Let alone profit, boro farmers not getting back production cost

Highlights 
•    About 50% boro paddy has been harvested so far in the country
•    This year, boro paddy has been cultivated on 48,83,760 hectares of land 
•    This year, boro production cost has gone up by 20% to 50%, compared to the last year, due to the severe drought
•    Production cost increases from Tk1,400-Tk1,500 to Tk2,000, for cultivation of the paddy on one bigha of land
•    Boro production has decreased by 15%-25% due to lack of rainfall this year

The wholesale prices of boro paddy this year do not even cover the production cost of the famers.

This year, the production cost of boro was much higher due to various reasons including increased irrigation cost due to severe drought and acute scarcity of rainfall; increased wages of daily labourers. 

As a result, the increased production cost has become a burden to the farmers as the offered boro prices at wholesale paddy markets are less than what they invested in cultivation of the paddy, said the cultivators.

It is learnt that the low prices of boro this year have thrown the hard-working farmers into an insurmountable crisis of irreparable financial loss; because by selling the paddy, let alone making any profit or collecting the next one year's family expenditures, they cannot even repay their loans they had taken on high interest from rural usurers for cultivation of boro.

Talking to a number of farmers in several districts including Rangpur, Rajshahi, Dinajpur, Mymensingh and Kishoreganj, it has been learned that this year, the production cost of boro has gone up by 20% to 50%, compared to the last year, due to the severe drought, increasing the irrigation cost from Tk1,400-Tk1,500 to Tk2,000, for cultivation of the paddy on one bigha of land. The daily wages of agricultural labourers for tending and cutting paddy have also increased. Overall, the cost of paddy production has increased.

According to the Department of Agricultural Extension (DAE), the production of boro paddy has decreased by 15%-25% due to lack of rainfall this year. 

According to the Department of Agriculture Marketing, the production cost of boro paddy is Tk26.01 per kg. It means, the production cost of per maund of boro is Tk1,044.

The DAE, however, said the boro production cost has been a little higher this year. The production cost of one kg of boro was Tk26.19. In other words, the cost of boro production was Tk1,047 per maund.

The ministry of agriculture, however, said that the production cost was Tk27 per kg, which means Tk1,080 per maund.

But even after cultivating the paddy at an extra cost, the farmers are at a loss about what to do, after going to sell the paddy to the market, because the offered wholesale price is less than the cost of production.

According to the estimates of various government agencies, the cost of boro production per maund this year was more than Tk1,000.

But less dried paddy is being sold all over the country at Tk750-Tk800 while fine variety dried paddy is being sold at Tk900-Tk1,000. In the last year, boro paddy was sold at more than Tk1,000.

Our Dinajpur correspondent said that in different areas of the district, per maund of raw paddy is being sold at Tk790-Tk800. However, dried and fine varieties are being sold at Tk900-Tk1,000.

In Bogura, paddy is being sold in different areas at the same price. 

In Netrokona's haor region, raw paddy is being sold at Tk700-Tk750 and dried paddy at Tk750-820.

Aminul Islam, a farmer from Kumarpur area of Sheikhpura union o Netrakona, said that the boro production cost this year has gone up, with increased irrigation cost and prices of fertilisers and insecticides. The cost of cultivating paddy on one bigha of land (44 shatangsho) is about Tk18,000 to Tk20,000 which was Tk15,000-Tk16,000 last year.

He said last year the government paid Tk26 as price of paddy and this year Tk27 per kg. But the government has not yet started buying paddy in full swing. On the other hand, farmers are being forced to sell paddy at prices lower than the government-fixed price.

Mojibur Rahman, a sharecropper in the same area, said the government has not yet started buying paddy. If the farmers can sell paddy at Tk27 per kg, or at Tk1,080 per maund, he would be able to make a minimum profit. Otherwise, it will not be possible for him to make up the losses inflicted by the increased production cost due to drought.

Bogura District Food Controller Mohammad Ashrafuzzaman said they have a target to procure 25,186 tonnes of paddy in Bogura this year. If the paddy procurement starts in full swing, the wholesale price will also increase in the local market.

Dinajpur Sadar Upazila Deputy Assistant Agriculture Officer Mostakim Hasan said in Dinajpur, paddy harvesting and threshing usually starts a little later. Harvesting and threshing has started in some areas. At present, only raw paddy is being sold for Tk1,580 to Tk1,600 rupees per sack of two maunds. 

However, he is hopeful that the market condition will improve within a few days.

Contacted, the Director General of DAE Md Asadullah told The Business Standard, "We have requested the food department to start paddy procurement as soon as possible. As soon as the government starts paddy procurement, prices in the market will start increasing.

In the current boro season, the government will procure 6.5 lakh tonnes of paddy from farmers at Tk27 per kg, and 11 lakh tonnes atap and siddha rice from millers at Tk40 and Tk39 per kg respectively.
 
The government has decided to increase the procurement price of per kg paddy by Tk1 and price of per kg rice by Tk4, compared to last year's prices.

Last year, the government bought paddy at Tk26 per kg and siddha rice at Tk36 per kg.

The government launched its boro procurement activities from 28 April and rice procurement from 7 May. The government will complete the procurement on 31 August. However, the

Food Department has not yet started any rice procurement activities.

Agricultural economists said the government will have to buy paddy and rice quickly from the beginning. Otherwise, rice collection activities like last year will be threatened. If the procurement activities start late, the farmers will not get the fair price of paddy.

According to the stock situation of the Ministry of Food, the government had a stock of 5.14 lakh tonnes of food grains in its warehouses until 28 April – 2.97 lakh tonnes of rice and 2.17 lakh tonnes of wheat.

Agricultural economist and Vice-Chancellor of the University of Global Village Md Jahangir Alam said, "If the government delays in procurement, there will be two problems. First, the farmer will not get the fair price of paddy, and secondly, the government will not be able to build up the stock of food grains it needs. Therefore, the procurement of the government has to start quickly, as the rice harvest in different regions is almost at the end.

According to DAE, 100% paddy has been harvested in haor areas across the country. About 50% of the paddy has been harvested so far in the country. This year, boro paddy has been cultivated on 48,83,760 hectares of land across the country.

**Dinajpur correspondent Bipul Sarkar Sunny and Bogura correspondent Khorshed Alam assisted in compiling the report.