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The contrast between price of rice and that of the new harvest of paddy grown in the haor area could not be starker. While rice price registered a 5.50 per cent rise here and still showing no sign of coming down in defiance of the general trend of price fall up to 19 per cent in the international market, the new boro harvest has been experiencing a drastic fall in price. Accepted that newly harvested paddy has moisture and it enjoys a lower price in the market. If this is so, why should last year's stored paddy price drop from Tk1,400 to Tk1,100 a maund (roughly 37.32 kgs)---Tk300 less straightway at a go?
The millers and hoarders are taking an undue advantage of the widely anticipated bumper yield of boro. This is just the early stage of boro harvest. Now the newly arrived coarse varieties have market prices between Tk670-700 a maund and finer varieties between Tk850-950. But the production cost of a maund of paddy stands at Tk 800. So, farmers growing coarse paddy have to incur a loss of more than Tk100. In case of finer varieties, the yield is less than the coarse varieties. Farmers also have to sustain losses if they are compelled to dispose of their crop early in the season.
Such things can happen only because the market is controlled, monopolised and manipulated by middlemen, millers and hoarders. They dictate the term as many farmers are often compelled to sell their produce immediately after harvest. How the market will behave when boro harvest starts in full swing within a week or so is not known. The stockists are unlikely to loosen their manipulative grip.
The government will start its paddy procurement drive from May 3 and rice procurement from May 15 and continue up to August 31. But such a drive never really had the desired impact on the paddy or rice market. The kind of seriousness and sense of purpose in carrying out the drive successfully has been missing so far. If it becomes any different this time, farmers can consider themselves lucky. This year the government has fixed the procurement price of paddy and rice at Tk36 and Tk49 a kg respectively.
How the four-month procurement drive will be carried out will largely decide the fate of farmers now facing losses. The government has its own limitation for storing capacity of grain silos. So the millers and stockists always have a role to play. If the government could procure paddy or rice in competition with private players, price of paddy and rice did not drop so abruptly.
The country's annual need for rice is 42.4 million metric tonnes whereas it produces about 40 million tonnes. This year the government's target is to procure a total of 1.8 million tonnes of boro paddy and rice. This country usually maintains a 'security stock' of 1.3 million tonnes. So the amount procured is not big enough for stabilising the market. There is a clear need for importing some rice to meet the shortfall and also any emergency need. It cannot stop the private players from manipulating the market.
Not all farmers can avail of the opportunity of selling their paddy and rice to the government when the procurement drive goes on. Although four months drive is expansive enough, the drive will be useless when its procurement target is filled. There indeed lies the problem. Now here is a dilemma for the government. It cannot procure the early harvest's paddy or even rice for heavy doses of moisture. This is the time the stockists and millers come to the scene to purchase rice at lower prices. They get the cheaper paddy dried well for future stocks. Once the stocks reach full quotas, they start demanding higher prices and make unreasonable profits. The government watches helplessly.
This is how monopoly business with items of longer shelf life continues and both growers and consumers are exploited at both ends of the supply chain. The supply side economy is thus distorted and inflation refuses to come down. So, the government should enhance the storage capacity of grain silos or even set up new ones in order to play a decisive role in time of farmers' sad plight.