Production and consumption of rice

Dhaka,  Wed,  23 August 2017
Published : 10 Jul 2017, 20:01:57

Production and consumption of rice

Rice is now grown mostly by landless, marginal and small farms and their market share has been going up over time. This trend warrants attention in devising incentive schemes for rice. Particularly, this group would benefit from a well-designed procurement drive whereas in the past, only large and medium groups allegedly used to benefit, writes Abdul Bayes
A glance at production and marketing of different crops, obtained from a survey of 62 villages from rural Bangladesh, the recent one being in 2014, reveals interesting insights into the emerging scenario in the field of commercialisation of agriculture in Bangladesh. Over 90 per cent of farms in Bangladesh grow paddy rising over time possibly reiterating the need for food security.  The average production of paddy per farm was estimated to be close to 3.0 tons in 2014 - marginally lower than that of 2000.  

Maize is a recent crop grown by one-tenths of farmers, thus, mostly meeting the needs of poultry industry. Pulses, onions and oilseeds seem to have staged a comeback after a prolonged downturn in acreage and production. It may be mentioned here that these crops were forced to take a backseat in the wake of the advent of High Yielding Varieties (HYVs) of rice and the need for food security. By and large, all these crops, excepting the cash crops, have historically been produced to cater to the needs of home consumption. 

But things have changed as far as marketing of these crops is concerned. Take the case of paddy - the staple crop. About a half of the total output was being marketed in recent years against one-thirds in 2000 and one-fourths in 1988. Again, four-fifths of total maize and two-thirds of wheat now find ways to the market.  Historically, 80-95 per cent of the cash crops like jute and sugarcane were sold in the market to meet cash needs of households. This still continues. 

However, the monotonic rise in the incidence of marketing of cereal crops seem to show that market-related incentives matter for producers of cereal crops. Likewise, increased incidence of marketing of crops like pulses, oilseeds and potatoes suggest that households growing these crops also need market-related incentives to match supply with growing demand. A number of factors could be adduced to the growing market orientation on the part of the rural households: (a) an increase in land productivity resulting from new technology helped households reap a better harvest from the same quantity of land, (b) improvements in communications, including telecommunications and media, widened the base of market information, (c) a reduction in household size reduced home consumption thus leaving some outputs for the market, and (d) perhaps, people are changing their pattern of consumption behaviour from paddy to non-paddy items. 

A cursory look at production and marketing of paddy/rice crop by socio-economic groups provides some interesting insights. First, participation of landless households in production and marketing of rice has risen over time. For example, this group now contributes to about one-thirds of total rice output as against one-tenths in 1988 and one-fifths in 2000. Again, they have been increasing participation in rice market. This possibly indicates a significant shift from the predominantly subsistence nature of rice production by poor households. Second, large and medium land-owning groups (1 ha+) contribute to about 30 per cent of total rice production as against about 50-60 per cent in compared periods. However, about two-thirds to three-fourths of their total production find their ways to the market and the incidence has risen over time. 

By and large, rice is grown mostly by landless, marginal and small farms and their market share has been going up over time. This trend warrants attention in devising incentive schemes for rice. Particularly, this group would benefit from a well-designed procurement drive whereas in the past, only large and medium groups allegedly used to benefit. 

Marketable surplus is derived by deducting total consumption from total output. Average production of rice per household went down between 2000 and 2014 from 1.2 tons to about 1.0 tons - a reduction by 20 per cent. However, increased area under modern varieties (MVs) possibly pulled up total production of rice in the country over time. Large and medium land-owning households decreased production while other groups increased production over time. Second, in 2000, landless households were distinctively disadvantaged with deficit of rice (consumption>production), but marginal households marginally survived with 25 per cent surplus. During those periods, medium and large households (1 ha+) had surplus rice to the tune of 70-80 per cent indicating that they produced 70-80 per cent more than consumption requirement.  

In 2014, the situation swung sharply with only pure landless households facing deficit of rice to the tune of 32 per cent. In other words, their production lagged behind consumption by 32 per cent. Large and medium ones continued to hold the lead in surplus generation. During this period, both functionally, landless and marginal households saw satisfactory surplus. By and large, about 40 per cent of the rice output went to the market to meet the demand of the consumers who did not produce rice. 

Field-level data also shows changes in rice consumption over time. On average, a household in rural areas consumed 1.0 ton of rice in 2000. This declined by 34 per cent to reach 667 kg in 2014. Even the poor households decreased their consumption of about 900kg/yr to 600kg/yr during the same period of time. The decline was steeper for medium and large land owning groups. 

What could be the causes for the decline? First, the size of household declined from 5.3 to 4.3 - a decline by 17 per cent, thus reducing total demand in the household. For example, daily rice consumption per household declined from about three kilogrammes to about two kilogrammes between 2000 and 2014 - a decline by 34 per cent. Second, per capita rise in income could have contributed to the decline in rice consumption as people tend to shift away from cereals to non-cereal crops with rise in income. And finally, awareness created through media, government and non-governmental organisations (NGOs) about the benefits of consumption diversification on nutritional outcomes could have also driven the downturn.

The writer is a former Professor

of Economics at Jahangirnagar University.

Editor : A.H.M Moazzem Hossain
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