Price stabilization, market integration and consumer welfare in Bangladesh

Research Grant Reports
[Final Report PR # 6/07]

The operational focus of the Government’s foodgrains expenditure policy has virtually no connection with where the marginal farmers are looking for livelihood.  The PFDS is substantively out of touch when it comes to the poorest-of-the-poor rural households. The typical marginal farm is subject to considerable, if not grinding, poverty. Small farmers however quite significantly out-earn marginal farmers.  They vastly out-earn the average Bangladeshi household.  Except for the marginal farmers, the small, or the medium or the large farmers ought to be off-limits to the ‘benefits’ of the PDFS.  The PFDS remains inadequate when it comes to ensuring food security and consumption welfare of the poor rural for all its admitted improvements since the 1990s. It is too bad that there is no propagation of price effects from the rice market to the labour markets.  That said, the answer to that problem---or, indeed, to any of the other substantive causes of rural poverty---does not seem to lie, essentially, with the ‘price stabilization’ prop of the platform of the PFDS, currently implemented.  The targeted channels of the PFDS are the ones to be strengthened, because they work, even though there are ‘leakages’.  These leakages need to be minimized. Ultimately, the true answer to the problem of rural poverty is about agricultural research; beefing up rural network of paved, all-weather roads; fostering targeted access to livelihood credits for remunerative income generating activities, enhancing rural access to primary healthcare and above all, empowering the status of women.

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Date and language
Feb 2010
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Agris Subject Categories: 
Production economics
Agris Subject Categories: 
Consumer economics
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