Paddy prices severely affected by fall in Aman production

During a field visit to Dinajpur region, it was found that coarse paddy rice, which is milled to produce coarse rice, became dearer in Dinajpur immediately after the peak Aman harvesting season. On the other hand, the price of fine paddy rice fell due to higher production.

Production of coarse paddy rice fell significantly, as farmers in the Dinajpur region increased cultivation of fine paddy rice instead.

Farmers, traders and millers in Dinajpur region said prices of coarse paddy rice rose by Tk 150-250 per maund (40 kilograms) during the recent Aman harvesting season (November-December 2024) compared to the prices a year earlier. On the other hand, the price of fine paddy rice decreased by Tk 500-700 a maund from the price a year earlier.

Overall, the country suffered a huge fall in production of  coarse varieties of Aman rice due to flooding in the Mymensing, Sylhet, Cumilla and Noakhali regions, and excessive rain in the Jeshore-Khulna region when crops were standing.

"The damage to Aman production due to natural calamities, especially flooding, resulted in shortfall in widely consumed varieties of paddy rice by, say, 15 per cent or so. This loss has been added to enhanced costs of production and thus we see price-hike of paddy during the harvesting period," agriculturalist Shahidur Rahman Apple, a high official at Krishibid Seeds Limited. He claimed that there is no cartel (or syndicate) of farmers or millers in increasing the prices of paddy rice or rice.

Economists would agree with him. Lakhs of farmers sell paddy rice, and hundreds of rice mills sell rice. Economists say that markets with so many sellers can't easily be controlled by a cartel.

Farmers of Dinajpur told the author that they got a good price for fine paddy rice in the previous season (harvested in 2023). This motivated them to cultivate BR34, a fine paddy variety, on a larger area of land in 2024. The area planted with Swarna, Guti and other coarse paddy varieties was reduced. So the output of coarse paddy rice fell, and its price soared.

"We've sold two staple varieties of Aman paddy rice for up to Tk 1,470 a maund recently, Tk 200-300 higher than the previous season's prices. Of course farmers like us have benefited from the price level this season," said Mizanur Rahman (48), one of four owners of a 33-acre family-owned land in Jyotmadhob village in Birampur upazila. The family cultivated rice on more than 23 acres. He pointed out that they failed to make profit from cultivation of fine paddy rice this year.

Rajib Sarkar (44), a Master's degree holder, farms 30 acres of land in Tegra Twokipur, Birampur. He added that many farmers in the region shifted to fine paddy cultivation in the recent season, motivated by the high price of fine paddy the year before. "I did not increase fine paddy cultivation and I used most of my land for coarse paddy production. I have already sold my produce since the price was good during harvest, unlike earlier years when the price fell at harvest," he said.

Farmers and traders say the price of coarse paddy rice increased because production fell, and the price of fine paddy rice decreased, because of overproduction. This agrees with economic theory. If production or supply of a product increases, price should normally fall, and if production or supply declines, price should normally increase.

Najmus Sakib Sohel (46), a trader of farm produce from Puraton Bazar, Birampur, mentioned that the price of fine paddy rice fell due to higher production and restrictions on exports. "Farmers who cultivated coarse paddy rice benefited from the price increase this year, as overall Aman production fell," he added.

Rajib Ali (40), the procurement manager of FM Agro Farm Ltd. an auto rice mill, in Jogonnathpur, Birampur, said they were compelled to buy paddy at higher prices during the harvest as there is a shortfall in production due to flooding and rains.

Mostafa Hossain (63), owner of another auto rice mill in the same area, observed that many rice millers struggled to procure paddy due to the price hike during the harvest. "I think, smart and solvent farmers got more benefit from the price rise of paddy," he said.

Chief Scientific Officer at Bangladesh Rice Research Institute Dr Ariful Islam explained that flooding and rainwater run-off from across the borders damaged Aman crops. Also, the increased cultivation of fine paddy rice led to a shortfall of coarse paddy rice. Too much fine paddy rice was cultivated because its price was high the previous year, he said.

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