Farming cost soars, sale prices of produce fall
Farmers across the country are going to face a tough time in the coming Boro season from December to May due to repeated increases of diesel price, a possible hike in power tariff and low prices of rice, potato and jute that have already caused them losses this year.
The situation is likely to worsen since the government has not yet given price support to farmers through procurement of rice during the ongoing Aman season –August-December– apparently for lack of storage capacity. The government already has a record stock of 15 lakh tonnes of foodgrains.
Economists view the situation as very tricky, and suggest that the government go for some innovative ways of giving price support to farmers. “Otherwise, the rural economy of the country will be at stake,” renowned agriculture economist Dr Mahabub Hossain told The Daily Star.
Diesel and power are two major farm inputs used for operating irrigation pumps and tractors.
The government hiked diesel prices by Tk 2 a litre in May, Tk 5 per litre in September and again by Tk 5 a litre on November 10. And it plans on raising fuel oil prices by Tk 4 to Tk 12 per litre by January next year.
And the Bangladesh Energy Regulatory Commission has recommended a 12.86 per cent increase in retail tariff of electricity by the Power Development Board.
Besides, an increase in the price of another essential farm input — urea fertiliser– from Tk 12 to Tk 20 a kg in June this year has already contributed to the rise of production costs of Aman paddy to around Tk 550 a maund though its price has fallen. Aman paddy now sells at Tk 500 to 550 a maund. The prices of some fine varieties, however, range from Tk 700 to 750 a maund, according to farmers and traders.
“This is very uncommon. Usually, paddy price at this time was higher in previous years,” said Mahabub, who is a former director general of the Bangladesh Institute of Development Studies.
The reason behind this is that big farmers, who had not released their paddy stocks expecting higher prices, have now started selling out those for fear of a further decline in prices, he said.
As the country expects a good Aman harvest this season and the government has a good stock of imported rice, paddy price is not likely to see a rise soon, added Mahabub, now executive director of Brac.
With the increased input prices, the production cost of Boro paddy might rise to around Tk 650 a maund, unofficial estimates have revealed.
According to the agriculture ministry, Boro production cost last season was Tk 586 a maund.
POTATOES
According to the Department of Agriculture Extension, potato production in the last season stood at 87 lakh tonnes, which is around 20 lakh tonnes more than the national requirement annually.
Price fall due to increased production as well as exorbitant cold storage charges led to farmers’ losses, Hafizur Rahman, vice president of Rangpur Potato Farmers United Council, stated when contacted.
The production cost of 220 maunds of potatoes on four acres of his land was Tk 55,000, but its price now is only Tk 33,000, said Hafiz.
“Now I am in a dilemma over what to do in the next Boro season as I have to take out loans for Boro cultivation,” he said.
Hafiz is one of thousands in such straits.
JUTE
In the wake of the high prices of jute in the previous two years, farmers this year suffered losses as prices fell due to increased production and demand for jute products declined in the international market.
Jute prices last year ranged from Tk 1,500 to Tk 3000 a maund, and those came down by more than 50 per cent this year, according to Bangladesh Jute Mills Association.
In such a situation, the government has to place special focus on farmers’ interests in the Aman and Boro seasons, said Quazi Shahabuddin, professorial fellow at BIDS.
Mahabub suggested making room for additional foodstocks by initiating a massive Food for Work Programme toward constructing embankments and digging canals for irrigation in the rural areas where the poor could find work.
The government can then buy rice from the local market to give price support to the farmers, he said.
Questioned on the matter, Agriculture Secretary CQK Mustak Ahmed said the authorities would take all steps to make sure that the farmers were not affected. “In the ministry, we will sit soon to see what we can do to help the farmers in the coming Boro season.”
-With The Daily Star input
