Rice, being the staple food item of 90% of the population, contributes the highest to the total national output of the agricultural sector. The industry also provides occupation to more than 2 million farmers, 86,000 wholesalers and retailers, 12,000 millers, and to many more that directly and indirectly depend on the industry for business and livelihood ventures. However, there are two broad constraints that the rice industry faces: (1) low productivity/inefficient production and (2) inefficient pricing and marketing system.
The low productivity and inefficiency in rice production resulted to the widening of the local demand and supply gap. Meanwhile, the inefficiency in pricing and marketing system has resulted due to the following: the large disparity between the prices received by the farmers from their production and the prices received by the traders, high costs of marketing and distribution, gap between the local wholesale prices and world prices, inefficiencies in postharvest, and lack of adequate infrastructures. Thus, in order to address these problems, the ability of the farmers to adopt new technologies must be considered, the forecasting and monitoring of supply-demand situations on rice importation should be enhanced, government investments on rural infrastructures must be increased and more competitive grains market and trade liberalization must be promoted, and the functions and performance of NFA should be assessed.
