From Parastatals to Private Trade
5 Public Food Distribution System in Bangladesh: Successful Reforms and Remaining Challenges A. M. M. SHAWKAT ALI, ISHRAT JAHAN, AKHTER AHMED, AND SHAHIDUR RASHID Despite beginning its journey with a war-torn infrastructure in 1971, haunting experiences of a famine in 1974, and repeated bouts of floods and other natu• ral calamities, Bangladesh is now widely recognized for successfully trans• forming its grain market structures. Behind this success is a series of reforms, which included, among others, dismantling the food rationing system and eas• ing restrictions on both domestic and international trade of grain in the early 1990s. Available studies suggest that the policy reforms have produced all the desired outcomes—that is, increased private-sector participation, reduction in food subsidy bills, higher food availability, and increased stability of grain prices (Ahmed, Haggblade, and Chowdhury 2000). Furthermore, unlike many other developing countries, the reforms did not provoke popular protests. How did it all happen? Clearly, a host of factors contributed to the success, but the answer to the question in large part lies in the government's commitment to changing the old set of policies and redefining its role in the grain markets.1 By the late 1980s, evidence on the ineffective, or even counterproductive, nature of the old set of policies was mounting, and the government and its de• velopment partners were convinced that the country's food policies had to be changed. Both food rationing and public procurement were found ineffective; and none of the then-existing public distribution programs were reaching the poor. However, given the level of food insecurity, as well as vulnerability of the country to natural calamities, it was also clear that complete government with• drawal from the cereal markets was not a feasible reform option.
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