For the next fiscal year, the government has decided to raise its outlay for subsidies under the Food Ministry by only 9.89%, far less than the amount demanded by farmers for recovering from their continuing losses.
Sources said the subsidy amount for the Food Ministry is expected to be increased to Tk1,981 crore for the next budget, a slender rise from the existing Tk1,806 crore, official sources said.
“We wanted food subsidy to be increased by 28% from the last fiscal year, as local farmers had failed to meet even the basic production cost of their crop over the last three years because of political turmoil,” said a Food Ministry official.
Seeking anonymity, he added that the three items which receive subsidised procurement rates – paddy, rice, and wheat – have seen their production costs rise significantly over recent years, while the negative influence of cheap Indian rice in the domestic market has also been hurting rice prices.
Finance Division sources however said the Food Ministry failed to present any strong arguments for increasing the allocation of subsidies.
The decision, however, has caused strong criticisms in the grassroots level. Farmers and traders alike said the new amount of subsidies will be far less than they anticipated.