Boro harvest season, rice procurement campaign, and food security

Rice is the staple food grain of Bangladesh, cultivated during three seasons: Aus, Aman, and Boro. Among these, Boro ranks highest in terms of production volume, followed by Aman and then Aus. Historically, Aman and Aus were the primary rice seasons, while Boro was of lesser importance, limited mainly to haor, beel, and low-lying areas. However, with the expansion of modern irrigation systems and the development of high-yielding rice varieties, Boro cultivation has steadily increased, while the risk-prone Aus and Aman seasons have seen a decline in acreage.

Boro rice is relatively safe from natural disasters, is dependent on irrigation, responsive to modern inputs, and yields more per unit. It is also more profitable for farmers. As a result, farmers now prioritize Boro cultivation across highland, lowland, and flat terrain. Boro contributes about 54% of the country’s total rice output, with Aman and Aus accounting for 39% and 7%, respectively. Therefore, ensuring good Boro production is crucial for national food security and price stability in the food grain market.

This year, Boro rice has been cultivated on 5.045 million hectares of land, with a production target of 22.6 million tons. Due to droughts early in the year and subsequent floods, Aus and Aman production suffered. Thus, farmers put in considerable effort to boost Boro output. However, high input costs, irrigation issues, recent droughts, and the outbreak of blast disease have somewhat hampered these efforts. Still, field observations across the country suggest a reasonably good Boro yield. Last year, Boro rice production stood at 21 million tons, and in the fiscal year 2022–23, it was 20.7 million tons. This year, the estimated yield could reach around 21.2 million tons.

Harvesting of early-maturing Boro rice has already begun in haor, beel, and low-lying regions. By mid-May, the harvest is expected to be completed in the plains. If early floods, storms, and hailstorms can be avoided, rice supply in the market will increase compared to previous years. This will ensure food security until the next Aman season and help curb the rising price of rice, thereby reducing food inflation.

The primary cause of Bangladesh’s current high inflation is food price inflation, driven by weather-related disruptions such as droughts, floods, excessive rainfall, and dry spells, which affected production. These factors led to supply shortages and price hikes. Food inflation was 13.80% in November, dropped to 12.92% in December, and fell further to 8.93% in March. Increased winter crop production, reduced vegetable prices, and a sharp drop in potato and onion prices contributed to this decline. When Boro rice enters the market, prices are expected to fall further, easing food inflation. However, this will require efficient market management, stricter monitoring, and action against middlemen and syndicate manipulation. Government intervention in the market must become more visible and effective.

During the Boro harvest, a large volume of rice enters farmers’ hands at once, increasing marketable surplus. However, the lack of adequate buyers can sometimes depress rice prices. Government procurement campaigns during Aman and Boro seasons are designed to protect farmers. The government buys paddy from farmers at set prices, mills it into rice, and stores it. Similarly, it buys rice from millers and traders at fixed prices for storage. During lean seasons, when prices rise, the government sells this rice at lower prices in open markets and distributes it through social safety net programs to low-income consumers. This long-standing strategy helps stabilize the rice market.

This year, the government has set the procurement price of paddy at Tk 36 per kg and rice at Tk 49 per kg. The procurement targets are 350,000 tons of paddy and 1.4 million tons of rice, totaling 1.75 million tons, equivalent to around 1.6 million tons of rice. The procurement drive began on April 24 and will continue until August 31.

In the past, more emphasis was placed on paddy procurement. For example, in FY 2017–18, the Boro season paddy procurement target was set at 700,000 tons but fell short. Subsequently, paddy targets were reduced while rice targets were increased. Due to government reluctance and procedural complexities, farmers are unwilling to travel long distances and bear transportation costs to deliver paddy to government warehouses. Instead, they prefer selling at lower prices directly from the farm to rice millers, corporate agents, or large traders. Currently, paddy in the haor and other regions is being sold at Tk 800–900 per maund, while the government-set price is Tk 1,440. Thus, farmers are being deprived of fair prices. On the other hand, traders are buying paddy cheaply and supplying rice to government warehouses at Tk 1,960 per maund, earning the profits. Since the government mainly procures rice during the harvest, millers and traders are failing to ensure adequate market supply, which keeps rice prices high even during the harvest season.

In this context, the government should prioritize direct paddy procurement from farmers over relying heavily on rice purchases from traders. Procuring at least 10% of total production would be reasonable—amounting to 3 million tons of paddy in this Boro season. The government’s procurement price-setting appears conservative. This year, the net production cost of paddy is Tk 33 per kg. Adding transportation and a 10% profit margin brings the cost to Tk 37. With a 20% profit margin, the fair procurement price should be Tk 40 per kg. Compared to this, the current price is low. The production cost of rice this year is Tk 48.88 per kg—almost equal to the procurement price.

Last year, the paddy procurement price was Tk 32 per kg. The prices for parboiled and non-parboiled rice were Tk 45 and Tk 44 per kg, respectively. The procurement targets were 500,000 tons of paddy, 1.1 million tons of parboiled rice, and 100,000 tons of non-parboiled rice. This year, paddy procurement has decreased by 150,000 tons, while rice procurement has increased by 200,000 tons. The procurement price has increased by Tk 4 per kg for both paddy and rice. As production costs rise every year, the base price of rice in the market will naturally increase. Consumers must therefore remain patient and tolerant.

Although the Boro harvest is underway, rice prices remain high. The price of medium-fine rice is still steep, and coarse rice is also expensive. Government rice stock currently stands at 884,000 tons. Holding such a high volume during the harvest season is not advisable. Ideally, 400,000–500,000 tons should have been released into the open market a month ago to curb the price hike. One of the main reasons for instability in the food grain market is poor management and insufficient government intervention. Presently, traders largely control the rice market, holding around 10 million tons in storage, while the government holds only 2.2 million tons. When unscrupulous syndicates manipulate prices, government interventions prove ineffective due to insufficient stock.

To have a real impact on the market, the government must increase its grain stock and release it when needed. Based on total rice production and demand, the government should aim to maintain a minimum stock of 4 million tons. To support this, around 2 million tons of additional storage capacity should be built. This year, natural disasters have disrupted Aus and Aman production, leading to a supply shortage, which syndicates have exploited to raise prices and make abnormal profits. As a result, rice prices have reached record highs for consumers.

In response, the government has focused on rice imports, approving over 1.6 million tons. By April 23, 1.083 million tons had already been imported—614,000 tons by the government and 469,000 tons by private traders. However, private interest in imports has been low, even after reducing the import duty from 62.5% in phases. This compelled the government to import more rice itself. Additionally, 4.83 million tons of wheat were imported, compared to 6.828 million tons in the previous fiscal year. Wheat imports are expected to increase further.

Given the likely success of this year’s Boro harvest, the government should now impose restrictions on rice imports and revise the duty structure. Simultaneously, the export of aromatic rice from Bangladesh should be encouraged.

Once the Boro harvest is complete, marketable surplus will rise, and rice supply in the market will increase. At this stage, the government could procure rice directly from the market to build its stockpile, reducing reliance on traders and curbing unscrupulous profiteering. A revised stock target of 2.5 million tons of rice should be set during this Boro season by procuring directly from farmers and markets. This would enhance the government’s capacity to intervene in the market, reduce the need for imports, and stabilize food grain prices. Both farmers and consumers would benefit.

Dr. Jahangir Alam: Agricultural Economist; Former Director General, Bangladesh Livestock Research Institute; Former Vice-Chancellor, University of Global Village