Nearly three months into the grain procurement season, the food department has managed to procure less than a fifth of its promised purchase of paddy from Aman growers.
With less than a month left, it is highly unlikely that it will be able to meet the target, and as a result farmers will not get the price support that the government had planned to provide them.
But when it comes to milled rice (processed from the paddy grown by farmers), the food department has already exceeded its target by purchasing more rice from the millers.
For years, experts and researchers have been asking the government to make an effort so that the price benefits of public sector grain procurement go directly to the farmers, and not mostly to millers and other intermediaries.
If this year’s Aman season rice and paddy procurement trend is something to go by, it appears that the food department paid no heed to that advice.
The inter-ministerial Food Planning and Monitoring Committee had decided back on October 31 last year to start public procurement of Aman paddy and rice from November 7 and complete buying 300,000 tons of paddy directly from the farmers and 500,000 tons of rice from the millers by February 28 this year.
And while inaugurating the Aman season procurement drive virtually on November 7 last year, Food Minister Sadhan Chandra Majumder also asked food officials to ensure a hassle-free paddy purchase directly from the growers.
But three months into the procurement drive, the food department has managed to buy less than 60,000 tons of paddy from the farmers so far while its rice procurement drive has already well surpassed the target. Against a target of 500,000 tons of rice, it has already procured over 550,000 tons from the rice millers till end of January.
The government raised the official purchase rate of paddy by Tk1 a kilogram from last year’s Tk26 to Tk 27 while increasing the price for rice purchase by Tk4 a kg from last year’s Tk36 to Tk40 this time. Most of this price support goes to millers and not directly to the farmers.
In recent months the Food Ministry and Directorate General of Food officials have said many times that an app is in operation and they are making efforts to buy paddy from the farmers through the application of paddy procurement apps.
But in reality, the food department’s procurement remains largely rice-biased, thereby giving the government-provided price benefit more to the millers than the paddy growers.
In India’s West Bengal, the state government purchases the majority of the staple cereal in paddy form, thereby providing the price benefits directly to the farmers.
A couple of years ago, the Washington-based International Food Policy Research Institute (IFPRI) carried out a study through its USAID-funded Policy Research and Strategy Support Program (PRSSP) in Bangladesh, with the Ministry of Agriculture commissioning the task.
The study noted that each year the food department buys far more rice than paddy under its food procurement program.
While its purchase of paddy benefits only a small number of farmers, the lion’s share of the government-provided price supports actually end up in the hands of rice millers and by default to traders and middlemen — all of whom buy paddy from crash-crunched farmers very early into the seasons, convert the same into rice, and enjoy a hefty profit by selling the same to the food department.
The IFPRI-study showed how a neighbouring Indian state does the public procurement of grains most efficiently — benefiting the rice growers and not the traders or millers.
How they do it in West Bengal?
In West Bengal, the state government procures a quarter of the paddy the farmers grow in a year across all rice seasons.
In Bangladesh’s case, the procurement volume is less than 10%.
Since 2016-17, the West Bengal state government has implemented an electronic paddy procurement (e-procurement) system.
From 2017-18 to 2019-20, farmers’ participation in the e-procurement system has increased five-fold, from 465,000 to 2.36 million farmers.
Overall, West Bengal’s paddy procurement was 22% and 24% of total production in 2017-18 and 2018-19, respectively.
Paddy is procured from farmers primarily through two approaches. Under the first approach, farmers bring paddy to centralized procurement centres (CPCs), where the Food and Supplies Department assigns one purchase officer and one disbursement officer who purchases paddy from farmers and records these sales in the e-procurement system.
Payments are made via account payee checks under the ‘Dhan Din Cheque Nin’ program on the same day as the paddy from farmers is received.
Under the second approach, registered farmers’ cooperatives, self-help groups (SHG), or producers’ organizations, which have applied, been screened, and are registered with the District Food and Civil Supply Department, announce the paddy procurement date in advance in the locality and procure paddy from registered farmers.
The cooperatives then deliver the paddy to the state government’s designated custom milled rice (CMR) agencies, which have agreements with select rice mills.
A designated government official certifies receipt of the paddy while the farmers’ cooperatives update the sales information on the e-procurement system and notify all registered members about sales via SMS. The state government pays farmers’ cooperatives and self-help groups.
In 2019-20, out of the state government’s 5.2 million metric tons target for paddy procurement, the selected state government-designated custom milled rice (CMR) agencies procured the most paddy (46%), followed by the state government-run CPCs (42%) and the Food Corporation of India (that is, the central government) (12%).
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