Aman procurement continues at snail pace

There is a real possibility that the government may fail to meet this season’s Aman paddy and rice procurement targeted as their existing prices are lower than that in the local market. In the two months up to January 17, the government has managed to collect only 29 per cent of the total rice and paddy procurement target for the season.

A recent report by The Business Post reveals that low prices slow down Aman procurement and the government has so far met just 29 per cent of the target with only 1.5 months of the season remaining. Stakeholders fear that authorities will not be able to meet the procurement target in the remaining one and a half months of the Aman season that will end in February.

The government has set the price of Aman paddy at Tk 28 per kilogramme and boiled rice at Tk 43 a kg for procurement this year, which is significantly lower than the market price. As of January 18, the mill-gate price of newly harvested coarse rice was Tk 45-46 kg while coarse paddy was trading at Tk 31-33 a kg across the country, according to the miller and farmers in Rajshahi, Naogaon and Rangpur region. According to Consumers Association of Bangladesh data, coarse rice was selling at Tk 55-56, medium rice at Tk 62-75 and fine rice at Tk 75-98 a kg in the city retail markets.

The lower price offered by the government have so far failed to attract adequate response from the millers and farmers resulting in the purchase of only 0.23 million tonnes of rice and paddy in the two months, according to the Directorate General of Food (DGoF). Farmers and millers however are responding poorly, as expected, to the low price offered for the staple food.

The food ministry has set a target to buy a total of 0.8 million tonnes of rice and paddy during the period between November 17, 2022 and February 28, 2023. In the past years, despite being cautioned by various quarters, the authorities did not heed much to either offer fair price or ensure the required facilitation.

Rice security has been a big issue in Bangladesh for many years. Per capita rice consumption in Bangladesh is still the second highest in the world and affordable rice availability is an ongoing and pressing policy concern for the government.

Indeed, rice farmers have been the heroes of Bangladesh’s economy in the last few decades. Yet public policy failures, especially in the last two rice seasons, have resulted in the country importing rice even when there is a domestic surplus, lowering prices through this oversupply and damaging the livelihoods of paddy cultivators.

Bangladesh uses a public procurement system – where the government influences the supply of rice by purchasing large amounts of the staple from millers – as an instrument for buffering domestic rice stocks, intervening in the retail market, and influencing wholesale rice prices.

Ensuring fair prices to protect farmers’ incomes must be the top priority of the policymakers. The authority concerned should also incorporate legal instruments into such a procurement policy to make rice millers and traders more accountable.

The current level of rice procurement is simply too meagre and has very little power to raise paddy prices for farmers, something the government should pursue, given its domestic surplus, to support the livelihoods of farmers and to shore up its stores of rice in the midst of a global crisis.

To achieve both food security and economic justice for its 13 million rice farmers, Bangladesh’s government must formulate a farmer-friendly procurement policy that focuses on a fair price for rice and uses domestic rice producers to fill food stocks, not resort to panicked imports.