With only around 4.62 lakh tonnes of grains in the public food stocks, one of the lowest in years, the government has moved to procure paddy, rice and wheat from local farmers and millers at prices higher than last year's.
In a virtual meeting held yesterday, the Food Planning Monitoring Committee (FPMC) decided to collect 10 lakh tonnes of boiled and 1.5 lakh tonnes of non-boiled rice from local dealers. The committee also decided to buy 6.5 lakh tonnes of paddy from the farmers.
"We are going to purchase 11.5 lakh tonnes of rice and 6.5 lakh tonnes of paddy in the current season. The details will be disclosed in a day or two," Food Minister Sadhan Chandra Majumder told The Daily Star after the meeting.
Agriculture Minister Muhammad Abdur Razzaque, who attended the meeting, told this daily that they primarily decided to buy boiled rice at Tk 40 per kg and non-boiled rice at Tk 39.
An official, who was also present at the meeting, said the price of paddy would be fixed either at Tk 27 or Tk 28 a kg.
Apart from rice and paddy, the government will also collect one lakh tonnes of wheat from the local market, said meeting sources, without disclosing anything about the prices.
The paddy procurement is likely to start on April 28 while that of rice on May 7, said the sources.
According to a food ministry report, obtained by The Daily Star, the government had 4.62 metric tonnes of food grains in its stock on April 20.
The stock was 11.20 lakh metric tonnes on July 1, 2020 when the current fiscal year began amid the pandemic. It was 15.99 lakh metric tonnes on July 1, 2019.
As the food stocks fell, the government distributed cash, instead of grains, under different of its public aid projects, including Food for Work.
The report said the government has distributed 5.37 lakh tonnes of food grains among people this fiscal year till March 31. It also said cash incentives, equivalent to 12.12 lakh metric tonnes of rice, were distributed under the social safety net programmes during the same time.
As the food stock went down, the price of coarse rice also increased in the last one year.
From March 20 last year to March 21 this year, the price of coarse rice has increased by Tk 13.24 per kg in the retail market, the report stated.
Although the government tried to boost the stock by procuring rice from the international market, the initiative fell short of expectations due to different reasons.
Till April 11, the government has signed several deals to import 7.50 metric tonnes of rice under government-to-government arrangements. However, only 2.43 lakh metric tonnes of rice could be imported.
At the private level, 5.64 lakh metric tonnes of rice and 39.43 lakh metric tonnes of wheat have been imported this fiscal year till April 11.
Food grain stock dipped to 4.78 lakh tonnes at the end of March this fiscal year, the lowest since August 2017-18 when the stock was 5.16 lakh tonnes, showed data from the Food Planning Monitoring Committee (FPMC).
The stock depleted also as a government move to procure rice and paddy from the internal market was not successful in the last Boro and Aman season. It happened mainly as the prices fixed were lower than the production cost, shows the report.
So, this time, the FPMC has set the purchase price higher than the production cost so that the government move to increase the food stocks becomes a success, adds the report.
This time, the agriculture ministry has fixed the production cost of per kilogramme of paddy at Tk 27, which is Tk 1.27 more than last year. The production cost of each kg of rice has been fixed at Tk 39, up Tk 1.02 from the price last year, said officials concerned.
According to the food stock report, last year the FPMC had decided to buy two lakh tonnes of paddy from growers at Tk 26 per kg and 6.5 lakh tonnes of rice from millers at Tk 37 per kg.
As the purchase prices were set lower than the production cost, farmers and millers chose to sell the grains at the market, instead of selling them to the government.
Last year, the government had set a target of collecting 16.70 lakh tonnes of Boro paddy, but it got only 9.10 lakh tonnes. Besides, against its target of purchasing 8.50 lakh tonnes of Aman paddy and rice, it could buy only 88,000 tonnes, shows the report.
When asked about the government's decision and the new prices fixed, Chitta Majumder, managing director of Majumder Group of Industries, one of the biggest rice millers and importers in the country, said the government would be successful if it set the purchase price of rice at Tk 40. "Otherwise, it would be hard for the government to achieve its target."
This year, the Boro production has been good.
"So, the government should fix the price at Tk 40 to ensure that farmers get their due prices.
"The government should have taken the move to import rice in June or July. If it had done so, the market would have been stable right now," he added.