Govt's boro procurement not a merry thing for farmers
Boro farmers incurred financial losses this season too as they were forced to sell paddy at Tk900-1,000 per maund, well below the government's procurement price of Tk1,280 because of a persisting challenge for them to access the state facility.
Experts are of the opinion that due to the Ministry of Food's failure to align paddy procurement with the harvesting time and create a competitive market environment, farmers are being deprived of fair prices every year.
The food ministry on 21 April announced a procurement of 5 lakh tonnes of paddy this year at Tk32 per kg nationwide, starting 7 May and continuing until 31 August.
During the announcement, Food Minister Sadhan Chandra Majumder said most of the paddy would be purchased from the haor regions. To ensure that farmers receive fair prices, the price of paddy has been increased by Tk2 per kilogram this year, which is expected to encourage farmers, he said.
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According to the Department of Agricultural Extension (DAE), harvesting of paddy in the haor regions began on 15 April and as of 2 June, 94% of it was harvested nationwide. However, nearly a month into the paddy procurement programme, the government has managed to purchase only 38,120 tonnes of paddy.
The food ministry sets various conditions for purchasing paddy, which often discourage farmers from selling. To address this, creating purchasing centres through agents or in rural markets will enable farmers to sell their paddy, fostering a competitive environment in the market,
Farmers cannot reap benefit
Farmers from villages have to go to the upazila food warehouses to deliver their paddy, which must have a moisture content of 14%. The biggest issue arises with moisture levels; if the paddy exceeds the specified moisture content, it is returned.
Growers are reluctant to go through the complexities of renting vehicles to transport their paddy to the food warehouses and potentially having to bring it back if it gets rejected. Besides, political influence often plays a role, with influential individuals sometimes selling paddy to the government in the farmers' names.
According to the website of the Department of Food & Supplies of the Government of West Bengal, when the government buys paddy in West Bengal, a purchasing centre is established in nearly every market of each block. It buys rice with up to 17% moisture content directly from the farmers.
However, in Bangladesh, there is no such precedent of purchasing centres being established in markets.
If a middleman buys wet paddy from the market or directly from farmers' fields for Tk1,000 per maund, drying it results in a loss of 5 kilograms, and its cost would stand at Tk28 per kilogram. Even if drying and other expenses would cost him Tk29, and if he sells it to the government at Tk32, he could still make a profit of Tk3 per kilogram or Tk120 per maund.
According to experts, there is also a problem with the quantity of paddy. It is appropriate for the government to buy more paddy to support farmers, even if it means buying less rice, they say. In that case, it is possible to create a more competitive environment in the market, say the experts.
When the paddy reaches the millers, they control the market and increase rice prices as they wish even though they are actually buying the paddy at lower prices.
DAE Director General Badal Chandra Biswas told TBS, "If area-based storage facilities are established, farmers could store paddy there and gradually sell it to earn money, paying off what they owe and selling the rest slowly."
Farmers often sell paddy to cover various expenses during cultivation and then prepare for the next season, he said. They often sell paddy directly from land to cover the costs of irrigation, equipment, and repayments of loans, Biswas said.
"The food ministry sets various conditions for purchasing paddy, which often discourage farmers from selling. To address this, creating purchasing centres through agents or in rural markets will enable farmers to sell their paddy, fostering a competitive environment in the market," Jahangir Alam Khan, an agricultural economist, told TBS.
State Minister for Commerce Ahasanul Islam Titu, at a recent programme in Dhaka, said, "If farmers had extra money, they wouldn't have to sell their paddy so early. They could gradually sell it over a period of time. Perhaps having a formal commodity exchange could help solve this problem."
"When the paddy reaches the millers, they control the market and increase rice prices as they wish even though they are actually buying the paddy at lower prices," DAE Director General Badal Chandra Biswas said.
MA Sattar Mandal, emeritus professor at Bangladesh Agricultural University and professorial fellow of Bangladesh Institute of Development Studies, in an article titled "What are the chances of survival for marginal farmers in Bangladesh?", said if farmers do not get fair prices, they may switch to cultivating other crops such as maize, mustard, sesame, etc.
If farmers do not get fair prices, they may switch to cultivating other crops such as maize, mustard, sesame, etc. Although this might bring some immediate financial benefit to farmers in the long run, the reduction in rice production could lead to an increased reliance on imports of the staple food. This situation is not desirable for the country's food security.
"Although this might bring some immediate financial benefit to farmers in the long run, the reduction in rice production could lead to an increased reliance on imports of the staple food. This situation is not desirable for the country's food security," he said.
Millers hit the jackpot
When paddy prices are low, rice mill owners across the country take advantage of the situation. They sell rice in the market for Tk52-53 per kg, which they buy from the government at a profit-inclusive rate of Tk45. They even start increasing rice prices only after the farmers' paddy stocks are depleted. So while farmers are being deprived on one hand, consumers also face pressure on rice prices over the years on the other.
"When the paddy reaches the millers, they control the market and increase rice prices as they wish even though they are actually buying the paddy at lower prices," DAE Director General Badal Chandra Biswas said.
