A possible setback for rice farming

Rice farming may face a setback as many farmers say they are incurring a loss by growing the staple crop and are now looking for alternatives. Low procurement rate, export and import of rice are to be blamed. A mysterious mix of export, import and low grade procurement produces disincentives for the country's rice growers. A small margin of profit per kilogram in the rate set by government for procurement of rice or open market price during the harvesting season hardly provides any stimulus for the rice farmers.
A subtle trick operates in the country's rice market. When farmers reap paddy, market is kept subdued and the growers fail to get fair price and reasonable returns on their produce. On the other hand, millers and big businesses store rice and jack up prices when supply line from growers dries up. The government-set price of rice was Tk 32 per kilogram in the Aman season. Good quality rice which a little better-off sections of people consume sells at no less than Tk 50 per kilogram. Thus the growers and the consumers both get cheated in an ambience of marketing anomalies.
Besides, import of rice creates a market glut and crisis of preservation space in silos. A pertinent question arises as to why the government should allow rice import when it has opted for export of rice and claims food autarky in the country. The government exported 50 thousand metric tonnes of rice in 2015 to Sri Lanka. Negotiations are reportedly on now with Middle Eastern countries for exporting more fine quality rice from the country.
 A national vernacular daily reported that what remains a riddle for many is that private businesses imported some 1.5 million tonnes of rice last fiscal year 2014-2015, from India. In the current financial year, 2015-2016, around 0.3 million tonnes have been imported and L/Cs opened for much the same quantity uintil March 2016. A prohibitive 20 per cent import duty on rice could not deter the importers.
The country now holds 3.0 million to 3.5 million tonnes of surplus food. Food officials say the government stocking facilities have an installed capacity of 2.0 million tonnes but practically 1.8 million tonnes can be preserved.
By the latest account, there is 1.2 million tonnes of food in government stock at present, leaving room for only 0.6 million tonnes. But the total amount in the pipeline now is over 1.8 million tonnes, including Boro rice and wheat. Then the question arises: where will the great deal of private imports go? Under such a situation, the government has decided to sell coarse rice at Tk 15 per kilogram, perhaps to vacate some spaces for fresh grains to be procured.
The process involves subsidy, as stated by chairman of the parliamentary standing committee on the Ministry of Food. The money for the gratis comes out of people's pockets.
Under the circumstances, farmers get discouraged to cultivate rice. Already vast swathes of paddies have been converted to fish-farming ponds in northern and north-western areas, especially in greater Rajshahi, a region famed as the granary of best quality of agricultural products. Farmers are also switching over to any higher-end cash crops, squeezing acreage of cropland for paddy growing. Such phenomenon is taking over in other rice pockets, including greater Mymensingh and Sylhet.
A well-thought-out policy is seen as an imperative to build up a balanced chain of production, marketing, preservation and distribution of food in the country. At the same time, guaranteeing wholesome food free from toxins and preservatives from field to shops is also a constitutional obligation of the powers that be.
The writer is a retired Professor of Economics, BCS General Education Cadre.
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