Haggblade (2000).
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