THE primary goal of the paddy procurement directly from the farmers is to give them price support. But in reality, it is not benefitting farmers much. The government is buying only 1.5 lakh tonnes of paddy from farmers. It’s less than one per cent of the total estimated production of around 1.96 crore tonnes this boro season. On one hand, millers are buying paddy in the open market at low prices and selling rice to the government at higher rates. On the other, the government is buying almost 13 times more (in terms of paddy) from millers than from farmers, resulting in an unattainable goal.
Under the procurement programme, the government pays millers at least Tk 21,600 for the rice produced from one tonne of paddy. In this case, the millers have to spend only Tk 15,750, including the husking cost of Tk 750 per tonne. This means the millers garner about Tk 5,850 in profit every tonne. According to government estimates, a farmer had to spend Tk 24,000 to grow one tonne of paddy. But millers are buying the same amount for Tk 15,000 inflicting a Tk 9,000 loss on farmers per tonne. If the government procures directly from farmers at Tk 26,000 a tonne, the farmers get Tk 2,000 in profit. In simple terms, while farmers make a profit of Tk 2,000 per tonne from government procurement, the same scheme gives Tk 5,850 of profit to millers.
Initially, the government stores the paddy at warehouses and then sends it to millers for husking. The decision on boro paddy procurement was taken in the presence of several ministers two months ago; the price started dropping only recently. Food grain procurement has little impact on the paddy market, and it was not in focus in the previous years. There is a difference this year because both Aman and boro seasons saw bumper yields. Moreover, the government cannot buy more paddy from farmers as the moisture content of their paddy exceeds the maximum recommended level of 14 per cent.
We must say, government must protect the farmers. If the farmers survive, the country will survive.
Under the procurement programme, the government pays millers at least Tk 21,600 for the rice produced from one tonne of paddy. In this case, the millers have to spend only Tk 15,750, including the husking cost of Tk 750 per tonne. This means the millers garner about Tk 5,850 in profit every tonne. According to government estimates, a farmer had to spend Tk 24,000 to grow one tonne of paddy. But millers are buying the same amount for Tk 15,000 inflicting a Tk 9,000 loss on farmers per tonne. If the government procures directly from farmers at Tk 26,000 a tonne, the farmers get Tk 2,000 in profit. In simple terms, while farmers make a profit of Tk 2,000 per tonne from government procurement, the same scheme gives Tk 5,850 of profit to millers.
Initially, the government stores the paddy at warehouses and then sends it to millers for husking. The decision on boro paddy procurement was taken in the presence of several ministers two months ago; the price started dropping only recently. Food grain procurement has little impact on the paddy market, and it was not in focus in the previous years. There is a difference this year because both Aman and boro seasons saw bumper yields. Moreover, the government cannot buy more paddy from farmers as the moisture content of their paddy exceeds the maximum recommended level of 14 per cent.
We must say, government must protect the farmers. If the farmers survive, the country will survive.
