Borrowing money to eat undermines right to food

The latest report by the Bangladesh Bureau of Statistics (BBS) titled 'Food Security Statistics 2023' does not paint a bright picture. It estimates that 25.5 per cent of households in Bangladesh borrow money to buy daily food items since their current incomes are insufficient to cover food costs. That figure is for the urban populace. Things get dicier as the focus is shifted from urban centres to rural areas. According to a report published in this paper states that "the incidence of taking loans is higher in rural areas at 27.8 per cent."

From a closer scrutiny of the study, the picture becomes clearer to show how bad the situation is for people who have to take loans to feed their dependants. The data point to the fact that the monthly household food cost (average) is Tk12,053 at the national level. That figure goes up to Tk 14,125 when  residents of city corporations areas are concerned and slightly lower for other urban areas (Tk 11,890) and in rural areas, the average cost stands at Tk 11,718.

So where is the money coming from? As per the study, nearly seven out 10 people are taking loans from non-government organisations (NGOs), 14.4 per cent from local lenders (commonly known as 'loan sharks'), about 10.9 per cent from relatives, a paltry 3.50 per cent comes from banks and the rest 30 per cent from various sources.Needless to say, a sad state of affairs when people are having to resort to taking high-interest, short-term loans from non-banking channels to cover their 'right to food'. Bangladesh is not a welfare state per se. Although, tall claims have been made about bringing nearly 10 million people under the safety net programmes whereby essential foods are supposed to be distributed amongst the most vulnerable in society, the country has more candidates for similar food assistance.

Going back to the official data, most of the loan money is spent on daily rice purchase, which is the basic staple for Bangladeshis. As one cannot simply survive on rice, a rural household is estimated to be spending (monthly average) Tk 1,737 on fish. In city corporation areas, the expenditures for the average urban household is a mixed bag: Rice costs more at Tk2,822 but fish costs less at Tk1,637. Now why is that? Traders state that the urban markets are more concentrated serving much larger pockets of population with better infrastructure. These are some of the reasons for greater interest in selling fish in urban centers rather than in rural areas.

But at the end of the day, people are suffering and they are resorting desperately to taking loans from sources that are simply not sustainable. The repayment structures are not kind to those who default on loans. These are non-traditional sources of finances that are backed up either by institutional law enforcement or, as in the case of loan sharks, repayment is ensured, courtesy of muscle power. When these people run out of avenues of taking loans from all these various sources, they have no choice but to become internal migrants totally uprooted from their homes ending up in urban slums.

There is no way to ignore the plight of millions of people. Their numbers are growing according to official figures. One out of four citizens is taking loans which, in all probability, will not be repaid. This means tens of millions of people are going to move down the social ladder and below the poverty line. This has multiple repercussions for the economy. Workers in factories forced to move away from industrial belts, marginal farmers forfeiting their meager land holdings to make repayments on loans taken - the list goes on.

"Since 21.92 per cent households experienced moderate-to-severe food insecurity in 2023 and some 0.87 per cent of them are facing severe food insecurity, it implies a high probability of reduced food intake. It can lead to severe forms of under-nutrition", observes the BBS report. Its natural consequence is malnutrition which will take its toll on the elderly and children in households, which in turn will stretch limited public health expenditure even further.

Isn't it time for policymakers to wake up and smell the coffee? Instead of giving useless advice on what to eat or not eat, why doesn't the State do something about fixing the systemic problems that have broken the normal supply chain of food in the country? If that is not possible, perhaps it is time to introduce some form of food support for those millions of people desperately in need of basic nutrition. Something has to be done and whatever it is, it has to be done fast at the policy level.

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