Why measures fail to halt price hike

The fixation of prices for essential commodities like eggs and chicken by the interim government has brought little relief to consumers, as these items cannot be purchased at the government-fixed prices anywhere in the city markets. The prices of eggs, instead of declining, have increased by up to Tk 10 per dozen following the price control measures. Under the previous regime, it was routine for the government to fix prices for certain essential goods as part of its price control measures, but traders routinely defied these regulations. This time, however, consumers expected the interim government to strictly enforce the fixed prices, yet they have been let down once again. The question arises: why do the authorities set prices if they cannot enforce them? First, it is the groundwork that has to be done meticulously before fixing commodity prices so that no one dares violate those.

On September 15, the government set maximum retail prices (MRP) for eggs and poultry in an attempt to offer some relief to the public. Eggs, for instance, were meant to retail at Tk 11.87 each but are now sold at as high as Tk 14 in some markets. Similarly, Sonali and broiler chickens, cheap sources of protein, are being sold far above the government-fixed rates. Beyond eggs and chicken, vegetables have also risen by Tk 5-10 per kilogram within a week. Rice prices, which increased by Tk 4-6 per kilogram a few weeks ago, have also remained stubbornly high, further straining household budgets. The fish market, too, offers no respite, with prices of fish like rui (carp), shrimp, and pangas (silver catfish) increasing by Tk 30-50 per kilogram.

As a matter of fact, cosmetic solutions like setting maximum retail prices without addressing the root causes of the problem will do little to alleviate the suffering of the consumers. One of the primary reasons for the failure of the current price control system is its narrow focus on the retail market, neglecting the role of middlemen. These intermediaries, who control the supply chain from farm to market, often manipulate prices to their advantage before goods even reach the wholesale market. This unchecked control enables them to inflate prices, contributing to the relentless rise in costs for consumers. Addressing this issue requires greater transparency and oversight throughout the supply chain. Additionally, the lack of authentic and reliable data on the supply and demand of commodities exacerbates the problem. Without accurate data, market interventions are based on guesswork, which lead to inefficiencies. There is a pressing need for verifiable information on the annual production of various edible commodities and their actual demands to ensure that price controls are realistic and effective.

The government's efforts must go beyond superficial measures and focus on systemic reforms. Reduction of production costs, maintenance of transparency in the supply chain, elimination of extortion, and improvement in market monitoring are crucial to stabilising prices. Additionally, the authorities need to increase the supply of essential commodities at lower prices by reducing import duties on these goods. The current supply of goods marketed through the Trading Corporation of Bangladesh (TCB) is woefully insufficient and has failed to make any meaningful impact on the market. Effective market regulation requires a scientific approach. Ointment should be applied where it hurts. Strategic, data-driven methods should guide the government's actions in stabilising prices.