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Farmers, poor to suffer most

Reaz Ahmad
The latest rise in diesel price will push up the agricultural output costs putting the marginal and small-hold farmers and poor urban consumers in economic hardship, said experts and officials of the Ministry of Agriculture (MoA).
As part of an overall rise in petroleum products, the government yesterday announced diesel price rise from Tk 26 to Tk 30 a litre.
The government has increased diesel price five times since late 2000, when per litre price was Tk 12.95.
Farmers will have to bear the enhanced input costs, Agriculture Minister MKAnwarsaid.
Economic experts and agronomists also fear that diesel price hike will lead to rise in production costs of staple food rice as well as costs of agricultural commodities (higher transport and marketing costs being included) that will badly affect the urban poor consumers and marginal and small farmers.
"The rise in diesel and kerosene prices will seriously hit the farmers, who require diesel to irrigate cropland and kerosene to lit candles and lanterns at their homes," Director General of Bangladesh Institute of Development Studies Dr Quazi Shahabuddinsaid.
"It is understood that the government may need to increase the petroleum prices for fiscal balancing, for maintaining macro-stability but not at the cost of poverty alleviation. Government needs to work out protection mechanism for the poor. You just can not equally expose all segments of the society to the fiscal adjustments," said Shahabuddin.
The real pinch of the diesel price hike will be felt in coming Boro season when farmers will have to buy diesel in higher price to irrigate their paddy fields, sources in the Department of Agriculture Extension told The Daily Star.
Even before that, the farmers may have to incur extra costs on diesel purchase for supplementary irrigation to rain-fed Aman cultivation due to this year's less amount of rain at various pockets, they noted.
Out of the 786,004 shallow pumps now in operation for irrigation across the country, 731,612 are diesel-run and the remaining 54,392 electricityrun while farmers use roughly six to seven lakh tonne of diesel a year mainly to irrigate winter rice Boro and provide supplementary irrigation for Aman, official statistics say.
Now per acre irrigation cost difference between the two systems is as high as Tk 600, the ministry sources said, adding that farmers using diesel-run pumps have to incur 30 per cent more cost than those using electricity-run pumps as the latter get power supply in subsidised rate.
A MoA bailout proposal made in August, 2003 to provide Tk 310 crore subsidy for diesel used in irrigation got nod from the Cabinet Committee on Agriculture and was recommended by the Parliamentary Standing Committee on Ministry of Agriculture for approval.
But the proposal has remained shelved so far due to finance ministry's negative attitude.
The proposed subsidy for dieselrun irrigation pumps is needed to match the subsidy that farmers are already enjoying in using electricityrun irrigation pumps, MoA officials said, adding that the subsidy would enable farmers to keep their production costs equitably low.
Meanwhile, Deputy Minister for Food and Disaster Management Asadul Habib Dulu told this correspondent that due to an already rising trend in rice price, the government will launch a vigorous vulnerable group feeding and open market sale programme from later this month.