In a bid to cushion the impact of the Covid-19 pandemic, the budget for FY2020-21 proposes Tk95,000 crore in farm subsidies, up from Tk9,001 crore in the outgoing fiscal. In his budget speech, Finance Minister AHM Mustafa Kamal proposed an allocation of Tk15,441 crore for the agriculture sector, an increase of Tk2,643 from the revised budget of the current fiscal year. He also proposed to exempt Value Added Tax (VAT) on agricultural machinery at the trading stage. The Tk15,441 crore allocated for the Ministry of Agriculture is 2.72% of the total proposed budget. In the current fiscal year, the sector’s revised budget is Tk12957 crore; while the proposed budget was Tk14053 crore. However, the allocation for the sector was at 2.58% of the total budget in the current fiscal year. “Although the Boro production has also been good, we had to address uncertainties created in harvesting due to labour shortages caused by the current shutdown. “To encourage the agricultural sector, I propose to give exemptions on agricultural machinery such as power reaper, power tiller operated seeder, combined harvester, rotary tiller, etc. at the trading stage,” Kamal said in his budget speech. As part of its effort for the recovery of the pandemic-hit economy, the government will continue its schemes of farm subsidies, incentives and support cards for fertilizers-seeds and other agricultural inputs, support for agricultural rehabilitation, special agriculture credit at low interests and easy terms at the required levels, he said before adding farmers’ subsidies on procurement of agricultural equipment used in harvesting crops will continue. “An allocation of Tk 5,000 crore for the Agriculture Refinancing Scheme will also be made through Bangladesh Bank in the next fiscal year. As in previous years, the sales price for chemical fertilizers will be kept unchanged in next year,” he said. An expert, however, has said Kamal’s budget proposal lacked how the funds meant for subsidies and incentives will be used. “Due to Covid-19 pandemic, prices of chemical fertilizers will go down in the international market. So, half of the funds meant as subsidies for chemical fertilizer will remain unused. But there are no clear directives in the budget speech how the fund meant for subsidies and incentives will be spent. Subsidies are needed to be given directly to the farmers who faced losses due to the adverse situation of calamity and Covid-19. “There are no directives on how the incentives or subsidies will be used in case of locally-produced compost fertilizers, which means local producers will face losses due to unfair competition with chemical fertilizers,” he said. “Incentives are needed for storage facility machinery and transportation vehicles by exempting or reducing tariff,” he added.
