Is this really an industry problem?

Sep 19, 2009 Letters

Dear Editor,
There has been much talk recently about the problems in the rice industry. However, these problems leave one to carefully examine the situation to see what the real difficulty is, that is to say whether it is an industry problem or something beyond that.
To illustrate this, let’s take the following into consideration. If a farmer were to spend $60,000 to cultivate an acre of paddy and does not harvest a minimum of 30 bags per acre between A and C grade then he should not be involved in paddy production, bearing in mind the drainage and irrigation infrastructure and the release of new varieties by government, in view of the following operations involved in production, cultivation, seeding, fertilizing, harvesting and transportation.
Assuming the farmer harvests 30 bags of paddy per acre and is paid $2,500 per bag then he makes $75,000 which leaves him with a profit of $15,000 per acre that is 25 percent on his investment. This is not a bad return for six months, which is 50 percent per year compared to the bank which is only offering five percent per annum.
At present the minimum wage is $35,000 per month that is $420,000 with benefits per year. Therefore a farmer has to cultivate 14 acres of land to obtain the minimum wage and without benefits.
They are not many farmers who cultivate this amount of land and although the farmers with these small acreages have a lot of time on their hand, often they cannot get other forms of employment to augment their income.
We all know that $35,000 per month is insufficient for one to subsist and sustain a family, maybe $75,000 per month which is $900,000 per year which results in a farmer having to farm a minimum of 30 acres.
The majority of millers are indeed manipulated by middlemen involved in marketing as they themselves are too small to market.
The millers might be seemed to be making lots of money, but the truth is that the return on investment is minimal.
As I pointed out, this is clearly the dilemma that rice operators whether millers or growers finds themselves in. Now, the problem is to find an approach that will solve what seems like a tedious task.
The solutions are not far reaching; they are right before us but needs to be more vigorously pursued.
Because of the unscrupulous middlemen involved in marketing, better marketing strategies need to be adopted in order to obtain a good price for rice which translates in improved prices per bag of paddy.
Secondly a fund should be established to make good the difference between the minimal amounts for living against the price the farmer would have received for his paddy and thirdly the agricultural diversification programme should be more vigorously pursued, thus enabling the farmers with other avenues to supplement their incomes.
Beni Sankar

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