Rice procurement during the current Aman season is proceeding fast thanks to enthusiastic participation from millers attracted by the competitive government offer.
In around one month since the procurement drive began in mid-November, the government has already purchased over 230,000 tonnes of grain, exceeding 30 per cent of its initial target of 700,000 tonnes.
Encouraged by this success, the food ministry announced last week a further increase in its target by 200,000 tonnes, according to Md Moniruzzaman, director (Procurement) at the Directorate General of Food.
Thanks to strong consecutive harvests in the past Boro and ongoing Aman seasons, the government has no immediate plans for rice imports, he said.
"We focus on maximising domestic procurement for the public distribution programme."
This year, the food ministry initially targeted 500,000 tonnes of rice and 200,000 tonnes of paddy purchases. This year, the ministry increased the offer price for rice by Tk 4 per kg and paddy by Tk 2 per kg.
Currently, millers are supplying parboiled rice at Tk 44 per kg and white or sun-dried aatop rice at Tk 43 per kg, while farmers are selling paddy at Tk 30 per kg.
However, the strong pace of rice procurement hasn't translated to paddy purchases. Insiders attributed this to farmers readily fetching similar prices in the open market, rendering the government's offer less attractive.
According to the food directorate, out of the 230,000 tonnes of grain procured so far, paddy accounts for only 13,000 tonnes, falling largely short of the 200,000-tonne target.
Hazarat Ali, the owner of Olima Traders in Nilphamari, told The Financial Express that paddy prices are 8-10 per cent higher this year compared to last year. Guti swarna, the key Aman variety, is trading at a minimum of Tk 28 per kg (Tk 2100 per 75kg sack), while Swarna-5 exceeds Tk 30 per kg (Tk 2250 per 75kg sack).
With good market prices readily available, farmers aren't enthusiastic about selling to government warehouses, he commented.
According to him, millers, on the other hand, stand to gain a minimum Tk 4 per kg profit by selling guti swarna or hybrid varieties. Currently, the mill-gate price for guti-swarna in northern rice mills is a maximum of Tk 41.5 per kg, down from Tk 43 per kg last year.
Md Rashed Ali, owner of Shahdat Auto Rice Mill in Dinajpur, said that the production cost for guti swarna, including rice bran profits, is around Tk 39 per kg this year. Millers, he said, are making profits of Tk 2 per kg.
However, another miller from Saidpur in Nilphamari commented that to maintain their supply trade, millers must pay Tk 1.5-2 per kg bribe to officials and influential figures.
Despite this, millers are still making a healthy Tk 4-5 per kg profit this year, he said, pointing at the disparity between farmer and miller earnings.
Md Shakhwat Hossain, Director General of the food directorate, confirmed a current rice stock of 1.25 million tonnes in public warehouses and a stable retail market price over the past year.
He said the government's paddy purchase target is primarily to ensure profitable prices for farmers.
Mr Hossain claimed that the government's offer indirectly benefits all farmers by influencing market prices.
According to the Department of Agricultural Extension, 5.87 million hectares of land were cultivated this Aman season, with 90 per cent of the harvest completed as of now.
The government has a target to produce 17 million tonnes of rice in this Aman season.
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