Home ›› 06 May 2023 ›› Front
Amid global supply chain disruptions, agriculture must get the highest priority in the upcoming national budget to achieve more self-sufficiency in food and also ensure food security in the coming days, experts say.
Considering the domestic and global food crisis, both agriculture allocations and subsidies must be increased by reducing allocations in other sectors, if needed, they say.
Experts also suggested keeping agriculture equipment prices low, easing machinery and technology imports, and investing more in infrastructure and research in the FY24 budget.
Jahangir Alam Khan, former vice-chancellor of the University of Global Village, told The Business Post irrigation, pesticide, seed, and labour costs have increased a lot, causing production costs to go up.
If farming is no longer lucrative, farmers will switch to other professions and the country will face a food crisis, he warned.
“Agriculture should get a 10 per cent allocation in the upcoming budget. Also, agriculture and rural development together must get 20 per cent,” the academic said.
Agriculture got only a 6.2 per cent allocation in the FY23 budget while the combined share of agriculture and rural development was 12.8 per cent.
Jahangir said agriculture allocation in the budget was 20 per cent while that of agriculture and rural development combined was around 50 per cent during the Bangabandhu’s government after liberation.
Agriculture and rural development allocations must be prioritised and increased, he added.
Private sector’s demand
The private sector, including corporations, involved in the agro business is seeking allocations for import alternatives, food processing, storage facilities, and mechanisation in the next budget.
Though there is no visible crisis, there are big problems, said FH Ansarey, managing director and chief executive officer of ACI Agribusinesses.
“We are struggling to open letters of credit (LCs), which has made it difficult to import important food items. In this situation, import dependency may lead to a food crisis,” he warned.
He said the government’s mechanisation programme has problems related to machinery supply.
“This may cause the programme to stop. But the programme must continue to address labour shortages in agriculture. Not only crops but mechanisation is needed in poultry, cattle, and fish farming as well,” he explained.
Ansarey said it has become hard to work in agro fields due to global warming. “We have to focus on farm mechanisation amid the changing climate conditions.”
He further said the processed food industry is heavily dependent on imported wheat, maize, and sugar. “For this reason, we need to focus on rice-based processed food instead of those.”
Meanwhile, dairy farmers want the guarantee that the milk they produce will be sold. They have also demanded an increase in milk import tax.
“Milk production has increased a lot, but farmers are struggling to sell their produce. To help them, milk import tax must be raised,” Mohammed Imran Hossain, president of the Bangladesh Dairy Farmers’ Association, said.
He said formula milk, which is important for children’s health, can be imported by paying lower taxes but tonnes of powdered milk are being imported illegally in the name of formula milk while the regulator is aware of it.
“There are several HS codes for formula milk. This gives importers the advantage of bringing in milk powder by choosing a code that has lower tax,” he explained. Imran, also the chairman of Sadeeq Agro, said imported milk is detrimental to health as vegetable fat instead of animal oil is used in it.
He said importing milk containing vegetable fat must be stopped to prevent the number of obese children in the country from going up.
“On top of that, frozen buffalo meat import from India is going on in full swing. It must be stopped as there is no way to check whether the animal was slaughtered and the meat was processed the right way,” Imran noted.
The agro business leader sought policy support in all these areas in the upcoming budget.
Subsidies
At least Tk 40,000 crore in subsidies is needed in the upcoming budget while some changes are also necessary in the types of subsidies, experts said.
Direct assistance and cash incentives for farmers need to be increased by reducing subsidies that they get indirectly, they said.
As part of the $4.7 billion loan programme, the International Monetary Fund (IMF) recommended reducing subsidies but did not object to cash incentives.
That is why how subsidies will be provided has to be changed but there is no need to reduce the amount, said experts.
The lack of adequate subsidies will create a food crisis, which will result in food imports from countries that patronise the IMF, Ansarey said, adding the government has to think about this carefully.
“For this reason, agriculture allocations and subsidies must be increased by reducing allocations in other sectors, if needed,” he said.
He also said subsidies are the most useful tool for becoming self-sufficient in food. “Though they are costly, farmers directly get the benefit. That is why subsidies must be increased.” Agro subsidy in the current budget was Tk 15,173 crore.
Price manipulations
Experts said the prices of one or two products often shoot up for no valid reason but the government is yet to address this. Policies and instructions are needed to stop such price manipulations, they said.
“Market channels have been disrupted globally. Developed countries are replacing food-related imports by increasing domestic production. Bangladesh is also following that path,” Jahangir said.
To be more self-dependent in food through domestic production, agro commodity prices need to be increased at the farmer level and reduced at the consumer level by eliminating manipulations done by middlemen, he said.
He further said the current government policy is not sufficient to stop market manipulations.
Md Asadullah, former director general of the Department of Agricultural Extension (DAE), suggested increasing earnings from high-value crop exports.
The policy in this regard must be updated to boost the economy, he said.
“High-value crops should be exported by meeting the local demand first. That is why the infrastructure of preservation and processing of high-value crops should get adequate allocations,” he noted.
“Potato exports to Russia have resumed while mango has good prospects. The vegetable export potential is also huge. The trend of increasing subsidies every year must continue,” Asadullah added.
According to the FY23 budget document, the government allocated Tk 24,220 crore for the agriculture ministry. Of this, Tk 19,881 crore was allocated for operational costs while the development budget was Tk 4,339 crore.
The fisheries and livestock ministry got an allocation of Tk 3,807 crore in the FY23 budget. Of this, operational costs amounted to Tk 1,726 crore and the development budget was Tk 2,081 crore.
Compared to FY22, the agriculture ministry’s allocation in FY23 rose by 27.88 per cent while it was an increase of 19.12 per cent for the fisheries and livestock ministry.
