Policy Adaptation Cost for Mitigation of Price Variation of Rice under Climate Change in Bangladesh

Abstract

This study develops a rice policy model in order to estimate policy cost to mitigate the variation of rice price in Bangladesh which will be affected by climate change. Future projections show that support price policy by rice procurement can mitigate severe price falls, in favour of famers. Subsidized price policy by rice distribution can mitigate severe price hikes, in favour of consumers. A projection of mixed policy shows that 1% reduction of price variation requires US$78 million as additional policy cost for whole projection period of 2010-2030. Furthermore, projection results show that to mitigate severe price variation by rice policy, governmental storage capacity needs to increase to 3 million ton. These projected costs and effects are expected to be used as basic data for food policy modeling in the era of climate change.