Govt Measures to Drive Paddy Prices Up: Nothing’s working

The government had announced a 20 percent incentive on rice export and a Tk 3,000 crore subsidy for farmers to buy agro tools. It had also doubled duties on rice import and nearly tripled its paddy procurement from farmers.

But none of these measures could push paddy prices up in the last three months.

Boro prices remain as low as they were immediately after the harvest in July. In different rice producing districts around the country, farmers are still selling paddy for Tk 550-750 per maund, depending on the variety and quality.

This is the lowest price in three years, and farmers are counting a loss of up to Tk 200 per maund.

Amid countrywide protests by growers over low prices, the government announced various measures to influence the market in favour of farmers, but experts and exporters said such steps were meant to fail.

“We are still looking for a market to export rice. Now the international rice market is dominated by India and Pakistan. They can export in a very competitive price as their production cost is lower than that in Bangladesh. So no buyer is interested about our rice,” said Shah Alam Babu, president of Rice Exporters Association.

India and Pakistan can export rice at $370-390 per tonne while Bangladeshi exporters ask for at least $500, he added.

“I was talking with a buyer from Ghana about exporting rice the other day. But he did not show any interest after hearing our price,” said Babu.

Asked about the export situation, Zahidul Islam Azizi, joint secretary (export wing) of the commerce ministry, said they were not monitoring it.

“We are only issuing permission for rice export to whoever is asking for it,” he added.

Bangladesh exports only fine aromatic rice since 2009 when the government imposed a ban on exporting course rice.

On May 30, Agriculture Minister Muhammad Abdur Razzaque said that the government decided to export 10 to 15 lakh tonnes of rice this year.

But M Asaduzzaman, former director of Bangladesh Institute of Development Studies (BIDS), said exporting rice would have little impact on the falling paddy prices.

“It’s not easy to export rice all of a sudden. First, we need to find a market. And even if we could export rice, it would benefit the millers,” he said.

The government should have taken long-term initiatives instead, such as announcing procurement prices before the production begins. Farmers would then be able to assess their profitability beforehand, he noted. 

He also recommended that the government buy paddy directly from real farmers.

Growers in different districts, including in Rajshahi and Sylhet regions, said that the current prices, from Tk 550 to 750 a maund, was still Tk 200 lower than their production cost.

Abdul Kadir, a farmer from Bhuksimoil in Moulvibazar, said although the government fixed Tk 1,040 per maund for paddy procurement, only a few farmers could actually sell their paddy to the government. 

Rafiqul Islam, a farmer in Sreepur in Sunamganj, said, “I sold my paddy for Tk 590 per maund a few days ago. Last year, I sold it for Tk 630,” he said.

At Kaliganj paddy market in Rajshahi, fine paddy (Nazirshail and Miniket) was selling at Tk 740 and coarse rice at Tk 600 in the last week of September. Farmers in this region said their production cost was Tk 1,000 per maund.

Of the 4 lakh tonne procurement target, which is just about 3 percent of the total rice production, the government has so far purchased about 3.99 lakh tonnes.

But many farmers vented frustrations that they gained nothing from the government decision as local influential politicians sold paddy to government depots instead of real growers.

In many places, the ruling Awami League men did not even allow farmers to sell paddy to the government.

In a letter to the Rajshahi Deputy Commissioner on August 27, Tanore Upazila Nirbahi Officer Nasrin Banu alleged that the local upazila parishad chairman Lutfar Haider Rashid obstructed her when she went to buy paddy from farmers.

She alleged that the ruling Awami League man collected rice from farmers through his cohorts at low prices and then sold those to government depots at high prices.

In Bangladesh rice accounts for more than 70 percent of the total annual cropped area of 1.54 crore hectares. Nearly 77 percent marginal and small farmers depend on rice for food security and their livelihoods, according to a 2015 survey by the International Food Policy Research Institute (IFPRI). 

[Our Rajshahi and Moulvibazar correspondents contributed to the story.]