Govt in dilemma over Tk 5.40b diesel subsidy disbursement

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S M Jahangir
The government is in a dilemma over utilisation of the Tk 5.40 billion fund allocated in the current budget for disbursement among the farmers as diesel subsidy on irrigation during the current 'Boro' season.
"Since the government has, in principle, dropped the plan of providing direct cash subsidy to the farmers on their use of diesel for the irrigation purpose, the Ministry of Agriculture finds itself in a difficult situation to utilise the budgetary allocation," said an official.
The last caretaker government allocated the fund to provide direct cash support to the farmers on their use of diesel for irrigating their Boro fields.
But the present government has changed the policy on payment of cash subsidy following alleged 'irregularities' in the fund disbursement process, official sources said.
Officials at the Ministry of Agriculture (MoA), however, told the FE that it was considering various options for proper utilisation of the allocated fund.
"Now, the authorities are brainstorming over the fund utilisation procedure," a senior MoA official said, adding that some alternative options to disbursement of the direct cash support are now under study.
Taking the alleged 'irregularities' in disbursement of the subsidy into account, the authorities concerned earlier considered some alternative options including issuance of identity cards (IDs) for the genuine farmers, especially those who use diesel for irrigation during the 'Boro' cropping seasons.
In the last fiscal budget, the government disbursed Tk 2.49 billion in diesel subsidy against the initial allocation of Tk 7.5 billion for the purpose.
During the last Boro cropping season, the government sanctioned cash subsidy for about 6.6 million listed Boro farmers across the country.
The listed farmers were supposed to receive the direct cash support at the rate of Tk 545 for irrigating one acre of land, official sources said, adding that the farmers who irrigated their Boro land by using diesel-run pumps came under the scheme.
The allocation of diesel subsidy has almost been doubled for the current fiscal budget, aiming to enhance both the rate of subsidy and the number of farmers.
Meanwhile, a recent visit to the country's northern region revealed that Boro cultivators were paying Tk 1600 to Tk 1700 to their respective operators of diesel-driven pumps for irrigating one biga of land. The rates for electricity-run pumps varied between Tk 800 and Tk 1000.
A good number of farmers said their irrigation costs increased significantly over the years following the rise in official price of diesel at the local level.
Although the government recently reduced the gasoline price in line with the falling global price, the farmers were hardly benefiting from it.
Official figures suggest usually over 800 million litres of diesel are used in running nearly 1.2 million water pumps during the Boro cultivation season.