Commerce Minister Khandakar Abdul Muktadir on Thursday said the government is prioritising reducing logistics costs, describing them as one of the biggest obstacles to bringing down Bangladesh's persistently high food inflation.
"While logistics costs account for around 10 per cent of GDP in many countries, they stand at 16 per cent in Bangladesh. If we can rein in logistics costs, food inflation can be brought down," the commerce minister said at an event on Bangladesh's food chain, organised by the Centre for Policy Dialogue (CPD) at the BRAC Centre in the capital.
Referring to inflation, which has remained above 9 per cent since the post-Covid period, Muktadir said many countries managed to bring it under control about six months ago, but Bangladesh has failed to do so because of the complexity of its market system.
"Our market system is quite complex. Alongside logistics costs, we need to bring down input costs and unaccountable financial transactions, such as extortion, as much as possible," he said.
The minister said every government in Bangladesh has focused on the agriculture sector, but a lack of coordination has limited the benefits.
"Since the famine of 1974, every government in Bangladesh has received the same message that staying in power requires paying attention to the agriculture sector. Since then, almost every government has worked for farmers. But due to a lack of coordination, farmers have not always received the maximum benefit," he said.
Muktadir said farmers often suffer because they do not receive accurate market information.
"A farmer who cultivated potatoes extensively over the past few years and got a good yield but did not receive a fair price, why does he still grow potatoes in excess of demand the following year and incur losses? This is a question. The major reason is that market information does not reach the farmer. He cannot understand what would be profitable for him to cultivate," he said.
The minister also said Bangladesh's agriculture sector has seen little scientific and planned development, with most agricultural activities still carried out in a "natural way", stressing the need to bring the sector under a proper plan.
Muktadir emphasised the need to improve farmers' living standards and bring the entire market system under an integrated plan.
CPD Executive Director Fahmida Khatun presided over the event.