The government is contemplating increasing fertiliser prices which is four times higher this time over last year, including doubling of shipping freight contributing to growing pressure to cut subsidy in order to keep the price manageable. But the problem is that if the government increases the subsidy it will eat up greater part of development budget while reducing subsidy will push prices of paddy and rice up. It is already very much volatile in market even during and after the Aman harvesting season.
Farmers are therefore facing a critical situation as there is every chance to reduce fertiliser subsidy at a time when the government needs Tk 28,000 crore this year for this purpose. Report said the government has already subsidized fertiliser to the tune of Tk 19,000 crore and the rest will be spent during Boro season.
Agriculture minister told reporters on Monday that in no circumstances subsidy will be reduced by raising fertiliser price up; but it is not clear how he would reduce the cost of higher subsidy. Need no mention that the ongoing worldwide coronavirus has abnormally increased fertiliser price in every exporting nation; that is why import price has phenomenally increased.
Moreover, due to increase of fuel price, ship freights have also been doubled. Report said import cost of per kg Urea was Tk 32 last year but it has increased to Tk 96 this time. Other fertilisers prices have similarly increased. Now the question is how farmers will use adequate fertiliser to produce enough food at higher cost or whether at lower dose of fertiliser, how farmers will be able to produce enough food to feed the nation.
The fertiliser subsidy was Tk 7,717 crore last year and Tk 9,500 crore has been earmarked this year. But estimates suggest the government needs Tk 19,000 crore more to meet the situation mainly due to exorbitant import price. We know that the World Bank, IMF and such other donors’ agencies are bringing pressure on the government to reduce subsidy to reduce budget deficit. But the main point is to make available enough fertiliser to farmers at reasonable cost.
We would suggest that the government must reduce misuse of funds and corruption to make fertiliser at lower price. Food production can’t be affected anyway by increasing fertiliser price.
