Foodgrain Supply, Distribution, and Consumption Policies within a Duel Pricing Mechanism: a Case Study of Bangladesh

Conflict between the short run welfare of poor consumers and agricultural production incentives creates some of the most difficult policy issues facing developing countries. Resulting policy option constraints are particularly severe in very low income countries. The conflict may on the one hand impede the growth in al production essential to improve long term welfare of low income consumers, and on the other hand restrain policies to increase consumption, which in the long run is essential to the success of the measures taken to increase production. The widely observed phenomenon of urban bias in food price policy is itself a product of the nature of low income societies and of this complex conflict. This research by Raisuddin Ahmed delineates and describes the complex interacting parts of this conflict in Bangladesh, one of the lowest income Third World countries. The study is one of a series being conducted at the International Food Policy Institute dealing generally with policies influencing the effective demand for food as specifically with food subsidies policies in South Asia. A study by Shubh Kumar, based on detailed survey of families in Kerala, India, was published in January 1979. It measured the effect of various food policies on the nutritional status and health of infants. A study by P.S George, examining historically and in detail the operation of the food distribution program in Kerala, is of particular interest in its treatment of the interaction of distribution and procurement policies. This study by Raisuddin Ahmed provides valuable information on who benefits from the public distribution, what feasible policy options are available for the rural poor, and the nature of the interaction between the public and market distribution systems which together compromise the dual market mechanism of foodgrain distribution in Bangladesh. The manner of treatment and types of questions addressed make the study especially valuable to persons operating or contemplating development of large scale food distribution.