Wednesday | 15 January 2025 | Reg No- 06
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Wednesday | 15 January 2025 | Epaper

Intrinsic causes behind the price hike of rice

Published : Monday, 25 December, 2017 at 12:00 AM  Count : 380
Haradhan Ganguly
Over six years, our yearly rice production has been getting reached to the extent of more than 3 crore tonnes. Side by side our import of rice has been soaring up day by day. Yet we see a quite discernable mismatch in market demand and supply of rice.
It is often told of the losses in rice production in haor areas this year due to catastrophic flash floods. Yes, it is true. Lost production reached to the extent of 10 lakh tonnes. But it is more than facts that our import of rice both in public and private sectors this year has broken all the previous records.
According to food directorate's estimate, during the five months of the ongoing financial year we have imported 55 lakh 89 thousand tonnes of foodstuffs. In addition, nearly 8 lakh tonnes of foodstuffs are waiting for unloading from 28 ships in Chittagong ports. Not only this, last financial year (2016-17) saw the highest ever food imports to the extent of 58 lakh 23 thousand tonnes.
So here lies the dilemma. On one side, we see ever rising food production or so to say rice production and on the other, rising imports of rice from abroad. Yet we see a continued price hike of rice in the markets causing enormous pains to commoners and low bracket income groups.
It brings about untold agony for those living in poverty and extreme poverty level. We know the price of staple food is called the first determinant of household expenditure that could bring down middle class to the lower middle class and the poor to the extreme poor. Then the question arises, are not our market studies regarding the real state of demand and supply of rice going correct? Abundance in food stock and paucity of supply of rice could not stay together without leaving a big mark of note of interrogation (?) so where lay the truth.
Our obsession is fading away by a recent study of the Bangladesh Bureau of Statistics or BBS. Under the title of "Analytical report on methodologies of the crop estimation and forecast survey and private stock of food grain survey 2016-17," the study shows that our agriculture is still dominated by the small farmers.
They own smallholdings at subsistence level. They occupy 52 per cent. What is the real scenario? Whatever production we have, the marketable surplus remains only at 39 per cent. That means 39 per cent of the total production of rice come into markets for sale.
Paucity of marketable surplus leads to escalating imports and fuelling price hike of rice. The study launched in 120 maujas of 64 districts. Study includes rice, wheat and maize. It is found in the case of rice, 36.40 per cent are used for personal consumption by the farmers. Share croppers give 8.15 per cent to the land owners.
Not all the rural people and many in urban areas are connected with rice production. The numbers of them are nearly 50 per cent. They rush to market for rice purchase. High demand for rice in markets is responsible for the price hike.
Timely response from the supply side is constrained by many factors, including greed for profiteering and market manipulation. Only when the small farmers will be able to produce surplus beyond their needs, then our supply side deficit will be covered up.
Then sufficient marketable surplus will be put in line with increasing demand. Pressure for price hike would be faded away. For this situation demands higher technology and long term planning.
The ultimate solution lies in enhancing the crop intensity of the small farmers. Otherwise, market manipulation in the form of the rising price for rice for windfall profit will remain in full sway.
Since greediness has no religion. If market manipulation is strong enough and run unhindered increasing import will have very little impact on rice markets. If it is so, then rising imports and production might have been their salutary effects on rice markets. The sufferers would not have to see the present situation.
During the last six years, on an average, our annual rice production stands to nearly 3 crore 42 lakh tonnes. There are 3 crore households in the country and out of this nearly 1 crore 51 lakh households are directly involved in agriculture.
That is nearly 53 per cent. 52 per cent of the total farmers engaged in rice production are marginal and they are producing 5o per cent of rice produced. After production of paddy, the so-called surplus they sell it to markets. But again they go to market for purchasing rice.
That means, they are inherently deficit farmers and depending on markets. Our rice markets always have to go through the pressure of demand, which facilitates market manipulation by market players of the supply side.
We know that our agricultural lands are decreasing annually by one per cent. Land for rice production is also decreasing. The growth rate of rice production is falling behind population growth rate. International food policy research Institute's finding tells us, rice production for 10 years starting from 2005-06 to 2015-16 has fallen half in comparison with the past 10 years from 1996-97 to 2005-06.
The present insatiability in the rice markets will be going away after coming up of boro. But a threat to price rise will remain the same unless and until cropping intensity of the small farmers is enhanced and scope for market manipulation by negative forces is withered away.

The writer is a freelance contributor






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