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Boro Procurement System

Traders reap benefits as paddy sells at low prices

Porimol Palma
It is not the farmers, but the traders are reaping the benefits of public procurement of rice as the peasants are selling paddy at much lower prices than the government's fixed rate in this Boro season due to the present procurement system.
Rice millers and traders have already purchased good amounts of paddy from farmers at Tk 350-450 per maund for milling and selling to the government, which started buying rice at Tk 22 per kg. non-boiled (atap) rice at Tk 21
while paddy at Tk 14 from May 1.
Targeting 12 lakh tonnes to be procured by September, the government will buy 1.5 lakh tonnes paddy, 50,000 to 60,000 tonnes nonboiled rice while the rest will be normal rice. By this time, the government has procured only around 400 tonnes of paddy.
As per government price, each maund paddy should fetch Tk 560, but farmers in the major rice-growing northern districts are selling paddy at around Tk 400 while at Tk 450 in Co mill a.
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Though the government has fixed the comparatively high procurement prices this season to safeguard farmers' interests, agronomists said the subsidy will mainly go to the traders' pockets as the government is procuring rice and paddy mainly from the millers and traders.
Farmers said they are compelled to sell paddy to the traders and millers during the peak harvesting period to pay back their loans, which they took to buy agricultural inputs.
Ashish Kumar Saha, a farmer at Nagessor in Kurigram, said he sold BR-28 variety paddy at Tk 410-420 while BR-29 at Tk 405-410permaund.
"This price is not benefiting us, even it is not equal to our production cost," said Saha, who cultivated rice on nine bighasofland.
Mazeda Begum, a female farmer in Naogaon, said she has no alternative to selling rice to traders, because she has to pay off to the pesticide and fertiliser dealers.
“I shall preserve paddy for ’consmnptwn for -s* months -and sell the rest to pay dues and meet my family expenses," said Mazeda, who cultivated Boro on 100 decimals ofland.
Small and medium farmers borrow money at high interest rate due to lack of loan facilities from banks and are compelled to sell rice at lower prices, economists said.
They cannot sell paddy directly to the government to get good prices fixed by the government.
"The government depends on the millers and traders for procurement of rice. Therefore, very few farmers can directly get benefit from government's fixed price,” said agronomist Dr Mahabub Hossain, executive director of Brae.
Fixing higher prices of rice by the government will have some indirect effects, but the problem is that millers and traders have already purchased good
amounts of paddy for milling and selling to the government stock, he said.
“This means traders will be the main beneficiaries," Mahabub Hossain told The Daily Star.
The economist said there are some practical problems for farmers to sell paddy to the government, as most fanners may not be able to maintain the low moisture level of paddy required by the government
"Gradually, the government should build up capacity for buying paddy directly from the farmers for drying and milling for stock. Otherwise, the growers will continue to incur losses," Mahabub said.
An agriculturist said the rice procurement price has been set in line with production cost and so the public money must go to them, but the reality is different because of the government's dependencyon millers.
"As long as millers and middlemen continue to be the beneficiaries, farmers' fate won't change," he said, wishing anonymity.
Food and Disaster WanagerflfeiTfMThftterDfAbtftir Razzaque agreed but said presently he does notsee any alternative to the existing arrangement forprocurement
He said the government is mulling to form a national price commission to fix prices of agricultural products for ensuring farmers' interests.