Incentive impasse hits potato export hard
Sunday, 1 May 2011
Badrul Ahsan
An inordinate delay in implementing the proposed enhancement of the existing cash incentive is undermining the growth prospect of potato, exporters said. According to them, a proposal for raising the cash subsidy on potato export to 20 per cent from the current level of 10 per cent remains pending over the months. The trade insiders said although they had an expectation to export potato worth Tk 15 billion in the current fiscal year, it could not be achieved following the government's indecision on the enhancement of the cash incentive. In February '11, the Ministry of Commerce (MoC) sent a letter to the Ministry of Finance (MoF), proposing 20 per cent increase in the cash incentive on export of potato, but the MoF is yet to take any decision in this connection. "We have already exported almost double quantity of potato compared with the export of last fiscal year. If government provides us the proposed 20 per cent cash incentive then we could export around five times higher than that of the previous year's exports," Managing Director of Agro Concern Dr Abdul Kadir said. "We are totally frustrated over the delay in the proposed increase of cash subsidy on potato export," he lamented. According to the statistics of Export Promotion Bureau (EPB), Bangladesh exported potato worth over Tk 2.41 billion in the fiscal 2009-2010, while the export earning during July-March of current fiscal stood at nearly Tk 4.65 billion. Bangladesh Vegetable Exporters Association sources said that the demand for Bangladeshi potato is increasing rapidly in the Middle Eastern countries and some countries of this Sub-continent. "Due to better quality of Bangladeshi potatoes, vast demand has also been created in Saudi Arabia, the United Arab Amirates, Malaysia, Thailand, Singapore, Sri Lanka and others," Mr Kadir added. "Prompt approval of 20 per cent cash incentive can save the farmers and also boost the country's export earning from bumper output of the vegetable," another exporter Mr Abul Kalam said. "Due to bumper production, the farmers are at a loss as they can neither store their produce in the cold storages nor sale it to the market," Mr Kalam added. He said that the market price of each tonne potato in the local market was around Tk 10800 last weak, while the exporters have exported each tonne potato at around Tk 19000. Bangladesh Cold Storage Association Chairman Md Jasim Uddin told the FE, "We can not meet more than 30 per cent of total demand for storage". Agriculture Minister Matia Chowdhury told the FE Wednesday, "The potato production of this year is around 10 million tonnes which is a bumper production. It happens due to favourable weather, available fertilisers, seeds and pesticides." She said, "The government has a plan to set up new cold storages for potato preservation if the country gets foreign assistance. At the same time, the government has recently promised to double existing cash incentive to 20 per cent for the next five years to boost up potato export. It will come into effective very soon." She also suggested the farmers to preserve part of their produce at their home in a traditional method to get the price benefit.
An inordinate delay in implementing the proposed enhancement of the existing cash incentive is undermining the growth prospect of potato, exporters said. According to them, a proposal for raising the cash subsidy on potato export to 20 per cent from the current level of 10 per cent remains pending over the months. The trade insiders said although they had an expectation to export potato worth Tk 15 billion in the current fiscal year, it could not be achieved following the government's indecision on the enhancement of the cash incentive. In February '11, the Ministry of Commerce (MoC) sent a letter to the Ministry of Finance (MoF), proposing 20 per cent increase in the cash incentive on export of potato, but the MoF is yet to take any decision in this connection. "We have already exported almost double quantity of potato compared with the export of last fiscal year. If government provides us the proposed 20 per cent cash incentive then we could export around five times higher than that of the previous year's exports," Managing Director of Agro Concern Dr Abdul Kadir said. "We are totally frustrated over the delay in the proposed increase of cash subsidy on potato export," he lamented. According to the statistics of Export Promotion Bureau (EPB), Bangladesh exported potato worth over Tk 2.41 billion in the fiscal 2009-2010, while the export earning during July-March of current fiscal stood at nearly Tk 4.65 billion. Bangladesh Vegetable Exporters Association sources said that the demand for Bangladeshi potato is increasing rapidly in the Middle Eastern countries and some countries of this Sub-continent. "Due to better quality of Bangladeshi potatoes, vast demand has also been created in Saudi Arabia, the United Arab Amirates, Malaysia, Thailand, Singapore, Sri Lanka and others," Mr Kadir added. "Prompt approval of 20 per cent cash incentive can save the farmers and also boost the country's export earning from bumper output of the vegetable," another exporter Mr Abul Kalam said. "Due to bumper production, the farmers are at a loss as they can neither store their produce in the cold storages nor sale it to the market," Mr Kalam added. He said that the market price of each tonne potato in the local market was around Tk 10800 last weak, while the exporters have exported each tonne potato at around Tk 19000. Bangladesh Cold Storage Association Chairman Md Jasim Uddin told the FE, "We can not meet more than 30 per cent of total demand for storage". Agriculture Minister Matia Chowdhury told the FE Wednesday, "The potato production of this year is around 10 million tonnes which is a bumper production. It happens due to favourable weather, available fertilisers, seeds and pesticides." She said, "The government has a plan to set up new cold storages for potato preservation if the country gets foreign assistance. At the same time, the government has recently promised to double existing cash incentive to 20 per cent for the next five years to boost up potato export. It will come into effective very soon." She also suggested the farmers to preserve part of their produce at their home in a traditional method to get the price benefit.