Rice price stabilization and food security in Bangladesh

Abstract

The paper reviews the rationale of price stabilization, establishes the importance of price stabilization for food security, examines the nature and extent of fluctuations in rice prices, and develops an approach to stabilize rice prices in Bangladesh. It shows that the extent of annual price variability has increased somewhat in the post-technology (1976–1984)period compared to pre-technology period (1960–1970). Seasonal pattern of prices has also changed with sharper troughs in September and peak in May in the 1976–1984 period. The paper argues that the theoretical positions against price stabilization are not valid in the context of rice price in Bangladesh. A framework for stabilization of rice prices that integrates public procurement, import, rationing and open market operations is developed in order to contain annual and seasonal prices within desired price bands.