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Dhaka Tribune

Food Ministry asked to formulate procurement policy that benefits farmers

It receives Cabinet Division letter amidst farmers’ woes over low paddy prices

Update : 27 May 2019, 12:06 AM

There seems to be no end in sight to the woes of farmers over low paddy prices. Neither the government nor traders and millers have gone for any big purchase drives. 

Though the government has fixed a Tk1,040 support price for each maund (40 kgs) of paddy, farmers across the rice-growing zones in the country are still reporting market prices as low as Tk600. 

According to Food Ministry statistics in the first one month of public food grain procurement drives, the government bought less than 2,000 tons of paddy and a little over 100,000 tons of rice up until May 21 this Boro season, where farmers are anticipated to have grown nearly 20 million tons of rice. 

Food ministry officials confirmed to the Dhaka Tribune yesterday, that upon receipt of a Cabinet Division letter, the ministry is revisiting the current food procurement system that mostly benefits rice traders and millers, hardly benefiting rice farmers, the primary producers.

Amidst a nationwide outcry over farmers getting poor prices for their produce in the current Boro season, the Cabinet Division has sent a letter to the Food Ministry asking them to include a farmer-friendly paddy procurement scheme in the ministry’s Annual Performance Agreement (APA) for 2019-20.

The 2019-20 APA is scheduled for signing in the presence of the prime minister on July 4, officials confirmed.

In the current procurement system, the grassroots level food directorate apparatus is largely buying rice from millers under seasonal agreements, thereby benefiting millers, middlemen, and seasonal rice traders only.

Farmers just get a tiny slice of that big support price cake in the form of sales of a few thousand tons of paddy to a few food procurement centres. 

Officials said they do not buy paddy from farmers directly mostly because of the high moisture content of paddy, freshly cut from the fields, and they prefer buying the grain from millers after the paddy is dried, husked, and converted to rice.

Food Ministry officials told this correspondent that the ministry is now mulling to develop drier facilities and paddy silos across the country so that the food directorate can procure more staple in the form of paddy, directly from farmers, rather than rice from the millers.

“It’s understandable that it will take a year or two to roll out the new plan for direct paddy purchases from farmers, but decisions are being taken in that direction, taking lessons from this year’s Boro paddy price fiasco ,” said a food official on anonymity.

Brake on imports

With 55% of the country’s annual rice output of more than 35 million tons coming from the irrigated Boro rice, farmers are now at the mercy of traders and millers who are not procuring much from them due to a supply glut and carryover stocks, thanks to a liberal import policy long pursued by the government.

Only last week, the government finally put a brake on private traders flooding the market with cheaper rice from across the border by imposing a whopping 55% tax on rice imports. Many consider it a late response from the government.

Against the officially declared one million ton of crop loss in the 2017 haor floods, the government allowed the import of over four million tons of rice in FY2017-18 and the imported rice was still in the pipeline, until the government finally increased import duties on rice last week.

Until there is a paradigm shift in the government’s long pursued food procurement policy, there appears to be no respite in sight for farmers in terms of getting a fair price for their produce.

This is evident from food statistics procured by the government so far in the current Boro season. Long before farmers started harvesting Boro in late April this year, the government had decided last March that it would buy 1.1 million tons of rice and 150,000 tons of paddy between April 25 and August 31.

Interestingly, a month after the official launch date of the food procurement drive, the food directorate purchased less than 2,000 tons of paddy from farmers and a little over 100,000 tons of rice from millers.

Farmers across the country, who are projected to have grown 20 million tons of Boro this season, are now going through hard times and suffering a cash crunch amidst very meager government purchases at poor, rock bottom prices from reluctant traders and millers, who already have huge import-fed rice stocks in hand. 

In the last financial year (2017-18), the government had announced the purchase of 0.15 million tons of paddy directly from farmers, but ended up buying only 24,000 tons.

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