Boro growers to bear brunt of fuel oil price hike
S M Jahangir | Thursday, 3 July 2008
Local farmers, especially the 'Boro' growers, will bear the brunt of the latest fuel price hike, which will escalate the production cost and push the price of rice up in the market, experts said Wednesday.
"The recent hike in the prices of fuel oils, particularly diesel, will take its toll on the country's Boro cultivation unless the government takes prudent steps to help marginal farmers rein in irrigation costs," Executive Director of Bangladesh Rural Advancement Committee (BRAC) Mahbub Hossain told the FE.
Among other petroleum oils, the government raised Monday the price of diesel by 37 per cent to Tk 55 per litre from the previous rate of Tk 40 to reduce the amount of subsidy provided for selling fuel oils at much lower than their import cost.
Since the Boro cultivation is largely dependent on irrigation, the cultivators of the country's largest cereal crop will have to count extra cost for running their irrigation pumps, Dr. Mahbub said.
About 1.2 to 1.3 million water pumps are used during the country's Boro cropping seasons. More than 90 per cent of the pumps are diesel driven, he said, adding that the use of diesel-run irrigation pumps had increased in recent years due to power supply disruption.
Official figures reveal that about 200 litres of diesel are required for irrigating one hectare of Boro field.
A Research Director of the Centre for Policy Dialogue (CPD) Uttam Kumar Deb also said the price hike of diesel alone will push the production cost of Boro paddy up by around 27 per cent.
According to Mr. Uttam, the overall irrigation cost for producing one kg of Boro paddy could be Tk 3.05 due to the price hike of diesel against Tk 2.40 previously.
Now, the Boro cultivators will require spending Tk 1000 to Tk 1200 more for irrigating each acre of land due to the latest hike in the diesel price, he said, adding that the average irrigation cost for one acre of Boro land was estimated at Tk 5,500.
Referring to the recent upward adjustment of official rates of urea fertiliser, Mr. Uttam said, "The price hike in both the urea and diesel will together raise the production costs of Boro paddy by more than Tk 1.0 per kg."
Considering the overall situation, both the experts suggested that the government should take necessary steps to help the marginal Boro farmers cope with their enhanced irrigation cost, caused by the price hike of gasoline.
They also observed that any setback in the Boro cultivation would create yet another adverse impact on the domestic rice market.
If the price hike of diesel affects the Boro cultivation, it could deal a blow to the country's overall food grain output, they added.
Dr. Mahbub also suggested that the government should adopt an action plan, under which it can provide supports to the poor farmers.
On the other hand, Mr. Uttam also suggested that the authorities should take necessary measurers so that the entire amount of Tk 5.40 billion, which has been allocated in the current budget as subsidy on use of diesel for irrigation purpose, reaches the targeted farmers.
"The recent hike in the prices of fuel oils, particularly diesel, will take its toll on the country's Boro cultivation unless the government takes prudent steps to help marginal farmers rein in irrigation costs," Executive Director of Bangladesh Rural Advancement Committee (BRAC) Mahbub Hossain told the FE.
Among other petroleum oils, the government raised Monday the price of diesel by 37 per cent to Tk 55 per litre from the previous rate of Tk 40 to reduce the amount of subsidy provided for selling fuel oils at much lower than their import cost.
Since the Boro cultivation is largely dependent on irrigation, the cultivators of the country's largest cereal crop will have to count extra cost for running their irrigation pumps, Dr. Mahbub said.
About 1.2 to 1.3 million water pumps are used during the country's Boro cropping seasons. More than 90 per cent of the pumps are diesel driven, he said, adding that the use of diesel-run irrigation pumps had increased in recent years due to power supply disruption.
Official figures reveal that about 200 litres of diesel are required for irrigating one hectare of Boro field.
A Research Director of the Centre for Policy Dialogue (CPD) Uttam Kumar Deb also said the price hike of diesel alone will push the production cost of Boro paddy up by around 27 per cent.
According to Mr. Uttam, the overall irrigation cost for producing one kg of Boro paddy could be Tk 3.05 due to the price hike of diesel against Tk 2.40 previously.
Now, the Boro cultivators will require spending Tk 1000 to Tk 1200 more for irrigating each acre of land due to the latest hike in the diesel price, he said, adding that the average irrigation cost for one acre of Boro land was estimated at Tk 5,500.
Referring to the recent upward adjustment of official rates of urea fertiliser, Mr. Uttam said, "The price hike in both the urea and diesel will together raise the production costs of Boro paddy by more than Tk 1.0 per kg."
Considering the overall situation, both the experts suggested that the government should take necessary steps to help the marginal Boro farmers cope with their enhanced irrigation cost, caused by the price hike of gasoline.
They also observed that any setback in the Boro cultivation would create yet another adverse impact on the domestic rice market.
If the price hike of diesel affects the Boro cultivation, it could deal a blow to the country's overall food grain output, they added.
Dr. Mahbub also suggested that the government should adopt an action plan, under which it can provide supports to the poor farmers.
On the other hand, Mr. Uttam also suggested that the authorities should take necessary measurers so that the entire amount of Tk 5.40 billion, which has been allocated in the current budget as subsidy on use of diesel for irrigation purpose, reaches the targeted farmers.