Agriculture Minister Muhammad Abdur Razzaque has made it clear that the government will not stop funnelling subsidies to farmers for fertilisers, even under the pressure of the International Monetary Fund (IMF) or anyone else.
"The prime minister is firm about this. She made this decision for the sake of food security," he told The Business Standard on Tuesday.
In a separate development on Tuesday (1 November), Food Minister Sadhan Chandra Majumder announced hiked rates for government paddy and rice procurement. Discarding food crisis concerns, he said the country's grain stocks will be stepped up further by imports.
Last year, Bangladesh paid Tk28,000 crore in fertiliser subsidy as the amount used to hover around Tk8,000 crore in previous years, according to Agriculture Minister Muhammad Abdur Razzaque.
But the government will need Tk46,000 crore fertiliser subsidy alone in the first six months of this year, he told TBS.
"It's almost impossible to maintain so much subsidy unless we discover a hidden treasure," he said. "But the prime minister has made it clear that no matter how much the fertiliser subsidy increases, the government will fund it anyhow."
Over a prospective $4.5 billion loan to Bangladesh, a Dhaka-visiting IMF mission recently advised the finance ministry to cut subsidies in the fertiliser, power and energy sectors.
"The IMF or the World Bank always talks about downsizing subsidies. But the government has to make the decision considering the interest of the nation. We are not going to reduce the subsidy for fertilisers on their prescriptions, not a single penny," the agriculture minister noted.
He said there will be no fertiliser shortage despite spiralling prices in the international market as the government has already imported adequate consignments.
The finance ministry has allocated Tk15,000 crore in fertiliser subsidy in the national budget of the current fiscal year. In the wake of an international price surge, the government has readjusted the price of urea – the most widely used in Bangladesh – by Tk6 to Tk22 per kg.
Even if the fertiliser subsidy increases further, the government will not hike prices in the domestic market, Razzaque said.
Echoing the views of the minister, Finance Division officials said there is no plan to reduce farm subsidies by increasing fertiliser prices. About energy and power, they said the authorities opt for reducing supply through demand-side management instead of hiking prices to adjust subsidies.
"Against the backdrop of a depleting forex reserve, international conflict and global inflationary pressure, we are emphasising self-sufficiency in food by scaling up agri production," the minister added.
In the national budget for the current fiscal year, Tk18,000 crore has been earmarked for power subsidy and Tk13,300 crore for subsidy on LNG import.
More import if local rice sourcing falls short
In the next Aman paddy harvesting season, the government will procure 5 lakh tonnes of parboiled rice and 3 lakh tonnes of paddy from domestic sources, according to Food Minister Sadhan Chandra Majumder.
At an inter-ministerial meeting Tuesday, he said the government will stock rice and paddy by imports if it fails to meet procurement ceilings from local sources.
The minister said the procurement will begin from 10 November. The government will buy rice at Tk42 per kg and paddy at Tk28 per kg.
Referring to per kg rice and paddy production costs Tk40 and Tk26.50 respectively, Agriculture Minister Abdur Razzaque said the government procurement will offer Tk2 and Tk1.50 profits to farmers for per kg rice and paddy respectively.
"Determining the rates is a double-edged sword for us. If we raise the rates to provide the farmers with more profits, the local rice market will face risks. On the other hand, if the prices are set low, farmers suffer," he added.
At the programme, the food minister said there will be no food crisis in Bangladesh even though the United Nations, the World Food Program, the World Bank and other international organisations fear a food shortage. "The government is already building up enough food stocks by increasing imports."
The minister said low rainfall during this year's Aman paddy plantation and later Cyclone Sitrang might altogether have a minimal impact on Aman yield. But Aman acreage is higher this season compared to the previous years.
Munshi sees no reason for any food crisis
The government will bring in 10 lakh tonnes of rice this year. Of this, import deals have been signed for 5.3 lakh tonnes, while one lakh tonnes of the food staple have already arrived in the country, according to the food minister.
He said the government has contracted to import 6 lakh tonnes of wheat, of which a lakh tonnes have arrived in the country from Russia.
"There has been an agreement to import 5 lakh tonnes of wheat from Russia. Two wheat-laden ships have already arrived, as two ships carrying the grain will be arriving every month."
He said the government has approved the private import of 8.83 lakh tonnes of rice. Of this, 1.63 lakh tonnes have been imported so far, while the private sector was allowed to import 15 lakh tonnes of wheat but 4 lakh tonnes came so far.
The minister said Russia's backtracking on the grain corridor deal may hurt private sector wheat imports.
Commerce Minister Tipu Munshi said he is approving food imports in coordination with the agriculture and food ministries to meet the domestic demand.
"Whenever the food ministry informs us about the import of any item, I immediately discuss with the agriculture minister and take measures. So, there is no reason to apprehend any food crisis in the country," he commented.