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Farm subsidy inadequate

Food self-sufficiency targeted by 2013

Reaz Ahmad
The government has deferred its target time for attaining food autarky from 2012 to 2013 and proposed a farm subsidy outlay that seems far short of the requirement.
On policy and research fronts, it has failed miserably to live up to its promises made in successive budget speeches in the last two fiscal years.
Making his budget speech in parliament, Finance Minister AMA Muhith yesterday said the government planned to achieve food self-sufficiency by 2013, which is a clear deviation from what he had said in his last two budget speeches.
The minister proposed a Tk 6,000 crore subsidy for the
farm sector.
In the last national budget, the amount was Tk 4,500 crore, which was later revised to Tk6,500 crore.
Experts found the amount quite inadequate given the fact that diesel price rose by 40 percent and key chemical fertiliser urea by 66 percent making farming costlier for around 18 million farmers in the country.
Dr M Asaduzzaman, research director at Bangladesh Institute of Development Studies (BIDS), said that given the
fuel-fertiliser price scenario, the proposed subsidy for the farm sector would not do.
Dr Quazi Shahbuddin, former director general of BIDS, agreed with Asaduzzaman. "In our country we adopt an ambitious ADP (Annual Development Programme] and then we cut it at the end of the financial year. But the reverse happens when it comes to agricultural subsidy. So it is expected that the finance minister will have to revise this subsidy at around Tk 8,000 crore at the end of the next fiscal year."
If more money were injected in the rural farming economy by enhanced farm credit, it could offset the shortage of subsidy, he mentioned.
But he didn't find it encouraging as the finance minister proposed just a paltry rise of Tk 330 crore in farm credit from Tk 13,800 crore (2011-12) toTk 14,130 crore (2012-13).
"A rise by Tk 1,000 crore in farm credit could have some effects on the farming com-munity in managing increased production costs," opined
Asaduzzaman.
If the agricultural credit is adjusted with inflation, it will show that it has not grown in real terms, observed experts.
On the policy front, the government had made empty promises as it for the third straight fiscal year continued saying it would prepare a National Agriculture Policy since the earlier version, drafted in 1999, has long been outdated.
In his 2010-11 budget speech, Muhith had said formulation of the National Agricultural Policy 2010 was underway, while in his following budget speech he had mentioned that the policy would be completed by December 2011.
But the reality is the policy had not been finalised till yesterday.
Dr Quazi Shahbuddin found it disturbing while Dr Asaduzzaman recalled that the draft for such a policy had long been exercised since the days of the last caretaker government.
Most surprising of all, the finance minister put high hopes on an “endowment fund" in pursuing agricultural research in the country. But people concerned said not a single penny of the Tk 350 crore fund had been spent on farm research since the fund's inception in 2008.
Dr Asaduzzaman said the fund now had been fuelled to over Tk 500 crore, thanks to bank interest. But he expressed frustration over the failure to use the fund.
Dr Quazi Shahbuddin termed the failure "pathetic," particularly when Bangladesh is known as a bad investor in agricultural research and development in South Asia, though it is an agrarian economy.
Experts noted that when the country's predominantly poor farmers were doing fantastic by offering the nation back to back bumper rice productions, they were not always backed up properly by policy and research support.
Dr Wais Kabir, who heads the country's national agriculture research system (NARS) in the capacity of chairman of Bangladesh Agriculture Research Council, acknowledged the failure in using the agriculture research fund.
He, however, expressed firm confidence in things moving positively soon.
Dr Kabir referred to the passage of Bangladesh Agricultural Research Council Act, 2012 in April and hoped that funds would be fast-tracked through strengthening the NARS.