It is beyond comprehension why the government is wasting taxpayers' money on the Trading Corporation of Bangladesh (TCB). Viewed as a white elephant - the government owns many such units - the state consumer goods marketing entity lost its utility decades ago. Willingly or otherwise, the government has liquidated a few loss-making and useless state-owned enterprises (SoEs). But it has been allowing operation of the TCB that, according to many, remains a strong candidate for liquidation. This is exacting a substantial cost from the state coffer.
According to a report published in this paper on Saturday last, the government had made available subsidies valued at Tk. 3.76 billion for marketing of a few essential consumer goods between 2010-11 and 2015-16. The government allocates certain amount of money for the TCB every year as subsidy to help it sell some essential food items at 'fair prices' as part of its 'market intervention' mechanism. Usually, the TCB puts in place the mechanism during the holy month of Ramadan.
But the harsh truth is that the state intervention mechanism has no effect on the market because of TCB's limited ability to do so. It operates mostly in large cities through its dealers, numbering about 2800. The quantity of goods it sells during a limited period of time is very small and has the least effect on the market. Moreover, the corporation, at times, procures food items of poor quality and finds it difficult to sell. This only adds to the financial loss that the entity has been incurring every year. The FE report in question has revealed that nearly 895 million of tonnes of lentil, stored for a long time in the TCB warehouse, are almost damaged. The corporation has now sought permission from the ministry of commerce to dispose of the item at throwaway price.
In a free market economy, wasting taxpayers' money in the name of market intervention is not at all desired. Yet one might support some kind of state intervention in a market that is considered imperfect. But it is hard to expect any positive result from a market intervention mechanism like that of TCB which is administratively, logistically and financially very weak.
The supply of essential consumables and their prices have been, more or less, steady and stable in recent years. Even most developed markets, on occasions, do witness price fluctuations. Naturally, Bangladesh market cannot be immune to such a phenomenon. However, a feeble organisation like the TCB can hardly play any role in the event of any major disruption in price situation.
Under the circumstances, for the sake of saving taxpayers' money, it would be prudent to liquidate the TCB and let the market forces play their role freely in determining prices. The government has been for long been bearing the burden of a number of loss-making state entities that are mostly inefficient and graft-ridden. The size of their debt to the government is enormous. So, it is high time the government took some remedial measures to save resources and divert the same to some productive and employment-generating activities.