Agriculture experts cast doubts over farmers’ getting the refinancing loan announced in the budget
The government has focused agriculture as the second among four pillars for the economic recovery of the country in the fiscal year 2020-21.
But, has the sector – the most crucial one to deal with a global food crisis peeping on the horizon in the post-Covid-19 world – received an expected amount of allocation in the proposed budget?
Agriculture experts have differed, saying it has not drawn as much attention as it really requires at these critical hours and that the proposed budget has not come up with many effective measures to increase food production.
The allocation to agriculture (5.3%) against the size of the budget for the upcoming fiscal year has actually reduced than that (5.42%) in the outgoing year.
To boost the food production, the finance minister has made announcements to lay emphasis on farm mechanisation, incentives for irrigation and seeds and rehabilitation of agriculture, and continue to provide subsidies on fertilisers.
A new refinancing fund of Tk3,000 crore has been announced apart from the prime minister declared Tk5,000 crore agri-loans. Low-income professional farmers and small traders will be able to take loans from the fund.
But experts have said that there is a doubt as to how farmers will get the loan.
As per a Food and Agriculture Organization observation, there is a possibility of the biggest food crisis in the last 50 years.
So, focus should be laid more on increasing production of various agro products, including wheat, maize, pulses, onions, ginger and garlic. But no specific instructions have been given in the budget in this regard, they have also said.
"Now, we have two challenges: Covid-19 and an imminent global food crisis," said Md Jahangir Alam, former member director of Bangladesh Agricultural Research Council.
It is vital to provide cash aid to farmers who have lost their capital and to give adequate incentives to the people who have lost their jobs and returned to villages to engage them in various agricultural activities, he continued.
Reaching out the farmers with the loan assistance has become a big challenge now, Jahangir Alam pointed out.
To subsidise fertilisers, the proposed budget has allocated around Tk1,500 crore more than that in the outgoing fiscal year. However, around Tk3,000 crore of that subsidy (around Tk8,000 crore) remains unutilised during the current fiscal.
"The money allocated for fertiliser subsidisation cannot be used in other sectors. The reason is: the subsidy becomes useful only if the fertiliser price goes up in the international market," said Md Nasiruzzaman, secretary of the agriculture ministry.
Besides, the government is focusing on increasing food production by mechanising the agriculture sector. Customs duty on import of farm machinery parts has been substantially reduced so that consumers can buy them at a low cost.
The government is working on a new project worth Tk3,200 crore for this purpose. The government will provide 60 percent subsidy to the purchase of agricultural machinery from this project. But there is no specific announcement on it too.
Also, the customs duty on imports of roller chain, ball bearing, steering wheel parts (rim), blower for grain dryer and coated electrodes of base metal has been proposed to be reduced from 10 percent to one percent.
Similarly, the customs duty on imports of tires and tubes has been proposed to be cut down from five percent to one percent.
In order to improve fisheries, poultry and dairy sectors, the finance minister has proposed to exempt tax on importing soybean oil cake and soya protein concentrate. These are poultry raw materials, and five to ten percent import duty is levied on them at present.
On the other hand, import duty has been increased to 20-35 percent on packaged chicken to protect the home-grown variety.
Five percent customs duty has also been proposed on importing onions to ensure fair prices for domestic growers.