Paddy prices fall sharply despite govt purchase

FT ONLINE

The government's procurement drive could hardly provide any relief to the farmers, as paddy prices dropped notably in this Aman harvesting season.

After incurring a loss, many of the farmers are abstaining from cultivating Boro crop, raising grave concerns of production fall in the ongoing season of the major crop, said insiders.

The government has targeted to procure 0.6 million tonnes of paddy, and 0.4 million tonnes of milled-rice in this Aman season between November and February.

The Directorate General of Food (DGF) fixed price for paddy at Tk 26 a kg, parboiled rice at Tk 36 a kg, and Atap (white rice) at Tk 35 a kg.

The Department of Agriculture Extension (DAE) recorded Tk 21-24 production cost for each kg paddy this year depending on regions.

Paddy of seasonal Swarna and BR-11 varieties was selling at Tk 1,020-1,080 per 75-kg sack (Tk 13.6-14.6 a kg) in many northern districts.

Md Golam Mustafa, a farmer at Dhelapeer Agricultural Market under Saidpur Upazila in Nilphamari, said on Wednesday that paddy prices declined further in the last one and a half weeks.

"We are incurring Tk 3,800-3,900 loss on per bigha (30 decimal) cultivation."

He said most of the farmers have no access to the government procurement system.

"A lottery was held in our village by the local UP member to fix the names of farmers, who will be able to supply paddy to food office. I was not lucky enough, as only 13 farmers, out of 360, got the chance."

He also said most of the farmers are in a dilemma whether to cultivate paddy in this Boro season or not.

"Many of us are thinking of growing vegetables, tobacco or maize to make some profit," he added.

Shahjahan Ali, another farmer at Pakerhaat of Khansama Upazila in Dinajpur, said that paddy price showed a slight hike in mid-November with a declaration of the government procurement. But it started declining again from the first week of December.

He said apart from price fall, paddy production also declined in their area amid attack of a brown planthopper (locally known as 'current bug').

"We got 360-370 kgs of paddy from per bigha land, when usual production is 640-700 kgs," he added.

However, our district correspondents in Pabna, Kushtia, Faridpur and Jashore said depending on varieties paddy prices are hovering from Tk 14.5 to Tk 16.4 a kg in the regions.

Assistant Director at the Department of Agricultural Marketing (DAM) Touhid M Rashed Khan said that farmers in different regions are incurring a 40-50 percent loss compared to their production cost in this Aman season.

He said the loss was 55-60 percent in the last Boro harvesting season.

Md Asaduzzaman, Professorial Fellow at the Bangladesh Institute of Development Studies (BIDS), said that the government restricted the import, increased procurement volume, and permitted export, which has benefitted only big traders and millers.

He said although the government has engaged more farmers in its procurement drive this time, it makes no impact on the mainstream market.

The government should introduce loans without interest for small- and medium-scale farmers during the harvesting season so that they can store crops for at least one and a half months.

Farmers' involvement in the drive should be ensured also, he added.

Prof Abdul Hamid, Chairman of the Agricultural Research Foundation (ARF), said farmers should be provided with direct cash subsidy to keep them in farming, which is necessary for ensuring food security.

Besides, rice export should also be increased, if its supply is ample. At least 20 percent incentive should be declared to boost rice export.

Contacted, secretary of the Auto Major and Husking Mill Owners Association KM Layek Ali said many millers are not buying paddy amid surplus stock and drop in rice sale.

The millers are now selling coarse Swarna rice at Tk 23-25 a kg at mill gate, depending on quality, against the production cost of Tk 22-24 a kg. The retail price of coarse rice is now Tk 25-26 a kg in northern and north-western regions.

He admitted that the millers started raising rice prices from November to boost the paddy and rice market. But it made no impact on the paddy market amid a rise in supply.

The price of rice again declined by Tk 2-3 a kg last week, he added.

The DGF Director-General Dr. Mosammat Nazmanara Khanum said the directorate is ensuring that only farmers can sell paddy to the food offices.

She said a total of 19,891 tonnes of paddy have been purchased until December 17, and the drive will continue until February 2020.

However, the government has 1.057 million tonnes of rice stock now.

The DAE recorded that 93 percent of Aman harvest has been completed out of 5.6 million hectares of land. The government has set a target of growing 14.3 million tonnes of rice in this Aman harvest.

Rice price was Tk 36-40 a kg (coarse), Tk 45-50 a kg (medium), and Tk 53-70 a kg (fine) in Dhaka city on Friday.