Agri ministry suggests hike in farm subsidy

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FE Report
The government is set to increase the amount of agricultural subsidy by around Tk 6.0 billion in the revised budget for the fiscal year (FY), official sources said.
"The agriculture ministry has submitted a proposal to the finance ministry for revising the volume of agri-subsidy upward to Tk 42 billion in the revised budget for FY 2009-10 against the original allocation of Tk 36 billion," a senior government official said.
Such upward revision of budgetary allocation will be required following a significant increase in the cash subsidy on use of diesel for irrigation purpose in the current Boro cropping season, he said.
The government recently doubled the amount of diesel subsidy to Tk 7.5 for helping the Boro farmers lessen their irrigation cost.
With the enhancement, some 8.3 million farmers, who are cultivating Boro crop on land measuring up to about 2.5 acres of land each will receive Tk 800 as cash subsidy for irrigation purposes this season.
Moreover, nearly 0.8 million medium-scale farmers, on the other hand, will get Tk 1000 each for irrigation purpose, official sources said, adding that the entire cash support is being disbursed through banking channel.
Although the government had a plan to adjust the increased amount of diesel subsidy with its original budgetary allocation, eventually it could not be materialised, said an official.
Except for the cash support for use of diesel for irrigation purpose, the lion's share of the government's allocated agri-subsidy is to be spent on account of supplying fertilisers to the local farmers at subsidised prices, sources said.
They also said the government requires to spend nearly Tk 27 billion for helping private importers drastically cut their sales prices of non-urea fertilisers -- TSP, MOP and DAP -- at the farmers level.
The increased volume of subsidy was required on account of marketing non-urea fertilisers at lower than the purchasing prices by importers concerned, official sources said.
Against the backdrop, the price of TSP came down to Tk 40 per kilogramme (kg) from the previous price of Tk 80 while MOP price declined to Tk 35 per kg from Tk 65 and DAP to Tk 40 per kg from Tk 90 previously.
Apart from that of non-urea fertilisers, the government has also to spend a sizeable amount of fund for selling urea fertilisers at lower than the production costs by the state-run fertiliser units.