Over the past two decades, Bangladesh has transformed its food markets and food policies to free the country from the constant threat of famine. The authors, in this report, describe this remarkable transformation.

IFPRI

English

Research Papers in Economics

OUT OF THE SHADOW OF FAM INE:
EVOLV ING FOOD MAR KETS AND
FOOD POL ICY IN BANG LA DESH
RAISUD DIN AH MED, STE VEN HAGG BLADE,
AND TAWFIQ- E- ELAHI CHOWD HURY, EDI TORS
O
nce de scribed by Henry Kiss inger as a “bot tom less bas ket,” Bang la desh has
long been as so ci ated with im ages of fam ine and grind ing pov erty in the pub lic
imagi na tion. Within Bang la desh, the leg acy of re peated fam ines has haunted
poli cy mak ers and ex er cised a pow er ful ef fect on food pol icy. The fam ines of
1943 and 1974 in par ticu lar led to myr iad gov ern ment in ter ven tions de signed to pro tect the
na tion’s food sup ply. Bang la de sh’s re cent ag ri cul tural per form ance stands in vivid con t rast to
these bleak im ages. Over the past two dec ades, the coun try has trans formed its food mar kets
and food poli cies to free the coun try from the con stant threat of fam ine. Out of the Shadow of
Fam ine, ed ited by Raisud din Ah med, Ste ven Hagg blade, and Tawfiq- e- Elahi Chowd hury,
and pub lished by Johns Hop kins Uni ver sity Press, de scribes this re mark able trans for ma tion.
TWO DECADES OF CHANGE
B
ang la de sh’s food pol icy re form has pro ceeded amid ef forts to de con trol ma jor sec tors of
the econ omy. Changes in key eco nomic and so cial in di ca tors in the first two dec ades af ter
in de pend ence in 1971 show sig nifi cant achieve ment. While popu la tion den sity re mains a se  ri  -
ous con cern, popu la tion growth fell be low 2 per cent. Gross do mes tic prod uct (GDP) more than
dou bled, grow ing on av er age about 4 per cent per year. Per cap ita in come grew about 2 per cent
an nu ally. The av er age tar iff fell from over 90 per cent to about 30 per cent, while ex ports grew
from about 3 per cent to about 13 per cent of GDP. The coun try has made re mark able prog ress in
de vel op ing in fra struc ture that will en hance its fu ture pros pects for growth. The length of paved
roads dou bled, and tele phone con nec tions more than quad ru pled. Elec tric ity gen era tion in  -
creased by about 450 per cent, while ir ri gated land area in creased about 215 per cent.
In di ca tors of so cial de vel op ment show some im prove ment in the over all qual ity of life
but also make clear the mas sive pov erty that con tin ues to be set the na tion. Gains made so
far are sim ply a small dent in a gi gan tic prob lem still to be solved.
TRENDS IN PRODUCTION, MARKETING, AND GOVERNMENT POLICY
R
apid change in Bang la de sh’s food grain pro duc tion and mar kets laid the foun da tion
for a ma jor re struc tur ing of gov ern ment food pol icy in the early 1990s. New
 high-yielding va rie ties (HYVs) of rice and wheat be came avail able in the mid- 1970s. For
10 years adop tion ex panded stead ily, but in the sec ond half of the 1980s, when mar kets for
fer til izer and ir ri ga tion equip ment were lib er al ized, it surged dra mati cally.
Growth in food grain pro duc tion, cou pled with sus tained in vest ment in ru ral in fra struc  -
ture, made pos si ble a mar ket ing revo lu tion of far greater scale. While food grain pro duc tion
in creased from 8 mil lion tons in 1962 to 18 mil lion tons in 1992, quan ti ties mar keted
 increased by a fac tor of six. In creased food grain pro duc tion in ex cess of popu la tion growth,
grow ing ur bani za tion, shift ing pref er ences for wheat, and in trac ta ble pov erty all con trib  -
uted to a steady sof ten ing in real rice prices.
Si mul ta ne ously, the price paid by the poor for grain from gov ern ment  ration chan nels
was gradu ally ris ing to meet the fal ling mar ket price. By erod ing the in cen tives of mil lions
of ra tion card hold ers to draw ra tions, the fall in rice prices in the early 1990s played a key
role in mak ing rapid down siz ing pos si ble. This sub sidy ero sion ef fec tively neu tral ized
15 mil lion ra tion re cipi ents, the larg est po ten tial op po si tion to down siz ing the enor m ous
pub lic food dis tri bu tion sys tem.
Spurred by re duced gov ern ment re sources and a sof ten ing for eign aid en vi ron ment, a
coa li tion of gov ern ment re form ers seized this aus pi cious mo ment to launch a se ries of rapid 
IFPRI
FOOD
POL ICY
STATE MENT
NUM BER  31,   AUGUST  2000
2033  K  STREET, N.W.
WASHINGTON, D.C. 20006-1002
U.S.A.
PHONE: 1-202-862-5600
FAX: 1-202-467-4439
E-MAIL: IFPRI@CGIAR.ORG
WEB: WWW.IFPRI.ORGdown siz ing moves. Be tween De cem ber
1991 and August 1993 they abol ished
the ma jor ra tion chan nels, re duced do  -
mes tic rice pro cure ment, and  lib er al  -
ized for eign trade in food grains. Even
with a change in gov ern ment and two
bad har vests (1994/95 and 1995/96),
down siz ing and lib er ali za tion have
been sus tained.
down siz ing moves. Be tween De cem ber
1991 and August 1993 they abol ished
the ma jor ra tion chan nels, re duced do  -
mes tic rice pro cure ment, and  lib er al  -
ized for eign trade in food grains. Even
with a change in gov ern ment and two
bad har vests (1994/95 and 1995/96),
down siz ing and lib er ali za tion have
been sus tained.
To day, Bang la de sh’s pub lic food
sys tem looks con sid era bly dif fer ent
than it did a dec ade ago. Ra tion chan  -
nels have been dis man tled. Only out lets 
serv ing the army and po lice con tinue to
draw ra tions of any sig nifi cance. In  -
stead, the sys tem fo cuses on a small
open mar ket sales out let and a tightly
tar geted set of dis tri bu tion pro grams
aimed at vul ner able groups. Gov ern  -
ment pro cure ment has shrunk apace.
Moreo ver, the rapid pri vate sec tor re  -
sponse to im port lib er ali za tion means
that, for the first time in five dec ades,
pri vate sec tor food grain im ports ex  -
ceeded the gov ern ment’s im ports be  -
gin ning in 1994.
THE ROAD AHEAD FOR
BANGLADESH
N
o longer a bas ket case, Bang la  -
desh has dem on strated that its
eco nomic growth can out pace its pop  -
ulation growth, that the coun try can
ma te ri ally im prove its abil ity to feed
it self, and that it might even at tain a
level of pros per ity suf fi cient to ac cord
ba sic dig nity to its vast popu la tion.
Ful fill ing this pros pect, how ever, de  -
pends on the coun try’s abil ity to ac cel  -
er ate the mo men tum of prog ress.
A market- oriented ap proach to de  -
vel op ment will help Bang la desh ac cel  -
er ate in vest ment, ex ploit po ten tial for
trade, and align it self with the rap idly
chang ing global en vi ron ment. This ad  -
her ence to the mar ket, how ever, does
not mean a pas sive role for gov ern  -
ment. Gov ern ment must play a pro-
  active role in a number of stra te gic ar eas,
in clud ing en sur ing a sta ble mac roecon  -
omy; im prov ing tar geted dis tri bu tion
to vul ner able groups; strength en ing
 agricultural re search, ex ten sion, and
in fra struc ture; and pro mot ing ag ri cul  -
tural di ver si fi ca tion and rice ex ports.
Through fur ther prog ress in mar  -
ket re form, in sti tu tional and tech ni cal
in no va tion, and in fra struc ture de vel op  -
ment, Bang la desh should be able to fur  -
ther strengthen ag ri cul tural pro duc tion
and food se cu rity. In so do ing, it will
make fur ther strides to ward cast ing aside
its im age as a poor, famine- stricken
coun try un able to feed its peo ple.
LESSONS FOR OTHER
COUNTRIES
L
ike Bang la desh, gov ern ments else  -
where have at tempted to down size
large- scale gov ern ment food dis tri bu  -
tion pro grams and re duce costly food
sub si dies. In do ing so, they have of ten
aroused le thal op po si tion and been
forced to back track. Yet where oth ers
have fal tered, Bang la desh has suc  -
ceeded in exe cut ing and main tain ing its
food pol icy re forms. What can other
coun tries learn from Bang la desh?
Proba bly the most im por tant les  -
son is tim ing—rec og niz ing and se lect  -
ing an op por tune mo ment for change.
In the late 1980s and early 1990s fal  -
ling mar ket prices co in cided with
gradu ally erod ing ra tion sub si dies. By
tak ing ac tion at this junc ture, the gov  -
ern ment and its do nor al lies ef fec  -
tively neu tral ized the most com mon
op po nent of food pol icy re form, the
ur ban ra tion card hold ers.
Al though change came gradu ally
at first, the gov ern ment later moved
quickly to abol ish ru ral ra tion ing, the
larg est rice out let in the food dis tri bu  -
tion sys tem. Its over night dis ap pear  -
ance forced a rapid se ries of ad just  -
ments to re store the bal ance be tween
pro cure ment and off take. This ex pe ri  -
ence sug gests that se lect ing a stra te gi  -
cally po si tioned first dom ino may fa  -
cili tate fur ther ac tion and fore stall
ef forts to de rail re form.
Fi nally, ex ter nal al lies were cru  -
cial. To face in ter nal op po si tion, re  -
form ers bene fited from the sup port of
ma jor food aid do nors—par ticu larly
the U.S. Agency for In ter na tional
 Development, the World Bank, and
Can ada. Their long- term com mit ment
to re form and main te nance of pol icy
con di tions helped sus tain the pace of
change. They also re di rected heat from 
in ter nal to ex ter nal agen cies.
OR DER FORM
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Send to The Johns Hop kins Uni ver sity Press, Box 50370, Bal ti more, Mary land, USA 21211- 4370.
Con tribu tors to this book are Akhter U. Ah med,
A. W. Nurud din Ah med, Raisud din Ah med, David A.
At wood, Lut ful Ho que Chowd hury, Nuimud din
Chowd hury, Tawfiq- e- Elahi Chowd hury, Paul
Dorosh, Francesco Go letti, Ste ven Hagg blade,
A. S. M. Ja hangir, Go lam Kabir, Wa hidud din
Mah mud, Sham sur Rah man, Sul tan Hafeez
 Rahman, Her bie Smith, and Sajjad Zo hir.

Out of the shadow of famine

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Out of the shadow of famine

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