The prices of paddy increased by Tk140-150 per maund (37.32kgs) at farm level in last one week following the levying of 10 per cent duty on rice import, a market survey reveals.
But farmers are reaping little benefit from the hike in prices. Big millers and traders, who have built up rice stocks through procurement of the main staple from domestic and external sources, are making the most of it.
By the time the paddy prices have taken an upturn, most farmers in the country are learnt to have sold out their new harvests.
Market experts said more than 60 per cent of farmers already had sold out their produce at much lower prices to millers and their allied local wholesalers (pikers) or mid-level traders.
Paddy prices plunged to a three-year low this Boro season with the beginning of harvest from mid-April when per-maund Brridhan-28 sold at only Tk450-500 while finer-variety Miniket sold at Tk500-550 per maund, according to Department of Agricultural Marketing (DAM) data.
The DAM reckonings show the prices of different varieties of paddy have increased by Tk140-150 per maund (30-33 per cent rise) in last seven days.
Costs of production of Brridhan-28 and 29 and Miniket were Tk750 to Tk800 per maund as per the calculation done by agriculture ministry.
The government is going to buy paddy at Tk880 per maund and rice at Tk1280 per maund from May 30 from the farmers and millers, said food officials.
Millers, traders and experts claimed that uncontrolled import of rice from India was the key reason behind the fall in paddy prices this Boro-harvesting season.
They had urged the government from the beginning of the year to withdraw zero duty on rice import as lower-priced imported rice flooded the market.
However, the private importers have brought 1.417 million tonnes of rice until May 18, according to the food ministry data.
Meanwhile, imports declined to 2,500 tonnes per day during the period from April to May 18 from 4,600 tonnes a day in July-March period of the current financial year, according to the data.
"As a consequence of huge imports, 60 per cent millers stopped their operation in December-April period in the peak Aman-and Boro-milling seasons," said KM Layek Ali, secretary of Bangladesh Auto Major and Husking Mills Owners Association (BAMHMOA).
He said Swarna variety's import cost was between Tk20 and 24 per kilogram when local milling cost of the produce was Tk27 to 29 per kg.
However, amid growing demand from farmers, millers, experts, the government finally slapped 10 per cent duty on rice import with effect from May 11, according to the National Board of Revenue (NBR).
The duty obligation pushed up paddy prices dramatically.
Md Shah Suja, a farmer in Ramnagar Union under Nilphamari sadar upazila, said Brridhan-28 was selling at Tk1140-1160 per 75- kg sack (Tk600-620 per maund) now against Tk850-900 per sack (Tk450-480 per maund) a week back.
He said: "The price started to increase when most of us had sold our products. Every farmer incurred a loss of Tk2500-3000 per bigha (33 decimal) by cultivating paddy this season."
He said local millers, paikers and traders are reaping huge benefits from the hike following the market intervention.
Economist and rice-market expert Dr Mahabub Hossain told the FE that the government policymakers should have analysed the matter much earlier when the number of LCs increased significantly for rice import.
He said if the duty obligation came earlier, it could benefit most of the farmers.
"But, many of the farmers who are in the harvesting process will get some benefit from recent price rises. If the paddy price increased to Tk650-700 per maund, the farmers at least could get back their investment," he said.
"Many farmers go for Boro farming much later. We now term it Braush (Boro+Aus). The Braush cultivators will reap benefits," he said.
Dr Hossain also said, "Without ensuring profits for farmers, we cannot increase our production at level necessary to ensure food security of the country."
Farm-economist Prof Gazi M Jalil said 60 per cent of the farmers have already sold their crop as they needed money for the jute and Aman cultivation and also for paying back their debts.
Prof Jalil, who teaches agriculture economics at Sher-e-Bangla Agricultural University, said the government should enact a time-befitting rice import and export policy to protect the interests of the country's people.
"Government should consider rice always a strategic crop, which could help it in framing a farmer-friendly import policy."
However, rice (milled) prices were static marinating lower prices at mill-gate for last two weeks, BAMHMOA secretary KM Layek Ali said.
The government allowed substantial rice import when local farmers gifted the country with record production, according to the government data.
Bangladesh Bureau of Statistics data reveal that rice production was a record 34.465 million tonnes in the fiscal year 2013-14 while output of Aman and Aus crops accounted for record 13.2 million tonnes and 2.328 million tonnes respectively in the current financial year.
Meanwhile, the production may surpass19.0 million tonnes in the current Boro season as per the prediction of the Department of Agriculture Extension.
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