Rice stocking emerges as stiff challenge

Trackback URL

Download PDF

With less than a half of the food procurement target attained in about three months, the interim government will face an immense challenge to reach its goal by the end of next month, food ministry officials said.

Shortage of rice and paddy in local markets coupled with rice millers’ refusal to supply food grains to the government at rates lower than market prices, is now the main impediment to fulfilling the target.

The government, now bogged down by the latest escalation of prices of essential commodities, is planning for ’selective interventions’ into the market to make sure its warehouses have sufficient amount of food grains.

“We have to secure enough food grain to face a more volatile market situation in the near future,” a senior food ministry official told The Daily Star.

The government has taken a number of measures to meet the official target of procuring 12 lakh tonnes of rice and 3 lakh tonnes of wheat by the end of next month. But the sharp decline in procurement in recent weeks has been a headache for it.

In its latest move, the government on Tuesday issued a statutory regulatory order for rice procurement under the Control of Essential Commodities Act, 1956 with the intent to regulate rice mills across the country and to ensure smoother operation of its food procurement drive.

“The government is committed to meeting the target of securing a safe level of food stock, which is important for launching programmes like Open Market Sales (OMS) and Food for Work. A sufficient stock also helps keep the market stable,” said the food ministry official.

He said meeting the target has been the main concern of the government since rice import in private sector has remained stopped for the last three months, and India is also delaying to release the remaining 4 lakh tonnes of the 5 lakh tonnes of rice it promised.

“We will find more pockets in Rajshahi division from where we may procure rice and paddy, the region from where the majority of the procurement comes,” Food and Disaster Management Adviser AMM Shawkat Ali said on Monday.

Encouraged by the recent bumper boro harvest, the military backed government in March set a procurement target of 12 lakh tonnes of rice at a buying rate of Tk 28 per kilogram (kg), up from last year’s buying rate of Tk 18, in an effort to build up a safe food bank.

They also targeted to procure 3 lakh tonnes of paddy from growers at the rate of Tk 18 a kg and 50,000 tonnes of wheat at the rate of Tk 26 a kg.

The government made agreements with 13,833 mills for supplying 9.94 lakh tonnes of food grains by the end of next month. According to the latest figures of the food ministry, 5.95 lakh tonnes of rice reached government warehouses since the procurement drive had begun on April 16.

But the drive slowed down as the millers, even after the agreements with the government, have been refusing to supply grains in the wake of further rise in prices following the latest hike in fuel oil prices on June 30.

“Millers are declining to sell rice to the government at the rate fixed by it, which is lower than market prices,” said an official adding that the official procurement rate for a kilogram of rice is several taka lower than the latest market price.

He said, “Let alone meeting the target, procuring the agreed upon amount now seems a far cry.”

According to the Rice Procurement and Control Order 2008, each miller seeking to procure paddy and sell rice must obtain a license from the authorities by applying for it on a prescribed form.

From now on the rice mill owners will also have to declare their stocks, and will face punishments including loss of licences if they fail to comply with the rules and refuse to supply rice to the government as per the agreements.

Licences of more than 1,200 rice mills across the country have already been cancelled for failing to supply rice and wheat according to the agreements with the government, and also for being unwilling to sign supply contracts.

“We will not take extreme measures against the millers,” said Shawkat Ali. He identified rain, inadequate power supply, and stockpiling by households and large farmers as the reasons behind the slide in government procurement.

Millers in the northern region said they are running out of funds and fear that many mills will shut down due to shortage of boro paddy in local markets.

“If supply to local markets doesn’t improve, the government’s rice procurement target is likely to fail,” General Secretary of Uttar Banga Rice Mill Association Federation KM Layek Ali told The Daily Star on Monday.

About 60 percent of the mid size and small size millers are already out of paddy, he said adding that many millers incurred huge financial losses by providing the government with rice.

“The overall food procurement situation is not satisfying at all here in the region,” said an owner of a large mill in Dinajpur.

Despite the dire situation many millers however continued supplying food grains to the government according to the agreement, and they urged the government to give them incentives for minimising their losses. Otherwise, they said the millers will be forced to decline supplying soon.

The owner of Puly Rice Mill, Toyez Uddin of Ulat village under Kahaloo upazila in Bogra said he supplied 25 tonnes of rice out of the total 73 tonnes he had agreed to. He is now refusing to supply the rest on grounds of short supply of paddy in local markets.

Another rice mill owner, Rafiqul Islam of Kichak village under Shibganj upazila, so far supplied 45 tonnes of rice, but was unable to supply the remaining 45 tonnes due to the changed market situation.

“I will lose 2.50 taka a kg of rice if I supply the rest after purchasing paddy at a higher rate from the local market,” Rafiqul told The Daily Star.

Food ministry officials said the government is not thinking of increasing the official rate for procurement, but will give incentives to rice millers instead for recovering from their losses.

The government’s current rate for procuring rice is Tk 28 a kg while the current market price of a kg of coarse rice is Tk 33.

“Increasing the rate for procurement will have an additional adverse impact on the already heated market,” a food ministry official told The Daily Star yesterday.

He said the joint forces and mobile courts will be deployed to ensure meeting the government’s food grain procurement target, if necessary.

The food adviser was hopeful of meeting the target saying the total stock will stand at 15 lakh tonnes once the procurement is concluded and the rice from India reaches the country.

Leave a Reply