Agriculture Reference
In-Depth Information
Thus, the government had to strike a balance between the two objectives
and find policy actions that would complement each other. While interventions
were significantly reduced, increasing emphasis was placed on strengthening
the country's SSN programs for the poor. The underlying idea was that lifting
restrictions on grain trade would change the incentive structure (that is, estab-
lish the right prices) and help markets develop through greater private-sector
participation. The government would then focus on playing its legitimate pub-
lic role—that is, reaching the poor, who did not have the purchasing power to
buy from the markets.
This realization led to a shift in policy emphasis that brought about sig-
nificant changes in the dual pricing policy paradigm. Instead of using public
distribution as an outlet for public procurement and price support, the empha-
sis shifted toward SSN and disaster-mitigation programs; procurement and
stocking were carried out only to the level necessary to meet those programs'
demand. This shift in policy emphasis is unique in the region, and the country
has traveled a long way, with redefined policy objectives, since it embarked on
the market reforms in the early 1990s. The experiences have been rich in terms
of setting goals, devising new institutional arrangements, and dealing with the
evolving challenges of food security threats. This chapter analyzes these expe-
riences by reviewing the trends of reform measures in the Public Food Distri-
bution System (PFDS), assessing the performance of the PFDS, and identifying
the future directions in the context of international trade liberalization, right-to-
food issues, and SSN issues.
Genesis and Evolution of the PFDS
Bangladesh shares the same colonial history of public intervention in grain mar-
kets with India and Pakistan. The nature and extent of interventions during the
East Pakistan era and the first two and a half decades of Bangladesh are well
documented in Ahmed, Haggblade, and Chowdhury (2000). This section pro-
vides a brief history of pre-Bangladesh policies and focuses largely on market
liberalization and the emergence of SSN programs. Accordingly, it is divided
into three subsections: policies before Bangladesh's independence, market lib-
eralization, and increasing emphasis on SSN programs.
Policies before Bangladesh's Independence (1939-71)
Bangladesh was under British rule until 1947 and was a province of Pakistan
until 1971. During British rule (1939-47), the regulatory framework consisted
of the Bengal Rice Mill Control Order of 1943 and Bengal Rationing Order of
1943. The first legislation required licensing of rice mills and reporting of
stocks; the second elaborated the regulations for the rationing system under
which the government sold grain to consumers. Two different rationing systems
