The recent media reports suggest that the government has decided to procure 200,000 tonnes of Aman rice from the country’s domestic production this fiscal year. The procurement price of each kilo of rice has been fixed at Tk30, which is up by 15.38% from the previous year. The procurement drive will start in December and continue until February 28.
The decision was taken at a meeting of the Food Planning and Monitoring Committee (FPMC) on November 27 at the Ministry of Food. Chaired by Food Minister Ramesh Chandra Sen, the meeting was attended by Finance Minister AMA Muhith, Agriculture and Fisheries Minister Matia Choudhury and Commerce Minister GM Quader, among others.
Factors that have been influencing successive governments in the domestic procurement of rice, both Aman and Boro, for a long time include providing incentives to farmers by arresting the fall of prices during the harvesting seasons, building up government food security stocks in order to implement the targeted food distribution programs such as food for work, test relief, gratuitous relief, selling rice through fair price cards among those who are not included in the government’s safety net programs, and intervening in the market through open market operations to help stabilise the price of rice when it shows an upward trend.
While talking to reporters the food minister said the present procurement target had been fixed at 200,000 tonnes, but depending on the market, the government might revise that later. He added that the higher procurement rate would benefit farmers.
Aman is the second biggest rice crop in the country, Boro and Aus occupying the first and third respectively. Actually Aman was the biggest rice crop in the country till the end of the nineties when its place was taken over by Boro.
The government generally takes into consideration certain factors to fix the price of rice to be procured internally. These are production, cost of production, stock position of food grains in government warehouses, the price of rice in international markets, and import of rice.
Last year, the government decided to procure 300,000 tonnes of Aman rice from domestic production when food grain stock in government warehouses stood at about 1.5m tonnes.
Questions may arise as to why the government has decided to procure less Aman rice (200,000 tonnes) this season when the food stock position in government warehouses, according to food ministry sources, has come down to around 1m tonnes. This happens at a time when, according to the food minister, production of Aman this year will exceed that of last year by more than 200,000 tonnes.
It has been a longstanding policy that the government will procure both paddy and rice from the domestic market during the harvesting seasons of Aman and Boro.
Besides, farmers’ organisations have been demanding for years that the government procure a substantial quantity of paddy, both Aman and Boro, directly from farmers during harvesting seasons in the interest of farmers.
Although the government has been purchasing small quantities of Boro paddy directly from farmers, it has been ignoring the farmers’ demand for procuring Aman paddy from them for the last few years. This has also been repeated this year.
The procurement price of each kilo of Aman rice has been fixed at Tk30 this year against last year’s price of Tk26. The ricemillers, hoarders, and big farmers will be the beneficiaries of this price hike. The marginal and small farmers sell paddy in the market.
They sell their products immediately after the start of the harvesting season to pay back their loans and meet the urgent needs of their families.
Taking advantage of the absence of the government program to procure Aman paddy, the rice-millers, who always want a low price for paddy, will be its sole buyers in the market. As a result, the marginal and small farmers will be deprived of the right price for their products.
A visit to the website of the food ministry shows that on November 26, the total stock of food grain in government warehouses stood at over 10m tons against almost 14.5m tons on the same date last year. The quantity of rice in particular stood at 664,000 thousand tonnes against last year’s 1.18m tonnes.
What prompted the government to procure only 200,000 tonnes of Aman rice when the food grain stock in government warehouses is not satisfactory? Bangladesh is a disaster prone country and that is why experts have suggested that the government’s food grain security stock should be maintained at approximately 2m tonnes.
This also prompted the government to go for crash programs to raise the food grain stock in government warehouses. While presenting the national budget for fiscal year 201314, Finance Minister Muhith informed that with the completion of the under construction silos and warehouses, the government food grain storage capacity would be about 2m tonnes against 14m tonnes in 2009.
For procurement of both Aman and Boro, the government is entirely dependent upon the rice-millers. We saw in 2010 how the rice-millers refused to supply contracted Boro rice on the plea of the high price of paddy, and the government had to accept their demand to increase the price from Tk25/kg to Tk28/kg.
The time has come for the government to find additional sources for the procurement of rice. As suggested by the National Food Policy2006, the government may, in addition to following the existing system, purchase rice from the domestic market through open competitive tenders.
To conclude, in the absence of any program to procure paddy from farmers, the newly announced Aman procurement policy cannot safeguard the interest of farmers. Increasing the procurement price of Aman rice by Tk4/kg will serve the interest of rice-millers.
The Aman procurement policy should have been designed in such a way that it serves the interest of the farmers, and not of the middlemen who now rule the roost.
