Govt trims food distribution plan for FY25 amid high inflation

The government has cut distribution plans for food grains for the upcoming fiscal year of 2024-25, which economists say is an illogical decision since food inflation has soared above 10 percent in the past two months.

For FY25, the government plans to distribute 30.3 lakh tonnes of rice and wheat among poor and low-income people through cash and non-cash programmes apart from distribution among public sector employees.

The quantity of the planned distribution is 10 percent lower than the revised distribution plan of 33.56 lakh tonnes for the outgoing fiscal year of 2023-24.

The food distribution plan is also below the original allocation for the outgoing fiscal year, according to the finance ministry.

"This is unwarranted given the persistent high prices of essentials, particularly of food," said the Centre for Policy Dialogue (CPD) in its analysis of the proposed budgetary measures for FY25.

Inflation has remained persistently high, hovering over 9 percent for two years, while the Consumer Price Index rose to 9.89 percent in May from 9.74 percent in April.

The think-tank said the total allocation for food support-related social safety net programmes has decreased nearly one percent to Tk 17,363 crore in FY25 from the revised allocation of Tk 17,483 crore in FY24.

For instance, the government has reduced allocations for the Open Market Sales (OMS) and Food Friendly Programme (FFW) by 4 percent to Tk 5,362 crore in FY25 compared to the revised allocation of Tk 5,491 crore of this fiscal year, according to the CPD.

The CPD said the food subsidy has been cut drastically by 20 percent for the next fiscal year starting from July.

Quazi Shahabuddin, a former director-general of the Bangladesh Institute of Development Studies (BIDS), said the government should expand food distribution as prices are high.

"The reduction of the food distribution target does not seem logical. Instead of cutting it, the government should expand food distribution programmes like OMS to cushion poor people from high food inflation," he said.

Mohammad Yunus, research director of BIDS, said the government should provide cash support to the poor and vulnerable which is equivalent to at least the distribution cut.

Mohammad Jahangir Alam, a professor of agribusiness and marketing at Bangladesh Agricultural University, said it has been seen in the past that the government's food distribution increases in the revised budget.

"So, I think we will see higher food distribution later," he said.

Md Habibur Rahman Hosaini, additional secretary to the procurement & supply wing at the food ministry, also said allocations for food distribution for the current fiscal year were lower than this year's revised budget.

"If needed, we will increase allocations," he added.