Home Bangladesh Govt in crises with
fertilizer subsidy
Bangladesh - February 14, 2022

Govt in crises with
fertilizer subsidy

Staff Correspondent: On the one hand, the government is struggling to provide huge subsidy for fertilizer due to increase in import cost. On the other hand, reducing the subsidy will increase the price of the product. As a result, the government is in crisis with the fertilizer subsidy, said the Minister of Agriculture Abdur Razzak.
He made the remarks at a press conference at the Secretariat yesterday.
The Minister said that due to the Covid situation, the price of fertilizers worldwide has increased dramatically, which is 3 times more than last year. At the same time, due to the increase in the price of fuel oil, the ship fare has almost doubled. As a result, the cost of importing fertilizers has increased.
He said it would cost Tk 26,000 crore in the current fiscal year 2021-22 to subsidize fertilizers. In the fiscal year 2020-21, the subsidy was Tk 8,617 crore. In the current financial year, the budget for the subsidy sector is Tk 9,500 crore. An additional Tk 19,000 crore is needed.
The minister said the government was working with utmost importance on where the huge subsidy would come from. On the one hand, if so, much subsidy is given, other development activities will be hampered, on the other hand, if the price of fertilizer increases, the suffering of the farmers will increase and the cost of production will increase. This will disrupt food production and increase the price of food products.
In this situation, the government will not increase the price of fertilizer? Responding to a question from reporters, the agriculture minister said the government has not yet taken any decision in this regard. But we are trying to go with the subsidy anyway. We are generously subsidizing. Our intention is not to increase the price, but to reduce it. But the situation is such that one has to worry. However, no decision has been made yet, discussions are underway.
Is there any pressure to reduce Surrey subsidy? In response to such a question from the journalists, Abdur Razzak said that the international organization IMF, World Bank are the ones who put pressure. Earlier, the BNP government did not give subsidies, it listened to them. Our Prime Minister Sheikh Hasina has said that the support we give to the farmers in Surrey is an incentive. It is not a subsidy at all. As a result, we are now much more self-sufficient in food.
According to the agriculture minister, the government is currently giving a subsidy of Tk 72 per kg for Urea, Tk 50 for TSP, Tk 41 for MOP and Tk 69 for DAP. The farmers are getting 96 rupees per kg of urea at 16 rupees. Farmers are getting TSP of Tk 80 at Tk 22, MOP of Tk 54 at Tk 15 and DAP of Tk 93 at Tk 18 per kg.
At the same time, the minister said, there has been no crisis in fertilizers and other agricultural inputs in the last 13 years. As a result, Bangladesh has achieved unprecedented success in agricultural production. In the fiscal year 2020-21, the total production of granular grains has been Tk 4 crore 55 lakh 5 thousand metric tons.
Of this, 3 crore 8 lakh tonnes of rice, 12 lakh 34 thousand tonnes of wheat and 57 lakh 83 thousand tonnes of maize have been produced. Besides, potato production has been 1 crore 8 lakh tons. Rice production has increased by 42 percent in FY 2020-21 as compared to FY 2005-06. Besides, production of wheat has increased by 46 per cent, maize by 975 per cent and potato by 136 per cent, he said.
The minister also highlighted the stock and demand of fertilizers at the press conference. He said that at present the stock of urea fertilizer is 6 lakh 7 thousand metric tons and the demand is 4 lakh 34 thousand metric tons. TSP stocks are 1 lakh 56 thousand tons against the demand of 60 thousand tons. MOP stocks are 3 lakh 95 thousand tons, while the demand is 1 lakh 64 thousand tons. And against the demand of 56 thousand tons, DAP has 2 lakh 52 thousand tons.
The minister said the import cost of urea was Tk 32 per kg in the 2020-21 financial year. In the current financial year, it has increased to Tk 96. Besides, the import cost of TSP was Tk 33 per kg in FY 2020-21, which has increased to Tk 80. Similarly, the import cost of MOP has increased from Tk 23 to Tk 54 per kg. And in the fiscal year 2020-21, the import cost of DAP has increased from Tk 38 per kg to Tk 93 now.

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