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Scarcity is
the fundamental problem in economies. This issue means that we have to make a
decision about what to produce and how to produce due to the limited resources
(Case and Fair, 2007). In today’s world, food crisis is all over the
world especially in Bangladesh, Ethiopia, Philippines, India and Africa.
The purpose of this blog is to talk about the food crisis in
Bangladesh. Food crisis arises due to the economic, environmental and social
factors such as crop failure, overpopulation and government policy.
Demand and Supply
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In economist view, economy factors are the determinant for
consumers’ purchasing power and the capability for producers to supply goods to
the market. According to Sloman et al (2012), demand is the desired of
something where a person can afford it and have plan to buy it while the supply
is ability of the firm used the resources to produce it, able to generate
profit from the production and has a plan to sell it. Through research, we
realized that total supply of rice is around 33848 and the demand for rice is
around 33000 in Year 2010 (Hussain, 2010).
Shift of Demand Curve
According to Mankiw (2012), there are few determinant of demand in
the articles. Two of the determinants of demand are population and level of
income.
Population is one of the social factors that causing the food
shortage. Increasing population will lead the high rate of clearing the
agriculture land for human settlement. The removing of agriculture land will
indirectly reduce the rice production. This is because less land is provided
for the farmer to grow the crops; hence the supply curve shift toward left
whereas the overcrowding cause the demand curve shift to the right. This
eventually results the shortage arise whereby the quantity demanded, Q2 has
exceeded the quantity supplied, Q1 (Refer diagram 2). For instance, the total
population in Bangladesh is around 139,252,683, thus the demand for rice is
high (Bangladesh Bureau of Stastistic, 2010).
http://www.bbs.gov.bd/WebTestApplication/userfiles/Image/BBS/Socio_Economic.pdf
However, the rice production is around 32300 only (Hussain, 2010).
However, the rice production is around 32300 only (Hussain, 2010).
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Grain%20and%20Feed%20Annual_Dhaka_Bangladesh_2-23-2010.pdf.
Shift of Demand Curve
This shows that the
quantity supplied of rice is not enough to afford all the citizens in
Bangladesh. As a result, the shortage of rice is arising whereby the excess
demand of rice is over the quantity supplied.
Level of Income
Apart from that, another determinant that will shift the demand
curve either left or right is the level of income. When there is rising
unemployment rate, more people are losing their job and indirectly affected
their income. When the people’s income level decrease, the consumer’s
purchasing power will decrease. As a result, the demand curve will shift to the
left. Based on the diagram 3, the shifting demand curve toward left will cause
the quantity demanded decrease from Qe to Q1 (Refer diagram 2).
Through research, I found out that there
is nearly 60% of households will suffer famine due to the insufficient income.
They have insufficient income because the unemployment rate in Bangladesh has
increased from 4.2 percent to 5.1 percent, meaning nearly 2.7 million of people
are unemployed (Irin, 2010).
From my point of view, government in Bangladesh should control the rate of unemployment in order to prevent further declining and reduce the poverty in the country. If this phenomenon continues decreasing, government should come out some alternative effective plan to reduce the number of people suffer from hunger in Bangladesh. For instance, government may provide food subsidy to reduce the food price, so the poor people able to afford it.
Shift of Supply Curve
http://www.irinnews.org/report/89920/bangladesh-unemployment-food-prices-spur-growing-hunger
Brazil
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http://www.oxfam.org/sites/www.oxfam.org/files/cs-fighting-hunger-brazil-090611-en.pdf
Comparative Analysis
Subsidy
There are also determinants of supply besides determinant of
demand. They are cost of production and state of nature which will contribute
to the factor of food shortage in Bangladesh (Mankiw, 2012).
Cost of production
Cost of production
When the cost of
production rises, most of the farmer will cut down cost by using
traditional agriculture infrastructure instead of modern agriculture
infrastructure. This is to reduce the production of rice to the market. When
the cost of production is high, the supply curve will shift toward left. This
indirectly result the equilibrium price increase from Pe to P1 and equilibrium
quantity decrease from Qe to Q1 as the consumers only move along the demand
curve towards the higher price, meaning the demand curve has not shifted.
Hence, the shortage will occur. (Refer diagram 3)
State of Nature
State of Nature
Another determinant that will cause the supply curve shift toward
left is the state of nature.
State of nature like drought and flood is quite common occur in Bangladesh.
When natural disaster occur, the production will decrease due to the crop yield
destroy by the soil that lack of water and nutrients (refer diagram 1).
According to the report released in May, rice production in Bangladesh will
reduce by 80 million ton by 2050 due to the natural disaster (Irin, 2010).
From my point of view,
when the rice production is reduced by the drought or flood, it is definitely
unable to afford all the citizens in Bangladesh. As a result, serious food
shortage problem will arise and many people will suffer from hunger.
Effect of rice shortage in Bangladesh
Effect of rice shortage in Bangladesh
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Malnutrition |
There will have some short-term or long-term impact of rice
shortage to the citizens in Bangladesh. In short run, the impact of
insufficient rice production is the children, women and elderly people may
suffer malnutrition. When the people suffer malnutrition, many people may lost
concentration and have less energy to carry out their daily life. Besides that,
lack of nutrients like minerals and vitamins may also cause the stunt growth
and underweight on children. The malnutrition has become underlying
factor that contribute to children death. According to the research, we know
that approximately 30 million of women and 12 million of below five years old
children are suffered from micronutrient malnutrition(Irin,2010).http://www.irinnews.org/report/89920/bangladesh-unemployment-food-prices-spur-growing-hunger More than 50% of
children died in Bangladesh are due to the malnutrition (Barrow, 2009).
However in
long run, the impact of rice shortage will increase global price of food due to
the supply and demand forces. This is because some illegal seller will increase
the price of rice to reduce the problem of rice shortage.
On the other hand, the country like Brazil
also face hunger problem due to the food scare previously but recently Brazil
very successful in fighting against the hunger by organizing ‘Zero Hunger
Program’. The purpose of this program is to improve health care, educate the
participants and provide work opportunity to the poor people so they can
increase their level of income. For instance the Bolsa Familia under the Zero
Hunger program has benefit around 45 million of poor people by providing basic
income to 11.1 million of household families which enabling them to earn up
almost US$60.00 per capita per month. Due to the basic income provided, most of
the poor people’s purchasing power has increased (Kilpatrick, 2010). Hence, the
demand for rice will increase.
Comparative Analysis
From my point of view, Bangladesh has
a serious food shortage and hunger problem as compared to Brazil. This is because Bangladesh does not come
out some effective plan like Brazil to reduce the poverty and hunger, so the
food shortage problem can’t be solve and always give greater impact on citizens
during natural disaster and economic slowdown. Therefore, Bangladesh government
should come out some effective solution to tackle it or other developing
countries should provide some aids to Bangladesh. For instance, Brazil
government can help the poor people in Bangladesh by donating 7,000 tons of
rice (World Food Programme, 2012).
http://www.wfp.org/news/news-release/wfp-and-brazil-collaborate-help-poorest-bangladesh-prepare-natural-disasters-and-c
The action of Brazil
government actually can help Bangladesh citizens especially the poorest to
cope with the impact of climatic changes and natural disaster.
Furthermore, the rich people in other country who desire to have a child, they
may try to adopt or sponsor a child in Bangladesh. So that, the child in
Bangladesh can growth well and be well-educated people. On the same time, the
plan of adopting may reduce the rate of children famine due to the food
shortage.
Subsidy
The graph below
show the effect of subsidy provided
Other than that, I will suggest government in Bangladesh provide
subsidy to the farmer and also focus more on the development of agriculture
sector. Subsidy can be defined as the direct aids or direct income
support provided by the government (Sloman et al, 2012).
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Subsidy provided to farmer |
With the subsidy
provide, the farmer income may be increased or stabilized. Subsidy provided
should be in the form of subsidy per unit of output (Sloman et al, 2012). This
kind of system may encourage the farmer to growth more paddies. Based on the
diagram below, we know that the farmers desire to reach the price of P2. At P2,
they will increase the production from Qe to Q1, this indirectly force the
market price down to P1. The subsidy that has to be burden by the government is
the difference between P2 and P1.(refer diagram 4)
Conclusion
In conclusion, food shortage problem like rice not only can be solved
through the helping of others developing countries but also can start from own
government effort. Government can provide subsidy to encourage the farmers
produce more and try to
forgone some sector of industry like automobile and fashion to increase the
opportunity cost of the development of agriculture industry.
(1627 words)
Video Related to Bangladesh Food Shortage
Video Related to Bangladesh Food Shortage
