Journal of Food, Agriculture and Environment

Rice price inflation and its impact on poverty and livelihood: Insights from Bangladesh

Author(s):

Taznoore S. Khanam *, Humnath Bhandari, Samarendu Mohanty

Recieved Date: 2015-01-02, Accepted Date: 2015-03-18

Abstract:

Rice is the major staple food in Bangladesh, contributing 71% of total calorie supply, 58% of total protein intake, and 15% of rural household income. More than half of Bangladeshi households are net buyers of rice. Poor households spend 40% of their food expenditure on rice. By reducing real income and purchasing power, a rice price inflation worsens food insecurity and, in turn, poverty for millions of Bangladeshi households. Rapid rice price inflation in recent years is thus a serious concern. The Green Revolution led continuous growth in rice yield kept rice prices low. Low rice prices reduced poverty through better food security, higher real income, and improved livelihoods. Rice prices have, however, spiked significantly in 2008 and again in 2010 and 2013. This study investigates the causes of rice price inflation and its effects on rural livelihood and examines poor households’ coping mechanisms to higher rice price. We found that the 2008 food price hike pushed an additional 9 million Bangladeshis below the poverty line. Higher rice price increased poverty incidence and overall inflation in Bangladesh. Several elements on the demand and supply side and some other factors contributed to the rapid rise in rice prices in Bangladesh. Poor households adopted multiple food-based and non-food-based consumptionsmoothing and income-smoothing strategies to cope with the impacts of higher rice prices. The consequences of some of these coping strategies are long term and irreversible. We conclude that rice price will remain high and will continue to rise in the future with adverse impact on food security and poverty reduction efforts. We discuss several technological and policy solutions to further cap the sharp hike in rice price, to supply rice at an affordable price to the poor, and to minimize the impact of future rice price hike on millions of poor Bangladeshi households.

Keywords:

Rice price inflation, poverty, food security, coping strategies, Bangladesh

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Journal: Journal of Food, Agriculture and Environment
Year: 2015
Volume: 13
Issue: 2
Category: Agriculture
Pages: 107-117

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