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Bangladesh - 2 weeks ago

Big allocation needed for agriculture dev

Zarif Mahmud: The economy of the country is in the expansion phase mainly due to the development of two indicators. One is agriculture and the other is manufacturing. This is what the latest Purchasing Managers Index (PMI) data says. However, the share of the budget in that agricultural sector is gradually decreasing.
In the current financial year, the allocation of agriculture sector in the total budget was only 5.74 percent, which is less than half of the direct contribution of this sector to the country’s economy. In the last period, the allocation in the budget for the agricultural sector has come down to half. In the budget of 2013-14, the share of agriculture sector was 11 percent.
Bangladesh is totally dependent on agriculture sector for food security. In the next budget (fiscal year 2024-25), allocation to agriculture sector should be at least 10 percent more. Subsidy on seeds, fertilizers, irrigation needs to be increased. Farmers and agriculture stakeholders feel that attention needs to be given to diversification of agricultural products, processing, increasing exports, agricultural research, innovation and tackling the effects of climate change.
Agricultural economist and former vice-chancellor of the University of Global Village Jahangir Alam told Daily Industry, “Where the main budget of the country is increasing every year, it is sad that the agricultural budget is reduced every year.”
This year the situation is quite different. Agriculture needs big budget. Keeping in mind the fact that we are completely dependent on agriculture for food security, the allocation for agriculture in the budget should be more than 10 percent.
He said, “We are suffering from high food inflation. This is the biggest problem of the country now. However, food prices are falling around the world. In the future, due to the global climate, the production of agricultural food will decrease all over the world, then it will be difficult for countries like Bangladesh to import food. There is no alternative to increase the productivity of agriculture. This issue needs to be given first importance in this year’s budget.
M Asaduzzaman, former research director and economist of Bangladesh Institute of Development Research (BIDS), spoke about the importance of seeds, fertilizers and uninterrupted irrigation facilities in the budget to increase agricultural productivity. He told Daily Industry, “We should first see that the farmers are not harmed in the budget.” His productivity should not be disturbed in any way. They can handle the tasks the way they do. They should get seeds, fertilizers and irrigation properly.
He said, ‘This time when it was very hot, there was an irrigation problem. Water should be kept right. If necessary, the allocation should be increased. More attention should be paid to proper import and production of fertilizers. Allotments should be increased in the budget for such works, which benefit the marginal farmers and which directly help to increase the agricultural production.
In the budget of the financial year 2023-24, Tk 43,700 crores were allotted to the agriculture sector. Tk 25 thousand crore have been kept for the crop agriculture sector, which is only 3.33 percent of the total allocation. The remaining 2.41 percent has been allocated to the Ministry of Fisheries and Livestock, Forest and Environment, Land and Water Resources, which is very insufficient according to the two agriculturists.
Regarding the budget, Sirajganj Sadullapur farmer Muazzem Hossain said, “The price of fertilizer has not been reduced after increasing it twice.” Let it be reduced in this market. Irrigation cost is increasing now due to heat, we need subsidy there. Besides, the cost of agriculture is increasing due to labor shortage, so the subsidy for mechanization of agriculture should be increased. I have heard that now the government gives 50% subsidy on agricultural machinery. But that is not available to common farmers. Let this facility be opened for everyone.
Farmer Khalid Hossain of Jamalpur village of Joypurhat Sadar said, “We don’t understand the budget.” We understand what benefits we got and what prices went up and down. We want the price of fertilizer and irrigation to be reduced in this budget. Besides, let our crops be sold at a fair price.
Needed seeds, fertilizers and irrigation
In Bangladesh there is sometimes a shortage of seeds including jute, wheat, potatoes. Due to which the stakeholders feel that special allocation is necessary for Bangladesh Agricultural Development Corporation (BADC). Apart from this, it is necessary to strengthen the ongoing project of seed conservation at the farmer level. Fertilizer prices have decreased in the world market. As a result, there is a need to reduce the price of fertilizers.
Apart from this, the private importers have demanded exemption from issuing ‘fertilizer’ invoices under zero VAT in the budget. Bangladesh Fertilizer Association in their budget proposal has claimed VAT exemption at the import level but some fertilizer dealers have not mentioned the HS (Harmonized System) code as applicable VAT exemption. They are – Zinc Sulphate, Magnesium Sulphate, Chelated Zinc, Boron, Soluble Boron and SOP.
They also say that boric acid, boron, chelated zinc, gypsum fertilizers are being assessed higher than the import price from abroad. Due to which the price of fertilizer is increasing. It demanded its withdrawal.
Bangladesh Fertilizer Association’s Executive Secretary Riaz Uddin Ahmed said, ‘If these issues are taken into account in the budget, the import of fertilizers will increase. The price will decrease at the farmer level.
This time in the budget, special allocation for irrigation is said by the agriculture concerned. The government is talking about giving a 20 percent discount on electricity bills for using electricity to irrigation pumps. But in reality, farmers are not getting this discount due to negligence of electricity department. It is being demanded to make it effective for all the marginal farmers along with increasing this discount.
Agricultural processing wants several facilities
In the financial year 2020-21, the export of agricultural products reached the milestone of $1 billion. The data of the National Board of Revenue (NBR) says that after an increase in one year, exports have decreased in the next. Exports in the fiscal year 2022-23 were around $830 million. In the first 10 months of this year, exports were $777 million. Export earnings are unlikely to touch the milestone this time as well.
Budget allocation for this sector is insufficient. Those concerned say that if the country is to move forward, the agricultural processing industry should be given utmost importance in the future. If the market for agricultural products and processed products is not big in the country and abroad, it is not possible to move forward in any way. Similarly, it is difficult to ensure fair price of produce produced by farmers.
In such a situation, Bangladesh Agro-Processors Association, an organization of agricultural products processing sector organizations, has made several proposals in the upcoming budget. Recommends continuation of 15 per cent subsidy against exports of agro-processed goods to 20 per cent till 2026. Besides, it has been recommended to abolish 10 percent tax deduction at source.
Advance income tax against import of agro-industry inputs and exemption from tax at source against supply of goods is sought. Besides, it is proposed to determine the limit of exemption of tax deduction at source and to reduce the rate of tax deduction and to introduce the provision of deduction of tax at source at a fixed rate while paying the contractor’s bill.
The organization demanded income tax exemption for sugar syrup production and 27.5 percent corporate tax reduction for corporates investing in agro-processing. The budget proposal also demanded rationalization of duties and taxes on refined sugar, beet sugar, food preparation, aseptic packs and other products.
The general secretary of the organization Iqtadul Haque told, “Due to the adverse reaction of the global economic recession, the growth rate of the export of agricultural products is continuously decreasing. Besides, we are lagging behind others in the current competitive global market. I can’t maintain competitive prices of products especially with India and Pakistan.
These neighboring countries are giving a lot of importance to the agricultural products processing sector. It is not possible to bear the cost of production, shipment/distribution of products by competing with them. Many times, the exporters are facing losses. Therefore, with the aim of increasing the export of agricultural processed products, maintaining the balance of import and export and earning more foreign exchange, this industry needs other facilities including cash subsidy facilities.
Export of fresh vegetables need incentives
Bangladesh is now exporting various types of vegetables from green chillies to gourds, pumpkins, brinjals, papayas, chichinga, kakrol, barbati, beans, tomatoes to many countries of the world. However, exporters claim that the amount of exports is decreasing day by day.
In such a situation, Bangladesh Fruits, Vegetable and Allied Products Exporters Association (BFVAPEA), an organization of exporters of fresh vegetables and fruit products, said in the budget proposal, now the incentive for export of fresh agricultural products has been increased to 15 percent, which was earlier 20 percent. It needs to be put back in place. Because Bangladesh’s competitors in the global market, India and Pakistan, are offering more product-based incentives. Bangladesh is lagging behind in the competition with those countries due to less incentives.
BFVAPEA President SM Jahangir Hossain told, “The export of vegetables has decreased due to several reasons. Reducing incentives is one of them. On the other hand, the cargo fare is also high in our country.
Besides, BFVAPEA has demanded to bring all the services in the field of export of agricultural products under a one-stop service. So that all the services of exporting goods are matched under one umbrella. It will save exporters hassle and time.

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