The New Nation - Internet Edition

ECONOMISTS have said that policies prescribed by the international financial institutions increased disparity, the cost of agricultural production and landlessness, and decreased credit flow into agriculture and soil fertility. The startling observation was made at a seminar held at the Bangladesh Institute of Development Studies in the city. Some experts besides some organisations had from time to time expressed similar views. The economists, however, agreed to a certain extent with the findings, suggestions and recommendations of a study on the implications of prescriptions of the multilateral lending agencies - the World Bank, the International Monetary Fund and the Asian Development Bank - on agriculture. According to reports, D-Net, a non-governmental organisation working in the area of information technology and development, collated the findings and recommendations of the study released on the occasion.

The study found that the policies, often imposed upon the government by the lending agencies, had some good effects in the short term, such as in the case of privatisation of fertiliser distribution. Although prices decreased on the whole, they have now become very volatile, rising sharply during the peak seasons and this has increased the farmers vulnerability. Farmers were rather sceptical about the quality of both fertilisers and seeds that they procured from private operators since there was no effective regulatory mechanism in place. According to the study, privatisation of irrigation has led to an unplanned increase in the number of tubewells that use increasingly higher quantity of ground water resulting in arsenic poisoning across large tracts of land. Besides, widespread use of pesticide encouraged protecting the high-yielding varieties of crops, and decimated fish population across the country.

Due to liberalisation and corporatisation of banks, credit flow to the rural areas decreased, meaning that the rural deposits were finding their way into the cities while the farmers were becoming increasingly dependent on local money-lenders. The number of landless people has also increased as a net effect of such policies, the study found. Several policy reforms, undertaken at the behest of international lending agencies, have benefited people who are already affluent, but not the hardcore poor, thus increasing disparity. And constant pressures are on despite the adverse impact for such reforms in many developing countries like Bangladesh. One economist observed that the policy prescription had an element of 'threat' that all funding would be cancelled if the prescriptions were not followed, while the other part outlined the rewards if they were accepted.

It was pointed out that the neo-liberal policies undertaken by the agencies stemmed from the philosophy of complete market freedom as envisioned by the Washington Consensus'. And there was always pressure to reduce subsidies and government expenditure, since that would increase efficiency. But the countries of the North or developed nations that run these lending agencies still continue to heavily subsidise their agricultural sector, which means further imperilling our farmers by withdrawing subsidies, since it is not a level-playing field, as one economist remarked.