The Ministry of Food has requested an additional 41.5 billion taka for subsidies on food products and rice imports in the revised budget for the fiscal year 2024-25.

Due to the rise in the prices of essential goods in the market, low-income people are increasingly purchasing rice and flour from the government's Open Market Sale (OMS) food distribution system. The Ministry of Food has projected that the food subsidy in the budget will increase by 75% compared to the original allocation.

According to Ministry of Food sources, 20.04 billion taka was originally allocated in the budget for the subsidy on food grain sales under the OMS system. However, the demand for rice and flour under the OMS system has increased this year compared to last year. Therefore, the Ministry has proposed raising the subsidy amount to 35.06 billion taka in the revised budget.

Similarly, the food-friendly program, which was allocated 32.58 billion taka in the original budget, has now been proposed to increase to 32.90 billion taka.

As a result, the total food subsidy budget will rise to 67.96 billion taka, an increase of 15.32 billion taka over the original allocation.

A senior official from the Ministry of Food, speaking on the condition of anonymity, said, "The allocation given to OMS dealers is double the demand. Every day, customers are returning empty-handed from OMS shops or trucks without rice or flour. Therefore, additional supplies are needed, leading to higher subsidies."

The official added, "A subsidy of more than 20 taka per kilogram of rice is required."

Proposal to Double Rice Import Allocation

The Ministry of Food has proposed doubling the allocation for rice imports in the revised budget. The original allocation for this was 28.98 billion taka. The Ministry has now proposed raising this to 62.70 billion taka.

This includes a request for 4.38 billion taka to pay off the previous year's import liabilities.

However, the Ministry has proposed reducing the allocation for wheat imports, as costs in this area are expected to decrease. The original allocation for wheat imports was 28.98 billion taka, and the revised budget proposes reducing this amount to 21.44 billion taka.

According to Ministry data, as of January 5, the government’s food stock includes 792,560 tons of rice and 417,917 tons of wheat.

According to the government’s procurement data, as of January 2, 249,472 tons of rice have been collected domestically.

A Ministry official said, "It will not be possible to collect rice domestically as per the target. To ensure safe stock, rice must be imported from international markets. Given the increase in rice prices globally and the rise in the exchange rate of the dollar, additional allocation has been requested for this sector."

Rising Demand for Subsidized Food Products

The Department of Food is responsible for implementing the OMS and food-friendly programs.

According to department sources, rice is being sold at 30 taka per kilogram and flour at 24 taka per kilogram under OMS. Each buyer receives 5 kg of rice and flour.

OMS activities are conducted in the Dhaka metropolitan area, the labor-intensive districts of Dhaka, Narayanganj, Gazipur, and Narsingdi, 10 city corporations, and all district towns and municipalities.

There are 912 total OMS sales centers, including trucks and shops.

Apart from the cities, the food-friendly program is available for 5 million families at the union level across the country. This program operates from September to November and March to April. Under this program, each family receives 30 kg of rice at the rate of 15 taka per kilogram.

This fiscal year, 740,000 tons of rice have been allocated for the program.

According to the Department of Food’s report on food grain distribution, from July 1 to December 26 of this fiscal year, 370,226 tons of rice and 207,591 tons of wheat, a total of 577,817 tons of food grains, have been sold through OMS.

Meanwhile, in the context of high inflation and no significant increase in income, low-income people in urban areas are flocking to OMS sales points to buy subsidized food. However, the government is unable to supply as much as the demand requires.

According to the Bangladesh Bureau of Statistics, food inflation in the country was 13.80% in November. In contrast, the wage rate increased by 8.10% in the same month.