Why paddy prices are still low?

Despite a raft of measures undertaken by the government, which include a 20 percent incentive on rice export and Tk 3,000 crore subsidy for farmers to buy agricultural tools, the price of paddy has remained low for the past three months. A report in this paper has found that a number of problems are hindering farmers from getting a fair price for their paddy. The mere decision to export rice has not borne fruit because the export market is already dominated by regional players like India and Pakistan, both countries that offer far more attractive prices than Bangladesh.

One of the biggest allegations that has surfaced is the fact that farmers have no way of selling directly to the government, because of the presence of local influential politicians who bar them from selling directly to government depots. Due to pressure from powerful syndicates, farmers have allegedly been forced to sell their paddy at throwaway prices, which are actually lower than the cost of production. These syndicates then sell the paddy to rice mills at government-fixed rates reaping windfall profits at the expense of farmers. Indeed, a particular Upazila Nirbahi Officer (UNO) had sent an official letter of complaint to the Rajshahi Deputy Commissioner on August 27 where it was stated that the UNO was physically obstructed from reaching and buying paddy from farmers. 

What has become abundantly clear is that the measures taken by authorities have failed to deliver because what is really needed is to break these syndicates that are backed up by local influential people. Unless, the government takes legal steps against these interest groups, farmers will continue to sell their paddy at a loss and consumers at the other end of the spectrum will remain hostage to high prices. The difference between what is paid to the farmer and charged from the consumer, is profit for syndicates and this is where action is needed promptly and strongly.