The Finance Division has released more than Tk8.75 billion as subsidy to the private sector against the import of fertilisers in the first phase of the current financial year (FY'15), officials said.
Under the government subsidy arrangement, the private importers who are members of Bangladesh Fertiliser Association (BFA) will get the perks from the Ministry of Agriculture's non-development budget where Tk 90 billion has been allocated for fertilisers and other agricultural activities for the FY'15.
"The subsidies will be provided against their import of 0.139 million tonnes of triple-super phosphate (TSP), 0.178 million tonnes of Diammonium Phosphate (DAP) and 0.142 million tonnes of Muriate of Potash (MOP)," an official at the Fertiliser Management and Monitoring unit under the agriculture ministry said.
He said Tk2.85 billion had been sanctioned against the import of TSP, Tk3.546 billion against DAP and Tk2.354 billion against MOP fertilisers.
A total of Tk8.75 billion will be given to the private importers as subsidy against their import of 0.460 million tonnes of non-urea fertilisers, he said.
The government has taken initiative to increase use of non-urea fertiliser, and under the initiative, it has cut DAP price by Tk2 per kg both at retail and dealer levels recently.
The subsidy for DAP might increase nearly by Tk140 billion this year, but it could be compensated.
"We are expecting that lower price of DAP can help cut urea use nearly by 50,000 tonnes worth Tk2.50 billion," he said.
The official said that the use of non-urea fertiliser is increasing, resulting in good crop production.
Chairman of the Bangladesh Fertiliser Association and lawmaker Kamrul Ashraf Khan (Poton) told the FE that it is a timely disbursement and it would help boost the fertiliser trade which is necessary for the farmers.
"The timely disbursement is needed as the government provides us the incentives considering our bank interests of four months," he pointed out.
"It took eight to twelve months to get the subsidy in the past. The importers counted the interest for additional months," he said.
According to the Department of Agriculture Extension (DAE), the demand for fertiliser in the country has been estimated as 5.3 million tonnes for FY'15, of which urea accounts for 2.8 million tonnes.
Demand for TSP, DAP and MOP has been set at 0.725 million tonnes, 0.675 million tonnes and 0.7 million tonnes for the current financial year.
In FY'14, fertiliser ate up 75 per cent (nearly Tk67.50 billion) of the total farm subsidy of Tk90.0 billion, according to the MoA.
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