Determinants of the farm-level stocks of rice and effectiveness of rice procurement program in Bangladesh

The domestic rice procurement program in Bangladesh aims to build stocks for the public foodgrain distribution system and provides income support to farmers. The support price is higher than the cost of production. We analyzed the factors influencing farm-level rice stocks and examined the effectiveness of this program. Understanding farm-level stocks is a pre-requisite in designing an effective procurement program in Bangladesh. In doing so, we used Household Income and Expenditure Survey 2010, historical and survey data. We found that the farm-level stocks vary positively with production. Also, the stocks varied positively with respect to prices in Boro and Aus seasons, but negatively in the Aman season. Results also showed that government stock was negatively correlated with domestic procurement, but the planned distribution was positively correlated with it. Apart from that, annual household income including farm income increased due to participation in the procurement program. The implications are discussed.