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Bumper rice to ease budget burden

Sohel Parvez
Rice is the silver lining around otherwise largely gloomy data for the next fiscal year.
In the current fiscal, rice production is expected to reach the highest level in the history of Bangladesh, thanks to millions of farmers who are enabling the country to ensure the staple for all.
Primary forecasts by different public and private organisations show that rice production will stand at 3.21 crore tonnes by the time the country enters the next fiscal, up more than 8.12 percent from a year ago.
The new height in rice production will be more than the country's total estimated
demand for 3.0 crore tonnes.
Such a surplus has now turned rather problematic for farmers who allocated more of their lands to rice production, encouraged by the staple’s high prices in the previous two years.
"It’s a clear indication of farmers’ response to high prices of rice. They produced more this year, encouraged by the high prices for their produce in the last two years," said Mahabub Hossain, executive director of BRAC.
But the farmers are now hit by a decline in prices. .Analysts say low prices might dampen prospects for rice plantation in the next fiscal.
"It appears that there is a surplus supply of rice, and it's dampening the prices. One clear indication it gives is that the farmers will cut their production next year," said Mahabub, also a former director general of the Bangladesh Institute of Development Studies.
Next comes the negative effect of the recent cyclone, Aila, which jeopardised the prospect of a good Aman rice cultivation, as tens of thousands of farmers in the southwestern coastal region are in trouble, following the storm.
Expectations ride high for continuing policy support for agriculture in the national budget for fiscal 2009-' 10.
Aided by favourable weather and high prices of food grains on both local and foreign markets, the current and previous governments' support for making agricul-tural inputs such as fertilizers Aid 'diestJ avaDiblc at rela- ' tively low costs, helped agri-output to grow almost double in the fiscal 2008- 09, compared to the previous year.
A provisional estimate by the Bangladesh Bureau of Statistics (BBS) shows that the agriculture and forestry sector grew by 4.81 percent in the current fiscal from 2.93 percent a year ago, enabling the economy to register a growth of 5.88 percent, at a time when growth in the manufacturing sector is down.
With Tk 4,285 crore as subsidy for fertilizers, electricity and others, the immediate past caretaker government allocated a total of Tk 6,499 crore for agriculture in the current budget, including doubling of cash subsidy for marginal and small farmers, in a bid to recover their irrigation cost amid high price of diesel.
The current government, which took over the rein in early January this year, did not continue direct cash subsidy for diesel, but reduced the price by Tk 2 a litre, and slashed non-urea fertiliser price by as much as a half, to help fanners get agri-inputs at low cost during the recently
ended season of Boro rice, the biggest rice crop.
"That was a very timely decision aimed at providing subsidy for non-urea fertilizers to promote use of balanced fertilizers, and to reduce the cost of agricultural production," said private research organisation, the Centre for Policy Dialogue (CPD), in its report titled the State of Bangladesh Economy in FY 2008-09.
To stimulate agricultural production in the wake of the ongoing global economic recession, Awami League-led ruling alliance also increased subsidy in agriculture by Tk 1,500 crore, along with raising allocations for recapitalisation of state-run agricultural banks, in its stimulus package for the economy, announced in April this year.
' "ThlTf>A^H^fre8tfd thf prospect for a good Boro harvest after fine Aman and Aus crops in the previous months of the current fiscal, leading to a soothing impact on inflation due mainly to a decline in rice prices on the domestic market, and also due to the global economic meltdown.
"The expected good Boro harvest will have a sobering effect on the food grain market with positive impact on food inflation in the country. If the current trends are maintained, it is more likely that the average inflation will be softened further in the coming months," said Bangladesh Bank in its quarterly publication for January-March 2009.
CPD is stressing the need for strengthening government procurement programme to safeguard farmers' interests.
Mahabub Hossain suggested increasing government storage facilities to intervene in the market.
Food & Disaster Management Minister Dr Muhammad Abdur Razzaque admitted that the government’s storage capacity is inadequate to develop a buffer
stock as a means for increasing supply after natural calamities, as well as for protecting farmers when prices of their produce fall.
"We are framing comprehensive plans to increase the storage capacity by four to five lakh tonnes. I hope some of the projects will start being implemented from the next fiscal year," he said.
"We are also considering to devise mechanisms for buying a major portion of food grains directly from farmers," he added.
In the next fiscal, the agriculture ministry is also expected to get allocations for strengthening research and development, including for developing surface water irugauon .4Vitun to reduce farmers' irrigation cost.
Allocation is also expected to be there for promotion of mechanisation in agricultural production, and for marketing of quality seeds by Bangladesh Agricultural Development Corporation (BADC).
In the coming budget for FY 2009-'10, Tk 860.65 crore has been allocated under the annual development programme for the Ministry of Agriculture.
"We attach high importance to developing surface water irrigation system to help farmers reduce irrigation cost, and to narrow down dependence on underground water for irrigation," said Agriculture Minister Matia Chowdhury.
"We also prioritise research and development special incentives will be there for real scientists."
She also said the ministry will work on encouraging mechanisation of agriculture, and strengthening of BADC's capacity to produce and market quality seeds for fanners.