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Farm subsidy likely to rise by 6.6pc

FE Report | June 13, 2019 12:00:00


Allocation for agriculture subsidy is likely to increase by 6.6 per cent in the next budget long after six years from the level of the outgoing fiscal year (FY 2019).

An official at the agriculture ministry said they sought Tk 96 billion in farm subsidy in the proposed budget for the FY 2020 against Tk 90 billion in the FY 2019.

Of the amount, Tk 30 billion will be spent for farm mechanisation.

"Farmers will get incentives for purchasing modern farm machinery," he said.

However, subsidy for the farm sector was stuck at Tk 90 billion each year between FY'14 and FY'19. Farmers didn't get any direct cash subsidy during the period.

A part of the allocated amount was spent on indirect subsidies in the forms of fertiliser, diesel, electricity and other inputs.

The Ministry of Agriculture (MoA) even abstained from spending the whole amount allocated for farm subsidy in last six years, according to the ministry data.

The MoA maintained austerity even in the current fiscal year, though farmers incurred heavy losses as paddy prices were low Boro season.

It might help save nearly Tk 30 billion out of Tk 90 billion of allocation in the outgoing fiscal year, according to the MoA.

Prof Abdul Hamid, chairman of Agrarian Research Foundation, told the FE that such austerity amounted to injustice when farmers were incurring 50-60 per cent losses.

He said the peasantry had been giving up farming as they have now several other options.

This rings the alarm bell for the country's food security, he said.

He said the farmers should be compensated and only that could encourage them to raise production in the upcoming Aman season.

He said the rice farmers should get direct cash subsidy every year apart from the indirect ones.

Prof Hamid also said that the Tk 96 billion incentive was not enough for the farmers.

He said at least 5.0 per cent of the total budget should be spent for agriculture subsidy against the less than 2.0 per cent at present in Bangladesh.

The local think-tank Centre for Policy Dialogue (CPD) on Tuesday also called for Tk 5,000 in cash subsidy for each the country's nearly 20 million farmers to help them compensate for the losses from their Boro harvest because of the low paddy prices.

CPD distinguished fellow Debapriya Bhattacharya said that an injustice was done to farmers because of the lower prices for paddy this year and the government did not take the right decision at the right time.

The observation came at a programme held for unveiling a CPD report on the state of the economy and the budgetary challenges.

There is no other economic sector that saw such a degree of mismanagement as happened in the paddy purchase, he said.

A farmer had to spend Tk 24,000 to grow one tonne of paddy, which the millers bought for Tk 15,000, causing a loss of Tk 9,000 loss per tonne, according to growers and the agriculture ministry.

The government, in turn, bought paddy from millers at Tk 26,000 a tonne, giving them Tk 5,850 in profit outright.

"Under the circumstances, a farmer deserves Tk 5,000 to make up for the losses," he added.

tonmoy.wardad@gmail.com


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