Agriculture Reference
In-Depth Information
per ton. This range seems unlikely, as the other two banks—one in the private
sector and the other in the nationalized sector—reported a price range of
$230-262 per ton. The bank that reported the lower range was asked to clarify,
and the response was that such differences could be caused by the quality of the
rice imported. This possibility points out to the need for a fuller investigation
into the relative efficiency regarding costs of imports in the public and private
sector.
6
Remaining Challenges
Research conducted to date suggests that the PFDS is likely to disappear in the
near future (Ahmed, Chowdhury, and Ahmed 1993), no longer necessary ex-
cept for mitigating emergencies arising out of natural calamities. This optimism
is based on several conclusions drawn by other studies conducted by IFPRI.
First, there has been an unprecedented expansion of
boro
crop since 1974. Sec-
ond, trade liberalization allowing private-sector imports provides an element of
stabilization of foodgrain prices. Third, development of the rice market since
1974 has facilitated easy movement of foodgrains from both public and private
markets. Fourth, there is greater availability of foreign exchange compared to
1974. Fifth, the risk of facing high international prices is not so severe now com-
pared to 1974 (Del Ninno et al. 2001).
The above analysis is true to a great extent, but by no means is the whole
truth.
Boro
rice production in terms of area and HYV use has reached a satura-
tion point. Besides, although
boro
crop is relatively less prone to natural disas-
ter compared to
aman
rice, the possibility of drought and frequent storms, in-
cluding hailstorms, cannot be ruled out. Poverty alleviation and food security
issues will still remain critical issues in the foreseeable future. The shifts in food
aid from humanitarian assistance to assistance for development of rural infra-
structure, poverty alleviation, food security, and employment generation un-
derscore the need for the continued role of the PFDS. Similarly, the overriding
importance of the PFDS in coping with natural calamities continues to remain
a fact. Its role in containing speculative market behavior cannot be overlooked.
Leaving these tasks entirely to the private-sector imports does not appear to be
a practical solution.
Furthermore, the reliability of international grain-market stability based
on the experiences of the late 1990s remains doubtful, especially in the context
of potential grain shortages occurring in India and Bangladesh at the same time.
The same argument holds good for imports from Thailand. Moreover, the av-
erage time taken in international contracts was 80 days in 1997/98 and 109 days
in 1998/99 (Rahman 1999). This delay raises the issue of optimal stock levels
6. Uttara Bank and Agrani Bank could not provide any data.
