Commerce Minister Khandakar Abdul Muktadir on Thursday said the government is prioritising a reduction in logistics costs, describing them as one of the biggest obstacles to bringing down Bangladesh's persistently high food inflation.

“While logistics cost stands at around 10 percent of GDP in other countries of the world, it is 16 percent in Bangladesh. If we can rein in logistics costs, food inflation can be brought down,” the commerce minister said at an event on Bangladesh's food chain, organised by the Centre for Policy Dialogue (CPD) at the BRAC Centre in the captial.

Noting that inflation which has been rising since the post-Covid period and currently stands above 9 percent, was brought under control by other countries around six months ago but Bangladesh has failed to do so due to the complexity of its market system, he said.

“Our market system is quite complex. Alongside logistics costs, we need to bring down input costs and unaccountable financial transactions such as extortion as much as possible,” he said.=

The minister said every government in Bangladesh has focused on the agriculture sector separately, but there has been a lack of coordination among them.

“Since the famine of 1974, every government in Bangladesh has received the same message that staying in power requires paying attention to the agriculture sector. Since then, almost every government has worked for farmers. But due to a lack of coordination in this work farmers have not always received the maximum benefit,” he said.

Muktadir said accurate information does not reach farmers in Bangladesh which causes them losses.

“A farmer who cultivated potatoes extensively over the past few years and got a good yield but did not get a fair price in the market, why does he still grow potatoes in excess of demand the following year and incur losses? This is a question. The major reason is that market information does not reach the farmer. He cannot understand what would be profitable for him to cultivate,” he said.

The minister also said Bangladesh’s agriculture sector has seen very little scientific and planned work, with most agricultural activities being carried out in a “natural way,” stressing the need to bring this under a proper plan.

Muktadir stressed the need for improving farmers’ living standards and bringing the entire market system under an integrated plan.

CPD Executive Director Fahmida Khatun presided over the event.