Average household spends 21% of income on rice: Study

A household spends 21 per cent of its income on average for consuming rice to meet its overall food demand, according to a survey by the Bangladesh Institute of Development Studies (BIDS).

The survey said expenditure share on rice in rural areas is higher than the urban areas. A rural household spends 23 per cent of its expenditure on rice while an urban household spends 19 per cent.

BIDS unveiled the survey at its conference room on Wednesday. BIDS Director General Dr Binayak Sen chaired the event where the institute’s researcher Wasel Bin Shadat shared the survey’s data.

However, BIDS conducted this survey based on the Household Income and Expenditure Survey of 2016.

Data was collected from 12,056 households in rural and urban areas. The survey assessed the expenditure on rice, pulse, fish, eggs, meat, vegetables, fruits, other food grains and other food items.

It considered rice, eggs and vegetables as necessary products and fish, meat and fruits as luxury food items. Consumption of luxury products will increase as household income grows.

According to the study, the extremely poor in rural areas spend the highest share of their expenditure — 32 per cent of income — on rice while the extremely poor in urban areas spend 3 per cent.

On average, household expenditure share on fish is 18 per cent and expenditure share on meat is 11 per cent, said the survey.

Shadat in his survey said 11 per cent of the household had reduced consumption of meat, fish and fruits after prices skyrocketed during the first Covid-19 lockdown, during which people’s income decreased by 70 per cent. But at the end of that lockdown, the rate came down to 43 per cent.

And at the end of the second lockdown, the rate stood at only 4 per cent, which goes to show that people’s income started returning to normal after the restrictions were lifted, the study said.

It said urban and poor households are more responsive to the price shocks of rice, which also leads to a sharp reduction of fruit consumption among all subgroups with the extremely poor affected most.

Rural and poor households tend to rearrange their food budget and keep a larger share to buy rice when prices fluctuate. If the price increases by 10 per cent, demand for fruit and vegetable goes up more than for fish and meat, said the survey.

Meanwhile, a household headed by a woman spends more on protein and nutrition items while a household headed by a man spends more on rice and other food.

On average, rural households spend more on rice and vegetable while urban households spent more on eggs, meat and fruits, the study said.