Budget to cheer up millions of angry dairy farmers
Friday, 5 June 2009
Doulot Akter Mala
The government has finally bowed to the demand of millions of dairy farmers as it is set to impose heavy duty on imported powder milk, making it costly to help save local jobs, officials said Thursday.
National Board of Revenue (NBR) officials said Finance Minister AMA Muhith would announce a raft of fiscal measures that would make imported milk costlier in the domestic market while reducing the tax burden on local farmers.
The move follows months of angry protests by dairy farmers who have poured their hard-earned liquid gold on the highways as part of their demand to protect them from an invasion of cheap imported milk.
"The government will increase customs and supplementary duty on imported milk so that the local farmers can compete in prices," said a senior NBR official, speaking on condition of anonymity.
He said the government would raise overall duties by seven to eight per cent. In addition, powdered milk importers will have to pay 53 per cent duty for retail import while 48 per cent for bulk.
Dairy farmers have said that they matched imported milk in pricing throughout 2007 and a better part of 2008, when the overall tax incidence on milk import was 77 per cent.
But the caretaker government reduced it by more than half midway through last year when the price of milk powder shot to a record high in the international market.
The cut has backfired as milk powder price slumped in global market. This year alone prices fell to $2000 a tonne from $4500 last year.
The dramatic slide in prices led to invasion of cheap foreign milk products in Bangladesh market, which enraged dairy farmers as they hardly found any buyers to market their liquid milk.
NBR officials said the finance minister would also declare a number of tax waivers on the country's nascent dairy industry, aiming at injecting a fresh lease of life on the moribund sector.
As part of the measures, the NBR would waive 2.5 per cent supplementary duty from local powdered milk and would also reduce value added tax on the sale of locally produced liquid and powdered milk at retail level.
Millions of Bangladeshi farmers raise cows every year. The amount of milk they produce meets most of the demand in the countryside and a fraction in the urban centers.
The government has finally bowed to the demand of millions of dairy farmers as it is set to impose heavy duty on imported powder milk, making it costly to help save local jobs, officials said Thursday.
National Board of Revenue (NBR) officials said Finance Minister AMA Muhith would announce a raft of fiscal measures that would make imported milk costlier in the domestic market while reducing the tax burden on local farmers.
The move follows months of angry protests by dairy farmers who have poured their hard-earned liquid gold on the highways as part of their demand to protect them from an invasion of cheap imported milk.
"The government will increase customs and supplementary duty on imported milk so that the local farmers can compete in prices," said a senior NBR official, speaking on condition of anonymity.
He said the government would raise overall duties by seven to eight per cent. In addition, powdered milk importers will have to pay 53 per cent duty for retail import while 48 per cent for bulk.
Dairy farmers have said that they matched imported milk in pricing throughout 2007 and a better part of 2008, when the overall tax incidence on milk import was 77 per cent.
But the caretaker government reduced it by more than half midway through last year when the price of milk powder shot to a record high in the international market.
The cut has backfired as milk powder price slumped in global market. This year alone prices fell to $2000 a tonne from $4500 last year.
The dramatic slide in prices led to invasion of cheap foreign milk products in Bangladesh market, which enraged dairy farmers as they hardly found any buyers to market their liquid milk.
NBR officials said the finance minister would also declare a number of tax waivers on the country's nascent dairy industry, aiming at injecting a fresh lease of life on the moribund sector.
As part of the measures, the NBR would waive 2.5 per cent supplementary duty from local powdered milk and would also reduce value added tax on the sale of locally produced liquid and powdered milk at retail level.
Millions of Bangladeshi farmers raise cows every year. The amount of milk they produce meets most of the demand in the countryside and a fraction in the urban centers.