Indian rice import puts farmers in a pickle

Prices of paddy have started falling in the local market, accelerated by uncontrolled, but 'avoidable' rice import from India, even if Boro harvest is going on, insiders said.

Boro is the major cropping period that provides 55 per cent of the rice the country produces and 60 per cent of the country's people including 2.2 million farm households and another 10 million traders are associated with the season, according to the Ministry of Agriculture.   

The farmers across the country are in despair as paddy price has started going down, a trend market players attributed to the uncontrolled import from the neighbouring India.

Traders say Bangladeshi importers bring in roughly 0.11 million tonnes of low-cost Indian rice every month at zero-duty.

Price of Brridhan-28 variety of paddy's (old stock) declined to Tk750-760 per maund in April, which was Tk880-900 per maund in March, Shahidur Rahman Patwary Mohan, a miller at Dinajpur, said.

"Most of the varieties of paddy have been decreasing in the last few weeks," said Mohan, also executive member of Bangladesh Auto Major Husking Mills Owners Association, the platform of 20,000 rice mills in the country.

Meanwhile, Boro harvesting started in few parts of Haor regions last week, the Department of Agriculture Extension (DAE) region Mymensingh and Sylhet said.

Newly harvested Brridhan-28 was traded at only Tk550-600 per maund in Haor regions in the last few days, which were Tk720-760 per maund (40 kg) during the corresponding period of last year, Nur-e Alam, a farmer at Shohilati village at Tarail upazila in Kishoreganj district told the FE over phone.

He said: "I have cultivated Brridhan-28 variety at 5 Ara (1 Ara=160 decimal in the area) of lands. I will start harvesting rice from Monday."

"If this price trend continues, most of us will be unable to get return on our investment as production cost is not less than Tk 680 per maund this year in Haor area," he said.

He also pointed out that many of his fellow farmers borrowed from local moneylenders at high interest (per month Tk100 for Tk1, 000) rate.

"We will have no option but to flee from the area if we cannot recover our production cost," he said.   

However, the government has fixed a target to procure 1.0 million tonnes of rice at Tk 32 per kg and 0.15 million tonnes of paddy at Tk 22 per kg this year from millers and farmers, which will started from May 1 next, according to the Directorate General of Food (DGoF).

"Imports of rice in huge quantity are forcing millers to stop their operation and its consequence is it is squeezing paddy trade between traders and farmers," the association secretary KM Layek Ali said.

He said importers can bring in the Indian Swarna variety at Tk24-26 per kg whereas milling cost of the same variety in Bangladesh is not less than Tk 29.50 per kg.

He said the Indian rice variety known as Ratna (nearly a close variety to Bangladeshi Brridhan -28) is being imported at Tk27-28 per kg whereas milling cost of Brridhan-28 in Bangladesh is minimum Tk35.5 per kg.

He said nearly half of the rice millers across the country have withheld their operation following the unnecessary imports and the political turmoil.  

The total import in fiscal year 2014 was 0.374 million tonnes from India, which has risen to 1.276 million tonnes until April 7 of the current fiscal, according to the food ministry latest data.

Bangladeshi importers brought 0.141 million tonnes per month in the current fiscal year, it showed.

An official at the food ministry told the FE that the import helped India become the biggest rice exporter last year, surpassing Thailand.

According to the Bangladesh Bank data, the local importers brought rice from India worth US $360 million (settled L/C) in the July-February period of the current financial year, which was $171 million in the corresponding period of the last fiscal year.

The parliamentary standing committee on food ministry last month expressed its concern over the "uncontrolled" rice import which has been affecting both rice farmers and millers.

The committee, in a statement, said the country has sufficient domestic production now and urged the government to discourage rice import for the time being to safeguard the interests of farmers.

The Bangladesh Bureau of Statistics data showed that rice production in the first two rice cropping seasons-Aus and Aman, increased significantly this fiscal year, compared with that of last fiscal.

Aman production showed a record 13.19 million tonnes while Aus 2.328 million tonnes in the current fiscal against 13.032 million and 2.32 million tonnes respectively in the last fiscal year.

According to the DAE, Boro has been cultivated at 4.84 million hectares this fiscal year which was 4.78 million hectares last year from which the country got a record highest 19.0 million tonnes.

Total rice output of 34.365 million tonnes in the FY'14 was the highest ever recorded in the country against a demand of 31.0 million tonnes, according to the BBS and Directorate General of Food (DGoF) data.

Economist Golam Hafiz Kennedy said the government should have "checks and balance" on local production, supply and price trend before it allows traders to import.

He said "The recent import from India is unnecessary as local production is showing very good trend."

"To keep the rice sector stable is necessary both for social and food security of the country," he said, "The protection of interests of farmers and millers is essential for better production and food safety as well," he said.

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