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Tobacco duty withdrawal will incentivize cultivation

  • Published at 02:39 am June 14th, 2018
  • Last updated at 02:40 am June 14th, 2018

Experts have said the withdrawal of the 25% customs duty on tobacco exports will encourage farmers to cultivate more of the cash crop, despite the health and environmental hazards it poses. 

In his budget speech delivered in the parliament on June 7, Finance Minister AMA Muhith said he had proposed the withdrawal of the customs duty in order to reduce domestic consumption by encouraging exports.

However, anti-tobacco campaigners and economists condemned the move, expressing fears that farmers would put more focus on tobacco cultivation and eschew other crops if the customs duty was removed.

 “When Bangladesh is supposed to be reducing the production of tobacco, it is giving incentives to increase production by withdrawing duties on exports instead,” Dr M Asaduzzaman, distinguished fellow of the Bangladesh Institute of Development Studies, told the Dhaka Tribune.

If the customs duty is withdrawn, farmers will get better prices and will be encouraged to cultivate more tobacco while shifting away from other crops, he added. 

The economist further said that if the government wanted to reduce domestic tobacco consumption, then they needed to take stricter measures than incentivizing exports.

Meanwhile, ABM Zubair, executive director of NGO Progga, said Bangladesh’s food security would come under threat if the duty was removed not only because farmers may shift away from food crops, but also because tobacco cultivation has a negative impact on the fertility of the soil and the environment as a whole.

According to a report by the World Health Organization (WHO) titled “Tobacco and its environmental impact: an overview,” tobacco cultivation is associated with land degradation or desertification in the form of soil erosion, reduced soil fertility and productivity, and the disruption of water cycles. 

Furthermore, the cultivation and curing of tobacco are both direct causes of deforestation, as forests are cleared for tobacco plantations and wood is burned to cure the tobacco leaves, the report said.

Moreover, chemicals used to control a weed commonly found in tobacco fields of Bangladesh were found to be polluting aquatic environments and destroying fish supplies, as well as soil organisms needed to maintain soil health.

Farming communities are also exposed to health risks caused by chemical pollution of their environment, as the farmers use abnormal fertilizers and chemicals to attain higher yields, the WHO report said.

The Anti-Tobacco Media Alliance has said the proposed budget conflicts with the Prime Minister Sheikh Hasina’s comment at the South Asian Speakers’ Summit on SDGs in 2016, where she said she wished to make Bangladesh Tobacco free by 2040.

Asking to remain anonymous, an official of the Agriculture Extension Department told the Dhaka Tribune that the cultivation of tobacco had been declining since the 25% customs duty was imposed in the last fiscal year, and its withdrawal may cause them to bounce back to previous levels.

He added that while farmers may switch to tobacco cultivation in the hope of making greater profits, the real beneficiaries will be larger companies who handle exports.