Traders and mill owners stockpiled rice during the coronavirus pandemic in fear of food shortages causing prices of essential commodities to go up abnormally.
This was revealed in a research of the Bangladesh Agricultural Research Council (BARC). The research report was released recently in the BARC auditorium in the capital.
Minister for Agriculture Md. Abdur Razzak said the government has taken a number of steps to reduce prices and keep the market stable. In order to reduce the price of rice, import duty has been reduced to 25 percent. As a result, the rice market has been stabilized.
According to BARC sources, BARC has formed three separate study teams with agricultural economists to find the reasons for the rise in prices of rice, potatoes and onions.
The final research reports of the three teams were presented at the event. It is said that due to coronavirus pandemic, farmers also sold rice slowly. They sold their surplus rice within a month after the paddy was grown. Afterwards, traders and mill owners stockpiled rice.
The government could not procure rice and import rice on time. That is why prices have risen. Apart from this, prices have gone up due to dominance of mill owners, seasonal traders, unequal competition, shortage of Aman production and stoppage of rice imports.
The agriculture minister said the production of Aush and Aman has decreased due to continuous floods. Mill owners and wholesalers have taken advantages of the fact that the target for procurement of paddy and rice has not been achieved by the government and there is insufficient storage in government food warehouses.
In consequence, mill owners and wholesalers took control of the market. In order to prevent this from happening in the future, all kinds of initiatives will be taken to meet the target of buying paddy and rice in the coming Boro season. Government stocks will be increased by buying rice so that the market remains under the control of the government.
If you cannot increase the production of any product, the market will not be stable. Razzak said activities are underway to further increase the production of rice, potatoes and onions. In order to increase the production of rice, importance is being given on the cultivation of Bri-6 and Bina-18 varieties of paddy. A roadmap has been formulated to achieve self-sufficiency in onion production.
According to the report, almost all the farmers sell their surplus paddy within the first month of harvest. But the pattern of rice sales has changed due to coronavirus during the last boro season.
This season, farmers sold their paddy slowly from stocks. As a result, there was a crisis in the market. Besides, the government collected less rice in the last season and failed to import the required rice on time. As a result, it was not possible to intervene in the market causing the price to go up.
As far as paddy is concerned, the market is dominated by big mill owners and traders and there is unequal competition. There was a fear of shortage in paddy production during the aman season. The cost of paddy cultivation and processing has increased. Growing seasonal traders are on the rise. Production has declined due to natural disasters. Due to these reasons, the price of paddy has gone up.
The report made several recommendations to keep the price of paddy and rice normal.
These include modernizing the paddy-rice collection system, collecting paddy directly from farmers and turning it into rice through millers.
Announcement of separate Minimum Support Price (SMP) by the government for thin and coarse grained rice to procure a minimum of 2.5 million tonnes of rice and to be able to procure about 10 per cent of the total rice production so that the government can effectively intervene in the market.
To ensure storage of at least 1.25 million tons of rice per month by the government as buffer stock. If the procurement price of paddy and rice is fixed considering at least 20 per cent profit on the cost of production, the farmers will be benefited and they will sell the paddy to the government.
In fear of price hike in future, there is less supply of potato from the storage and cold storage at the farmer and trader level. Potatoes stored in the cold storage have changed hands frequently. Potato exports have increased in some neighbouring countries. Seasonal traders are playing a role in creating an artificial crisis by stockpiling huge quantities of potatoes. There is limited government control over the potato market and lack of information about the actual state of the market. As the monsoon season became longer, vegetable production declined and demand for potatoes increased. Due to these reasons, price of potato went up.
Volatility in the onion market involved manipulation by domestic unscrupulous trade syndicates, ban on Indian onion exports and over-reliance on onion imports, lack of expeditious activities to find alternative sources of onions for imports, limited production of summer onions and murky onions.
The recommendation is to identify the unscrupulous trade syndicates and bring them to justice. In times of crisis, we need to find quickly more than one exporter to import onions. Import dependence must be reduced by increasing domestic production. The price of onion should be fixed and monitored in the market throughout the year through the formation of Agricultural Prices Commission.
ask/wi
