Japanese investors want subsidy for agro-product export

The potential Japanese investors, who agreed to invest inside Bangladesh’s Economic Zones, want cash incentives for processing agricultural products against exports to foreign destinations, said an official Economic Zone Authority.

This vital issue was revealed in minutes of the 7th governing board meeting of the Bangladesh Economic Zones Authority (BEZA) which was chaired by Prime Minister Sheikh Hasina. The meeting also decided that the Finance Division will take necessary measures about the export-oriented agribusiness in the Economic Zone which will enjoy the export subsidy or cash incentive in line with export-oriented agro-industries outside BEZA. Prime Minister Sheikh Hasina said to provide more incentives to the export oriented agro-processing industries so that the local farmers can benefit from the exercise. Senior Finance Secretary Abdur Rouf Talukder gave his consent to handing cash incentives to the exporters of agro-products from the Economic Zones across the country.

In the current move, around 87 Japanese firms are considering to shift their businesses from China to other countries. The Japanese government is providing these firms with a $22.10 crore subsidy if they relocate to Bangladesh or India.

The embassy of Bangladesh in Beijing informed the ministry of foreign affairs, at least 34 Japanese companies operating in China have shown interest to relocate their production units to Bangladesh.

Dozens of Japanese firms have planned to leave China on the back of trade war between the USA and China, supply chain disruptions and spread of deadly coronavirus

Quoting Japan External Trade Organisation (JETRO) officials in Beijing, the embassy said the 34 out of 690 Japanese firms registered in China have so far revealed the relocation plan following the announcement of a stimulus package by the Japanese government for the shift out of the mainland China. It also said the JETRO officials recognised Bangladesh’s attractiveness as an investor-friendly destination.

Meanwhile, the government provides 20% cash assistance on exports of 20 types of agricultural products produced in the country, except in economic zones and export processing zones. These include all kinds of products made from potato, flattened rice, puffed rice; all kinds of confectionery products made of flour, chanachur, fried peanut, fried pulse, fried flattened rice.

All kinds of nuts, spices, jams, jellies, pickles and sauces, vermicelli, macaroni and noodles; all kinds of fruits and vegetables and all products made from them, frozen mushrooms, paratha, snacks, bread, black seed oil (nigella) and sesame oil are also in the list. The list also includes ketchup, vinegar, cassava, chocolate, candy and lollipops.

 The agro-food processing industry constitutes an important industry in the manufacturing sector in most countries. This industry is an important part of the manufacturing sector in Bangladesh which now accounts for about 20 percent of gross domestic product (GDP) of the country.

The agro-food processing industry now contributes about 8.0 per cent to manufacturing output (1.7 percent of GDP).

According to the Export Promotion Bureau, the country exported $862 million worth or agro-products in the fiscal year 2019-20, which was 5% less than that of the previous fiscal's volume of $908 million.

Meanwhile, in the first quarter of the current fiscal year, export earnings from agricultural products increased by $9 million year-on-year. In the July-September period of this year, $271 million worth of agro-products were exported, up from $262 million in the same period a year ago.

The United States, European Union and Middle Eastern countries are the main markets for Bangladesh's agricultural products. About 500 companies of the country including Square, Pran, ACI are involved in the export of agricultural products.

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