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The Financial Express

Lower prices offered to farmers failing official Aman rice procurement drive

| Updated: November 21, 2020 16:33:02


Lankabangla and Fianancial Express Lankabangla and Fianancial Express
- FE file photo - FE file photo

The government's rice procurement drive during this year's Aman season is facing hurdles because of the mismatch between the ruling market prices and that fixed by the government of both rice and paddy.

The two main sources of procurement--- farmers and millers--- are found reluctant to sell paddy and rice to the field-level food officials. The prices of both paddy and rice in the grain hubs (mokams) are much higher than the prices offered by the government for both.

The food officials have procured a highly insignificant quantity of paddy and not a single grain of rice so far. The procurement of paddy began on November 07 last. The procurement of milled rice was due to start on the November 15th, but it could not be launched in the absence of agreements with the millers.

Coarse variety of Aman rice is being traded at Tk 43-46 per kilogramme (kg) and coarse variety of paddy at Tk 28-Tk. 28.5 a kg in the rice hubs during this peak harvesting season against the government's procurement price of Tk 36-37 (rice) a kg and Tk 26 (paddy) a kg respectively, according to Department of Agricultural Marketing (DAM).

The millers and farmers have expressed their reluctance to sign agreements with the Directorate General of Food (DGoF) to supply the staple due to high prices in the open market, said insiders.

The DGoF is, however, still hopeful of signing deals with the millers by November 26, its officials said.

The DGoF has set a target to buy 0.65 million tonnes of rice, including 50,000 tonnes of white (non-boiled) rice. The price of white rice has been fixed at Tk 36 a kg and the rest--- 0.62 million tonnes of parboiled rice--- at Tk 37 a kg.

It has also set a target to purchase paddy directly from the framers at Tk 26 a kg.

Though paddy procurement has started, the farmers are not interested in selling it. As a result, the authority could purchase an insignificant amount of paddy in last two weeks, an official at DGoF said.

He said the rice procurement drive has not yet started as millers are not interested fearing losses.

The directorate has also floated an international tender to import 50,000 tonnes of rice as the stock of rice at the public warehouses has come down to as low as 0.62 million tonnes, he added.

When contacted, Additional Director of DGoF Md Moniruzzaman said the directorate is hopeful that millers will sign contracts by November 26 next as the price might decline with the beginning of harvest in full swing.

"The framers are getting prices more than the government rates as we procure paddy only to benefit the farm community. If the farmers get more profits in the open market, it is a welcome news."

He added: "Our main aim is to purchase rice to raise the public stock and meet the need of the social safety-net programmes during this pandemic."

Mr Moniruzzaman said the directorate has also floated an international tender to purchase 50,000 tonnes of rice. Also, another tender will be floated soon to bring in 50,000 tonnes more.

Asked, he said they have not taken any decision yet on raising the asking rates further to attract millers.

The DGoF also couldn't achieve the Boro procurement target this year as it purchased only 1.1 million tonnes against the target of 1.9 million tonnes.

When contacted, Secretary of Bangladesh Auto Major Husking Mill Owners Association (BAMHMOA) K M Layek Ali said production of Aman might witness a decline due to flooding this year which caused a surge in the prices of the staple.

Prices of paddy have reached an all-time high this season as Swarna and BR-11 paddy have been selling at Tk 1,000 a maund which was Tk 680-700 a maund last year, he added.

According to him, price of per kg Swarna rice is now Tk 43-44 at mill gates. "How can a miller supply the grain at Tk 37 a kg," he questioned.

Consumers Association of Bangladesh (CAB) Humyaun Kabir Bhuiyan said the government should reduce duty on rice import which is nearly 62 per cent now.

He suggested that the government should raise the stock of rice to at least 3.0 million tonnes during this pandemic to tackle any possible food shortage.

Rice distribution through social safety-net programmes should be expanded to ensure food security of millions of people who joined the rank of poor during this pandemic, he added.

According to the Department of Agricultural Extension (DAE), nearly 48 per cent Aman harvest out of 5.89 million hectares of land has been completed so far.

The government is expecting a production of 15.5 million tonnes of rice this Aman season, said DAE.

However, the price of Aman coarse rice is now Tk 44-46 a kg at mill gates and Tk 48-52 a kg in Dhaka.

Prices of medium and fine variety of rice increased further by Tk 2.0-3.0 a kg in last two weeks as fine rice sold at Tk 62-72 a kg and medium at Tk 54-56 a kg in Dhaka on Friday, market sources said.

According to the food ministry the public warehouses have now a stock of only 0.62 million tonnes of rice which was more than 0.9 million tonnes in the corresponding period of last year.

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