SUKANTA HALDER

The allocation for agriculture in the proposed FY2026-27 budget has increased marginally in nominal terms.

However, the sector’s share of total spending has dropped to its lowest level in at least a decade, raising concerns at a time of rising production costs, climate shocks, persistent food inflation, and slowing agricultural growth.

Economists and experts say the modest increase in allocation, coupled with unchanged subsidy and incentive support, could make it harder for the BNP government to contain production costs, boost output, and ease food inflation.

The proposed budget allocates Tk 46,821 crore for agriculture and food security, including livestock, environment, climate change, land, and water -- up 2.3 percent from the revised FY2025-26 allocation of Tk 45,789 crore.

But as the overall national budget expands 19 percent to Tk 9.38 lakh crore, agriculture’s share has fallen to 5.0 percent from 8.7 percent in FY2023–24, continuing a sharp decline since FY2024-25.

The reduced share comes as the sector continues to lose momentum.

According to the latest Bangladesh Bureau of Statistics data, agriculture grew by only 2.42 percent in FY2024-25 -- the slowest rate in more than a decade. Provisional estimates suggest a slight recovery to 2.78 percent in FY2025-26.

Agriculture’s contribution to GDP has also steadily narrowed, falling from more than 38 percent in the early 1970s to around a provisional 10.93 percent in the outgoing fiscal year.

In his budget speech, Finance Minister Amir Khosru Mahmud Chowdhury said the government aims to build a self-reliant, climate-resilient and technology-driven agriculture sector.

To support that goal, the budget prioritises affordable inputs -- including fertilisers, seeds and irrigation -- to lower production costs, expand mechanisation, introduce agricultural insurance against natural disasters, diversify agricultural products, and expand cold storage and cold-chain facilities.

Under its blue economy agenda, the government also plans to deploy commercial vessels to harvest tuna and pelagic fish in deep seas, expand seaweed cultivation, and increase fisheries export earnings to $1 billion by 2030.

The budget further proposes a series of tax and tariff measures to reduce costs and support domestic production. These include full exemption of VAT and advance tax at the import stage for fertilisers and pesticides, removal of the existing 7.5 percent VAT at the business stage on fertilisers and 7.5 percent advance tax on pesticide imports, and zero VAT on 36 raw materials used in domestic pesticide manufacturing.

Other measures include reducing import duty on zinc ash -- used in local zinc sulphate fertiliser production -- to 5 percent; extending zero-duty concessional treatment for veterinary medicine imports under generic categories; imposing import duties of 5 percent and 25 percent respectively on unprocessed and processed cashew nuts; levying a 20 percent supplementary duty on imported pangasius fillets; and adding three raw materials for poultry, dairy and fish feed production, along with selected machinery inputs, to the zero-duty concessional list.

MOUNTING PRESSURE

Abu Saleh Md Shamim Alam Shibly, senior research associate at the Centre for Policy Dialogue, said the shrinking

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