Price gap slows boro procurement drive

Obaidul Ghani, The Daily New Age, 17 May 2008

The boro procurement is yet to gain pace because of a large gap between the price of rice on the market and the price set by the government, market sources said.
   Frequent power outages are also hampering the regular supply of rice by millers and the early fixation of the price by the government has contributed to the price gap, rice suppliers and market sources said on Friday.
   Most farmers are reluctant to sell their rice immediately after harvest thinking that the price might go up further when the government will begin procurement drive in full swing, they said.
   Sources said the government was mounting pressure on the millers to increase the supply of rice, but the millers were unable to buy rice for the price set by the government.
   Paddy now sells for Tk 850 a maund (37.33kg), but the government has set the rate at Tk 720, they said.
   The government in the first-phase procurement ending on May 15 has been able to procure 35,360 tonnes of rice against the target of 2,75,750 tonnes.
   Paddy procurement in the period was only 6,190 tonnes, but about 70 per cent of the boro has been harvested, said officials at the Department of Agricultural Extension.
   It is unlikely for the government to fulfil the boro procurement target in time and is likely to extend the period, said Mohammad Habib, a rice supplier in Kushtia.
   The government needs to increase the procurement price; it will, otherwise, be impossible for the government to control the market, said BRAC’s executive director Mahbub Hossain.
   The government at any cost needs to increase the local procurement by at least 15 to 20 lakh tonnes to control the local market as the rice price on the international market is around $900 a tonne, he said.
   According to statistics of the food department, the procurement in the Dhaka division till Thursday was 9,500 tonnes or rice against the target of 50,000 tonnes.
   Only about 19,000 tonnes out of targeted 2,08,000 tonnes rice were collected from the Rajshahi division and the procurement in the Khulna division stood at 6,000 tonnes against the target of 15,000 tonnes.
   In Chittagong, about 800 tonnes were collected against the target of 2,200 tonnes, and in Sylhet only 60 tonnes against the target of 550 tonnes.
   The total procurement of paddy was 6,190 tonnes together from the Dhaka, Rajshahi, Khulna, Chittagong, Barisal and Sylhet divisions, said sources in the food department.
   The boro procurement in 2008 began on April 16 and it will continue till August 31, and the price of a kilogram of rice has been set at Tk 28 and of paddy at Tk 18.
   In 2007, the government procured 7,10,000 tonnes of rice and 6,500 tonnes of paddy against the target of 10 lakh tonnes rice and 3 lakh tonnes paddy at the price of Tk 18 a kilogram of rice and Tk 11.25 of paddy.