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Agri allocation slightly higher, yet falls short of requirement

YASIR WARDAD | June 07, 2024 00:00:00

Spending on agriculture as a percentage of total budget for the FY 2024-25 is proposed to increase marginally as compared to the budget proposed for the last FY.

Finance Minister Finance Minister Abul Hassan Mahmood Ali on Thursday proposed an allocation of Tk 47,332 crore (473 billion) for the agricultural sector, including crop, fisheries, livestock, farm subsidy and incentives, for the next FY.

The amount is 5.94 per cent of the FY's total outlay of Tk 7.97 trillion - up from Tk 437 billion or 5.75 per cent of the proposed budget Tk 7.6 trillion for the outgoing FY.

This marginal hike in allocation, however, fell well short of the requirement considering the extent of inflation, rocketing costs of farm inputs, transportation and other operating costs, experts said.

The actual expenditure on agriculture as per the revised budget for FY '24 eventually stood at a record Tk 560 billion.

The proposal for incentives and subsidies for the agriculture sector was Tk175 billion in FY'24 but the expenditure finally went up to more than Tk 257 billion, according to the finance ministry.

Around Tk 300 billion has been allocated for agricultural sectors in FY '25 as compared to Tk 303 billion estimated in the revised budget for FY'24.

Additional Secretary of Agriculture Md Mahbubul Haque Patwary said the proposed subsidy for the agriculture sector was Tk 175 billion which later readjusted to nearly Tk 257 billion to comply with the requirement.

He said that increasing fertiliser prices in the global market, freight and transportation charges, devaluation of BDT against US Dollar, and a hike in fuel prices mainly contributed to the record subsidies and incentive expenditure.

Despite many difficulties, he said the government allocated Tk 64.24 billion for agricultural ADP (annual development programmes) for the next FY which was Tk 44 billion in the outgoing FY.

Mr Patwary said the ministry will give farmers all logical support to keep and maintain sound growth of production of key products.

Economist M Asaduzzaman said the share of livestock and fisheries witnessed a notable decline in terms of total allocation - in cases of both ADP and operating expenditure.

He pointed out that allocation for the livestock and fisheries ministry is Tk 42.8 billion which is hardly 0.53 per cent of the total allocation for FY'25; it was 42.4 billion or 0.55 per cent of the total outlay in FY' 24.

The ADP for the ministry has been cut to Tk 23 billion in F'25 from 24.2 billion in FY'24, he said, explaining that this is not a good trend when the government has been focusing on ensuring nutrition security for the people.

Without raising production of fish, meat, eggs and milk, there is no other way of nutrition management, he said.

He said the agriculture sector should get at least 10 per cent of the total outlay while the utmost priority should be given on research and development.

Economist Prof Dr Rashidul Hasan said the ADP budget will show you how the government is addressing the need for research and development (R&D).

He said the sector needs high focus during a gradual change in climate which has been making cultivation and farming vulnerable day by day.

"We should now focus on developing stress-tolerant crop varieties, climate-resilient farming of fish and livestock, and introducing farmers-friendly machinery to cope with the changing climatic condition," he said.

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