Who will restrain prices in the month of restraint?
A government's job is not to preach about people's food choices, but to keep food prices stable and reasonably down. When it starts to preach, more often than not it is trying to deflect scrutiny of what it cannot achieve through actions. So when the industries minister advises us to choose locally sourced fruits like plums and guavas for iftar—over imported delicacies such as dates or grapes—as a means of cutting down on Ramadan costs, any sincerity in his statement is lost on consumers who have been overwhelmed by the relentless tide of price rises for about three years now. Instead, it comes across as insincere, classist, and oddly evasive, as if he was responding to an unuttered accusation.
When people worry about food prices in Ramadan, they don't mean just grapes or dates. Despite the minister's claim, these are still outliers—one a luxury best afforded in kinder economic times, and the other a starter best had in small quantities. No one, frankly, rues not having more dates on their iftar plates. But it is their prices where they become one with essential food items, with the humble date going for as much as Tk 1,500-2,000 per kg now, up from last Ramadan's Tk 500-700. This is even after the government reduced import tariffs on dates earlier last month. Prices of almost all other fruits have similarly gone up. One kg of sugar, another iftar essential, will set you back about Tk 140-150.
For all latest news, follow The Daily Star's Google News channel. Before we get into further details, consider this: if the total number of households in the country is 4.1 crore, price rises have affected over 2.9 crore (or 71 percent of all households), according to a World Bank report published in early January. Since then, nothing has changed to assuage their concern. On the contrary, food prices witnessed a fresh spike well before the start of Ramadan, which is when you usually expect it to happen.
As per a recent report by this daily, multiple price shocks have sent consumers reeling, with things set to turn worse following the imposition of newly set electricity prices. Barring exceptions, prices of most Ramadan staples including chickpeas, moshur daal, rice, eggs, and all varieties of meat have seen an increase. The price of onion has slightly decreased following news of imports from India, but only just. It is unlikely to go down much further if the state of other food imports is any indication.
So, try as the government may to get us to buy into its upbeat Ramadan forecast, with the finance minister even refusing to accept inflation as a major issue, the fact is, prices in general remain in the stratosphere. The question is: why can't the government control them despite supposedly enhancing market monitoring, vowing tough legal action against hoarding, shoring up supplies, and reducing import duties on some items? Checking commodity prices was one of the priorities outlined in Awami League's election manifesto. What possible reason could there be for an all-powerful government, saturated with MPs boasting enviable business pedigree, to fail to deliver on one promise?
Last week, at a meeting organised by the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), business leaders identified four major reasons for the surge in prices, including the crisis of dollar and its increased rate, extortion, syndicates, and still-high import duties. Importantly, they said that traders are being forced to pay extortionists at multiple stages while bringing a product from grassroots to the wholesale markets. Even after buying from wholesale markets, retailers also have to pay additional money to secure their release. Apart from extortion, traders also blamed the middlemen, saying sometimes a product changes hands at least four times before coming to the wholesale markets. Thus, prices of locally sourced items may increase abnormally.
There are other factors and forces as well. We can talk about market monopolies. We can talk about excessive dependence on imports, or how systemic barriers often make imports costlier as they reach our shelves. We can talk about the trickle-down effects of high costs of fuel and utilities, as well as ever-increasing indirect taxes hurting people's buying capacity. We can talk about the culture of rules violation by traders and the culture of non-enforcement by relevant agencies. We can even talk about excessive greed. Many influences coalesced to create the perfect storm that is our commodity market.
But one aspect that rarely gets a mention from government functionaries is the crippling effect of patronage politics. The gaggle of syndicates, middlemen, hoarders, and extortionists who exert an oversized influence on the supply chain draw their power from their association with the ruling establishment. So when the government talks tough love, how tough can it be, really? How far or long can the deputy commissioners—who have been lately tasked with checking hoarding and ensuring the smooth transportation of supplies—go when the many beneficiaries of patronage politics push back? For they will push back, sooner or later.
Organised highway gangs are perhaps the most visible of these disruptive forces. Last month, Prothom Alo reported how about Tk 2 crore was being extorted every month from goods-laden trucks in Sylhet city. Men behind this racket? Activists of different groups and sub-groups affiliated with Sylhet Chhatra League. On Tuesday, Transparency International Bangladesh further revealed that private bus operators are forced to pay at least Tk 1,059 crore in bribes annually to unscrupulous BRTA officials, police, transport associations, staffers of city corporations and municipalities, and individuals affiliated with political parties. The list of "collectors" is really stupefying. What about goods-carrying trucks? One can only guess what insanity they, too, are subjected to on their route.
Against this backdrop, efforts like adjusting fuel prices, fixing rates of certain essentials, conducting drives against hoarding and price gouging, or occasional import tariff reductions are but baby steps that will take us only so far. To really make an impact, what we need are institutional reforms to prevent any scope for undue influences in the market and resolve all systemic issues. If the government really wants to control or bring down prices during Ramadan and afterwards, it must be willing to go after its "own people."
Badiuzzaman Bay is assistant editor at The Daily Star.
Views expressed in this article are the author's own.
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