Farmers’ Supply Response and Perception of Rice Procurement Program in Bangladesh

Abstract

Rice farmers in Bangladesh do not get proper returns due to lower market prices and many unexpected situations that may affect the supply of rice production. To protect the farmers, the government introduced the rice procurement program. This study tried to analyse the supply response to rice production and assess the farmers’ perception of government procurement program including their financial risk of rice production. Vector autoregressive (VAR) model was employed to analyse the supply response of rice using secondary data. In addition, 100 Aman and Boro rice farmers were interviewed for assessing their financial risk and perception of the rice procurement program. The result reveals that present production was significantly affected by the production of last two years, rainfall and exchange rate. The financial risk was more in Aman rice compared to Boro rice production. This risk was occurred due to a lower market price. It was found that no farmers sold rice directly to the procurement centre and they had no knowledge of the rules and regulations of the procurement program. Therefore, they were getting a lower price than the procurement price where middlemen were getting the benefit. The study suggests direct rice collection from the farmers to make the procurement program effective, as well as rules and regulations need to be disseminated properly among the rice producers.