PL-480 TITLE III PROGRAM IN BANGLADESH; AN EVALUATION OF THE FIRST 16 MONTHS, AUGUST 1978-NOVEMBER 1979

This USAID/Government of Bangladesh (BDG) evaluation covers the period 8/78-11/79 and is based on site visits. Although effective and well-priced procurement programs were carried out during the last two harvests, OMS were consistently low (overall, only 126,000 of 400-600,000 targeted tons) relative to need and to the level of the modified rationing (MR) program which BDG still prefers. For reasons not wholly under the project"s control, the goal of constraining coarse rice prices was not achieved. BDG reported allocating $15.1 of $16.5 million Title III local currency proceeds for USAID"s fertilizer project. USAID finds no evidence of this. Major program emphases should be placed on keeping OMS prices above the support price; responding to year-to-year supply rather than seasonal variations; and making grains available before planting so as to provide price incentives to farmers. Specific recommendations include the following: In regard to OMS, drop constraining coarse rice prices as a goal (wheat or atta should suffice in this regard); keep the OMS wheat price high enough to give traders a margin for storing, handling, and reselling wheat; base OMS on an atta trigger price and sell wheat wherever the latter is exceeded; keep OMS prices equal to the market price; and drop dealer, price, and volume restrictions and make efforts to sell to atta dealers. As for local currency use, permit loan forgiveness upon proof of disbursements from project accounts, and make the fertilizer project ineligible for loan forgiveness. As for wheat supply and attribution, increase FY 80 allotment from 742,000 to 942,000 tons; attribute 400,000 tons of this total to MR, the rest to OMS or BDG stocks; and apply the terms of the amended Title III agreement to all FY 80 wheat and to the proposed 5-year Title III program aimed at establishing an OMS stabilization reserve.