Experts recommend subsidy on diesel for Boro farmers

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Yasir Wardad Experts and farmers' representatives recommended subsidy on diesel for Boro farmers this season to keep production cost steady following the fresh hike in diesel price by the government. The 11.47 per cent hike in diesel price will raise the production cost by Tk 10 billion at farm level in addition to increased transportation cost which will make the staple dearer. Experts also opined that this hike will hamper the production to a great extent as many of the farmers, who have already been affected by low price of paddy for the last six consecutive seasons, may shift from farming to other profession. Despite strong opposition from farmers, experts, civil society members and political organisations, the government hiked the diesel price by Tk 7.0 per litre to Tk 68 at a time when the farmers are busy with cultivating Boro crop, the major source for staple rice. The farmers are now being sandwiched in between poor price tag of farm produces and increasing trend of input cots in current Boro season. Former agriculture secretary and farm expert Dr Z Karim said Boro farmers spend 41 per cent of the total input costs for irrigation purpose. The cost might be increased to 46 per cent for the 11.47 per cent hike in diesel price, he predicted. Z Karim said to keep the production cost steady, the government should provide subsidy for Boro farmers through the 'Agriculture Input Assistance' cards. He predicted that the paddy production may fall if the farmers do not get fair price. The local think tank Centre for Policy Dialogue (CPD) also lambasted the fuel price hike saying the latest hike---especially of diesel and kerosene, may put pressure on common people, affect Boro production and raise inflation that has been on a downward trend. CPD Executive Director Mustafizur Rahman said if fuel price is increased by 7.8 per cent it results in a decline in GDP from 0.2 per cent to 0.3 per cent. In a presentation on 'half-yearly review of Bangladesh's macro-economic performance' by CPD held last week Dr Mustafiz said: "Regrettably, government's position on diesel subsidy is not clear. The subsidy needs to be increased to prevent the rise in cost of paddy production." According to the Bangladesh Agricultural Development Corporation (BADC)'s minor irrigation unit, fuel based Boro farming needs 1.10 billion litres of diesel to drive 1.4 million of water pumps both deep and shallow ones across the country. Talking to the FE President of Bangladesh Krishok Samity Morshed Ali said: "The cost of production during the Boro season in FY'12 increased by about Tk 30 billion compared to that of FY'11 due to the price hike in fuel and fertilisers". "The production cost will further increase in the current financial year by Tk 10 billion at farm level only for diesel used for water pumps and tractors," he said. To keep the farmers remain in farming, the government must reconsider the fuel price hike, he said. Economist Prof Dr Mustahidur Rahman said the farmers will need big capital due to the increase in input costs and it would force them to borrow from the money lenders-- 'Mahajans' and NGOs. "This debt will further hinder the poverty alleviation, the key agenda for the macroeconomic development of the country," he said. Agriculture economist and market expert Dr Mahabub Hossain said if the farmers get profitable price for their produce, the diesel price hike wouldn't affect them. "But we observed that the farmers failed to get back even the production cost of their crops in last one and a half years," he said. He said the farmers should be ensured with profitable price to maintain firm production growth, a key to ensure food security of the country. Department of Agriculture Extension (DAE) officials said this year the target for Boro production has been set at 18.7 million tonnes (rice) on 4.78 million hectares of land. Nearly 3.5 million hectares out of total acreage are diesel dependent, DAE officials said. BADC statistics showed farmers across the country use nearly 1.4 million water lifting pumps of which 1.192 million are diesel driven and rests depend on electricity. The diesel cost has been increased by 54.5 per cent in last one and a half years---to Tk 68 in 2013 from Tk 44 in 2011 per litre. The government provided cash subsidy for diesel to 9.089 million marginal and medium scale farmers amounting to Tk 7.89 billion in 2009, MoA sources said.