Proposed budget allocation insufficient for sustainable agri dev: Economist Jahangir Alam

Agricultural economist Jahangir Alam believes that the allocation for the agriculture sector in the proposed budget is insufficient for sustainable development and demands an increase in allocation and subsidies to sustain the sector's growth.

"The allocation is not enough for sustainable agricultural production; this amount should be increased significantly," he said in a keynote presentation at a discussion titled "Agriculture Sector in the Proposed Budget for the fiscal 2024-25," organised by the Dhaka School of Economics at its Eskaton office on Wednesday (26 June).

"This is because the supply of capital needs to be increased to transform the traditional production system of agriculture into commercial agriculture," added Jahangir, who is also the director of the institute.

In the discussion, it was mentioned that in the proposed budget, Tk47,332 crore has been allocated to five ministries for the agriculture sector, which is 5.94% of the total allocation.

Out of this, Tk27,214 crore has been earmarked for crop agriculture, which is 3.41% of the total budget. The allocation for the entire agriculture sector has decreased by Tk8,670 crore, or 15.48%, compared to the allocation in the revised budget of the current fiscal year.

Additionally, the amount of subsidy has been reduced. In the revised budget, the subsidy was estimated at Tk25,644 crore, which has been brought down to Tk17,261 crore.

The keynote speaker said the cost of production has increased due to the rise in the price of diesel and agricultural machinery in the international market. In this context, reducing the subsidy is undesirable as it will hamper agricultural production and disrupt food security.

According to the Global Report on Food Crisis 2024 published by Germany, Bangladesh ranks 8th among the top 10 food-insecure countries in the world. According to data from the Bangladesh Bureau of Statistics, 22% of people are still food insecure.

Jahangir Alam noted that while the prices of urea and TSP fertilisers had surged globally in July 2022, resulting in local price increases, global prices have since dropped by 52%, yet high fertilizer costs persist domestically.

He highlighted that the budget fails to outline specific growth targets for the agricultural sector. Despite targeting a 4% average growth rate in the 8th Five-Year Plan until 2024-25, actual growth averaged 3.2% over the last four years.

Amidst a food inflation rate averaging 10.67% over the past 11 months, the economist emphasised the necessity of boosting production to mitigate rising global food prices and slowing production rates.

Alam pointed out a decline in rice production growth, with 2022-23 seeing a 0.45% decrease to 390 lakh tonnes. The average growth rate over the last three years was 0.52%, compared to a population growth rate of 1.3%.

In conclusion, he urged for a reasonable increase in both allocation and subsidies to the agricultural sector to ensure the country's food security.