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Rice price draws mixed reactions from farmers and millers

  • Published at 06:17 pm December 22nd, 2013

After a bumper production of T-Aman and positive market trends so far, farmers are expecting a higher turnover this year to recoup the losses incurred over the past two years.

Small-scale farmers, who hold the key to meeting the country’s rocketing food needs, are happy with the surge in price and have already started preparing for the next cultivation season. The millers, however, are worried they might not be able to meet the procurement target set by the government.

Currently, the price of each maund of coarse rice is around Tk750, which is almost Tk200 more than the previous year’s rate.

“The price is good this year and turning in favour of smallholders like me,” said Sajjad Hossain, a farmer of Dinajpur who cultivated T-Aman on a five-plot.

 “This year’s production was better than last year’s, thanks mostly to favourable weather conditions all through the season.”

The countrywide production may outstrip the government target by nearly 200,000 metric tonnes, according to Rafiqul Hasan, deputy director of the Department of Agriculture Extension. The government had fixed a target of producing over 1.28 crore metric tonnes.

T-Aman is the second highest food grain in the country in terms of production after Boro, which recorded a production of over 1.87 crore metric tonnes last season.

However, the high price of rice has led many farmers to resort to hoarding in the hope of getting still better prices at a later point of time.

“Many farmers are hoarding their produce with the expectation that the price will go up further within a short time,” said Masud Chowdhury, a farmer of Thakurgaon, who admitted to storing his stock of rice produced on an eight-acre farm.

What motivated the hoarders further was the assurance of getting seeds, fertilisers and other resources on credit as they prepare to cultivate Boro in the coming season.

But the millers, procuring rice for the government so that it can build up a stock of its own, say they are being affected by both the current trends of pricing as well as the hoarding.

“It is astonishing that there is not enough rice to buy despite a bumper production. An artificial crisis is being created by the hoarders,” said Towfiqul Islam Babu, president of Naogaon Rice Mill Owners Association.

“If the existing trends continue for another month, we will have to face huge losses since most of the millers have been purchasing rice on loan.”

The government on November 27 fixed a target of procuring 200,000 tons of T-Aman for its own stock at Tk30 for each kilogramme of rice. The decision was based on estimates that farmers would get “fair prices” against their production cost of Tk25.42 per kg.

However, the millers maintain that the price fixed is not in proportion to the rising market trends.

“The production cost of rice has risen and so has the price at the market,” said Towfiqul Islam Babu, urging the government to provide millers with an incentive of Tk4 against each kilogramme of rice.

In this regard, Quazi Shahabuddin, former director general of the Bangladesh Institute of Development Studies (BIDS), told the Dhaka Tribune that the current price would go down once there was a steady supply of rice.

Until that happens, argues Nirod Baran Saha, president of Naogaon Rice Wholesalers Association, most of the suppliers will have to continue procuring rice at a loss in order to retain their supply license. “Some suppliers may discontinue supply but there will be some who may supply imported rice, which will be unethical and against the law,” he said.

According to Mahabub Hossain, executive director of Brac, it is important that the millers have their due profits but it is more important to save the farmers first. “Otherwise, they may switch their attention to cultivating other crops.”

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