Let’s not start with any beating around the bush. Coming straight to the point- paddy prices this year have declined to the lowest at the growers’ level. The farmers are so frustrated that, we all saw, one of them set fire to his paddy field in Tangail.
Despite the bumper production of boro paddy, the farmers are not happy due to the low prices, almost half the production costs.
Incidentally, this year Bangladesh’s rice production may reach 35.6 million tonnes, highest among the world’s main rice producing countries, according to the the US Department of Agriculture (USDA).
There are certain factors contributing to the current situation and hindering the possible benefits that the country could have reaped from the ample boro production.
The leaders are preaching and proclaiming development everyday and relishing the bumper production of crops. But what about the farmers? While the country speeds along “the highway of development”, the key drivers of development are left far behind, burning their fields or throwing their produce onto the roads, protesting the apparent mismanagement of the concerned ministries and authorities. The agriculture minister, on a private TV channel this week, said there was a surplus from the past year and so the millers are unwilling to buy paddy anew, leading to lower prices of paddy.
He also said the ministry was considering rice export. The same was reiterated by the finance minister at a pre-budget meeting.
Our question is, what have they been doing all this time? The ministry has records of surplus in previous years and about the estimated total production after harvesting this year.
It is the ministry’s job, not anyone else’s, to take measures on the basis of the existing data of surplus and production.
According to official and unofficial reports, there is a surplus of 2.5 million to 3 million tonnes of rice in the country at present. According to the minister speaking on the TV channel, the rice mill owners already have stocks from last year.
If we have ample paddy production, then why has 200,000 tonnes of rice been imported in the last 10 months through government and private channels?
The minister tried to explain the situation with the basic economy theory of supply and demand that affects the price.
If the theory actually applied here, the prices of rice would have declined due to sufficient supply of paddy in the market.
And again, there must be a feasible yet effective way to stock paddy for future sale.
One thing has to be taken into consideration. Our marginal farmers take loans to grow paddy. They have to pay the field labourers and meet so many other costs by selling the paddy immediately after harvest.
In that case we could adopt the Futures Market mechanism like India. In the mechanism, the farmers and millers or traders, all can purchase or sell a specific commodity for delivery at a later date.
The contract includes the amount of the commodity and the future price. It allows a less capable farmer to reduce certain risks by transferring them to another person who is more willing -- and able -- to bear them.
Another solution can be providing loans to the farmers. Former Bangladesh Bank governor Atiur Rahman proposed providing bank loans to the farmers for mechanisation of agriculture.
Not only mechanisation, but the farmers also should be provided with loans for production. Our experience says, unlike the big borrowers, the small creditors always pay their loans on time. If interests of millions of corporate loans can be exempted, the interests of small loans to the food crop growers can be and should be exempted after proper investigation, in case they fail to pay the dues.
Thus, the farmers may achieve the ability to meet the production costs without selling paddy right after harvesting and store it for selling in future.
It is not possible for the government to purchase all the produce from the farmers at higher prices and selling them with subsidy later. In that case the government will collect more tax from the people only to meet that extra cost. The government is also not being seen to be proactive in this situation. It set a target to procure 1.3 million tonnes of rice from May this year in three months. Half of May has passed, but so far only 1,269 tonnes have been procured. Most of the rice mill owners also have not begun buying rice from the market.
In response to a question at seminar recently, the agriculture minister said the government has no plan to raise procurement price now. But the farmers are not even getting the existing price, fixed by the government itself. How would a price hike help them, then?
On the other hand, there is a possibility that due to the loan exemption and massive government procurement, famers may stop growing any crops other than rice whereas alternative crops can reduce the huge surplus of one particular crop and make the country self sufficient in food. Alternative crops also safeguard the farmers from the risk of loss.
We believe there are more solutions like these and the related ministry and its people are well aware of that. The question is whether they want to solve it.
It is clearly visible that a syndicate of millers and traders are operating and controlling the rice market. We all know who will be benefited from the low price of paddy.
Government procurement and subsidy could be a temporary solution if the farmers would be the direct beneficiaries in this process.
Besides, we heard Abdur Razzaque saying that the prime minister Sheikh Hasina was worried as the paddy price goes down significantly. Why is she worried? Why does the relevant ministry sound helpless, as if they are taken hostage by the greed of certain millers and traders?
Concerning the import of rice despite surplus, the minister said, the five-star hotels and the wealthy persons of the country only consume fine grain fragrant rice. Perhaps the imports are to meet their needs. About 200,000 tonnes of imported rice and another 380,000 tonnes in the pipeline are only for the so-called five-star hotels and wealthy people! Our farmers should start producing fragrant rice as soon as possible!
Flaunting development, declaring success based on GDP, or relishing ample production of agricultural goods is facilitating the politicians only. But the real development remains a far cry as people and the growers are still deprived of the tangible benefits of development.
If the government does not take steps to prevent pecuniary benefits of a particular group or syndicate, the agriculture sector will collapse causing irreparable misery.
It has to be stopped. If not, somebody send a message to King Hirok, “We are coming home.”
*Farjana Liakat works for Prothom Alo. She can be reached at firstname.lastname@example.org