Rice Import to Curb Price Spiral in Covid-19 Era

Md Roushon Jamal

18 September, 2020 12:00 AM printer

Rice Import to Curb Price Spiral in Covid-19 Era

Md Roushon Jamal

Bangladesh has graduated to 3rd position (38.7 million tonnes) in the rice worldwith a big Boro harvest (20.26 million tonnes) this year. Bravo, rice farmers! Super bumper Boro harvest during Covid-19 pandemic has got comprehensive media coverage. During a suffocating hour of Covid-19 pandemic, comfortable rice supply pacified the escalating concern over price spiral and hunger issues. Surprisingly farmers started to get areasonable market price of freshly harvested paddy this year, despite surplus production. They are a bit happy with the price. The government and the consumers are satisfied with adequate supply and affordable prices, especially during this Covid-19 crisis. The rice deficit countries have started to view Bangladesh as a new import destination.However, the lowachievement of the public procurement drivegenerated a new concern over a likely price spiral due to insufficient public stock and likely market engineering by the rice traders.

Rice security, as well as price security (for consumer and farmer), has always been an important national issue because of its strategic and political importance. Bangladeshi people are popularly branded as ‘bheto bangali’ for over-reliance on rice for calorie and nutrition. Per-capita rice consumption is still the highest in the world. The availability of rice at a lower price, even purchasing power and cost of production rises manifold, is an eternal desire of the ‘bheto bangalee’.

Comfortable public stock plays a dominant role in balancingthe rice market and food security. The government usually tries to curbs the price spiral with the public stock. This year the rice miller did not supply the agreed amount of rice to the public stock with the excuse ofthe narrow profit margin. Farmers have shown little interest to sell paddy at public storage as they got a good price in the open market. As of the last day (15 September) of the procurement season, 8.67 lakhs tonnes of rice has been procured (Mo Food) against the target 19 lakh tonnes. As reported by IFPRI, farmers have stocked 29% of Boro (58 lakh tonnes). The Ministry of Food still hopes that the millers will supply agreed rice. If not, what will happen? What should be our policy option? To provide a policy direction, BRRI arranged a national Zoominar on 9 August. In the keynote paper,the Director General of BRRI presented a rice security scenario untilthe next Boro harvest with science, statistics, risk scenario, and policy option. With 20.26 million tonnes Boro rice production this year, carry over Aman rice surplus from the previous year, estimated 3.56 million tonnes Aus rice and 15.5 million tonnes of Aman rice in 2020-21, the domestic rice surplus until next Boro harvest is estimated at 80-90 lakh tonnes, which is the highest ever rice surplus in the country. Naturally, there is a big chance of price fall at the farmer’s level because of thisconsiderable surplus. However, the Ministry of Food has expressed their opinion in favour of importing rice from the international market to keep the public stock at a comfortable level. Now the question is how much realistic import of rice is! What is the likely impact of rice import on paddy production?

Let’s retrospect the improvident rice import drive in the 2017-18 periods and its subsequent impact on the domestic paddy market. The rice world knows Bangladesh as a leading rice-producing as well as a consuming country with a prospect to be a net exportersoon. But, surprising the rice world, Bangladesh became the champion in rice import (11% of global import) in 2017-18, which was very abnormalto the international rice market as well. To supplement the ten lack tones of yield loss in the Haor region, the government and private sector imported 38 lakh tonnes of rice from the international market. In 2017-18, domestic rice production was 36.28 million tonnes (7.3% higher than the previous year). The rice importers celebrated the ‘import festival’ with zero import duty. The domestic marketflooded with imported rice. The paddy price was reduced to a disgracefully low level. Rice farmers incurred huge losses for two consecutive years and started to plan alternate farming options.

As there is no supply shortage of rice in Bangladesh, the import of rice is likely to deprive rice farmersagain from fair price. If the public procurement drive does not proceed anymore, the Ministry of Food should carefully consider importing some (2-3 lakh tonnes) rice at the government level. The farmer’s profit issue must be considered seriously to ensure price justice to the rice farmers. Besides, rice import is not as easier as it was in 2017-18. The recent outbreak of the coronavirus disease 2019 (Covid-19) has sparked fears over the stability of global rice production and supply chains.The international rice market is very narrow (6% of production). Some 34 million tonnes of rice were exported in 2018 with a 30% share of India. More than 80% of export is shared by only six countries (India, Thailand, Vietnam, Pakistan, China, USA). More than 200 countries import rice from the international market. Bangladesh usually imports rice from India (73%). The global import demand is outstripping the export capacity in recent years. The Middle East and Western African countries have appeared as leading rice importer. Iran and Saudi Arabia import rice worth USD 3.0 billion (14% of total import). African countries share 32% of global imports. Some of the Asian rice-producing countries such as Vietnam, Myanmar, India and Philippines have recently placed restrictions on rice exports. Production and supply chain disruption, the stockpiling attitude of both exporting and importing countries, and the export restriction is likely to affect demand-supply dynamics, and it can trigger a price crisis in the international rice market.

The rice traders always try to take the advantage of production loss, disaster, and insufficient public stock for making a big profit. Capitalism explores profit everywhere- in tragedy, in a pandemic, even in the ICU, funeral, or graveyard. Any anarchy, social unrest, and mass-deprivation multiply their profit.

Policy steps should be judicious and ‘farmer-oriented’ to balance rice security and price security. Bangladesh should set up a ‘national rice taskforce’ to review all production and market issues and to advocate appropriate policy options. We,the rice consumers, should feel the silent crying of land heroes, who save our economy and feed our hungry stomach with their dedication, love, and patriotism. Bangladesh has a big challenge ahead to feed the 215 million bheto bangalee in 2050 with our domestic production. The rice farmers are the key actor to translate all policies, technologies, and supports into increased production. To achieve the ‘rice vision-2050,’ it is inevitable to keep the rice farmers in farming business. We expect our restive bheto bangalee to tolerate a little rise of rice price (around Tk 50 per kg) to ensure a price justice to the rice farmers. Dear consumers, please remember, if rice farmers quit this non-profitable and risky farming business, then ‘you will know what’s what.’We must stop depriving farmers, we must change our attitude.A small mistake today will cost a massive value tomorrow. Farmers’ friendly import decisions should be taken to keep the rice farmers in the golden rice field with dignity and economic justice.

 

The writer is a PhD fellow, University of New England, Australia.

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