Farmers in double bind
A man operates a tractor to prepare a field for farming in the northern district of Bogra. Photo: Hasibur Rahman Bilu
A fall in rice prices is frustrating for Refayet Ullah, a farmer in the northern district of Rangpur.
He was forced to sell his produce at prices lower than last year. His anguish did not end there. In the current boro season, Refayet will have to incur additional costs to grow rice because of a spike in diesel prices. The rent for tilling and irrigation will also go up, said Refayet, a rice grower in Pirgachha upazila.
These will add to the high prices of urea and labour costs. Farmers will have to bear a higher cost of production.
“We do not get fair prices for our produce. It is sad that we cannot buy a kilogram of beef by selling a maund of rice," Refayet said.
“I have reduced the area to grow boro by more than a half. It will be tough to manage the increased costs against the low prices of rice,” he said.
Refayet is not alone.
Thousands of his fellow farmers are similarly frustrated as they are preparing lands to grow the principal crop, boro rice.
Following falling prices of rice, potato and jute and various other minor crops last year, a steady hike in the price of diesel came as a double blow to farmers.
In the last eight months, the government increased diesel prices by 39 percent to Tk 61 a litre in an attempt to reduce its subsidy burden.
In addition to the power tillers and tractors used for tilling most lands, 70 percent of 16 lakh irrigation pumps use diesel, according to data from Bangladesh Agricultural Development Corporation.
“Pump owners plan to increase rents for irrigation due to a hike in electricity tariff, while power tiller owners demand higher,” Refayet said.
To irrigate 22 decimals of land, pump owners now demand Tk 750, which is 25 percent higher than a year ago, he said.
And a rise in diesel prices will lead to an increase of Tk 255 for tilling 22 decimals of land, added Refayet.
The only hope for rice farmers like Refayet is that market prices of the staple go up.
"We will get respite if rice prices increase after the next harvest. Otherwise, we will be in deep trouble," said OC Sikder Ashique, a farmer in Gopalganj district.
Last year, he grew rice, wheat, jute, pulses and mustard, but his profits from sales dropped to a fifth from nearly Tk 1 lakh in the previous year.
For Ashique, the only profit came from sales of rice, wheat and mustard.
Ashique, also a diesel pump owner, said he would raise rental by 50 percent to Tk 3,000 for irrigation on half an acre of land because of the rise in diesel prices.
“But farmers don't want to pay higher rents,” he said.
Sohrab Hossain, a farmer in Adamdighi, Bogra, is yet to sell rice harvested in the past aman season.
Nirod Boron Saha, president of the rice and paddy wholesalers' body in Naogaon, said prospects of a quick rebound in prices are dim.
"There is an adequate supply, thanks to bumper boro and good aman crops. Adequate stocks in government warehouses keep prices steady," he said.
Mahabub Hossain, who follows agriculture and the rural economy, said increased urea prices will have little impacts on the cost of production as farmers have reduced overuse of the input.
"Due to the urea price hike, farmers now use less urea and more of other fertilisers (along with farm yard manure), which has had a good impact on soil health and crop yield," he said.
In addition, irrigation costs will go up by 4 percent because of the diesel price spike, he said citing recent cost and return studies.
"The cost of producing rice on account of the payment of wage is indeed much higher than the cost of fertiliser and irrigation,” said Hossain, also executive director of BRAC.
Over the last four years, the wage rate has increased at a much higher rate than agricultural prices as the government does not have any control over labour costs, according to the economist.
But the wage rate may not increase this year due to lower crop prices.
He however said the fall in the prices of farm produce matters more to farmers than an increase in the prices of inputs.
"So, if the present low prices persist in the medium- and long-run, farmers will not have the incentive to sustain growth in production," he said.
The economist however said the fall in rice prices is temporary, citing that rice supply will decline on the international market, following the devastating floods in Thailand. It will result in a rise in prices, he added.
“As a result, rice and paddy prices in the domestic market will start increasing very soon.”
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