Price instability is a fact of life. In a market economy, domestic prices change in response to changes in supply, consumer preferences, policy, world prices, and other factors. Crop prices tend to be particularly volatile because harvests occur only once or a few times per year and because the size of the harvest varies due to weather, prices, and other factors. For internationally-traded commodities, volatility in world prices can be another source of instability in domestic prices.
Unprecedented growth in rice production in Bangladesh over the last four decades has outpaced the capacity of post-harvest operations, resulting in substantial grain losses. While production technology has changed dramatically over time, there has been relatively little private investment in transforming storage capacity in the country. This paper explores the lack of widespread private investment in improved grain storage and examines the potential for public support to stimulate greater private sector investment in modern storage. We calculate the returns to investment in bulk grain silos and hermetic cocoons that could upgrade warehouse storage, and calculate the grain loss that conversion to those technologies would prevent. We then assess the public support that would be required to trigger private investment in modern storage systems.
Unprecedented growth in rice production in Bangladesh over the last four decades has outpaced the capacity of post-harvest operations, resulting in substantial grain losses. While production technology has changed dramatically over time, there has been relatively little private investment in transforming storage capacity in the country. This paper explores the lack of widespread private investment in improved grain storage and examines the potential for public support to stimulate greater private sector investment in modern storage. We calculate the returns to investment in bulk grain silos and hermetic cocoons that could upgrade warehouse storage, and calculate the grain loss that conversion to those technologies would prevent. We then assess the public support that would be required to trigger private investment in modern storage systems. Our analysis shows that storage in jute bags in warehouses or homes outperforms the modern technologies in terms of financial returns at observed prices. Our analysis further shows that given the observed price changes during the harvest and post-harvest periods from 2008 to 2018, cocoon and silo storage as well as conventional warehouse storage were unprofitable in most years and on average overall. Although seasonal variation in market prices for paddy is sometimes pronounced, the pattern of the variation is not sufficiently large or consistent to make paddy storage reliably profitable. Conventional warehouse storage implied an average loss of BDT 2,877/MT/season over the 20 seasons considered. Use of modern storage methods would have implied average losses of BDT 3,200/MT/season to BDT 4,950/MT/season, depending on technology used. These results imply that a public sector co-investment on the order of BDT 300/MT would be required to trigger a shift from conventional to modern storage by traders or millers. This shift would imply a reduction in grain loss of 30kg to 80kg per MT stored for a public cost of BDT 3.75 to BDT 10.00 per kilogram of loss avoided. To make it profitable for intermediaries to provide commercial storage services to farmers who currently store on-farm would require a much larger co-investment of about BDT 3,200/MT stored, implying BDT 40 to BDT 106 per kilogram of loss avoided. Removal of import tariffs on storage technologies or realization of a price premium for silo-stored or hermetically stored grain could be sufficient to encourage millers to adopt modern storage, but would be inadequate to trigger increased off-farm storage as an independent activity. There is anecdotal evidence of a price premium for paddy that has been stored using improved technology. Existence of such a premium could significantly reduce public support needed to trigger private investment in improved storage.
This study conducts an assessment of the current mandates, performance, and capacity gaps of the Directorate General of Food (DG Food) and suggests remedies to strengthen the agency. Formed originally as the Supply Department in undivided Bengal under British rule in the early 1940s, the organization was named the Directorate General of Food by the provincial government of East Pakistan in 1956. Upon the independence of Bangladesh in 1971, DG Food became a part of the Ministry of Food and Civil Supplies and was later renamed as the Directorate General of Food in 1975. The last major reorganization of the agency took place in 1984. The current mandates and organogram are from 1984. As the custodian of the Public Food Distribution System (PFDS), DG Food plays an important role for the Government of Bangladesh (GoB). Under the Social Safety Net Programs (SSNP) of the GoB, DG Food ensures food security for vulnerable populations. In its sprawling countrywide network of 650-plus traditional warehouses, DG Food has an effective storage capacity of 1.9 million tons. In recent years, DG Food has procured and distributed approximately 3.0 million tons of foodgrains per year. A very large organization, DG Food has a sanctioned workforce of over 13,000 officers and employees, and an annual budget of approximately 1.5 billion U.S. dollars.
Bangladesh has a complex rice value chain consisting of farmers, upstream paddy wholesalers and intermediaries, millers, and downstream rice traders, wholesalers and retailers. Each of these actors serve distinct functions and have lines of trade that affect their stock turnover in different ways. There is a lack of complete information on the volume of rice traded and stored by the private sec-tor. This leads to difficulties in the timeliness of requisite policy actions on the part of the govern-ment. When rice prices spike, the typical response has been to lay the blame at the feet of millers and traders. For the government, it is important to have a general picture of the level of private stocks in a given year to ensure appropriate adjustments in procurement, distribution and import de-cisions can be made to meet their food security and price stabilization objectives.
The Agricultural Outlook 2021-2030 is a collaborative effort of the Organisation for Economic Co-operation and Development (OECD) and the Food and Agriculture Organization (FAO) of the United Nations. It brings together the commodity, policy and country expertise of both organisations as well as input from collaborating member countries to provide an annual assessment of the prospects for the coming decade of national, regional and global agricultural commodity markets. The publication consists of 11 Chapters; Chapter 1 covers agricultural and food markets; Chapter 2 provides regional outlooks and the remaining chapters are dedicated to individual commodities.
Investing to promote agricultural growth and poverty reduction is a central pillar of the World Bank's current rural strategy, 'Reaching the Rural Poor' (2003). This 'Sourcebook' addresses how to implement the rural strategy, by sharing information on investment options and identifying innovative approaches that will aid the design of future lending programs for agriculture. It provides generic good practices and many examples that demonstrate investment in agriculture can provide rewarding and sustainable returns to development efforts. It is divided into eleven self-contained modules. Each module contains three different types of subunits that can also be stand-alone documents: I. Module Overview II. Agricultural Investment Notes III. Innovative Activity Profiles. The stand-alone nature of the subunits allows flexibility and adaptability of the material. Selected readings and web links are also provided for readers who seek more in-depth information. The 'Sourcebook' draws on a wide range of experiences from donor agencies, governments, institutions, and other groups active in agricultural development. It is an invaluable reference tool for policy makers, professionals, academics and students, and anyone with an interest in agricultural investments.
This book presents an overview of the key debates that took place during the Economic and Social Council meetings at the 2007 High-level Segment, at which ECOSOC organized its first biennial Development Cooperation Forum. The discussions also revolved around the theme of the second Annual Ministerial Review, "Implementing the internationally agreed goals and commitments in regard to sustainable development."--P. 4 of cover.
The vast majority of the world's poorest households depend on farming for their livelihoods. During the 1960s and 1970s, most developing countries imposed pro-urban and anti-agricultural policies, while many high-income countries restricted agricultural imports and subsidized their farmers. Both sets of policies inhibited economic growth and poverty alleviation in developing countries. Although progress has been made over the past two decades to reduce those policy biases, many trade- and welfare-reducing price distortions remain between agriculture and other sectors and within the agricultural sector of both rich and poor countries. Comprehensive empirical studies of the disarray in world agricultural markets appeared approximately 20 years ago. Since then, the Organisation for Economic Co-operation and Development had provided estimates each year of market distortions in high-income countries, but there have been no comparable estimates for the world's developing countries. This volume is the third in a series (other volumes cover Africa, Europe's transition economices, and Latin America and the Caribbean) that not only fills that void for recent years but extends the estimates in a consistent and comparable way back in time and provides analytical narratives for scores of countries that shed light on the evolving nature and extent of policy interventions over the past half-century. 'Distortions to Agricultural Incentives in Asia' provides an overview of the evolution of distortions to agricultural incentives caused by price and trade policies in the 12 largest economies of East and South Asia. Together these countries constitute more than 95 percent of the region's population, agricultural output, and overall GDP. Sectoral, trade, and exchange rate policies in the region have changed greatly since the 1950s, and there have been substantial reforms since the 1980s, most notably in China and India. Nonetheless, numerous price distortions in this region remain and others have added in recent years. The new empirical indicators in these country studies provide a strong evidence-based foundation for assessing the successes and failures of the past and for evaluating policy options for the years ahead.
