Economists hailed the government for rolling out the Tk5,000 crore lifeline package for farmers, underlining the need for an efficient supply chain and improved storage facility for agricultural produce to ensure fair farm gate prices.
The rescue package for the farm sector would help shore up the battered farmers hard hit by the coronavirus-related shutdown as the low-cost loan would help them out in sourcing working capital for harvesting next crop, they added.
Talking to Dhaka Tribune on the Tk5,000 crore bailout package for agriculture sector, they stressed for fair prices of agricultural produce and well-organized supply chain mechanism to prop up the country’s farm economy.
On Sunday, Prime Minister Sheikh Hasina announced a Tk5,000 crore stimulus package for agriculture sector to boost crop production during the Covid-19 emergency.
The rural small and medium farmers would get the loan from the fund and they can use the money in producing flowers, fruits, fish, poultry, etc, Hasina said.
The fund involves 5% interest.
“In the economy, the agriculture sector is now in a good shape, compared to other major sectors. So, keeping the supply chain for agricultural produce is the most important task for the government right now,” Centre for Policy Dialogue (CPD) Research Director Khondaker Golam Moazzem told Dhaka Tribune.
To this end, the government must be cautious so that the production of agriculture is not hindered and reaches consumers under an uninterrupted supply chain system, he added.
On the other hand, Moazzem underlined the need for an adequate preservation facility for agricultural produce and their fair prices.
"In Dhaka, we are buying agricultural products at higher prices, while the farmers are being forced to sell them at throwaway prices in rural areas where they produce the crops," Policy Research Institute Executive Director Ahsan H Mansur said.
He said cash was not too much of a problem, but smooth transportation was of paramount importance now.
He stressed on proper logistics and fair prices.
When farmers need loans
However, the package will be very important and needful, when the harvesting ends and the farmers will prepare the harvest for the next season. The fund could be used as working capital of farmers.
“Farmers, who have already harvested paddy or other crops, could not sell the produce due to the shutdown –related obstacles. They will need cash when the next season of harvesting appears," World Bank’s Former Lead Economist in Dhaka Zahid Hussain said.
Then the stimulus package would provide them funds and it would help the farmers in managing working capital for the cultivation of other crops, added Zahid.
“But how the fund will help the farmers in harvesting the Boro paddy is the biggest challenge right now for the government,” said Zahid.
For harvesting paddy, farmers needed labourers who could not travel due to shutdown, Zahid said further.
On the other hand, the government should focus on storing facility for paddy and ensuring fair prices, he mentioned.
How to make the lifeline effective
When the crisis period is over the impact of coronavirus will be felt and become more visible. The farmers in dairy, poultry, fisheries, and other sectors will need the cash then.
For the effective use of the stimulus package, the government must assess the losses and find out the real needy ones, suggested Moazzem.
For the farmers, the economist suggested using bank accounts and urged the government to take help from the associations concerned to assess their losses.
