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Dhaka Tribune

Levy on rice import fails to bring smile for paddy farmers

Update : 20 May 2015, 07:37 PM

Duty hike on rice import has failed to bring smile for the paddy farmers as the move has pushed the prices at a level that is not enough to bring them out of woods, according to farmers and traders.

Farmers said during the ongoing boro season (April-May) they are selling paddy at least 20% lower than their production cost. Boro paddy is the largest rice crop, accounting for 55% of total annual rice production in Bangladesh.

Yesterday, freshly-harvested boro paddy was traded at Tk600 per maund (40kg) in the areas of Pabna district and Tk650 in Joypurhat, according to them.

Before imposition of levy, boro paddy was traded at Tk500-Tk550 per maund and these prices were much lower than the last year’s price of Tk800-Tk850 a maund.

Higher domestic production and rising imports were blamed for the price downturn below last year’s level, bringing hardship both for millers and farmers.

For this season, the government estimated that the farmers’ production costs to produce one kilogramme of paddy would be Tk20 during the current boro season, meaning the growers would come to the break-even point if they get Tk800 on average for each maund of paddy.

On May 12, the government imposed 10% duty on import of rice to ensure that farmers in Bangladesh get fair price for the rice they cultivate.

“We are selling boro paddy at Tk600 per maund now. It took more than Tk700 to produce a maund paddy,” said Mohammad Alam Sheikh, a farmer in Nagarbari area of Pabna district.

A Joypurhat farmer Abdul Quddus was selling boro paddy at Tk650 a maund yesterday. “But before duty imposition, I was selling this at Tk500-550.”

Quddus was also a small miller but gave up rice milling since the government allowed to import rice from India last year.

Traders and millers fear that fall in rice price in India after duty hike in Bangladesh would deny safeguarding the interests of farmers further to get remunerative prices for boro paddy.

“This may cause hardship to the farmers and millers as levy hike did not bring any good for them of the remunerative prices,” said Md Layek Ali, general secretary of Bangladesh Auto, Major and Husking Mills Association.

“Rice price increases here but decreases in India due to the government move. This might bring joy for local importers.”

After raising import duty in Bangladesh, rice price in India has fallen almost 20% particularly in the eastern Indian states as well as Andhra Pradesh in south India as these regions export quite a good volume of non-aromatic parboiled rice to Bangladesh, according to Economic Times.

Sushil Kumar Choudhary, a leading rice exporter to Bangladesh said: “Since the news came in, prices have fallen in domestic market by almost 20%.”

Grain analyst Mahabub Hossain said rice import cancellation and further raising duty might ensure fair prices for the farmers.     

He said another effective measure can be huge quantity of rice procurement by the government from the domestic market and later during scarcity or flood period, the government can sell at higher price, which will also bring profit for farmers.

For effective rice price, the government may procure rice, fixing price instead of setting procurement target, said Hossain, also a former director general of Bangladesh Institute of Development Studies.

According to the Department of Agriculture Extension (DAE), Boro has been cultivated on 4.84 million hectares of land this year and more than 50% of the crop was so far harvested.

According to the Bangladesh Bureau of Statistics (BBS) and the Directorate General of Food, the country produced 34.465m tonnes of rice in the last financial year against the demand for 31m tonnes.

Earlier, the zero tariff on rice import, coupled with the lower prices in Indian markets, encouraged the private importers to go for import on a wide scale in the current fiscal. 

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