Food Assistance Programs In Bangladesh

About the SASPR Working Paper

The purpose of the SASPR Working Paper Series is to provide a quick outlet for sharing more broadly research/analysis of issues related to development in South Asia. Although the primary source of such research/analysis in SASPR staff, other contributors are most welcome to use this outlet for rapid publication of their research that is relevant to South Asia’s development. The papers are informal in nature and basically represent views/analysis of the concerned author(s). All papers submitted for publication are sent for an outside review to assure quality. I provide only a very light editorial touch. For enquiries about submission of papers for publication in the series or for copies of published papers, please contact Naomi Dass (telephone number 202-458-0335).

Sadiq Ahmed

Sector Director

South Asia Poverty Reduction and Economic Management

World Bank, Washington D.C.

Table of Contents

1.Introduction

1. 
   In a low-income country like Bangladesh, mobilizing sufficient resources to ensure adequate food intake for all is a daunting undertaking. Fortunately, the country has one of the largest systems of targeted food transfer programs in the world, testament to the commitment of successive governments in Bangladesh to the cause of food security and to ensuring that scarcities such as the disastrous famine of 1974 never occur again. Since 1993-94, over 1 million metric tons of food grains have been allocated to these programs each year (Figure 1 and Table A1).
   

2. 
   All these programs are supplied by the non-sale (“non-monetized”) arm of the Government’s Public Food Distribution System (PFDS), one of the largest distribution systems of its kind in the world. There has been a welcome improvement in targeting, with some poorly targeted subsidized PFDS ration channels cut back in recent years and others abolished. Almost 80 percent of the total food grains channeled through the PFDS are now directed towards these programs compared with 30 percent in the early 1980s.² In fiscal year 1999, in response to the floods that hit Bangladesh, the food provided by these programs was increased to about 1.8 million tons. At a conservative estimate this is a transfer of more than US$300 million, a substantial sum by any standard. Aggregate resource transfers under the targeted food assistance programs—not counting grain storage and distribution costs, the associated administrative expenses of the concerned line agencies, etc.—was more than 120 percent of the government’s recurrent expenditure on Primary Education, or nearly 80 percent of the entire budget of the Ministry of Health and Family Welfare during that year. Hence a closer examination, both of how effective these programs are in reaching their intended beneficiaries as well as of their development impact, is very important from a policy perspective.
   

3. 
   As Bangladesh has a wide array of targeted food assistance programs, each with its own specific objectives and target populations, Section 2 begins by providing a brief description of the main programs currently in operation in the country, outlines the main objectives of each program and its implementation arrangements, as well as lists the criteria and the process followed for selecting beneficiaries. Given the program objectives and selection criteria, Section 3 examines the issue of whether there is scope for further improvement in allocation of resources across different regions. In Section 4, data from the 2000 Household Income and Expenditure Survey (HIES) are used to assess the targeting effectiveness of three of the food assistance programs: the Vulnerable Group Development, the Vulnerable Group Feeding, and the Food for Education Program. In addition to average participation rates, this section also presents estimates of the marginal incidence of each program – i.e. the impact at the margin of an expansion or contraction in the scale of the program. The question of how pro-poor is the spending on these programs is intimately linked to what share of the budgeted food grains actually reaches beneficiaries. Therefore, in Section 5, we attempt to quantify the extent of leakage of resources from the system. Finally, as redistributing resources to the poor is only one of the many objectives of these programs, in Section 6 we summarize some of the key findings of other studies assessing the developmental impact of these programs. Section 7 concludes by summarizing the main findings, and outlining select areas where further analytic work could potentially yield high dividends.