Middlemen, weak mkt oversight make food pricey: CPD

Too many middlemen and weak market management are keeping food prices high in Bangladesh, even when production is sufficient, the Centre for Policy Dialogue (CPD) said at a seminar on Thursday.

Presenting a study titled The Food Price Chain: Markets, Margins and Intermediaries in Bangladesh, CPD Research Director Dr Khondaker Golam Moazzem said long supply chains and poor competition allow traders to earn unusually high profits while farmers receive low prices and consumers pay much more.

The study found that the gap between farm and retail prices is highest for green chilli, where consumers pay about 116 per cent more than the farm-gate price. Onion prices rise by 87 per cent before reaching retail markets, followed by pulses at 78 per cent and brinjal at 72 per cent. 

CPD said urban aratdars, or commission agents, dominate the wholesale trade of onions, potatoes, vegetables, eggs and fish. Retailers depend heavily on these traders, reducing competition and making it easier for a few market players to influence prices.

The think tank said Bangladesh's food inflation is being driven not only by demand but also by structural weaknesses in the market. Supply bottlenecks, market concentration, hoarding, weak oversight and excessive intermediary margins continue to push up consumer prices. 

BEFORE HITTING MKTS 
*    Onion prices rise by 87pc
*    Pulse prices peak by 78pc 
*    Brinjal prices balloon by 72pc
*    Green chilli climb up by 116pc

It said monetary policy alone cannot bring down inflation unless these problems are addressed.

To improve the situation, CPD recommended stronger market monitoring, stricter action against cartels and anti-competitive practices, better price transparency and improved collection of production and market data. 

It also called for stronger links between farmers and retailers, investment in storage and cold-chain facilities, timely import decisions and expanded social protection for low-income households.

The seminar brought together economists, policymakers, business representatives and researchers to discuss ways to make Bangladesh's food market more competitive and efficient while easing the pressure of high food prices on consumers.