Mitali Saha, Senior Officer, Corporate Division

MBR: The agriculture ministry has declared huge incentives to small and marginal farmers for cultivation in recent years. In what way do you think it can benefit and motivate the farmers?

Md. Abdur Rashid: About 90% farmers of Bangladesh are small and marginal with having average land of 2.5 acres and below. They are very often constrained by finance and thus cannot afford high costs for management. Moreover, they have very limited access to institutional credit because of collateral requirements. As, farmers are responsible for all crops and livestock that are needed for us to survive, we need to take care of them. In recent years, we saw that Ministry of Agriculture has introduced several incentive packages and micro loans with easy terms and low interest for farmers. This step is certainly beneficial for the producers as they will be able to get the required financing and it will also motivate them for cultivation. Also government has raised the target for procurement and distribution of rice and paddy by 2 lakh MT in FY 2020-21 which will help to ensure that farmers get fair prices for their production. In addition, allocation of BDT 3,198 crore to promote farming mechanization and reducing custom duty on importing parts of agriculture machinery will reduce the price of farming equipment and generate employment.

MBR: In pandemic time farmers are worried about the timely supply of rice to the government storehouse because of insufficient cash and paddy. How farmers and owners are mitigating this obstacle?

Md. Abdur Rashid: Due to the pandemic, the government imposed a nationwide lockdown and instructed everyone to stay at home to curtail the spread of the virus. Many farmers were facing a crisis over the lack of agricultural workers to harvest rice due to COVID-19. Also, farmers and rice millers faced cash crisis during the pandemic for lockdown and limited banking hours for which they couldn’t purchase paddy.Though there was plenty of production of paddy, farmers were concerned about whether they would be able to process the paddy as there were barriers of movements, labor shortages and insufficient money supply. But due to the government intervention and collective support, farmers and rice mill owners were able to overcome the barriers.The Agriculture Ministry decided to issue special passes to workers for harvesting. Also, transports loaded with fertilizers, pesticides, diesel and other agricultural products remained out of the purview of the transport ban. Farmers were provided mobile phone numbers of the local DAE (The Department of Agricultural Extension) officials so that they could be in touch with them in this difficult time. Government unveiled a BDT 50 billion (USD 590 million) stimulus package with a 4% discounted interest rate on loans for the farmers who are being affected severely by the ongoing lockdown and set the paddy price which helped to alleviate the crisis.

MBR: What is the thought of farmers and owners regarding the government quoted price “BDT 36 per kg” for selling the rice? Will all type of rice mill owners be able to survive in the industry with this price?

Md. Abdur Rashid: Government has set the price of paddy and rice for maintaining a stock to ensure food security and providing price support to the crop growers. Definitely, this is a good news for producers and farmers who produce rice. But the actual scenario is a bit different from previous experience of last Boro season.We could see that, almost 98.66% farmers, who had to sell their paddy to middlemen, traders, millers and wholesalers. They got an average price of BDT 20-22 for each kg of the grain, which was BDT 6-4 less than the floor price of BDT 26 for paddy set by the government. Only 1.34% of the farmers got the government-set price against their production, as they were the only lucky ones who could sell paddy to the government’s food department. And as the rice millers have to procure paddy in bulk and further process it to make rice, the costing increases. Millers cannot supply BDT 36 per kg of rice as the production cost of rice becomes BDT 42-43 per kg, which is why most millers have to procure the rice at a lower price from the farmers.

MBR: How do you handle the situation when government imports rice to meet up with the demand? As an industry expert, do you think the impact of importing rice is different for large and comparatively smaller sized rice mill owners? If yes, how is it different and how to deal with such situation in both cases?

Md. Abdur Rashid: Basically rice import is very insignificant compared to our total production but when there is any natural disaster which causes the harm to our production. Due to controlling price, government decides to import rice from abroad to maintain stable price. As a miller, I have to be very calculative in that case. I have to have update regarding how much rice would be imported and what extent the calamities harm the crops. Sometimes, it is very challenging to predict market but my long experience in this industry helps me run business along with the demand, supply and government policy. Impact of importing rice is different to a large miller from a small sized miller though some factors affect equally to both parties like price of paddy, price of rice, availability of raw materials but the difference lies in managing the situation. Large millers can easily contribute in importing rice due to having very good access to finance with other advantages but it is rarely possible for small sized millers to extend their business production with importing rice from abroad. That is why authority should be very careful determining the amount of rice to be imported and be very vigilant to ensure the estimated amount of import.

MBR: As the population is increasing faster, we are losing lands for cultivation every year. Is that affecting in a huge way in the production compared to the actual demand?

Md. Abdur Rashid: Bangladesh is a small country with huge population and the rate of population growth is increasing very fast. Due to the high pressure of the increased population, the country is losing nearly 82,000 hectares of land annually on an average, of which 55% is used for housing followed by industrial and other commercial sectors. Besides, structural transformations and the increasing rate of industrializations are also high. Conversely, food production is not increasing as the same proportion as the population growth according to the food demand. Rather agricultural land is declining every year. If the present trend of population growth of two million people per year continues, Bangladesh will undoubtedly face far severe food shortage in the next few years reaching a critical level by 2050.

MBR: Isn’t lack of modern technology in husking and traditional rice mills resulting in poor quality rice? Are they meeting up with the International standard? Also, as an industry expert what do you think of the future prospect of such kind of semi auto, husking, traditional rice mills?

Md. Abdur Rashid: Definitely, quality of rice produced by traditional and husking rice mills is not as good as auto rice mills. Rice husking mill is far behind in terms of capacity, technology, quality than auto rice mill. Moreover, the husking and semi auto rice mills do not meet the international standard as the traditional boilers used in the mill are quite unsafe for the operators, onlookers and they are profusely polluting the environment. Very often a number of these inefficient and unsafe boilers accidentally explode because of uncontrolled internal steam pressure. Husking mills are currently on the verge of extinction while some semi-autos are on the way. Nowadays everyone is leaning towards automatic rice mills, which will be more sophisticated with new technology than the current ones in near future.

MBR: Do you think lack of skills related to operation and technology resulting in low productivity compared to other countries?

Md. Abdur Rashid: Bangladesh is an agricultural country whose economy is largely dependent on agriculture. Among the various crops produced in the country rice is the major one. Majority of the rural population are involved in production, processing and marketing of rice. But the rice producing and processing technology followed by the farmers and mill owners are either completely traditional or a combination of modern and traditional method. Though Bangladesh is the fourth largest producer of rice in the world, still we have some lacking in adapting new technologies and skills. A significant portion of our farmers still use traditional method of farming for which productivity of the land reduces. We can see that large rice producing countries like China, Vietnam and India are producing huge quantity of rice through using the latest technology. We should also adapt the modernization and develop our cultivation process for increasing productivity.