A step in the right direction
THE government has decided to import rice to meet the domestic demand. In its meeting on March 7, the cabinet committee on purchase approved the food ministry's proposal to select the Singapore-based Indo-Sino Trade Private to supply 25,000 tonnes of un-boiled rice from Myanmar in April. Food Minister Abdur Razzaque told reporters after the purchase committee meeting that more rice would be imported later on.
Now, the question may arise as to why the government went for importing rice when the harvesting of the major rice crop, boro, was one month and a half or so away, and contradicted its not too long distant thinking of exporting rice.
First, food availability is considered as the first component of food security, the other two being access to food and utilisation of food. Again, satisfactory food grain stock in the government godowns is one of the sub-components of food availability. The government food grain stock is primarily built up through internal procurement of aman and boro rice. This season's aman procurement program began on December 7 and was scheduled to end on February 28.
The food and disaster management ministry's (MOFDM) Fortnightly Foodgrain Outlook dated March 4 reveals that as of February 25, the government could procure only 9.1 thousand tonnes of aman rice against the procurement target for 300 thousand tonnes. The program almost totally failed primarily due to higher price of rice in the open market compared to the government administered procurement price of Tk. 22 per kilogram.
Second, because of the failure to procure targeted aman rice, and disbursement of food grains (rice and wheat) for government financed food programs such as food for work, test relief, gratuitous relief as well as for open-market operations to help stalibilise rice prices, the government security stock of food grains has come down to below 1 million tonnes, which, according to a decision of the immediate past AL government, is the minimum food grain stock to be maintained in the government godowns at all times. The need to replenish the security food stock has made it obligatory for the government to go for importing rice even before the harvesting of the coming boro crop.
Third, the production targets for aus, aman and boro rice in 2009-10 have been fixed at 2.49 million tonnes, 12.74 million tonnes and 19.0 million tonnes respectively. The BBS has finalised aus rice production at 1.71 million tonnes, which is 0.78 million tonnes less than the target. Although the agriculture ministry has claimed attainment of aman rice production target, this is yet to be confirmed by the BBS. This year's boro production target is 1.19 million tonnes more than the last year's actual production (19.0 million tonnes -- 17.81million tonnes) against 2.5 million or so new mouths.
Boro is primarily an irrigation-based crop. Recent newspaper reports suggest that the acute power crisis is seriously hampering irrigation of boro crop during the peak season. The Daily Star of March 21 published an alarming report, which said that farmers were feeding dying boro plants to cattle at Mirzapur under Tangail district as lack of irrigation due to power crisis caused premature death of the plants.
Groundwater is the main source of irrigation. Over-extraction of groundwater for irrigation of boro crop has led to the depletion of groundwater level in many places of the country, and extraction of groundwater by using irrigation pumps has not been fruitful in those places. Uncertainty in achieving boro production target has also influenced the government to go for importing rice.
Fourth, the June, 2009 issue of Food Outlook, a biannual publication of FAO, forecasted a modest growth in rice production in Asia in 2009-10 after two years of fast growth, and hinted that a few countries, including Bangladesh, might experience a contraction in rice production. The December, 2009 issue says that the global paddy production outlook had worsened substantially since the release of the June issue, and stands at 675 million tonnes, 13 million tonnes or 1.9 percent less than 2008. There is concern about a possible return to another round of high prices. This has given a signal to the government to go for importing rice to augment its food grain stock position.
Fifth, we had a bumper boro crop last year. As a result, soaring price of rice came down significantly in the first eight or nine months of 2009. But the prices of different varieties of rice have been on the rise since October of the current fiscal year. According to the BBS, the country's food inflation crossed double-digit mark (10.56 percent) in January this year, which was 9.50 percent in December last. The country's overall inflation increased by 0.48 percentage points reaching 8.99 percent in January this year, which was 8.51 percent in December last.
Since the rising price of rice has made the lives of the low and middle-income groups miserable, the government has to intervene in the market operations through open market sale of rice countrywide. This needs a satisfactory food security stock to be built up by internal procurement and imports.
Sixth, food aid, a sub-component of food availability, has dried up in recent times. As a result of failure to procure aman rice from the domestic production, the government has no other way but to go for importing rice at the moment.
Last but not the least, the AL-led government seems to be well aware of the situation of 2008, when the then government faced difficulty in importing rice due to restrictions imposed by most of the rice exporting countries, which resulted from the worldwide shortage of food grains and their very high prices in the international markets.
The government has rightly decided to increase the government food grain storage capacity to 2 million tonnes or so from the existing 1.5 million tonnes. A satisfactory food security stock helps stabilise the market by discouraging the hoarders to hoard food grains for a long time.
In view of what has been stated above, the need for a satisfactory food stock in the government godowns can hardly be over-emphasised. The government has to do this through procurement of domestically produced food grains as well as through imports, when necessary. The private sector food importers have also to play an important role to ease the food situation in the country.
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