Published in The Financial Express on Monday, 16 May 2016
MoA saves Tk 39 billion on global fertiliser price fall
The expenditure on agricultural subsidy has declined over the last three consecutive years, thanks to the downtrend in fertiliser prices in the international market, officials said.
This has helped the Ministry of Agriculture (MoA) to save nearly Tk 39 billion during the period, they said.
Experts, however, said it could be good news only when farmers’ condition is improved and production is handsome.
An official at the MoA told the FE that the ministry has been able to save a handsome amount from farm subsidy against the fixed allocation thanks to the low prices of fertiliser in the global market.
He said from fiscal year (FY) 2013 to 2015, the government’s allocation on farm subsidy was fixed at Tk 90 billion every year.
The spending on farm subsidy was Tk 120 billion in FY’13.
He said the actual expenditure on agri subsidy in FY’14 declined to Tk 89.6 billion.
The cost plunged to Tk 70.95 billion in the FY’15 when 3.73 million tonnes of fertiliser were imported of which urea was 1.87 million tonnes.
Tk 1.59 billion was paid as electricity rebate in FY’15, he said.
According to the global commodity web-portal ‘indexmundi’, urea price has been hovering between US$ 203 to $ 260 per tonne (Tk 16.24 to Tk 20.8 per kg) in the globe for the last one year.
Price of TSP (triple super phosphate) dropped to $ 275 (March 2016) from $ 385 (July 2015) per tonne during the period, according to the portal.
MoA Additional Secretary (Administration & Inputs) Md Nasiruzzaman told the FE that they were expecting another Tk 20 billion savings this year thanks to low price range of major input — fertiliser.
He said apart from subsidies on fertiliser and power, farmers have been given 670 million direct subsidies both in cash and inputs in the outgoing fiscal year. He said the allocation for farm subsidy will also remain at Tk 90 billion in the upcoming budget for FY’17.
Centre for Policy Dialogue (CPD) Research Fellow Towfiqul Islam Khan said such saving is a good news when the country has a big budgetary deficit. If the ministry can maintain such austerity, there is a need to evaluate the allocation for farm subsidy.
“But we should also see how could the amount saved be used in research development and other required sectors of agriculture,” he said. Farmers incurred loss from cultivating rice. They could be subsidised in diesel and other inputs, he said.
He said non-crop agriculture like livestock and fisheries should also be subsidised to ensure better production which is needed in the food-nutrition security context.
Former food secretary Abdul Latif Mandal said austerity might be praised if this could help in socio-economic development of the farmers.
The production scenario is outstanding for last decade but the condition of farmers has deteriorated.
He said more than 1.8 million farmers left farming in last five years finding agriculture non-profitable.
Both subsidies and ministry allocation for agriculture have been declining in terms of the country’s GDP and total budgetary allocation, he said.
“The government should raise allocation for farmers to make them remain in agriculture which is a challenge in the 21st century’s food security perspective,” he added.