An Assignment on Term paper summary

Submitted to: Mr. Dr. Sheikh Abu Taher Lecturer & Course Instructor Microeconomics

Submitted by: Name Nusrat Rahman Mst. Sabrina Rahman Rowshonara Akter Akhi Md. Khaled Hossain Zohura Rahman Student ID 1287 1291 1297 1330 2519

BBA Program (3rd Batch)

05 Aug, 2012 Savar, Dhaka-1342

Department of Finance & Banking Jahangirnagar University

Economic Analysis of Rice Production and Consumption in Bangladesh

Rice is a staple food for over half of the world's population. Rice accounts for over 20 percent of global calorie intake. Over 90 percent of the worlds rice is produced and consumed in 6 countries of Asia- China, India, Indonesia, Bangladesh, Vietnam and Japan. Rice is also a wage commodity for workers in the cash crop or non-agricultural sectors. In the context of Bangladesh rice is the single most strategic commodity. It is not only because to feed 150 million people but also its importance in economic contribution, employment, poverty alleviation and politics. Rice alone contributes about 70% of agriculture GDP and 50% of the total agricultural valued added in Bangladesh. Besides, rice production continues to be one of the important sources of livelihood. 30% of the countrys 54 million workforce directly engaged in cropping. It provides estimated 76% of the people's average calorie intake and 66% of protein intake. Price of rice is also an important economic and political factor. As 31% of the population lives below the poverty line increase in rice price would push them into severe hardship. On the other hand farmers have to face economic losses if they dont get proper price of the commodity. So, in addition to ensure food security, one of the major economic challenges for any Government in Bangladesh is to maintain proper price of rice that would serve the purpose of both producers and consumers. Global Rice Production & Trade: Rice is the major food item for much of the population in Asia, as well as in Latin America and the Caribbean and in Africa; it is central to the food security of over half the world population. According to FAO estimate World production of rice has risen steadily from about 200 million tons in 1960 to over 678 million tons in 2009. The three largest producers of rice in 2009 were China (197 million tons), India (131 million tons), and Indonesia (64 million tons). Bangladesh ranked 4th in world rice production. Of the total rice produced only about 56% is traded in international market. In economic terms, the global rice trade was a small fraction of 1% of world mercantile trade. Many countries consider rice as a strategic food staple, and various governments subject its trade to a wide range of controls and interventions. While there are

numerous importers of rice, the exporters of rice are limited. Just five countries Thailand, Vietnam, China, the United States and India. Rice Production in Bangladesh: Geographical, climatic condition and large labor force are highly favorable for rice production in Bangladesh. Rice Production stood 34.25 million tons in 2011 which was only 11 million tons in 1972. Rice production tripled in 4 decades while population growth doubled. Rice acreage in the country has grown from about 9 million hectares in 1972 to about 12 million hectares in 2011. This significant increase in rice production has been possible largely due to the adoption of modern rice varieties, use of technologies, irrigation and wide use of fertilizer and insecticides. Rice production in Bangladesh mainly occurs during three seasons: Aus (harvested in July-Aug); Aman (harvested in Nov-Jan) and Boro (harvested in Apr-June). In FY 2011 production of Aus, Aman and Boro was 2.13, 12.79 and 18.61 million tons. Rice Consumption in Bangladesh: Aggregate consumption of rice depends on size of the population, structure of demography, income level, substitute crops, culture and taste. Historically people lives on Bangladesh. According to the Bangladesh Bureau of Statistics (BBS), Countrys 150 million people consume over 35 million tons of rice a year, with domestic production making up more than 95 per cent of the intake. According to BBS survey per capita consumption of the main staple was 416 gram in 2010 while it was 439.7 gram in 2005. Growth in income level, urbanization and migration to cities from rural areas, increased consumption of wheat, and availability of alternative foods contributed decline in per capita rice consumption. Although per capita consumption is declining aggregate demand for rice will continue to increase due to growth in population. Although Bangladesh is close to self sufficiency in rice production, there is no room for complacent. To meet the demand of growing population, rice production will be needed to increase continuously. It will be a very tough job amid declining arable land, hostile climate change and environmental degradation. Proper policy adoption and implementation of that are extremely necessary by both public and private sector to improve crop yield, preservation of arable land while keeping the quality of the soil intact.

Note:
We have collected all information from Financial express, Daily star, Wikipedia, Bangladesh Bureau of statistics, Bangladesh Economic review 2012(Published by Ministry of Finance), Bangladesh Rice Research Institute (BIRRI) and our basic knowledge on selected topic.