ABSTRACT
In recent times the world has witnessed unprecedented volatility in the prices of major staple foods such as rice and wheat. As a net importer of food grains, Bangladesh was seriously affected by the surge in world rice prices that occurred between September 2007 and April 2008, as rice is the dominant food staple accounting for over 90 per cent of total consumption. The domestic price increased by nearly 65 per cent during 2007–2008. This food price inflation led to considerable erosion in the purchasing power of the poor who spend over half of their income on rice, and has threatened to undermine the progress made toward achieving the Millennium Development Goal (MDG) targets on reducing hunger and poverty. Since September 2008 prices have declined and by April 2009 reached a level lower than the cost of production, threatening farmers’ incentives to produce.
