Mohammad Yunus, Quazi Shahabuddin, Mustafa K. Mujeri, M. Asaduzzaman, Nazneen Ahmed, Monzur Hossain, Siban Shahana, and Morshed Alam.

    An unresolved paradox in the Bangladesh food economy is the mismatch between estimated demand for and supply of food grains based on official statistics. In this context the present study strives to (i) streamline the supply-side as well as the demand side estimates and analyze the food gap in Bangladesh; (ii) assist the policy makers in early decision making for domestic and international procurement of food grain; and (iii) assist the government in determining the PFDS size and desirable stock of food grains over the months of a year for operating an integrated and effective PFDS.

Food Grains Consumption

    Daily per capita consumption of cereals (rice and wheat) has been estimated at nearly 511 grams, with consumption of rice and wheat at 469 grams and 42 grams respectively. As may be expected, per capita consumption of rice is relatively higher in rural areas than in urban areas, while that of wheat intake is substantially higher in urban areas. The reasons behind higher levels of consumption may be consideration of as many food items made of wheat as possible and the success in capturing consumption of food grains or items made thereof outside home.    While per capita consumption of cereals significantly differs between the poor and the non-poor in rural areas, it does not differ much in the urban areas.

Domestic Food Grains Production and Supply

    The assessments boil down to the fact that the full-count census is the one which needs to be taken as the benchmark subject to the proviso that this has an underestimate of 0.13 percent of area due to the BBS practice of considering only farm households and underestimation of 8.5 percent due to undercounts and non-response as indicated in the Post-Enumeration Check of the Agricultural Census 2008. Given these underestimates, the routine estimate of area based on Annual Estimates each year by the BBS contains an overestimate of around 7.4 percent. It was also found that about 2.5 percent of rice output was overestimated due to inappropriate attribution of yield rates of local and HYV rice. Further, there is on average an overestimate of slightly more than 2 percent between farmers’ reported area and actually measured area. Thus, the total overestimation is about 12 percent.

    As Bangladesh has to depend on estimates of global output and its distribution by countries to plan for imports, one particular issue of interest is which estimates of the several available to use. After a comparison of the FAO and USDA figures it was concluded that it would be prudent to rely more on the USDA figures than the FAO.

Seed, Feed, and Wastages

    It is found that, in the case of rice, total seed, feed and wastages (SFW) is 11.55 percent of gross production and the recommended ratio is 12 percent. Total farm level wastage (excluding seed and feed at the farm level) is 9.65 percent of gross production which is the lowest for large farmers (7.09 percent) followed by 7.93 percent for marginal farmers, 8.91 percent for small farmers, and 10.88 for medium farmers.

    In the case of wheat, total SFW is estimated at 14.82 percent of total production and the recommended ratio is 15 percent. The rest 85 is crushed for making wheat flour. In doing so, wheat equivalent was derived heuristically using a conversion factor of 0.87. This conversion factor assumes that 75 of wheat grain are crushed through compact flour mill with a conversion factor of 80 percent and the rest with chakki with a conversion factor of 99 percent. Thus, about 13 percent of the wheat grain goes out of human consumption into cattle feed as wheat bran (bhushi) making total SFW of wheat about 28.

Projection of Population

    The cohort component method was used for projecting the population. Since population in Bangladesh is experiencing low fertility transitions in recent years, the low variant with NRR equal to 1 by 2021 which corresponds to TFR equal 2.1 in 2021 has been used to project the TFR in different years.

    The projected total population in 2021 is 171.20 million in Bangladesh consisting of 85.39 million males and 85.81 million females. In urban areas, the total population is estimated at 51.40 million of which 26.60 million are males and 25.70 million are females. On the other hand, the total population is 119.80 million in the rural areas, which include 59.79 million males and 60.11 million females.

Private Stocks and Marketed Surplus of Food Grains

    Stock is mainly kept by the growers, which varies from 16 to 43 percent of gross production in different months of the year. Among the private traders, millers in case of rice and the retailers in case of wheat dominate in keeping stock. Growers hold stock of food grains to minimize risk, to sell at a higher price or to meet unforeseen need of the family. More than half of the total rice produced is marketed, a part of which is purchased back by the growers. Thus, a part of the flow of food grains takes place among the growers themselves. The remaining part comes to the market for non-producing households.

Estimates of Food Gap

    The present study reveals that the country was in deficit in rice in recent years, which varies between -2.05 MMT in 2008 and decreased to -0.13 MMT in 2010. These estimates roughly correspond to the historical facts of imports of rice from the rest of the world. Since last fiscal year the domestic production of rice appears to be sufficient to meeting the consumption requirement and the thin surplus is likely to increase to 2.5 MMT in 2016 if current production trends in rice exist. Our projection shows that the country will likely to experience of a thin surplus of 1-2 MMT annually from next fiscal year onward. Since the private sector holds about 2-3 MMT of rice during the lean moths of the years, the ‘surplus’ may remain with the private sector agents as ‘idle stock’ and the country will not likely to be in a position to export rice to the rest of the world soon.

    In contrast, the country is in deficit of wheat by 2 MMT per year. It may be noted that the private sector and the government together imported 2.4 MMT, 3.4 MMT, and 3.8 MMT of wheat during FY 09–FY 11. This is consistent the deficit of wheat derived in the present gap analysis. Since rice is predominant in production of food grains, the country was continuously in deficit of wheat in the past years and will remain so in near future unless technological improvement boosts production in the wake of growing consumption, especially by the urban consumers.

PFDS Distribution, Public Stock, and Procurement Needs

    The study gives PFDS distribution, stock and procurement needs for the next three years, 2012-13, 2013-14 and 2014-15 based on a multi-equation disaggregated model for food sector using monthly data for the 1990-90 to 2009-10 periods. The model results are supplemented by projections using relevant information, especially for those variables which are treated exogenously in the model.

    The combined results provide estimates for distribution needs by major channels (in some cases such as OMS by months), at 2.08, 2.22, and 2.34 MMT of food grains for FY13-FY15, Of these amounts, 1.33-1.47 MMT would be needed in rice and the rest would be in wheat. In order to implement these distribution targets, public stocks needs would be 1.92, 1.96, and 2.01 MMT respectively. These targets for public stocks would be achieved through domestic procurement of 1.13-1.15 MMTS of mainly rice. The rest would be achieved through public and private imports.