Farm subsidy can lessen production costs: Akhtar Ahmed

Despite bumper rice crops, farmers face a crisis due to the low cost of paddy. International Food Policy Research Institute (IFPRI) resident director Akhtar Ahmed in an exclusive interview talks to Prothom Alo on how to emerge from the current crisis and ways to protect agriculture and farmers in future.

Prothom Alo: Why did the price of rice fall suddenly? What are the ways to ensure a reasonable price for farmers?
Akhtar Ahmed: The price of paddy has fallen in keeping with the common economy theory where supply has been higher than demand. There was a deficit of rice in the haor areas in 2017. But rice was imported more than the deficit at that time. This caused to the fall of paddy prices. The high paddy harvest is good. Reducing production is not a solution. Paddy and rice are very important in the context of Bangladesh’s economy. This should not be considered as mere an agri-product. It has multifarious significance. Employment of millions of people is involved in this. However, the problem is complex. Farmers are affected if prices of paddy fall. The poor section is affected if the price of rice goes up. It is necessary to bring a balance between these two.
Prothom Alo: How do other countries in the world bring about a balance?

Akhtar Ahmed: The reality of our country is not the same as other countries in the world. Our reality can be compared with India. The government there gives more subsidies to farmers. Farmers are given subsidy to everything including fertiliser, seeds and electricity. We mainly give subsidy for fertiliser and electricity for irrigation pumps. As farmers in India get adequate subsidy, their production costs and the procurement prices are low. Actually, the price of rice has come down to half in the last 30 years. If inflation is counted, the price of rice has gradually fallen every year. Farmers are affected badly due the low price of paddy.

Prothom Alo: Why do the farmers cultivate paddy despite losses?

Akhtar Ahmed: Cultivation of paddy is still more suitable for our farmers. Although the price of rice has fallen, the production of paddy per acre is gradually increasing. Ten millions of tonnes of paddy were produced after the independence. Now about thirty five millions of tonnes of paddy are produced although the cultivable land has decreased. There is no bigger success than this in Bangladesh. This success has come through the hard labour of farmers and innovation of new varieties of paddy by scientists. The structure of our paddy production has also been changed. Even 20-25 years ago, Aman was our main crop. Now boro constitutes 55 per cent of our crop. The production of boro is free from natural disaster to a great deal. Natural calamity frequently occurs during Aman season. Farmers are interested to cultivate paddy as there are more risks in alternative crops. Although the price of paddy falls, this is not like potato.

Prothom Alo: Did not the government know that the production of paddy will be higher this year? Why did the government not take steps to come out of the crisis?

Akhtar Ahmed: The field workers of the Agriculture Extension Department certainly knew the production will be higher this year. International organisations also forecasted bumper production of Aman and Boro. It would be better if steps were taken in advance. We have to learn lessons from this year’s experience.

We can use the West Bengal experience of our neighbour India. They directly procure paddy from farmers. There are no middlemen there. Why can’t we do the same? The food department say they don’t procure paddy from the farmers because it is damp. But the Rajya Sarker of West Bengal procures damp paddy and manages to dry it. West Bengal procures paddy from the farmers. We procure rice from the rice mill owners. A team from the food ministry can visit West Bengal. Our rice mill owners purchase damp paddy from farmers. They dry this and make rice.

Prothom Alo: What is the purpose of our government to procure rice and paddy? Are the farmers benefited?

Akhtar Ahmed: The main purpose of our government to procure rice and paddy is to increase the stock. Its purpose is to face the crises. On the contrary, rice and paddy are procured in West Bengal to assist the farmers. That is a pro-farmer programme. There are many ways for our government to increase the reserve of rice and paddy. Through tender, the government can procure grain from the businessmen. The attitude of the government to procure rice and paddy has to be changed. Here one thing is done in an attempt to fulfill many purposes. As a result, nothing is accomplished properly. Each task should aim to fulfil a particular purpose. Rice and paddy should be procured to assist the farmers.

Prothom Alo: Have farmers committed suicide after failing to get fair prices?

Akhtar Ahmed: Farmers in India commit suicide mainly due to debt. And this happens in case of onion and cotton growers. But there are a few incidents that the paddy cultivators are not getting fair price.

Prothom Alo: The marketing of our rice and paddy is very weak. There is an allegation that middlemen take a big chunk of the profits.

Akhtar Ahmed: It is not fair that the middlemen are treated here in such a negative way in case of rice and paddy. The middlemen play important role in marketing rice and paddy. After the beginning of harvesting paddy, the government is not able to procure all the crops. Rice millers, most of the time, are not interested to buy paddy. At that time the middlemen buy paddy. Had not they purchased paddy, the condition of farmers would have deteriorated further. Now top rice millers play the role of middlemen. They are purchasing paddy from the market at cheap rates and supplying the government warehouses at higher price. They are making higher profits. If the government procures paddy, the profit of rice millers will decrease and farmers will be benefited. But there are differences among the rice millers. Once there were many rice-dying spaces or ‘chatals’ in our country. They are now struggling for survival against the big rice mills. These chatals are being shut down. The rice market is being controlled by the big rice millers. This is a significant change.

Prothom Alo: The deficit of rice was one million tonnes in 2017 and rice was imported 4 million of tonnes. The price of rice has decreased due to excessive import.

Akhtar Ahmed: There should be a proper assessment as to how much rice is being imported and whether it is necessary to to import that amount. There is the Food Planning and Evaluating Committee responsible for monitoring this. The excessive import of rice shows that the monitoring was not carried out properly. There should be strong monitoring.

Prothom Alo: What should be the government’s duty be now?

Akhtar Ahmed: The government will not be able to influence the market much by procuring rice and paddy, but the farmers will get their fair price. Countries in Europe, America and the countries like Canada and Japan give huge assistance to farmers. Assistance for farmers has to be increased so that the production cost for farmers in Bangladesh decreases. Paddy has to be purchased from farmers directly.

Prothom Alo: Is the government’s decision export rice correct?

Akhtar Ahmed: I think Bangladesh is not in position to export rice. Five countries in the world control the rice market. These countries are India, Thailand, Vietnam, Pakistan and Myanmar. In this situation, it is difficult for us to enter the international market. Our production of paddy is not stable. There is deficit in some years and surplus in others. It is not proper to enter the international market, and then drop out all of a sudden. The buyers will not be interested to import rice from this sort of country. Following higher production, you can reach an agreement with certain countries and then export rice. That is not possible through the private sector. Under such circumstances, no country can export rice. Beside, the quality of rice is important. We have to take into consideration whether the rice we produce has any demand in the international market.

Prothom Alo: How can the security of farmers be ensured?

Akhtar Ahmed: The price of paddy has come down to half in 30 years while production has been threefold. It has been possible due to provide assistance to farmers. The government has slashed import duty on different agricultural equipment including shallow tubewells. We invested a lot in agriculture research. He International Rice Research Institute (IRRI) has assisted significantly in our rice research. Two and half tonnes of paddy are produced per acre of land and this can be raised to five tonnes. The production cost of farmers will decrease. The farmers will not be affected much despite fall of of paddy price. Around 70 per cent of our farmers produce two crops. We have to pay attention so that they can produce more crops.

Prothom Alo: Why do our farmers not produce other crops?

Akhtar Ahmed: The risk for other crops is very high. For example, there are risks in producing vegetable and fruits. If these crops are produced a bit more, the price falls significantly. You often here of farmers destroying their tomatoes, potatoes and cauliflowers. We have noticed this in case of fruits. On the contrary, the price of paddy does not fluctuate that much.

Prothom Alo: What should the government do to ensure security of farmers?

Akhtar Ahmed: Farmers should be given assistance under social safety net programmes. Steps should be taken so that the farmers need not sell paddy immediately after harvest. It is very urgent to assist them during the crisis period.

Prothom Alo: Thank you.

Akhtar Ahmed: Thank you.

*This interview, originally published in Prothom Alo print edition, has been rewritten in English by Rabiul Islam.