Farmers' supply response and perception of rice procurement program in Bangladesh

Rice farmers in Bangladesh do not get proper returns due to lower market prices and many unexpected situations that affect the supply of rice. Hence, the government introduced the rice procurement program to minimise the financial risk of the farmers. 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. Additionally, 100 Aman and Boro rice farmers were interviewed for assessing their financial risk and perception of the rice procurement program. The result reveals that production was significantly affected by the production of the last two years, rainfall and exchange rate. The financial risk was found more in Aman rice than that of Boro rice production, and this risk occurred due to a lower market price. It was also 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, farmers were getting a lower price than the procurement price, that profited the middlemen. The study suggests direct rice collection from the farmers to make the procurement program effective, as well as the need to disseminate appropriate rules and regulations among the rice producers.