Farmers, rice mills play waiting game in Bengal

suchandra · May 8, 2008

Mayapur village, must be Navadvipa?

The Wall Street Journal:

Farmers, rice mills play waiting game in Bengal

http://www.livemint.com/2008/05/07223336/Farmers-rice-mills-play-waiti.html

Mill owners are looking at softer buy prices while farmers are expecting higher prices for their produce

West Bengal: Purna Chandra Halder is a broken man. The 50-something farmer from Mayapur village in the Arambagh subdivision of West Bengal’s Hooghly district has just finished harvesting the boro paddy grown on his one-acre plot, but he is now facing a huge loss.

sowing hopes: A file picture of farmers planting paddy saplings. Prices of almost all varieties of paddy have been falling for the past few weeks

“No rice mill wants to buy my paddy. The few that have offered to buy my crop have offered rates at which I wouldn’t recover costs,” says the distraught father of five.

Haldar had sown the Miniket variety of fine-grain rice last October. Boro, or spring rice, is sown in October-November and harvested by April-May. Production last year was estimated at 4.4 million tonnes by the West Bengal government. Paddy grown between October and April is largely dependent on irrigation as those months don’t receive enough rain. Hence costs are slightly higher.

“I had borrowed heavily from the local moneylender and bought fertilizers on credit,” says Halder, who has been offered Rs560 for a 60kg sack of paddy. “They (moneylenders) want their money back and are pressuring me to sell at this price even though I want to hold on till the price improves a bit.” Each such sack of paddy yields 40kg of rice.

Miniket rice is retailing in Kolkata, 70km from Arambagh, at around Rs22 a kg, Rs8 more than the price Halder would have realized by selling paddy at Rs560 a bag. His fate is shared by thousands of farmers in the paddy-growing belt of Tarakeshwar, Pursura, Arambagh, Dhaniakhali, Singur and Haripal in Hooghly district and Memari, Purbasthali and Monteshwar in the adjoining Burdwan district. They say the demand for the crop has fallen because the government has banned export of rice.

<box></box>Demand for rice has gone down because of export ban, say farmers

“Bangladesh was a big market for us but the ban has spoilt it all,” says Dinabandhu Ullal, manager at Ma Gouri Rice Mill in Arambagh. Many mills have even shut down for ‘maintenance’, and some mill owners say their employees have gone home for the panchayat polls starting Sunday.

Mill owners and farmers are playing the same game, but from opposite sides of the table. While farmers are waiting for the price to harden, mill owners are waiting for it to weaken. And so far mill owners have called the shots—with every passing week, prices of almost all variants of paddy have been falling by about Rs10 a 60kg bag, say farmers.

Even the coarse paddy, which is cheaper, isn’t getting too good a response with Swarna Masuri fetching the farmer Rs450, and Ratna, Rs435, a 60kg bag.

These are at least Rs15-20 less than last year, and indications are that the prices are going to weaken further.

“How is it that the retail price of rice is increasing while our income is decreasing?” asks Abu Sufiyan Laskar, a farmer in Pursurah, who has just sold 100 bags of Swarna Masuri to a mill in Arambagh.

There is no conclusive proof, but economists at Kolkata’s Indian Statistical Institute (ISI) blame intermediaries for this situation. “The export ban theory doesn’t sound credible—very little was exported out of Bengal. I suspect intermediaries are responsible for paddy prices being low,” says Abhirup Sarkar, professor of economics at ISI. His colleague Chiranjib Neogi, too, is of the same view.

The agriculture department of the state government, however, doesn’t seem to be worried at all, though last month an indebted potato farmer in Burdwan district killed himself because he couldn’t recover costs.

West Bengal agriculture minister Naren De, who represents the Forward Bloc party in the state government led by the Communist Party of India (Marxist), or CPM, said he wasn’t aware of the fall in paddy prices, and hence couldn’t comment on it.

His party colleague Naren Chatterjee, who heads the state’s agricultural marketing board, said: “We can’t do a thing in this state. So, what is the point of even pondering over these problems? The government does what only the chief minister wants. So why don’t you ask him what farmers or the government should be doing in this situation?”

Lately, the Forward Bloc party, which has traditionally controlled the state’s agriculture department, has been bickering with the CPM over a range of issues including allowing private players in large format retail.

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