Dear Editor,
There has been much talk recently about the problems in the rice industry. However, one has 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 did 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, and having regard to the various operations involved, namely, 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 would make $75,000, which would leave him with a profit of $15,000 per acre, that is, a 25 per cent on his investment. This is not a bad return for six months, and is 50 per cent per year compared to the bank, which is only offering five per cent 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 without benefits.
There 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 hands, 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 on and sustain a family; maybe $75,000 per month would be, since this is $900,000 per year. However, to earn this a farmer would have 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 seem 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, find 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 need 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 to improved prices per bag of paddy. Secondly, a fund should be established to make good the difference between the minimum amounts needed for living against the price the farmer receives for his paddy; and thirdly the agricultural diversification programme should be more vigorously pursued, thus enabling the farmers to avail themselves of other avenues to supplement their incomes.
Yours faithfully,
Beni Sankar
