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Govt must make millers comply with procurement deal

Published: 00:00, Dec 02,2020

 
 

THE import of rice that the government has begun amidst a continued supply refusal by millers will almost certainly benefit the millers and will deal a severe blow to farmers. The Directorate General of Food, responsible for food management and related policies, is reported to have begun importing 300,000 tonnes of rice by January in a situation where millers, who are legally bound to supply the government with rice, have showed a lukewarm response with a promised supply of only 72,000 tonnes against the government plan for the procurement of 650,000 tonnes of aman at a price of Tk 37 a kilogram that the government set about a month ago. The millers, who procure aman paddy from farmers for Tk 26 a kilogram, now appear unwilling to sell rice to the government for less than Tk 41 a kilogram. The government may have started importing rice amidst a rapidly declining stock that plunged to 564,000 tonnes on November 30, about a half the stock that the government stock had on the day a year before while a stock of 1.3 million tonnes is said to be a comfortable proposition. Besides, during the boro procurement that ended in September, millers reneged on their deal by supplying the government with only 940,000 tonnes of rice against the target of 1.95 million tonnes.

The import of rice, decided in December, when the aman harvest is at its peak, will in all likelihood take a heavy toll on farmers by pushing down the prices that have already been below the production cost. It appears that the government is doing what the millers want it to do because with rice having been imported, the millers could pay farmers less and could build a good stock to cash in on it in times of crisis, natural or artificial. While experts have sounded a warning that the import, which could be avoided by forcing the millers to supply the amount of rice earlier decided, would put farmers in a difficult situation, the Auto Major and Husking Mill Owners’ Association welcomes the government’s rice import decision. The government, instead of importing rice, should have attended to problems in the procurement process, with only a limited direct procurement from farmers, which is fraught with numerous problems that could be sorted out with the right stringency on part of the government. In the boro procurement, about 40 per cent, or 7,635 out of 19,230, of the millers failed in their supply and their security deposits were forfeited in a punitive measure. But experts believe that the forfeiture of the security deposits, which is only 2 per cent of the total transaction, is not deterrent enough as the profit earned from the sales of rice after buying the paddy at a lower price far outweighs security deposits.

All this, which affords undue advantages to millers, shows that the government’s procurement policy of rice and paddy is fraught with problems which warrants an early overhaul. While the government should rethink its rice import decision, it must make millers behave, even if, by resorting to deterrent punitive measures so that they supply the government with the decided amount of rice to save hassles and troubles.

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