Govt under pressure to grow food stocks

The government is facing pressure to increase food stocks as it has been unable to import rice fast, unlike the private sector.

In this situation, rice prices are not falling in the market, and continuing food distribution under social security programmes is at risk.

The government decided to import rice both at the public and private levels after failing to procure rice and paddy from internal sources in the Aman season.

In the just-concluded Aman season, the target was to procure two lakh tonnes of Aman paddy, six lakh tonnes of Aman boiled rice, and 50,000 tonnes of Atap rice from internal sources.

But at the end of the season, the government reached 4.15% of the paddy procurement target and 8.86% of the rice procurement target.

As a result, food stocks came down to a risky level and rice prices in the market went up.

The Trading Corporation of Bangladesh said coarse rice is being bought at 37.31% higher prices, medium thin rice at 14.13% higher prices, and thin rice at about 9% higher prices compared to the same period last year.

Food ministry sources said 10.39 lakh tonnes of rice and 3.01 lakh tonnes of wheat had been distributed till 31 January of the current financial year. Also, another 8.26 lakh tonnes of rice and 2.89 lakh tonnes of wheat have to be distributed.

Analysts say the government is in trouble over food stocks as it failed to procure from internal sources during the Aman season. Moreover, both the government and the private sector started importing rice but still the rice market could not be brought under control.

Due to the delay in rice imports, the government does not have enough stocks.

Food ministry data show the government had 6.47 lakh tonnes of food grains in stocks till 25 February, including 5.38 lakh tonnes of rice and 1.01 lakh tonnes of wheat.

Dr Jahangir Alam Khan, agro-economist and vice-chancellor of the University of Global Village, said the government had been under pressure for several months due to the shortage of food grains and traders had used the opportunity to increase rice prices.

He said the government needs to increase stocks fast to overcome this situation.

"The government should always have at least 10-12 lakh tonnes of food grains in stocks. Then it can handle any situation," he added.  

The food ministry's Food Planning and Monitoring Unit recently held a meeting chaired by Food Minister Sadhan Chandra Majumder to address the situation. Secretaries of various ministries as well as the finance minister, the agriculture minister, the fisheries and livestock minister, and the state minister for disaster management and relief attended it.

According to the meeting minutes, the ministers urged the food ministry to finish importing rice fast because Boro paddy will be harvested in May-June. Officials were asked to ensure that the effects of imports at that time would not deprive farmers of fair prices of paddy.

Finance Minister AHM Mustafa Kamal told the meeting producers would suffer if shipments arrived during the harvest.

Agriculture Minister Muhammad Abdur Razzaque said it is important to determine the procurement price of paddy by observing market prices during the upcoming Boro procurement season.

Moreover, rice imports have to be completed fast before Boro paddy is harvested, he said.    

State Minister for Disaster Management and Relief Md Enamur Rahman said people would panic if rice imports could not be finished considering the upcoming distribution demand in the first two weeks of Falgun, Chaitra, and Baishakh.

Explaining the failure of the government's internal procurement drive, the food minister said Aman crop production had declined due to floods and heavy rains.

"As a result, paddy and rice prices were higher than the market prices since the beginning of the season. Farmers did not sell paddy to the government as they got higher prices in the market," he said.

Similarly, millers did not supply rice to the government using the excuse that they would incur losses if they accepted the price announced by the government, he added.

But some millers signed deals to supply 1.43 lakh tonnes of rice, sources said.

The food minister said his ministry had decided in principle to buy 10-15 lakh tonnes of paddy directly from farmers in the next Boro season.

Food Secretary Mosammat Nazmanara Khanum told the meeting the government had decided to import two-three lakh tonnes of rice under the government-to-government (G2G) deal in the current financial year.

"But as procurement targets in the last Boro and Aman seasons could not be met and to keep stocks at a satisfactory level, rice imports through G2G and international tenders were increased."

Importing six lakh tonnes of rice from different countries is underway, sources said.  

The food secretary said another five lakh tonnes would have to be imported to meet the demand.

Food ministry sources said 320 traders and organisations had been permitted to import over 10 lakh tonnes of rice at the private level. The ministry, after several extensions, set 15 March as the deadline for marketing the imported rice.

The finance minister at the meeting urged officials to make seasonal projections of food demand instead of annual forecasts.

He also gave his opinion on increasing warehouse storage capacities; maintaining food quality; and coordinating production targets of food grains, demand, internal procurement, and import through a specific structure.