Allocation to food sector decreasing by Tk 2519 cr
Mahfuja Mukul: In the next (2023-24) financial year, the allocation for the food sector is decreasing by Tk 2,519 crores. The total allocation for this sector is Tk 20,695 crores.
In the current budget, Tk 23,214 crores have been allocated to this sector. However, experts feel that it is necessary to increase the allocation in this sector in the coming year to deal with inflation. Because inflation will be a headache in the future.
According to the officials of the finance department, due to falling prices in the international market, at least Tk 4,000 crore will be saved in the import of rice and wheat in the coming year. Besides, the subsidy of OMS program will save Tk 400 crore.
Based on this calculation, the total expenditure of the food sector in the next budget has been finalized. However, in the future, more importance is being given to domestic procurement than import of foodgrains.
For this reason, about Tk 2000 crore more than the current year has been allocated for the collection of rice and wheat produced in the country. This information was found in the relevant sources.
Sources also said that out of the total expenditure in the food sector, Tk 19,763 crore will be spent in the management sector and Tk 932 crore in the development sector. About Tk 4000 crore has been allocated for food import and Tk 9,149 crore has been allocated for domestic food grain collection. And the total subsidy will cost Tk 8,757 crores. In this context, Food Secretary recently Ismail Hossain told that the food prices in the world market will decrease in the next financial year compared to the current year. Besides, the country’s food production situation will also improve. It is expected that the pressure on the food sector will be reduced in the future.
The pressure on OMS, especially the low-cost food distribution program for poor people, will decrease in the future. For that purpose, the target of rice distribution in this program will also be reduced. Which will have a positive impact on the budget.
When asked, the former governor Atiur Rahman told Daily Industry that there is not much precedent in the world to reduce inflation. This can cause headaches in the coming year. However, if daily commodities including food supply are provided at low prices, the common people will get some relief.
A program to provide food grains including rice to garment workers every week at a much lower price than the market price can be a boon for these productive workers if the government and employers can jointly do so. For this, allocation to food sector should be considered seriously.
According to sources, 2.71 percent of the next budget will be allocated to the food sector as a draft. According to those concerned, more food grains can be supplied to the market with this allocation. Which will play a helpful role in controlling inflation.
It is reported that a large portion of the rice is distributed under the OMS programme. This is called as social security program. Because the price of rice is high in the market due to rising inflation. The government sells rice through OMS at a low price to provide sustenance to the poor. At the beginning of the current fiscal year, 350,000 tons of rice was allocated in this program. But inflation has put more pressure on this program. As a result, the size of OMS has been increased to 5 lakh 90 thousand tons in the revised budget.
A senior official of the Ministry of Food involved in this process said that there will not be much demand for the OMS program in the coming year. Because the production of food grains in the country will be good. This will further reduce the price of rice. As a result, four lakh tonnes of rice will be allocated in the financial year 2023-24 to run this program.
It is known that every year the government imports rice and wheat from abroad to run various food programs. Funds are kept in the budget for this.
Sources in the finance department said that in the next fiscal year, a provision of Tk 1,919 crores and Tk 2,810 crores has been made for importing rice from abroad. However, the allocation for this sector has decreased by 50 percent compared to the current financial year. On review, it has been found that Tk 8,278 crore have been allocated for the import of rice and wheat from abroad in the current financial year.
According to the concerned official of the finance department, the cost of import will be less as the price of rice and wheat in the world market is on the decline. Besides, to deal with a special situation, the Prime Minister has ordered to stock up by importing more rice and wheat than the actual target this year. As a result, rice and wheat were imported much more than the target this year. Which will not require such initiatives in the coming year.
Meanwhile, due to the Russia-Ukraine war, global prices of rice and wheat rose abnormally. Besides, there is a crisis with wheat. Because wheat produced in Ukraine meets 50 percent of the world’s demand. Along with this, the price of fuel also increases.
As a result, on the one hand, the price of foodgrains rises abnormally due to crisis and crisis. Due to which the amount of subsidy also increases in the management of foodgrain distribution in other programs including OMS. It has been seen that at the beginning of the year, Tk 6,745 crores were allotted for subsidy. But in the revised budget, Tk 812 crores were increased. As a result, the total expenditure in this sector stands at Tk 7,557 crores.
Finance department sources said that in the next financial year, the total subsidy in the food sector will increase by Tk 1200 crores to Tk 8757 crores. However, even if the overall subsidy expenditure increases, the subsidy in the OMS sector alone will decrease by Tk 406 crore.
Sources also said that this year, 8 thousand Tk 799 crore have been allocated for the collection of paddy and Tk 350 crore for the collection of wheat. It is assumed that the production of paddy and rice in the country will increase this year. For this reason, more importance will be given to foodgrains from farmers as opposed to imports.
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