At a recent policy discussion, experts emphasized the need for a digitalized and integrated supply chain to combat inflation. The discussion also delved into fair pricing and lower interest rates to stabilize the cost of essential goods. The event, titled Fair Prices of Food Commodities: Exploring Strategies for Market Supervision, took place at a city hotel and was organized by Bonik Barta on Sunday. The newspaper’s editor, Dewan Hanif Mahmud, moderated the session while Dr. Khandaker Golam Moazzem, Research Director at the Center for Policy Dialogue (CPD), delivered the keynote speech.
Dr. Moazzem presented a paper titled Integration of Food Supply Chains in Bangladesh: Digitalization for Efficiency, Transparency, and Accountability. He highlighted the importance of proper business licensing and pointed out that the Competition Commission lacks sufficient data, leading to inefficiencies in market regulation. He advocated for establishing a well-integrated food supply system and long-term structural changes. Citing India’s experience since 1965, he explained how regulatory bodies there have focused on agricultural reforms, financial policies, and operational oversight.
Dr. Moazzem also raised concerns about shell companies, where a single person controls multiple businesses, creating monopolistic practices. He called for stricter regulations to prevent a handful of individuals from dominating the market. He also stressed the need for technology-driven market management, particularly for staple foods like rice and potatoes and imported essentials such as sugar and cooking oil. According to him, the full digital transformation of the supply chain could take three to five years and require long-term commitment.
Challenges in the Market and Banking Sector
Speaking at the event, Commerce Adviser SK Bashir Uddin discussed the economic difficulties faced by the previous government due to fixed lending rates. He pointed out that rice pricing involves multiple layers of cost adjustments, making it difficult for consumers to afford. He announced plans to meet with CPD representatives to explore solutions.
Uddin criticized the previous administration for spreading corruption across all sectors, weakening institutions. He stressed the need for fair taxation, calling for an equitable system where taxes are based on effort and capability. He also criticized the banking sector, claiming that some banks had turned into financial crime hubs. He gave an example of a person withdrawing over Tk 1 trillion from a single bank, while 90% of its loans remained unpaid. He urged strict accountability for such cases.
Economist Prof. Anu Muhammad argued that Bangladesh does not have a truly open market but rather an oligopoly, where a few powerful businesses control everything. He stated that strong institutions are needed to combat this issue. He also criticized the government for prioritizing conditions set by the International Monetary Fund (IMF) over public interest. He pointed out that fuel prices were raised to secure a $4.0 billion loan, hurting businesses and exports. He demanded more transparency in loan utilization and criticized the outdated approach to borrowing from global financial institutions.
NBR Chairman Abdur Rahman Khan highlighted that Bangladesh’s tax collection is much lower than that of Western nations. While countries like the US and UK have a tax-to-GDP ratio of 45%, Bangladesh stands at only 7.9%. He emphasized that the poor pay a larger portion of taxes, while many wealthy individuals and businesses avoid their obligations. He noted that while there are 1.1 million registered taxpayers, 60% fail to file their returns, creating additional pressure on those who do comply.
Rising Food Prices and Market Monopolies
SM Nazer Hossain, Vice President of the Consumers Association of Bangladesh (CAB), spoke about rising rice prices, which he attributed to low government reserves. He pointed out that despite reducing tariffs on 31 products, prices continued to increase ahead of Ramadan. He questioned whether businesses would uphold their commitments to keep prices stable during the holy month. He also highlighted the struggles of farmers in North Bengal, who do not receive fair prices for their vegetables, even though consumers in urban areas pay high rates.
Farid Ahmed Russel, President of Karwan Bazar 2 No Aratdar Merchant Association, explained that potato prices surged due to government pressure and the lack of proper receipts from wholesalers and cold storage operators.
Sabir Hasan Nasir, Managing Director of the retail chain Swapno, denied the existence of price syndicates, calling such claims baseless. He pointed out that while paddy prices had risen by 34%, rice prices increased by only 22%. He emphasized the need for formalized and digitalized market operations, stating that Bangladesh lags behind other countries in digital adoption. While Sri Lanka and Thailand have digitalization rates of 43% and 64%, respectively, Bangladesh has only 2%.
Rice mill owner Abdul Khalek from Desh Agro Industries in Kushtia shared that 80% of mills in the region had shut down due to unfair competition from large corporations with vast financial resources.
Kazi Zahin Hasan, Director of Kazi Farms, attributed the high cost of raw materials to the Ukraine-Russia war and the previous government’s excessive money supply. He called for balanced economic policies that promote lower interest rates and a free-market system based on supply and demand.
Addressing Market Manipulation and Policy Reforms
Sarjis Alam from the Anti-Discrimination Student Movement (ADSM) stressed that representatives of major political parties should participate in such discussions to voice their opinions openly. He blamed political figures for widespread extortion in business sectors. According to him, large corporations do not compete but instead divide market territories among themselves like animals marking their domains. He criticized the Competition Commission for failing to take action against these practices, calling it one of the most ineffective institutions in the past 16 years.
Alam pushed for the proper enforcement of policies to prevent monopolistic practices. He also suggested decentralizing imports to boost market competition. Umama Fatima from ADSM reflected on the government’s market monitoring strategies and advocated for policies that benefit both producers and consumers. She questioned the rationale behind high taxes on essential Ramadan-related items like dates, chickpeas, and soybean oil.
Challenges in the Banking Sector
Mahbubur Rahman, Managing Director and CEO of Mutual Trust Bank Ltd, addressed the difficulties facing the banking sector, such as low lending capacity, a high number of unpaid loans, and liquidity shortages. He revealed that 11 banks are currently unable to issue new loans due to excessive bad debts. He also noted that rising utility costs are further burdening consumers.
Md Obayedullah Al Masud, Chairman of Islami Bank Bangladesh Ltd, discussed the bank’s reach in 32,000 villages, with plans to expand to 64,000 in the next three years. He highlighted the importance of middlemen in the supply chain, arguing that they provide essential services rather than drive up costs. However, he admitted that extortion remains a significant factor in price hikes.
Government Role in Price Regulation
Mostofa Haider Chowdhury, Director of TK Group, emphasized the government’s authority to regulate food prices under the Essential Food Act. He called for a well-planned supply chain strategy to ensure fair pricing. He pointed out that developed countries manage their markets through tariff adjustments and maintaining strategic reserves.
Conclusion
The event highlighted critical economic and market challenges, with experts calling for digital reforms, stronger regulatory bodies, and policy adjustments to ensure fair pricing. The discussions underscored the need for long-term strategies to combat monopolies, improve tax collection, and support struggling businesses. Implementing these reforms could help stabilize the economy and ensure affordability for consumers.
