RETRIEVING THE INVISIBLE HAND OF MARKET

During the pandemic, domestic markets collapsed in Bangladesh. To overcome the situation, a livestock and dairy project was borne to reconnect suppliers and consumers.

The Scottish economist Adam Smith wrote in his treatise“Theory of Moral Sentiments” published in 1759 how the invisible hand of market brings equilibrium between supply and demand. The onslaught of the Corona pandemic in the second quarter of 2020 brought much of Bangladesh to standstill because of frequent lockdowns and severe restrictions on physical movement of people. The consequence was disastrous for small producers. Dairy farmers could not sell their milk, and in turn feed their animals. Women who reared chicken could not sell their eggs because of market shutdown. Farmers suffered because they did not earn enough to buy rice and oil to feed their families. Chicken meat prices plummeted by 60% while poultry feed prices rose by 50%. Urban consumers were worse off due to the breakdown of supply chain for agricultural produce. Without the invisible hand of the market, working ordinary life was paralysed.

It was in April 2021, the World Bank-financed “Livestock Development and Dairy Project” in Bangladesh stepped into revive the market. Initially, in Cumilla, tuk-tuks were hired to buy milk, egg, and meat from farmers’ doorstep and sell at busy road cross points. Later, the idea was replicated in the entire country. Until March 2022, 22,709 teams of project officials sold 6.06 million litres of milk, 74.5 million pieces of eggs, 1.9 million kg of chicken meat. Along with relief sales, the project provided cash grants to more than 620,000 poultry and dairy households. The 36-year old Nazma of Nawabgang, who lost her husband due to Corona, received EUR 135 as grant to buy feeds for her cows. Now with an assured market provided by the project, Nazma has bought one more cow from her earnings. She is grateful to the project for timely help “the project has given me a new lease of life. They have given me one more chance to stand up on my feet and hold my head high”.

AFC and its local partner in Bangladesh are happy to provide technical and business advice to the project, which clearly is benefitting a large number of vulnerable people and communities.

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