Probably the most important immediate cause of starvation during the 1974 famine in Bangladesh was a sharp drop in the food purchasing power of agricultural earnings. Past work has attempted to explain this in terms of conditions in food markets. This paper reports an econometric investigation of wage movements before and after the famine which reveals a significant structural break in the short-run response of wages to prices at the time of the famine. Without this change in labour market conditions real wages would have remained fairly stable during the famine.

This paper makes an attempt to assess the adequacy and representativeness of Bangladesh’s only published official time series data on money daily wage rates in industry with a view to interpreting the experience of her large-scale industry about the movement of real wage levels prevailing in the quinquennium 1972/3-1976/7. The desire to interpret this experience is premised on both its analytical and historical relevance to a proper inventory of facts. We argue that the above noted data, generated by the Bureau of Statistics (BBS), while it purports to estimate average wage rates in five industries, must be adjudged to be poor estimates, largely because, by improperly aggregating establishments of varying size, and covering respondents with potentially differing personal and occupational characteristics from one year to the next, the underlying sample involves a degree of misplaced aggregation. A perhaps more important conclusion we reach is that, while a knowledge of the experience of Bangladesh’s large scale industry during the quinquennium 1973-1977 is of a certain historical and analytical Interest, the BBS industrial wage data has to be adjudged an inaccurate guide with regard to the most important segment, from the point of view of that particular experience, of Bangladesh’s large scale industry, viz, the nationalized industry. Empirically, we show, that BBS data show no reflection of the very considerable increases achieved by public-sector workers in 1973/4, that since 1973/4, proportionate annual increments underlying BBS data have mostly been higher than, and extraordinarily more variable than, the matched increments for large industries, and finally that real wage levels derived from BBS data understated, despite higher annual increments, the matched levels in the nationalized industries by between 10% to 17%, depending on the industry type, between 1972/3 and 1976/7.

Inflation has become an endemic feature of today’s world, specially of the developing countries. Two broad schools of thought have emerged regarding the causes of inflation. The structuralists view it as a structural problem, that is, they see it essentially as the inevitable result of trying to push development strategies without making the necessary structural reforms. The monetarists, on the other hand, view inflation as a monetary phenomenon caused by inappropriate monetary and fiscal policies.This paper attempts to analyse the inflationary process in Bangladesh in the light of the structuralist-monetarist controversy. To this end, three models of inflation are constructed and tested : a purely structuralist one, a purely monetarist one, and a hybrid model. The hybrid model performs best, suggesting that at least for Bangladesh, both sets of factors are relevant.

Under the present social set-up in Bangladesh, the role of the Comilla cooperative programme in augmenting farm supply and thus bringing about prosperity to owner farmers has largely dominated over its role in promoting equity. This is reflected in the low participation of poor farmers in the programme as well as in falling real wage to farm workers and fast rising income and wealth gains to land owners due to increase in productivity, rent and price of farm land. Thus, the scope of the Comilla cooperative programme is reduced to that of other Government programmes for modernizing agriculture by strengthening the input supply system through larger private sector participation. Available data do not indicate that the process of concentration of land ownership and polarization among peasantry through land transfer is a specific phenomenon for the areas with Comilla-type cooperative programme. It is rather a concomitant feature of pauperization in Bangladesh peasantry as a whole. Appropriate Government action may be taken to correct the undemocratic functional mechanism of the Comilla cooperative programme to ensure the full-fledged participation of the poor farmers. This may be also supplemented by policies towards agricultural wage and rent reforms in order to ensure a steady growth in the income of farm workers and poor tenants in accordance with changing production possibilities.