Rice price not falling despite high production amid calamities

Bangladesh was hit hard by Amphan last year right before monsoon followed by floods four times. Although cyclone Yaas did not strike Bangladesh, it, however, affected the coastal areas.

Despite these catastrophes, the country’s farmers have astounded the world as Bangladesh ranked third, overtaking Indonesia among the highest rice producing countries. A report titled ‘Global Food Outlook-June 2021’ published by UN’s Food and Agriculture Organisation (FAO) revealed the information this week.

The report says, despite a series of natural calamities, Bangladesh produced 36.5 million tonnes of rice in 2019. The country ranked third, leaving behind Indonesia for the first time that year. Bangladesh secured third position in 2020 as well despite natural calamities. The production was 37.4 million tonnes and it increases to 37.8 million tonnes in 2021.

On the other hand, Indonesia has been trying to boost their production to beat Bangladesh again. Their production increased by 6 per cent this year to 37.1 million tonnes.

The report hinted that China and India secure first and second position with 146.6 million and 123.1 million tonnes respectively. Among these countries, production in China, Bangladesh and Indonesia has been increasing while India’s production remained static.

Agriculture minister Muhammad Abdur Razzaque told Prothom Alo, "We are giving more importance to agricultural mechanisation. We are constructing paddy storehouses in different parts of the country to reduce the rice mill owners’ manipulation in the market. Farmers can sell paddy directly to those storehouses. If this continuity is maintained, the production of paddy in the country will increase further.”

According to the FAO report, rising rice prices have played a key role in the steady growth of rice production in Bangladesh. Mechanisation of agriculture and use of technology has increased. This week's report by the US Agency for International Development (USAID) also mentioned that rice production in Bangladesh has increased this year.

Although rice production has been steadily rising, prices have not reduced. According to the agriculture ministry, the production cost of rice in the Boro season this year was Tk 38 per kg. The government has announced it will buy rice at Tk 40 per kg and paddy at Tk 27 per kg. But the price of paddy in the market is four to five taka less than the collection price of the government. According to Trading Corporation of Bangladesh (TCB) and the food ministry, coarse rice is being sold at Tk 44-48 per kg. In other words, rice mill owners and traders are the ones who are reaping benefit of the increased production. Farmers are not getting the price of paddy announced by the government.

Nazneen Ahmed, a senior research fellow at the Bangladesh Institute of Development Studies (BIDS), told Prothom Alo, “A handful of rice mill owners control rice market in the country. Even rice import and export including purchasing paddy, rice processing is under their control. If the production of rice in the country increases, the profit of the rice mill owners is more than that of the farmers.”

However, the consumption or demand for rice has increased in Bangladesh at this time of pandemic. Last year, Bangladesh imported 1.8 million tonnes of rice. According to the FAO report, a total of 9.7 million tonnes of food grain was imported. Besides rice, wheat imports also increased by 400,000 tonnes to 6.4 million tonnes last year. However, this year it may reduce to 100,000 tonnes.

It is believed that the demand and import of wheat decreases when the production of rice is good. Consumption of wheat in the country has almost doubled in the last one decade. In the 2013-14 financial year, the production of wheat in the country came down from 1 million tonnes to 700,000 tonnes. Last year it increased again to 1.1 million tonnes. This year it could be 1.3 million tonnes.

Beef production may decrease somewhat

On the other hand, cow and beef imports have been almost stopped in Bangladesh for six years. The production of beef and milk was continuously increasing in the country. In 2020, the production of beef in the country was 234,000 tonnes. This year, it may reduce to 232,000 tonnes, the report said.

When asked about the decline in production, Shah Imran, general secretary of the Bangladesh Dairy Farmers Association, said a large portion of the country's population has lost income due to coronavirus. Many of them have reduced their consumption of beef. Many farms have also reduced sales due to lower prices. As a result, the sale of beef and mutton has decreased. But the rearing of cows and goats in the country as a whole has not decreased, but has increased.

Among imported products, the import of nutritious food such as edible oil has also increased in Bangladesh. From 2016 to 2019, Bangladesh imported an average of 2.5 million tonnes of edible oil. In 2020, it came down to 2.2 tonnes. This year it may increase to 2.4 million tonnes. The bulk of this edible oil comes from Malaysia as palm and soybean oil. In addition, soybean, sunflower and olive oil are imported from various countries including United States and European countries. All of these oil imports could increase this year, the report said.

* This report, originally published in Prothom Alo print edition, has been rewritten in English by Farjana Liakat