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The amount of 4,285 crore earmarked in the current
budget for subsidising the prices of fertilisers will now exceed Tk
6,000 crore, mainly to provide bailout packages to the importers of
non-urea fertilisers imported earlier at higher prices.
Sources
in the agriculture ministry said an amount of about Tk 2,700 crore
estimated as subsidies for non-urea fertilisers would be distributed
among the importers on conclusion of the current Boro cultivation
season. The rest, out of more than Tk 6,000 crore subsidy requirement,
would be spent to provide subsidy on urea fertiliser.
The finance
ministry has in principle agreed to provide the additional amount
required for providing subsidies for non-urea fertilisers at a rate of
around 55 per cent, apart from meeting the expenses to make up for the
administered price of urea to support the farmers.
‘We have
already taken account of the stocks of non-urea fertilisers, names of
the importers and the rough amounts to be needed for subsidising the
prices. The subsidy amounts will be distributed after the fertilisers
will reach the farmers,’ an agriculture ministry official told New Age
on Sunday.
The official ruled out any possibility of forgery or
drawing of the subsidy money based on false declaration. The government
has decided to provide the subsidy as a bailout package to the
importers in view of the recent fall in prices in the international
market, he added.
Some economists said the new government, while
providing farmers with fertilisers at subsidised rates quickly, had
shouldered the responsibility of ‘financing losses’ of the importers,
which, according to them, was a practice contradictory to the principle
of free market economy.
And when the government has reduced the
price of triple super phosphate fertiliser to Tk 40 a kilogram by
providing subsidy, a private company has offered the fertiliser at Tk
30 per kilogram, without any cash support from the government.
‘Yes!
It is loss-financing as the government is providing the bailout package
for the stocks of fertilisers imported earlier at much higher costs
than the current international market prices. The government has to
think of other options in future,’ Anu Muhammad, a professor of the
Jahangirnagar University, told New Age.
Economist Ananya Raihan,
too, described the subsidy for non-urea fertilisers as ‘somewhat
loss-financing’ because of the government’s compulsion to provide farm
subsidy and reach the agricultural inputs to the doorsteps of the
farmers in time. He is for increasing the number of importers to escape
the cartel of a few importers.
The agriculture minister earlier
announced 55 per cent subsidy amounting to about Tk 1,236.51 crore for
non-urea fertilisers, effectively bringing down the rate of triple
super phosphate to Tk 40 from Tk 75-80, of murate of potash to Tk 35
from Tk 65-75 and of di-ammonium phosphate to Tk 45 from Tk 80-85 per
kilogram.
However, Poton Traders, in a recent newspaper
advertisement, offered the price of triple super phosphate at Tk 1,450
for each bag of 50 kilograms 0f TSP without any subsidy from the
government. It has a stock of 15,000 tonnes of TSP, the company
official, Nazmul Alam Badal, said when contacted.
The market
watchers said the price of triple super phosphate had become less than
half, compared to the price range of $1020 and $1060 a tonne a few
months back when the Bangladeshi importers procured the non-urea
fertilisers for their stocks.
The importers’ stock of TSP stands
at about 3 lakh tonnes as against a demand of 1.34 lakh tonnes for
January-March period. They also currently have about 1.8 lakh tonnes of
MoP and 46,000 tonnes of DAP fertilisers compared to the period’s
requirement of 1.08 lakh tonnes of MoP and 40,000 tonnes of DAP.
The
private importers earlier appealed to the government to help offset
their losses due to drastic fall in prices in the world market by
providing subsidy. In response, the then agriculture adviser, AMM
Shawkat Ali, said that the government would discourage opening of
letters of credit for importing fertilisers to protect their interests.
In
the current system of distribution of subsidies for non-urea
fertilisers, the agriculture ministry hands over the subsidy money to
the private importers to reduce prices at the farmers’ level.
However,
justifying the decision on providing subsidy through the traders,
agriculture minister, Matia Chowdhury, said it was a better policy to
subsidise local farmers and traders instead of giving the money to
foreigners to buy food grains.
‘We are not here to quarrel with
the traders and dealers. We believe support should be given to the
Bangladeshis despite the chances of leakage,’ she told a workshop at
the Bangladesh Institute of Development Studies immediately after
announcing the subsidies.
Asked about the solutions to the
problems of agricultural input subsidy distribution, Anu Muhammad
suggested elimination of dependency on the imported fertilisers through
research and investments while Ananya Raihan recommended open market
sales of all fertilisers introducing a transparent system for
distribution of subsidy money.
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