The government has decided to increase fertilizer subsidy to Tk 15,000 crore in the upcoming budget for fiscal year (FY) 2022-23, aiming to boost domestic food production.
Despite a 58 per cent hike in fertilizer price in the global market, the government wants to avoid price hike as a stimulus to the farmer to ensure more crops production and control the price of food items in the local market.
In the last 13 years from 2008-09 to 2020-21, the government subsidised around Tk 82,000 crore for the single sector. In FY 2020-21, Tk 7,717 crore was spent for fertilizer subsidy.
The Ministry of Agriculture is encouraging farmers to use agricultural inputs including incentives in fertilizers and seeds to ensure food security.
A senior official of the National Board of Revenue (NBR) said a decision has been taken in this regard at a meeting at the Prime Minister's Office after the recommendation of the Finance Division recently.
The government wants to create more employment in the farm sector and avoid any kind of instability in food production ahead of the national election, said the official.
According to the Bangladesh Bureau of Statistics, the agriculture sector’s contribution to GDP is about 13 percent.
In FY 2021-22, the government allocated a total of Tk 9,500 crore as subsidy for the sector. But due to rise in the price of fertilizer in the international market, the actual subsidy of the government till April, 2022 stood at around Tk 13,332 crore. However, it is estimated that the subsidy could exceed Tk 25,000 crore in the current fiscal year.
Talking to reporters recently, Agriculture Minister Md. Abdur Razzaque claimed that this year the government will spend Tk 30,000 crore for fertilizer subsidy as agriculture is being given utmost importance in the budget of 2022-23.
In the last FY, the import cost of urea fertilizer was Tk 32 per kg, TSP Tk 33, MOP Tk 23, DAP Tk 37, which has increased in the current FY to Tk 96, Tk 70, Tk 54 and Tk 93 per kg respectively.
However, urea is being distributed among the farmers at Tk 18 per kg, TSP at Tk 22, MOP at Tk 15 and DAP at Tk 16 per kg respectively.
In the FY 2021-22, the demand for chemical fertilizers is 57.50 lakh tonnes. Of this, 26 lakh tonnes urea, 7.5 lakh tonnes of TSP, 7.5 lakh of MOP and 16.5 lakh of DAP.