Cash incentive on rice export to go soon

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FE Report
The government is likely to withdraw the cash incentive given to rice exporters soon.
The withdrawal is aimed at discouraging export of rice as the prices of the same is showing an up-trend in the international market in the backdrop of shortfall in rice output in some of the major rice growing countries.
Rice exporters are now entitled to 20 per cent cash incentive against their export earning. The incentive was made effective in 2005 to boost the export of non-traditional items from the country, sources said.
The ministry of finance is expected to give its decision to discontinue the cash incentive facility on rice export in the current week in response to a proposal from the commerce ministry, a source in the finance division said.
The proposal of the commerce ministry on the discontinuation of subsidy was given to ease the pressure from rice exporters to allow increased volume of rice export. The commerce ministry had decided in July last to allow export of 10,000 metric tonnes of aromatic rice.
The procedure to issue export orders against 10,000 metric tonnes of aromatic rice will start after the month of Ramadan, a commerce ministry official said.
"I am sure the interest of rice exporters and their lobbying to increase the quantity would largely diminish once the incentive facility is withdrawn," the official added.
Bangladesh exported rice worth about $9.0 million in fiscal year (FY) 2007-2008 and $5.97 million in FY 2006-2007.
On the other hand, the country imported 0.53 million (5.3 lakh) tonnes of rice during the first nine months of the fiscal 2008-09, 1.634 million (16.34 lakh) tonnes in FY 2007-2008 and 0.367 million (3.67 lakh) tonnes in FY 2006-2007.