This book investigates the theoretical and practical impacts of the government procurement policy on rice producer price in Bangladesh agriculture. The policy, basically, aims at procuring a targeted amount of rice and wheat at predetermined prices in order to protect the producers' income by stabilizing food prices and to provide foods to specified target-groups of consumers in course of normal time as well as in emergency period. The study conducted econometric analyses with twenty five years data collected from various government and private sources. The empirical finding of the study indicates that the rice producers are unlikely benefited from this policy even in the short run because of the potential caveats in the theoretical model and in its implementation. In effect, government intervention in terms of procuring food-stuffs deserves further review in order to reach its targeted objectives.

“Boro” is the dry season irrigated rice crop planted from December to early February and harvested between April and June. In 2018/2019, the total production of rice in Bangladesh was 36,391,000 (36.4 million) metric tons (MT), of which boro rice accounted for 53.8 percent; aman rice, 38.6 percent; and aus rice, 7.6 percent. In 2019, paddy prices in Bangladesh were depressed due to a bumper harvest of the boro rice crop. Average paddy price was Tk 17.42 per kg in January 2019 after the aman harvest, but declined by 22 percent to Tk 13.56 per kg in May 2019 (DAM 2020). Farmers complained that they did not receive price support from the Government when paddy prices did not cover their production costs. In response to this situation, the USAID-funded Bangladesh Policy Research and Strategy Support Program (PRSSP) implemented by the International Food Policy Research Institute (IFPRI) actively engaged in policy dialogues, and the media extensively covered IFPRI’s analysis and policy recommendations on this issue. On 20 May 2019, the IFPRI Country Representative presented policy options on how to improve farmers’ situation, as related to the low paddy price issue, during a policy seminar at the Agricultural Policy Support Unit (APSU) of the Ministry of Agriculture, Government of the People’s Republic of Bangladesh. On 11 June 2019, the Ministry of Agriculture requested IFPRI-PRSSP to conduct a study jointly with APSU to assess the paddy price issue. IFPRI agreed to carry out the study. The objectives of this study are to (1) assess to what extent boro farmers were able to sell their paddy to the Government at the announced procurement price; (2) evaluate the efficacy of the direct paddy procurement from farmers by the Government, in order to help farmers overcome low paddy prices in the future; and (3) examine ways to improve the foodgrain procurement system. This report presents IFPRI’s study findings and identifies policy options to address the study objectives.

The prospects for continuous growth in rice yields have been examined within the context of a simulation model where demand parameters for both rural and urban populations and for different income groups have been used. Coupled with available estimates of supply response parameters, the prospects for a rice surplus in year 2000 appear moderate. On average, only 157,000 metric tons of rice surplus would result if current prices were to prevail. If prices were allowed to adjust, only a negligible price decline would result. That is also the case in the more favorable scenario of high growt of rice yields. Domestic demand would be capable of absorbing the increased rice surplus without an appreciable decline in price. The analysis of the proposal to support rice prices through procurement of domestic production has led to the conclusion that even massive increase of domestic procurement would result in very small price increases while at the same time causing serious storage capacity and budgetary problems for the government.

Price instability is a fact of life. In a market economy, domestic prices change in response to changes in supply, consumer preferences, policy, world prices, and other factors. Crop prices tend to be particularly volatile because harvests occur only once or a few times per year and because the size of the harvest varies due to weather, prices, and other factors. For internationally-traded commodities, volatility in world prices can be another source of instability in domestic prices.

Research report on the effect of agricultural price price policy for agricultural production in Bangladesh - examines the case of rice and Jute, land utilization, production costs, supply and demand, irrigation, agricultural surplus, etc., and discusses implications for agricultural employment and rural welfare. Bibliography pp. 74 to 78 and graphs.

Introduction; Price stabilization issues; Fluctuation in rice prices; Causes of luctuations in annual and seasonal prices; Intermarket links and regional prices; An approach to price stabilization.

Research report on food policies in relation to grain food security and food consumption in Bangladesh - discusses impact of administered price rationing and market price on supply and demand of wheat and rice, of price support and fertilizer subsidy on agricultural production, and of food aid on poverty relief in rural areas and urban areas, and presents policy recommendations. Bibliography pp. 80 and 81, graphs and statistical tables.