• 1.OVERWIEW
• 2. SOCIO-ECONOMIC CONTEXT
  • 2.1 The Economy
  • 2.2 Agriculture in the National Economy
• 3. CEREAL PRODUCTION IN 1998/99
  • 3.1 The 1998 floods
  • 3.2 Crop Production Forecast
• 4. Food Supply Situation
  • 4.1 Rice Prices and Access to Food
  • 4.2 National Food Balances
  • 4.3 Food Assistance Needs

MISSION HIGHLIGHTS Unprecedented floods from July to September caused around 2.2 million tonnes of rice production losses. Monsoon rice production (Aus and Aman) in 1998 will be 14 percent and 20 percent lower than 1997 and 1996 (a normal year) respectively. An increase in the winter-sown Boro rice crop is expected to partly offset the flood losses. The 1998/99 paddy output is forecast at 26.3 million tonnes (17.6 million tonnes on milled basis), some 7 percent and 5 percent below 1997/98 and 1996/97 respectively. Wheat area and yields are expected to increase during this coming winter, with a 10 percent increase in production forecast. Cereal import requirement in 1998/99 is estimated at about 4 million tonnes, with rice and wheat accounting for 1.6 and 2.4 million tonnes respectively. Commercial imports are estimated at 2.5 million tonnes, comprising 1 million tonnes of government purchases and 1.5 million tonnes imported by the private sector. International assistance is required to import the balance of 1.5 million tonnes and to rehabilitate agriculture for the Boro season.

1.OVERWIEW

During the first ten days of July 1998, the first warnings of possible floods were received from Bangladesh. As a result of exceptionally heavy rains in the basin areas of the rivers Brahmaputra, Ganges and Meghna, water levels were rising rapidly in the downstream flood plain of Bangladesh. During the next two months three major floods occurred and about 50 percent of the country was under water for periods of up to 67 days, at depths of up to three metres. The Aus rice crop harvest was interrupted, the planting of Aman crops was delayed and, in some areas, was never completed. Devastation was caused, not only to cropped areas, but also to rural people, their homes and their livestock. When the water receded in late September and some degree of normal communication was restored, it was clearly essential to assess the impact of the floods on food production and incomes in this low-income food-deficit country. An FAO/WFP mission was rapidly dispatched to assess the food supply situation and forecast food production, import requirements and food aid needs for 1998/99.

The Mission was joined by 11 local consultants and two FAO local staff who participated in the fieldwork. The mission was funded by UNDP and considerable assistance was received from staff of the country offices of FAO, WFP and UNDP. Lengthy discussions were held with the Ministry of Food (MOF), the Ministry of Agriculture (MOA), the Bangladesh Bureau of Statistics (BBS) and a number of donor representatives and NGOs.

The fieldwork extended over one week with visits to 40 of Bangladesh's 64 districts. For the 24 districts not visited, crop estimates were made as a desk exercise using available statistics and knowledge of the local consultants. In order to identify particular locations and people facing food shortages, four WFP local staff visited 20 Districts affected by the floods and held discussions with vulnerable groups and with local government officials administering the new Vulnerable Group Feeding (VGF) programme.

The Mission forecasts 1998/99 total rice production at 17.55 million tonnes (on milled basis), some 1.3 million tonnes (7 percent) less than last year and 1996/97. Wheat production in 1999 is forecast to rise by 10 percent to 1.98 million tonnes, compared with 1998, and 36 percent more than in 1997. Thus, total cereal production (including milled rice) is forecast at 19.5 million tonnes, down by 1.1 million tonnes (5 percent) on last year and 0.8 million tonnes (4 percent) less than two years ago. The average rice yield is slightly higher because of good expectations for the coming Boro crop.

For Aus and Aman crops together, production is down 1.5 million tonnes (14 percent) on last year or 20 percent less than 1996 (a normal year). This is wholly due to a loss of 1 million hectares of harvestable crop mainly as a direct result of the floods. Although the Mission did not attempt to estimate independently the flood-related crop losses (rather, concentrating on forecasting production), the difference in production between this year and two years ago gives an indication of the flood losses i.e. a loss of 2.2 million tonnes of Aus and Aman rice. The MOA official estimate of losses was 2 million tonnes at late October.

The food supply situation resulting from losses in Aus and Aman seasons is extremely serious in the flood-affected areas. For the six months to the end of 1998, the national deficit between net production and consumption requirement is 2.3 million tonnes or 22 percent of the requirement. But in flood-affected areas, the situation is much worse.

For the second half of the marketing year (January to June 1999), the deficit is expected to be smaller. Prospects for Boro rice and wheat are generally favourable. There are strong incentives for farmers to plant larger areas and to manage the crop more effectively. In addition, siltation in some areas will improve fertility, and the costs of pumping for irrigation will be reduced due to the high water table and replenished aquifers resulting from both floods and heavy October precipitation. The Mission forecasts a tentative production of 8.4 million tonnes of Boro rice from 3.0 million hectares (3 and 5 percent up on last year respectively, and 12 and 9 percent up on 1996). For wheat, the forecast of 2.0 million tonnes is 10 percent higher than last year, mainly from an 8 percent increase in area planted.

These forecasts for the winter crops assume normal weather and adequate supply of inputs. A review of the outturn of the winter crops will be necessary to firm up the estimates. Based on these forecasts, the deficit (between net production and consumption requirements) for the second half of the marketing year will be 1.3 million tonnes. The resulting deficit for the full marketing year to June 1999 will, therefore, amout to or 3.6 million tonnes. Against this cereal deficit, the Government is planning to import 1.0 million tonnes commercially, food aid pledges amount to 1.12 million tonnes, and the Mission estimates private sector imports at 1.5 million tonnes for the year. Import tariffs have been removed and substantial quantities of rice are now being imported from India by grain traders. This, and the open market sales by Government, are compensating for the current very low levels of domestic stocks. Moreover, prices, although high, have only seen a rather modest rise (15-20 percent) since the floods. The Mission expects that prices will remain fairly stable as the Aman harvest gets underway in December.

Emergency Food Assistance must target all areas affected by the floods and no distinction should be made between the directly and indirectly affected population. The frequency of food aid distribution intervals will need to be increased. It is also important that the major part of this food aid - which predominantly will be provided as wheat - be distributed speedily to avoid further asset depletion and to reduce possible negative impacts on markets.

After the immediate emergency food needs for direct consumption, the predominant role of emergency food assistance will be to assist vulnerable households in order to allow them to rebuild their assets and to invest in future income generating activities.

2. SOCIO-ECONOMIC CONTEXT

2.1 The Economy

Bangladesh is one of the most densely populated countries in the world, with 127 million people in late 1998 living on 148 thousand square km. Most of the country lies within the broad alluvial delta formed by the confluence of the rivers Meghna, Ganges and Brahmaputra. The terrain is level, low-lying and subject to annual flooding. Bangladesh receives the drainage from an area twelve times its size. The climate is tropical monsoonal with 80 percent of its heavy rainfall occurring between late May and mid-October. Its agriculture is relatively productive with rice dominating crop production, grown in three distinct seasons (two rainfed and one irrigated).

Population growth is currently estimated at 1.8 percent per annum and the country has a structural food deficit of around 1.5 million tonnes of cereals. GDP for 1996/97 was US$ 259 per caput, some 25 per cent below the figure for India and one of the lowest in south Asia. Annual GDP growth has been between four and six percent during the past seven years, above population growth, but poverty remains one of the country's most pressing problems. According to the World Bank's 1998 Poverty Assessment, poverty incidence has fallen from 43 percent in 1991/2 to 36 percent in 1995/6 but still remains unacceptably high. In rural areas, which account for 80 percent of the population, poverty rates are even higher. Economic growth for financial year 1998 was forecast at 5.5 percent in May 1998, which may be revised down due to the damage caused by the floods.

The economy is predominantly agricultural, accounting for 32 percent of GDP and 63 percent of employment but the industrial sector has been expanding, particularly cotton, leather and food processing and paper production. The garment and knitwear sectors have been growing particularly strongly in the last 2 years.

Although the Government of Bangladesh (GOB) has adopted a policy of progressive liberalisation (a Structural Adjustment Programme has been in place since the late 1980s), privatisation has been slow and losses by state-owned enterprises are a drain on the Government's already deficit budget (expected at a deficit of US$ 1.7 billion for FY98). Domestic inflation targets have largely been met in recent years with consumer inflation at 3.3 percent annually in 1992-96. Since food accounts for nearly two-thirds of the index, price rises for food during the last year have pushed the annual rate of inflation beyond the Government's target to around 10 percent.

Bangladesh's export growth rates have recently been high although this is largely based on the expansion of the garment and knitwear industries. Other export-earning sectors (jute, leather and frozen foods) have been static. Imports have been rising only slowly, partly assisted by self-sufficiency in gas, the low petroleum price and by widespread currency devaluation in east Asia. A current account surplus (of some US$ 80 million) was recorded in the first half of 1998. The annual trade balance for 1996/97 has been provisionally estimated at a deficit of US$ 2.7 billion (compared to US$ 3 billion the previous year). This translates to a current account deficit of US$ 0.9 billion after adjustments including substantial remittances from workers abroad. Reserves are generally considered inadequate bearing in mind the vulnerability of the economy to external shocks. The taka has been subject to small but frequent devaluations but on the whole much less than by many of Bangladesh's trading partners during the past year. In fact, the country's economy has so far suffered relatively little from the world economic slowdown. New foreign investment in the country's natural gas sector earlier this year was giving rise to some confidence in the medium-term prospects for the economy.

However, this modest optimism occurred before the floods devastated considerable areas of the country between early July and late September 1998. The vitally important agriculture sector has been directly affected through damage to both the Aus and Aman rice crops, to monsoonal horticulture and some of the rural infrastructure in flood-affected areas. Employment has temporarily reduced, and major costs for rehabilitation and increased food imports will be borne by government and by the affected population. The impact on the economy is difficult to forecast but reduced agricultural production will directly affect national output, will have a multiplier effect on other sectors, and increased public spending will put further pressure on the Government's budget. External budgetary assistance is currently being mobilised to ease the burden of the economic effects of the floods.

Bangladesh is rated a moderately indebted, low-income country. Its debt-GDP ratio last year was slightly above 50 percent, but 90 percent of the debt is official (bilateral and multilateral) and on highly concessional terms. Debt service payments (about US$ 600 million in 1997) accounted for 11 percent of export earnings last year.

2.2 Agriculture in the National Economy

Since agriculture is by far the largest sector, its performance has a direct bearing on the economy as a whole. In favourable agricultural years, the economy expands and when agriculture is depressed or suffers natural shocks (floods, cyclones), the overall economy contracts, food imports increase (with balance of payments consequences) and the government budget deficit tends to increase.

Over the medium term, agriculture has made steady progress. Cropping intensity has risen to 175 percent and rice production has nearly doubled since independence in 1971. The main sources of this growth in production are: the rapid increase in the adoption of shallow tubewells, the use of high-yielding seed varieties (from 11 to 55 percent of the area during the past 25 years), and an increase in fertiliser consumption (doubling in 20 years). Wheat, potatoes and vegetables have also been increased although not as much as rice. Agricultural exports of primary products are around 10 per cent of all exports but if account is taken of the export of agriculturally based intermediate and industrial products (leather, jute), the contribution to exports rises to above 20 percent. However, agriculture's contribution to the national food supply is its most important role. Rice production has expanded rapidly over time, with accompanying reduction in food imports, especially food aid.

Despite these improvements, food insecurity is of critical concern. More than half of the population subsist below the poverty line (consuming less than 2122 kcal/cap/day), and child and maternal malnutrition are widespread.

The cropped area in 1996 was 13.5 million hectares. Double cropping is practised on 57 percent of the land and the triple cropped area is 21 percent. The average cropping intensity is 175 percent, while irrigation facilities are present on 44 percent of cultivated area. Rice occupies 73 percent of the total cropped area, followed by pulses (5 percent), wheat and other cereals (5 percent), jute and other fibre crops (4 percent), oilseeds (4 percent), vegetables and fruits (3 percent), sugarcane and other cash crops (2 percent).

On the basis of different climate and soil conditions, four types of rice have been identified in the course of time, three are grown in rainfed conditions (Aus and Aman) and one under irrigation (Boro). Wheat is cultivated during the winter under irrigation though the mild winter temperatures restrict yields. Other cereals, such as maize, are grown on very small areas.

Table 1 indicates the three-year average production for rice and wheat. It illustrates the importance of the T. Aman (transplant) rice and the irrigated Boro rice in the overall rice production. Note the high yield level of the Boro rice crop.

Table 1: Rice and Wheat Production, average for 1995/96 to 1997/98

Cereal production normally falls slightly short of demand: only during favourable years free from floods and droughts has self-sufficiency nearly been reached. Since land for cereal expansion is not available and population is increasing at a rate of nearly 2 percent per year, all additional production is expected to come from improved yields.

3. CEREAL PRODUCTION IN 1998/99

3.1 The 1998 floods

The floods started in the first week of July peaking three times; on 28 July, 16 August and 6 September 1998. More than 50 percent of the country was under water; 314 Thanas in 52 districts were affected at different levels of intensity.

This year’s floods have been compared to those which occurred in 1988 in terms of magnitude and the damage caused, but crop production loss has been estimated to be higher: 2 million tons (10 percent of the average cereal production) compared to an estimated loss of 1.4 million tons in 1988. The recorded height of the river waters and the peak levels over the danger levels were similar to those recorded for the 1988 floods. The main difference was the extremely long duration of the 1998 high water levels over the defined danger levels, with an overall duration of 67 days. This led to greater damage to infrastructure and houses, than in 1988. The rainfall in July (566 mm) was 57 percent over the average, while in August (369 mm) it was 5 percent higher. At the time of the Mission no recorded rainfall data were available for the month of October. But the behaviour of this year’s October rains is considered to be positive and beneficial to the standing crops.

3.2 Crop Production Forecast

Table 2 summarises the Mission’s forecasts at the national level compared to the last two years and Table 3 presents the details at regional level.

Aus is the first rice crop of the marketing year with its harvest at the end of July. This crop was therefore at harvesting stage when the floods occurred. Some damage to the crop also occurred due to the heavy rains at the beginning of July. The Department of Agricultural Extension (DAE) has estimated a production loss of about 218 000 tons over a damaged area of about 198,500 hectares. Major damaged areas included Comilla, Chandpur, Sylhet and Habigonj in the east, and on the south-west flood plain of the Padma river in Madaripur, Shariatpur, Gopalganj and Faridpur.

The Mission estimates the Aus harvested area for the 1998/99 season at 1.34 million hectares and the production at 1.52 million tons. The yield is estimated to be some 6 percent lower than last year. Farmers were obliged to harvest a poorly matured crop to avoid greater losses from floods.

Aman rice comprises two plantings, namely B. Aman (broadcast) and T. Aman (transplant). B. Aman is the crop which has been hit most severely both in terms of lost area and production, first, because it is cultivated in the deeply flooded low-lying areas and second, because the crop was at its early vegetative stages when the floods occurred. The DAE estimates a loss of 324 000 hectares. The districts of Manikgonj, Brahmanbaria and Gopalgonj have registered the most severe loss (more than 30 000 hectares each), followed by Chandpur, Faridpur, Madaripur, Shariatpur and Habigonj. A productive area of 590 000 hectares and a resulting forecast production of 380 000 tons has been estimated by the mission for the 1998/99 season.

T. Aman rice is the most important rice crop with a share of 49 percent in terms of area and 45 percent in terms of production over the last three years. When the floods first occurred the crop was being raised in seedbeds for seedling production. The DAE has estimated that over 55 000 hectares of seedbeds were damaged forcing farmers to repeat sowing the nurseries. Since the floods lasted the whole transplanting period of the T. Aman crop, two types of damage have occurred: direct damage to the standing crop and areas not transplanted due to the presence of flood waters. The DAE has estimated direct damage at over 587 000 hectares (1.06 million tons of production loss) and an area of about 340 000 hectares not planted (0.4 million tons of lost production). The most affected areas are Barisal (northern part of the district), Bogra, Nilphamari, Gaibandha, Rangpur, Nawabganj and Naogaon. The mission’s forecast for the season is 4.4 million hectares of planted area and 7.28 million tons of production with an average yield of 1.65 t/ha which is 2 percent higher than the drought affected yield. Boro rice is grown under irrigation in winter. From discussions with DAE officials at local level and assuming that farmers will endeavor to recoup the loss of Aus and Aman cereal production, the mission estimates that an area of around 3.04 million hectareswill be cultivated, yielding some 8.37 million tons. Average yield is expected to be 2 percent lower than last season (which was particularly high) due to the flood impact on the farmers' investment capacity. The main constraint is considered to be a decreased availability of seeds at the farmer level. Total seed requirement is 90 000 tons while the normal farmers' seed holding is about 85 000 tonnes. However, seed holdings have been severely reduced this season due to losses. The Bangladesh Agricultural Development Corporation (BADC) has a distribution plan for only 5 000 tons. Therefore, immediate action is required for importing seed varieties adaptable to the country's environment.

Table 2: Bangladesh - Cereal Production, 1996/97 - 1998/99

Crop		1996/97 (actual)	1997/98 (actual)	1998/99 (forecast)	1998/99 as % of 1997/98	1998/99 as % of 1996/97
Aus Rice	Area (ha)	1 592	1 565	1 341	86	84
	Production (000 tonnes)	1 871	1 875	1 519	81	81
	Yield	1.18	1.20	1.13	94	96
B. Aman Rice	Area	840	814	594	73	71
	Production	866	780	384	49	44
	Yield	1.03	0.96	0.65	68	63
T. Aman Rice	Area	4 963	4 995	4 416	88	89
	Production	8 686	8 070	7 278	90	84
	Yield	1.75	1.62	1.65	102	94
Aus & Aman	Area	7 395	7 374	6 351	86	86
	Production	11 423	10 725	9 181	86	80
	Yield	1.54	1.45	1.45	100	94
Boro Rice	Area	2 783	2 889	3 040	105	109
	Production	7 460	8 137	8 373	103	112
	Yield	2.68	2.82	2.75	98	103
Total Rice	Area	10 178	10 263	9 391	92	92
	Production	18 883	18 862	17 554	93	93
	Yield	1.86	1.84	1.87	102	101
Wheat	Area	708	805	868	108	123
	Production	1 454	1 803	1 980	110	136
	Yield	2.05	2.24	2.28	102	111
Cereal	Area	10 886	11 068	10 259	92	94
	Production	20 337	20 665	19 534	95	96

Sources: 1996-97 and 1997-98: BBS
1998-99: Mission forecast

Wheat is the other important winter crop. For similar reasons to the Boro rice crop, it is expected that the area under wheat will be expanded in the 1998/99 season to 0.87 million hectares (+8 percent over 97/98 and +23 percent over 96/97) resulting in a production of 1.98 million tons (+10 percent over 97/98 and +36 percent over 96/97) and an average yield of 2.28 t/ha. An increase of two percent over last season's yield is considered feasible due to farmers' declared intentions to increase wheat production, which also has a lower input requirement than Boro rice. Seed requirements of 110 000 tonnes will be mostly met by farmers (75 percent) and MOA plans to cover the remainder.

Table 4 shows the production forecasts for 1998/99 compared with the past three years, and Figure 1 indicates longer-term trends.

Table 3: Cereal Production Forecast for 1998/99, by Region

	Aus Rice			B. Aman Rice			T. Aman Rice			Boro Rice			Total Rice			Wheat			Cereals
Regions	Area	Prod.	Yield	Area	Prod.	Yield	Area	Prod.	Yield	Area	Prod.	Yield	Area	Prod.	Yield	Area	Prod.	Yield	Area	Prod.
	('000 ha)	('000 tonnes)	tonne/ha	('000 ha)	('000 tonnes)	tonne/ha	('000 ha)	('000 tonnes)	tonne/ha	('000 ha)	('000 tonnes)	tonne/ha	('000 ha)	('000 tonnes)	tonne/ha	('000 ha)	('000 tonnes)	tonne/ha	('000 ha)	('000 tonnes)
Bandarban	8	11	1.41	0	0	0	10	23	2.37	4	7	1.98	21	41	1.95	0	0	1.40	21	41
Chittagong	37	62	1.68	0	0	0.00	248	559	2.26	101	267	2.63	386	888	2.30	0	0	2.06	386	888
Comilla	51	77	1.51	83	76	0.92	115	234	2.04	233	664	2.85	482	1 051	2.18	55	127	2.31	537	1178
Khagrachari	5	7	1.54	0	0	0.00	18	41	2.25	5	11	2.19	28	59	2.12	0	0	1.15	28	59
Noakhali	83	82	0.99	5	4	0.88	267	359	1.34	84	209	2.50	438	654	1.49	2	4	2.10	440	658
Rangamati	6	10	1.67	0	0	0.00	10	21	1.98	7	15	2.25	23	45	1.98	0	0	1.69	23	45
Sylhet	135	179	1.33	75	44	0.58	313	475	1.52	307	645	2.10	830	1 344	1.62	5	11	2.04	835	1 355
Dhaka	64	49	0.77	83	23	0.27	51	42	0.82	203	570	2.81	400	683	1.71	36	82	2.31	435	765
Faridpur	150	96	0.64	177	81	0.46	36	42	1.18	118	366	3.11	479	586	1.22	72	163	2.27	551	749
Jamalpur	30	34	1.14	1	1	1.00	128	268	2.09	119	317	2.66	278	620	2.23	39	91	2.33	317	712
Kishoregonj	71	93	1.31	8	11	1.34	160	282	1.77	250	703	2.81	489	1 089	2.23	22	44	2.04	511	1 133
Mymensingh	99	140	1.41	0	0	1.30	209	322	1.54	125	355	2.84	434	817	1.88	19	42	2.27	452	860
Tangail	19	13	0.67	24	27	1.10	60	118	1.95	134	399	2.98	238	556	2.34	27	60	2.27	264	617
Barisal	111	91	0.82	8	6	0.72	356	235	0.66	46	107	2.34	521	439	0.84	11	24	2.17	532	463
Jessore	84	101	1.20	36	34	0.93	253	595	2.35	176	543	3.08	549	1 273	2.32	48	117	2.43	598	1 391
Khulna	10	16	1.50	7	7	2.70	335	581	1.73	57	149	2.62	410	752	1.83	4	9	2.33	414	760
Kushtia	72	93	1.28	8	8	1.00	86	185	2.14	49	136	2.76	216	421	1.95	69	161	2.33	285	583
Potuakhali	70	98	1.39	0	0	0.00	320	506	1.58	12	21	1.75	402	624	1.55	0	0	1.55	402	624
Bogra	12	28	2.39	0	0	0.00	226	434	1.92	229	633	2.76	468	1 096	2.34	14	35	2.43	482	1 131
Dinajpur	26	35	1.34	0	0	0.00	370	613	1.66	145	389	2.68	541	1 037	1.92	146	323	2.22	687	1 360
Pabna	53	29	0.55	47	32	0.68	47	66	1.40	136	384	2.82	283	511	1.80	77	169	2.20	360	680
Rajshahi	95	119	1.26	30	30	0.99	284	422	1.49	237	701	2.96	645	1 273	1.97	106	243	2.30	751	1 516
Rangpur	52	58	1.12	1	1	0.97	514	856	1.67	264	780	2.95	831	1 695	2.04	117	272	2.32	948	1 967
All Bangladesh	1 341	1 519	1.13	594	384	0.65	4 416	7 278	1.65	3 040	8 373	2.75	9 391	17 554	1.87	868	1980	2.28	10259	19 534

Source: Mission forecasts

Table 4: Cereal Production Estimates in 1995/96 and 1996/97 and Forecast for 1998/99 (‘000 tonnes)

Divisions	1995/96			1996/97			1997/98			1998/99 Forecast
	Rice	Wheat	Cereals	Rice	Wheat	Cereals	Rice	Wheat	Cereals	Rice	Wheat	Cereals
Dhaka	4 249	309	4 558	4 679	323	5 002	4 643	393	5 035	4 351	483	4 835
Sylhet	2 390	7	2 397	2 368	3	2 371	2 350	4	2 353	2 104	11	2 116
Chittagong	2 150	105	2 254	2 329	107	2 436	2 338	121	2 459	1 978	131	2 109
Rajshahi	5 389	678	6 067	5 934	751	6 686	6 123	976	7 099	5 612	1 042	6 654
Khulna	2 286	260	2 546	2 376	259	2 635	2 416	297	2 713	2 446	288	2 734
Barisal	1 225	10	1 235	1 196	11	1 207	993	12	1 005	1 062	24	1 087
All Bangladesh	17 687	1 369	19 056	18 883	1 454	20 337	18 862	1 803	20 665	17 554	1 980	19 534

Sources: 1996/97 - 1997/98 : BBS
1998/99 : Mission forecast

Vegetables grown in the monsoon season have been severely affected by this year's floods. An average of 70 000 hectares of vegetables are cultivated during monsoon (107 000 hectares during Boro) producing 0.36 million tons of vegetables (0.8 million tons in Boro). DAE's estimate of the area damaged is 71 percent, which corresponds with the estimates made by farmers to the Mission. It is estimated that there will be a considerable expansion of vegetable cultivation in the next Boro season (+15 percent), but in the north and north-west, late October rains have flooded some early-sown vegetables and delayed the planting of later crops.

The area under fruit production in the country is about 180 000 ha. Severe losses of fruit planted areas were reported by farmers, particularly for Jackfruit trees, which represent some 15 percent of the country's total fruit area. Many farmers in the Dhaka, Khulna, Rajshahi and Chittagong divisions have reported losses of up to 75 percent. The important papaya and banana plants were also damaged.

In addition, farmers' livestock have also suffered in the flood-affected areas. The direct effects are losses of poultry, goats and cattle due to rising water, and flash floods in the north-east. But the worst widespread damage to the livestock sector is the loss of animal feed (especially rice straw from the damaged Aus and Aman crops), consequent loss of condition, and an increase in animal disease, especially in cattle. Prices for livestock have fallen due to the serious shortage of fodder and because hard-pressed farmers have been selling animals to raise cash for purchases of food or to repay debts.

Fish farming has also been seriously disrupted in the low-lying areas as ponds have become submerged by the rising water, with serious losses of valuable stocks. On the other hand, over a much larger area, there is a temporary abundance of wild fish brought down by the flood waters. As the floods receded in September, these fish became trapped in natural depressions, lakes, ponds, rivers and fields, with a sharp upsurge in fishing to harvest this windfall stock. Fish prices have fallen 30 per cent in the flood-affected areas and additional fish consumption has partially offset the loss of other foods. However, as the dry season approaches (later than usual, due to heavy October rains), the fish stocks will be exhausted and more normal supplies will occur.

The Mission urges that all efforts should be made to expand the irrigated area for the coming Boro season. The supply of low lifting pumps (LLP) for surface water with no installation requirements is considered the most feasible and rapid solution. The Mission is also concerned with the severe cash shortage to finance essential inputs for the coming season, especially in the flood-affected areas where crops have been lost and employment has been severely reduced. Although a new Government initiative to enlarge credit facilities and improve access to credit by farmers and sharecroppers has been announced, few farmers have yet been able to take advantage of the new, more relaxed arrangements. An improved credit system would go some way towards compensating for the cash crisis in the flood-affected areas, and would ensure that sufficient areas of Boro crops are planted and input use is near optimum.

The MOA, through the DAE, has promptly initiated post-flood rehabilitation programme at a cost of 346 million Taka (US$7.4 million), targeting 1 million of the severely affected landless, marginal and small farm families. The aim is to enhance the production of the Boro crops particularly wheat and Boro rice both by expansion of areas as well as by an increase in yields, through input supplies such as seed, fertilizer and equipment. The targeted area is 125 000 hectares for an expected output of 265 000 tonnes.

4. Food Supply Situation

4.1 Rice Prices and Access to Food

The time of Mission's visit (October) is normally a 'hungry' period when stocks are low and prices high, prior to the Aman harvest. In this year with the Aus crop 19 percent down stocks held by farmers and traders are extremely low. The Government is currently building stocks of rice and wheat through its commercial import programme, at relatively low prices. With Indian cereal production at a fairly high level, favourable rates of currency exchange, and the lifting of import taxes, commercial traders are currently importing relatively large quantities of cereals, both rice and wheat. Most Bangladesh markets in border areas are now stocking only imported rice. Total commercial imports for the 1998/99 marketing year are forecast at 2.5 million tonnes - considerably higher than any year since 1994/95.

Current rice prices of between 14.5 and 16.0 taka/kg are 2-3 taka above July (pre-flood) prices, and around 4 taka higher than one year ago. Prices normally peak at this time and only some of the increase is due to flood damage effects. Prices would have risen further if imports had not been encouraged and if the Government had not instituted its open market sales policy. The outlook for prices is for a continuation at current levels with the possibility of a small decrease after the Aman harvest.

The main problem for the flood-affected areas is the loss of income and wages which has reduced purchasing power and access to food at the relatively high prices of the past three months. Reliable evidence suggests that in these areas, low-income labourers and sharecroppers have significantly reduced cereal consumption levels. The Government's Vulnerable Group Feeding (VGF) programme has been extended to 4 million families, but using a ration which provides only 25 percent of normal cereal intake. Employment prospects will improve in December as harvesting begins and land preparations for the winter crops (including Boro) get underway.

4.2 National Food Balances

In terms of national food supplies, it is useful to consider the two halves of the marketing year 1998/99 separately. The first (July - December 1998) covers the Aus and Aman harvest, and the second includes the Boro and wheat crops. For the period up to end 1998, net production will fall short of consumption needs by 2.34 million tonnes (22 percent), whereas for the period January - June 1999, the deficit will be 1.29 million tonnes (12 per cent), using the Mission's estimates for winter crops. However, local situations vary greatly; in flood-affected districts the July - December 1998 deficit exceeds 70 percent in Districts such as Narshingdi and Brahmanbaria. Map 1 shows the most food deficit districts for the July-December 1998 period, calculated in kg of cereal deficit per caput. The high deficit areas are those with flood damage and those with substantial urban populations. Table 5 indicates the Divisional-level deficits for the two periods and for the year as a whole. Clearly the Divisions of Dhaka and Chittagong are most in deficit, not only because of their high urban population but also because parts of these Divisions were directly affected by floods. Figure 2 illustrates net production and consumption for the marketing year, by Division.

Table 5: Forecast Divisional Cereal Food Balances 1998/99

Districts	1998/99 population (000)	Surplus/ Deficit Jul/Dec (000 ton)	Surplus/ Deficit Jul/Dec (kg per cap)	Surplus/ Deficit Jan/Jun (000 ton)	Surplus/ Deficit Jan/Jun (kg per cap)	Surplus/ Deficit July/June (000 ton)	Surplus/ Deficit July/June (kg per cap)
Bangladesh	127 006	-2341	-18	-1286	-10	-3628	-29
Barishal Division	8 749	112	13	-595	-68	-483	-55
Chittagong Division	24 759	-660	-27	-893	-36	-1553	-63
Sylhet Division	8 102	-48	-6	-85	-11	-134	-16
Dhaka Division	39 134	-1792	-46	-391	-10	-2183	-56
Khulna Division	15 047	201	13	-253	-17	-52	-3
Rajshahi Division	31 216	-154	-5	931	30	777	25

BANGLADESH : Cereal Surplus/Deficit (Kg per caput) by District
July–December 1998

Source: Mission Forecast of Net Cereal Production and Cereal Consumption Requirement by District

In summary, the food deficit is likely to be at its worst during the first half of the marketing year, particularly in the September - November period. After the Aman harvest, the supply situation will ease and there are good prospects for both the Boro rice crop and for wheat.

The food situation for the whole country is indicated in the national cereal balance sheet shown in Table 6. The assumptions used are:

• a mid-1998/99 marketing year population of 127 million
• per caput consumption of cereals is 167 kg (139 kg rice, 28 kg wheat as indicated by recent trends) but with a marked shift from rice to wheat
• opening stocks comprise 5.2 million tonnes of rice and 0.7 million tonnes of wheat and closing stocks are made up of 4.9 million tonnes of rice and 1.3 million tonnes of wheat [/ The Mission notes that, in view of the tight world rice market, additional food aid is expected to be mainly in the form of wheat. Given the mission's rather optimistic forecast for the Boro (winter) crops, which are yet to be planted, adequate level of closing stock has been assumed to cope with any exigencies in the coming year.]
• seed and waste amount to 10 percent of production
• there are no cereal exports, and animal feed use is minimal
• maize and other cereals are insignificant
• food aid requirement assumes the Government target of 1 million tonnes of imports will be realised and forecast private commercial imports of 1.5 million tonnes.

Table 6. Bangladesh: Cereal Supply/Demand Balance, July 1998-June 1999 (‘000 tonnes)

* Including government imports of 1 million tonnes.

The total import requirement of 4 million tonnes will be the highest recorded for Bangladesh (1987/88 was nearly 3 million tonnes). Due to favourable terms of trade for importing wheat and some international budget support there is every prospect of Government achieving its target of 1 million tonnes. Private traders have already imported 0.9 million tonnes this marketing year and a total of 1.5 million tonnes is plausible. This still leaves the large food aid requirement of 1.5 million tonnes, of which 1.125 million tonnes has already been pledged and more seems likely.

At these levels of imports, rice stocks would decline by 230 000 tonnes during the year but wheat stocks would rise by 580 000 tonnes - an overall rise of 350 000 tonnes. The increased wheat stocks would provide an improved buffer against future shortages, built up during a year of low international wheat prices and greater availability of food aid.

4.3 Food Assistance Needs

The catastrophic floods of 1998 have not only caused a national cereal deficit of about 1.5 million tons, which the Government and the private sector will not be able to cover, but also had a devastating impact on a large number of critically food insecure people. The majority of them not only lost crops, livestock, and physical assets, but also savings and employment opportunities. In order to secure immediate survival, many had to take up expensive loans or borrow from relatives and friends. This combination of asset losses and indebtedness impedes speedy recovery and can very negatively affect the daily food intake, with particularly grave consequences for vulnerable group like small children and pregnant/nursing women.

Emergency food assistance to Bangladesh, therefore, should not only be sufficient in volume, but must also adequately target vulnerable groups who have the least means to overcome the hardships caused by the recent floods. Constraints faced in the beneficiary selection and in providing timely assistance will therefore be crucial factors in determining the actual emergency food needs.

Short-term food deficits will be felt by a large number of the rural population, producers and the large number of landless alike. However, whereas critical food shortfalls for many of the producers will last only until the next harvest in early 1999, many of the poorest will feel the impact of the disaster - through a reduced economic access to food, for much longer. Emergency assistance therefore will have the following functions:

• nutritional support until local food availability improves
• preservation of income which otherwise has to be spent on food purchases
• employment generation and rehabilitation of damaged infrastructure through Food for Work.

Based on the calculation of the national supply deficit, FAO and WFP estimate the overall food aid needs for the 1998/99 agricultural year to be 1.5 million tons. It will however be crucial that the major part of this food aid - which predominantly will be provided as wheat - be distributed speedily to avoid further asset depletion and to reduce possible negative impacts on markets.

Beneficiaries and Benefits

The floods have affected the livelihoods of 25 to 30 million people either directly (losses of crops and livestock, destruction of houses, loss of property etc.) or indirectly (e.g. reduced employment opportunities for day labourers, increase in food prices, income reducing effects of high interest payments for loans). For landowners and sharecroppers (especially for those who had paid cash advances for land-rent), the direct effects were the most severe. The indirect effects were even felt in less affected surrounding areas. Therefore, beneficiary selection criteria for emergency assistance also have to include food insecure households who, although having suffered little direct losses, are particularly hurt by the indirect effects.

Even where the losses due to the floods were severe, it is certainly not correct to assume that an average poor household is now left without any income for several months to come. Some will be able to replant or will cultivate alternative crops to the Aman rice. Others will find employment through rehabilitation activities, like the removal of silt, repair of damaged roads etc. The mission therefore estimates that on the basis of a household earning of Tk 1200/month (this is the income of a very poor rural household during normal times), between Tk 400 and Tk 800/months, equivalent to US$ 8.50 to US$ 17) have been lost in income through loss of employment, without much difference between directly flood affected and surrounding areas. In addition to that, a poor family has additional expenditures of about Tk 180( US$ 3.75) per month due to increased market prices for rice and wheat.

Summing up these indirect impacts amounts to Tk 600 to 1 000/month, which, at actual market prices, corresponds to 50 to 80 kg of wheat or 10 to 15 days of a worker’s salary. This is a very significant loss, which many households will only be able to overcome through taking up loans, which will make them food insecure for a long period after the floods. The crop losses incurred by sharecroppers and landowners most likely will have been much greater and may have left many, also extremely food insecure, even though they might not have been so poor to begin with.

The role of food aid, after the immediate emergency food needs for direct consumption have been covered, will be to relieve the economic burden from vulnerable households in order to allow them to rebuild their assets and to invest in future income generating activities.

Since it will be very difficult to apply too rigid selection criteria, against a background of massive needs and limited management capacities, a geographic targeting covering a high percentage of the needs in each targeted area is recommended. Bangladesh has very functional and democratic structures at the lowest administrative levels to target food aid.

Food aid should be targeted to all areas affected by the floods and no distinction should be made between the directly and indirectly affected population. Depending on the severity of the crisis, a much higher percentage of the population should receive assistance, with a share of up to 60 % in the most affected villages. The present relief distribution allows only a coverage of 5 - 20 % of the population in the affected areas and most government officials involved in the distributions agree that they would need at least doubling of ration cards.

Implementation of the Food Assistance

The following programmes can be used for the distribution of the flood relief:

• The Vulnerable Group Feeding Programme (VGF)
• Expanded ongoing rehabilitation/development programmes like the Agricultural Development Scheme (AD) and the Vulnerable Group Development (VGD) Programme.
• Government Food for Work, Education and free relief programmes.

The VGF programme is the programme specially set up for the flood relief. It is supposed to run until December 1998/January 1999 covering 25 to 30 million people.

Present plans are to distribute 400 000 tons of cereals. A large portion of this assistance is provided by WFP, with other funds coming from government and bilateral donors.

The activities of the existing food aid programmes for rural rehabilitation and development, most of them carried out by WFP in co-operation with government, can be increased to absorb 400 000 tons and cover the needs of about 4 million people. An expansion of these programmes will absorb a further 150 000 tons. These programmes will take care of the longer lasting impacts of the floods on particularly poor households.

The government executed Food for Work, School Feeding and free relief programmes are estimated to have an absorptive capacity of 380 000 to 420 000 tonnes. These programmes will be able to cover most of the estimated supply deficit of 1.5 million tons, leaving about 150 000 tons of the food deficit not covered by targeted programmes. In case no additional outlets for targeted distribution through government or NGO -channels can be found, the remaining food aid could be used to build up the strategic food reserve of government.

As already mentioned a very crucial factor for the success of the food relief will be its speedy implementation. Time is important for two main reasons: to avoid further asset depletion with the affected population as well as to reduce possible negative impacts on markets. Recent experiences show that in a normal year about 700 - 800 000 tons of wheat can be distributed as food aid without having a negative impact on local markets. With an increased wheat consumption - mostly as relief wheat - the absorptive capacity for wheat should be higher this year. In any case, immediate relief needs must have priority even if some market disturbances occur. However, relief aid has to be phased out as soon as the food supply situation of the relief beneficiaries improves and "surplus" food aid should be put into the strategic reserve for future FFW activities. It should not lead to an extended relief distribution, especially of free hand outs.

Food Aid Logistics

The capacities at the ports (Chittagong and Mongla), the logistic set-up and logistic co-ordination mechanism established are adequate to receive and deliver the planned food aid and commercial shipments, estimated to be around 4 million tons for the current fiscal year. WFP has increased its capacity, consisting of specialised staff in Chittagong and Mongla ports and has placed food monitors in ten different locations in the interior of the country. WFP is also co-operating with the government in the preparation/updating of the food distribution plans and of the despatch plan from the ports to avoid bottlenecks.