Bangladesh agricultural researchers blame government failure to control syndicates for price spikes

Bangladesh Agricultural Research Council, or BARC, has blamed syndicates of rogue businessmen twinned with the government’s failure to rein them in for the soaring prices of essential commodities like rice, onion and potato.

The state agency in a report published in Dhaka on Tuesday also cited inconsistencies in production information as one of the reasons behind the rise in the prices.

The study found that the farmers sold paddy from their stocks gradually instead of selling at a time in the last Boro season, which drove the rice prices.

The government bought less rice than expected, and failed to import and intervene at the right time to control the market, the council said.

Control by owners of large mills and businessmen and an uneven competition between them also drive the prices while the number of seasonal traders increases, which is affecting the market.

A rise in costs of production and processing coupled with low harvest due to natural disasters are among the other reasons behind paddy price hike.

The report said hoarding of potato by farmers and traders for profiteering led to price hikes. Supply from the cold storages was also low and changed hands several times.

The export of potato to neighbouring countries and rising number of seasonal traders, who created an artificial crisis in the market, also drove the price, according to the report.

A lack of government control on the market and failure to get the real picture of the market were among the reasons behind potato price hike.   

A drop in vegetable production due to long rainy season led to a rise in demand and price of the root vegetable.

Syndicates of dishonest businesses manipulated the onion market, the BARC study found.

Excessive dependency on the Indian onions caused the price hike when the neighbouring country suspended exports.

The government was late to react in finding alternative sources of onion, the report said.

The researchers said a drop in production during summer caused the onion price hike as well.

To keep rice prices down, the council advised the government to collect paddy directly from the farmers, collect at least 2.5 million tonnes and increase the capacity to collect 10 percent of the total harvest, announce separate minimum support price for fine and coarse varieties, fixing the price for government purchase by ensuring 10 percent profit for the farmers.

The researchers said the government should set up a commission to fix prices of potato, and then announce minimum and maximum support prices, removing ambiguity from information on production, demand, supply and price, monitoring cold storages, identify and punish those involved in market manipulation, develop varieties for export.

To control the onion market, the government should identify the dishonest businesses in the syndicates and bring them to justice, explore more countries exporting onion for quick import during crisis, and increase domestic production to cut dependency on import, according to the council.

Agriculture Minister Muhammad Abdur Razzaque, who was present at the report publication event presided over by BARC Executive Chairman Shaikh Mohammad Bokhtiar, admitted that millers and wholesalers were manipulating the market.

He said the government is trying to control the situation by cutting import duty, but importers show no interest in bringing the staple from abroad, demanding more cut to make profit.