Political Economy of State Interventions in the Bangladesh Food-Grain Sector

Abstract

Policy analysts and researchers need to be aware, while making policy recommendations, of the political feasibility of their suggestions. At the same time, the policymakers need to be aware of the extent of the loss in economic efficiency that may be involved in policy choices designed to meet their political objectives. The range of political considerations affecting policy formulation is wide depending on the sectors and the particular circumstances of a country. This paper illustrates how the evolution of input/output policies in the food-grain sector in Bangladesh have been the result of interaction between various interest groups such as agricultural/rural and industrial/urban groups. The interaction between the diverse viewpoints and responsibilities of the various policymaking institutions engaged in making and implementing food-grain policies have also affected the decisions of the government. In many instances, the donors engaged in financing development projects/programs in the relevant sectors/projects exercised varying degrees of influence on policy decisions. In a few instances, they joined hands with social scientists/economists in the government or in national think tanks who shared similar views. Experience and analysis has sometimes led to a reversal of policies. Similarly, events like the major world food crisis in 1973-1974 and again in 2007-2008 greatly influenced the policy deliberations in the direction of greater self-sufficiency in food supply and a reduction of import dependence. There have been changes over time in the relative emphasis on market forces and state intervention. A period of market liberalization was reversed in response to a shock such as supply scarcities in the world food market or bottlenecks/interruptions in the domestic marketing and distribution system. The attainment of an assured and stable supply of food for the growing population with an emphasis on the poor and the vulnerable was a political imperative. Similarly, the adequate and regular timely supply of inputs such as fertilizer to farmers was considered essential for ensuring domestic food production.

Keywords: food crisis, urban bias, suburbs, market failure, interest groups, price support, public food stock, safety net, donors, social scientists/economists