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Poor pace of paddy purchases hurting farmers

  • Published at 10:58 pm June 16th, 2019
File photo of farmers reaping paddy in a field in Moulvibazar Mehedi Hasan/Dhaka Tribune

A paltry 7.5% of targeted paddy volume has been purchased from farmers so far, but millers managed to sell 35% of the rice that the government plans to buy this Boro season

If the government wants to provide farmers with price support, the last thing it should allow is to have a situation where farmers end up selling their paddy to middlemen at lower prices.

But thanks to systemic apathy in the government’s paddy purchases from farmers, there is no spirited drive in the ongoing foodgrain procurement program.

Market sources fear that by the time the drive gains momentum, if at all, farmers in dire need of cash would already be compelled to sell paddy at much cheaper rates to middlemen and millers. Paddy farmers would eventually not get the price benefit meant for them.     

The government’s food purchase centres across the country might likely buy less than 30,000 tons paddy from farmers in the first one and a half months of a four-month long procurement drive.

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This purchase would only be 7.5% of the procurement target of 400,000 tons. 

Thanks to a rice glut, courtesy of high domestic production and unregulated cheaper rice imports from across the border, farmers this Boro season are distressed and are being offered Tk500 for each maund of paddy as against the government declared support price of Tk1,040 per maund.

When it comes to providing price support to farmers, it’s the pace of the government’s procurement drive that matters most, not the volume.

Though the government last week revised its procurement volume from an initially planned 150,000 tons to 400,000 tons, the desired pace in procurement is completely missing, as evidenced by Food Ministry statistics.

Market sources say that given the reality of the government buying only a small portion of rice and paddy from farmers and millers, it needs to do it at a much better pace. Otherwise, farmers miss out on the true benefits of the government price support intended to help them, and middlemen and millers end up cashing in on the benefits instead.

Interestingly, when it comes to rice but not paddy, the procurement drive appears to be a good success. Out of a targeted purchase of 1.1 million tons of rice, the Food Directorate has already procured over 380,000 tons in the first one and a half months of the four-month long drive, accomplishing a third of the task at a fast clip.

The price benefit of the government’s rice procurement program largely goes to rice millers, who buy paddy from farmers at cheaper rates, converting that into rice and selling the same to the government at higher rates.

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Reached over the phone, Agriculture Minister Dr Abdur Razzaque told this correspondent that after revising the paddy procurement target from 150,000 tons to 400,000 tons, the government has instructed purchase officials to buy paddy directly from farmers and convert the same into rice. 

Food officials acknowledge that the government does not have the capacity to hold paddy in public granaries which have expressly been built to store rice.

Food Minister Sadhan Chandra Majumder recently said a process was underway to build several new food depots across the country where one million tons paddy could be stored.