IN its Election Manifesto for the parliamentary election of 2001, the BNP recognised the need for farm subsidies for the welfare of the farmers as well as agricultural growth (para 3.16 of the Manifesto). It pledged that the party would consider providing subsidies for fertilizers, seed, irrigation etc. It also affirmed that the party would pay special attention to ensure that the benefits of subsidies reach poor and marginal farmers. It is perhaps necessary to look at where things stand now.
In this context, it is also necessary to point out that unlike BNP, the AL) specifically pledged in its Election Manifesto of 2001 that the policy already initiated for providing subsidy would be continued. It did not say it would consider provision of farm subsidy (para 5 of Election Manifesto).
The Election Manifesto of Jamaat-e-Islami, BNP's close ally, is conspicuously silent on agriculture sector. It referred to rural development and poverty alleviation but has not mentioned anything about farmers, let alone subsidies (www.bangla2000.com /Election -- 2001/Manifesto --Jamaat-e-Islami.shtm). No wonder that the issue did not engage the attention of the Minister for Agriculture who belonged to this party.
It is possible, however, that he might have tried but the details are not known. At least during his tenure in office, the issue does not appear to have received much attention.
BNP took two years to decide on providing subsidies to the farmers. It is only recently that some information in this respect has been published in the press. It is difficult, however, to make a full assessment of the operational guidelines relating to farm subsidies.
Inquiries and investigations made in this respect have led to the following results in terms of approach taken by the government to provide subsidies to farmers.
It is apparent from the above that all the cost items relate to agricultural support services rather than subsidies for farmers per se. It is also not known why Soil Resource Development Institute (SRDI), which provides support services to the farmers in respect of soil testing has been substituted for DAE. SRDI is already involved in executing a project titled "Establishment of Soil Testing Laboratories." In this context, it is necessary to point out that the AL government during the mid-nineties introduced Soil Health Card for the farmers on an experimental basis. It is felt that budgetary support in this area of activity could have benefited the farmers. DAE maintains as many as 37 Horticulture Development Centres
in different locations of the country. The paltry allocation of Tk. 5.0 million, therefore, will mean Tk. 135,135.00 per centre. Is this going to help? On the other hand, the possibility of running the Horticulture Centres on commercial basis or even at breakeven basis should have been explored.
Tk. 100 million is said to have been allocated to BARC to conduct R&D on oilseed, pulses and spices. The rationale for such allocation is involved in research. Its primary job is research management and coordination of the different agricultural research institutes (ARIs) collectively called National Agricultural Research System (NARS). Second, as far as spices are concerned, a separate project has been undertaken for execution by Bangladesh Agricultural Research Institute (BARI) since 1999. The project cost initially was Tk. 179.88 million, which has been revised
not easily understood for several reasons. First, BARC is not directly unapproved (RU).
As far as pulses and oilseeds are concerned, the Ministry of Agriculture (MOA) has a Crop Diversification Project with an outlay of 1,547.2 million. It has a research component covering pulses and oilseed and the allocated amount is Tk. 238.9 million for BARI. Finally, there is also the project called Agricultural Diversification and Intensification Project (ADIP) exclusively for the north-west
upward to Tk. 549.5 million. The status of the project is revised region of the country. The total project cost is Tk. 1,264.0 million, which is funded by International Fund for Agricultural Development (IFAD) and Bangladesh Government. It is supposed to promote production and marketing of high value crops other than rice.
The document called Bangladesh NARS-2020, which provides the vision of agricultural research (BARC, 2000) has listed a number of pulses and oilseeds varieties already developed by BARI and BINA. The current status of adoption of these varieties by the farmers before going for further research should have been assessed. Tk. 2.0 million has been allocated to BJRI for technology transfer of improved variety of jute seeds. In fact, technology transfer falls within the domain of DAE and it is not understood how an insignificant amount of Tk. 2.0 million will achieve technology transfer. Similar incongruity is visible in the allocation of Tk. 5.2 million for technology transfer of HYV to be executed by BINA. Next comes Tk. 70.0 million for BSRI. The purpose is to achieve technology transfer of improved varieties of sugarcane. A number of studies conducted in the recent past indicates that there is no comparative advantage for production of sugarcane. At the same time, it cannot be denied that
while only 25-30 per cent of the total sugarcane produced is used for the sugar mills, the remaining 75 per cent is used for Gur making. Consequently, withdrawal of support from sugarcane production may adversely affect the livelihood opportunities of millions of farmers, manufacturers of Gur and traders.
During the mid-nineties government supported a technical assistance project executed by Bangladesh Agriculture University (BAU) to advise the government on sugarcane production as well as diversification of sources of sugar. Earlier than that a number of other committees including the one during mid-nineties led by a Member of Parliament submitted a report on the future of sugar production and sugar industry. The wisdom or lack of it of all such reports ought to have guided decisions to support sugarcane production.
The analysis presented above leaves lot of questions unanswered. On the face of it, there are overlaps and duplications on allocation of funds said to be provided from the revenue budget when there are a good number of projects to catre for the same activities under ADP. To top it all, these allocations are more in the nature of agricultural support services that fall within the frame-
work of the concept of public good as envisaged under World Trade Organisation (WTO) agreement. The expenditure envisaged cannot, by stretch of imagination, be called subsidy for farmers.
Administration of agriculture subsidy and its management is a more serious than a mere political game. It is all the more so in the context of WTO agreement to which Bangladesh is a party. The Aggregate Measures of Support (AMS) need to be more clearly understood in order to make meaningful choices of the use of different boxes (Green Box, Amber Box, Blue Box). Bangladesh Institute of Development Studies (BIDS) with support from food and Agriculture Organization (FAO) completed a study in 1999 suggesting determination of the trade-off among types of subsidies within Amber Box and between Amber Box and Green Box measures to determine the most cost-effective support to agriculture while making it more competitive to take advantage of increased production in view of restrictions imposed on agriculture in other countries. Without this approach subsidies for farmers will remain far removed from reality.
A M M Shawkat Ali is a former Secretary, Ministry of Agriculture.