The Political Economy of Food Price Policy
the Case of Bangladesh
Global food price hikes during 2007 and 2008 resulted in a sharp rise in staple food prices in Bangladesh. The poor and marginalized households were particularly vulnerable to such an adverse situation as their real purchasing power eroded. Several studies indicated that the adverse effects of the food price hike in Bangladesh were primarily manifested by the significant rise in the number of households falling below the poverty line income. At the political front, Bangladesh was run by an unelected and undemocratic ‘civil’ caretaker government backed by the military. The civil caretaker government came to power in January 2007 in the wake of intense political conflicts between the outgoing government led by the Bangladesh Nationalist Party and the opposition, led by the Awami League. The civil caretaker government remained in power until the end of 2008 and undertook several steps to contain price hikes. These measures included cuts in tariffs and taxes, increase in the allocation for subsidies, widening the scope and coverage of the social safety net programmes, public procurement, and distribution programmes, etc. Some of these policies and programmes were effective and some were not. Also, different stakeholders were affected differently depending on their interaction and integration with the markets.