Published in The Financial Express on Saturday, 30 December 2017
Record-high rice prices hit consumers hard in 2017
Farmers suffer due to flood-led output fall
Yasir Wardad
Both farmers and consumers suffered a setback throughout the outgoing calendar year (2017) following two spells of flood that caused a fall in production of rice and took the staple’s prices to record high.
Prices of rice might remain high in the upcoming year also due to low output in the current Aman harvesting season, experts said.
They urged the government for compensating farmers with cash and input subsidies as well as providing commoners with subsidised rice and other essentials to prevent thousands from falling into poverty trap.
Rice prices hit Tk 55 (coarse) to Tk 70-80 (finer varieties) a kg in September this year, reaching all-time high, according to Trading Corporation of Bangladesh (TCB).
The rice prices witnessed a slight decline during the last three months, but the staple food is still trading at Tk 52-54 and Tk 65-78 a kg respectively in the city’s retail markets, which are 34-60 per cent higher than those of a year ago.
TCB data showed that apart from rice, the prices of red meat, vegetables and onion also showed a 31-200 per cent hike in the outgoing year, causing immense sufferings to the commoners.
However, according to the government data, the year 2017 started with a depressing note for the farmers, as the prices of potato and onion witnessed a debacle during January-April period.
Onion reached the second highest level of Tk 140 a kg this December at retail markets. But it was earlier traded at only Tk 14-18 a kg at farm level, depriving 1.5 million farmers even from getting back their investment in the crop production, Department of Agricultural Marketing (DAM) data showed.
According to the DAM data, production cost of onion was Tk 15-20 a kg based on variety and quality.
Potato was sold by the farmers at Tk 5.5-8.0 a kg in February-April period, based on varieties, which is almost the same as its production cost.
According to Bangladesh Cold Storage Association, a huge quantity of potato is still preserved in 412 storages, creating disasters for both the farmers and the traders.
Prices of paddy, however, showed a higher trend both in Boro and ongoing Aman season. But crop loss due to rice blast, flash-flood in March-April and monsoon deluge in August across the country ate up the profits of the producers and even causing them to incur severe loss, asst director of DAM T M Rashed Khan told the FE.
He said Boro paddy was sold at Tk 950 (Brridha-28) – Tk 1,150 (Jeerashail) a maund during May-July period, and Aman is now selling at Tk 940 (Swarna) – Tk 1,350 (Najirshail) a maund.
But farmers witnessed a crop loss of 2.5 to 4.0 maunds of paddy per bigha (33 decimals) in many districts due to flood and delay in farming.
Local think-tank Centre for Policy Dialogue (CPD) research fellow Towfiqul Islam Khan told the FE that their survey found flash-flood caused an approximate loss of 1.53 million tonnes of rice worth Tk 53 billion during the Boro season.
He said monsoon flood in August affected 8.2 million people in 32 districts, causing damage to 9.0 per cent of croplands, especially that of Aman.
“The financial cost of haor flash-flood is equivalent to 3.7 per cent of agriculture crop sector gross domestic product (GDP).”
He also said the financial cost of monsoon flood is likely to be about 0.35 per cent to 0.44 per cent of GDP of the financial year 2017-18.
However, the state-run Bangladesh Bureau of Statistics (BBS) estimates a decline of 0.9 million tonnes in rice production in the financial year 2016-17 (FY 17) amid flooding in Boro season. The total rice production was 33.9 million tonnes in FY 17, according to BBS.
Mr Khan said the government allocation and incentives were inadequate for the flood-affected people in haor areas.
Only 0.6 million flood-affected people were supported to cultivate one bigha of land each, irrespective of their flood loss.
In terms of area coverage, the government incentives covered only 19.2 per cent of the total cultivable land affected by flash-flood, he also said.
The government should provide cash subsidy to the affected farmers apart from input incentives to boost their farming output, he added.
Bangladesh Institute of Development Studies (BIDS) Professorial Fellow Dr M Asaduzzaman said the hike in prices of rice and vegetables has a correlation with the two spells of flood that caused damage to standing Boro crop and vegetables.
He further said monsoon flood also hit Aman crop this year. The government’s delay in easing import also caused a surge in rice prices.
Prices of paddy are now much higher in this Aman harvesting season, forecasting a possible high-price trend in the upcoming year also.
The government should assess the availability of domestic rice, imported grains and public stock to prepare itself for meeting any possible rice shortage, he opined.
Meanwhile, poultry farmers have incurred 18-42 per cent loss amid drastic fall in egg and meat prices at farm level this year, according to Bangladesh Poultry Industries Association.
Moshiur Rahman, president of World Poultry Science Association, Bangladesh, said farmers are selling egg at Tk 3.5-5.0 a piece against the production cost of Tk 5.0-6.0. He said broiler chicken is being sold at Tk 110-112 a kg at farms against the production cost of Tk 130-132 a kg.
Hundreds of farms have been forced to stop their operation amid such debacle.
CAB secretary Humayun Kabir Bhuiyan told the FE that both the farmers and the consumers suffered in the outgoing year.
He said local onion was sold at Tk 120-140 per kg a few days back, whereas the primary trading price of the spice was Tk 18-22 a kg in February-March period.
He said imported onion was sold at Tk 100 a kg when the highest import cost was Tk 52 a kg.
Big importers and their allied traders cashed most benefit of rice and onion markets, depriving both the producers and the consumers.
The government should raise its rice stock at any cost to provide the limited-income consumers with subsidised rice, he noted.
Besides, the state-run TCB should be made operational, so that it can put impact on the essential market.
He also said strict monitoring by the government agencies is mandatory in the next year to keep the prices of essentials within the reach of commoners.
Higher prices of Aman, however, has been showing hope for the farmers who are now busy with Boro cultivation.
The consumers are in hope and despair whether the prices of essentials would ease in the upcoming year or not.