To contain the impact of the Covid-19 pandemic, the budget has also proposed Tk9,500 crore in farm subsidies
The national budget for the 2021-22 fiscal year has raised the allocation for the Agriculture Ministry by Tk759 crore from Tk15,442 crore in the outgoing fiscal year to Tk16,201 crore.
Of the total budget for the ministry, Tk123,610,798 has been allocated for the Secretariat, while the rest have been allocated for the Department of Agricultural Extension, the Seed Certification Agency, the Agricultural Information Service, the Department of Agricultural Marketing, Soil Resource Development Institute, Cotton Development Board, and the National Agricultural Training Academy.
To contain the impact of the Covid-19 pandemic, the budget has also proposed Tk9,500 crore in farm subsidies, up from Tk9,001 crore last fiscal year.
In the revised budget of FY21, subsidies were later reduced to Tk8,070 crore. In the proposed budget, the agricultural subsidies have increased by Tk931 crores, which is 3.7% of the total budget for subsidies.
While presenting the budget in the parliament on Thursday, Finance Minister AHM Mustafa Kamal said that although food security was likely to be threatened due to the disruption caused by the pandemic, Bangladesh did not have to face any problem thanks to the timely decision taken by the government.
Amid the pandemic, the government is going to increase the production rate by popularizing the mechanization of the agriculture sector and boosting up the usage of hybrid crops across the country.
“The government will take all possible measures to achieve the production target to ensure food security,” the finance minister said.
10-year tax exemption for agro industries, entrepreneurs
The government has decided to exempt tax facilities for agro-based industries and entrepreneurs for 10 years to facilitate the industries and generate employment.
Agricultural entrepreneurs who will process fruits, vegetables, produce dairy and dairy products, and produce children’s foods, will get the benefit, Kamal said.
Besides, 10-year tax exemption facilities will be continued for the entrepreneurs who produce agricultural machinery.
In his speech, the minister said the flourishing of agro-based industries and generation of employment is possible through the production of import substitute agricultural products in the country.
Furthermore, at this time of free trade, it is possible to take a substantial share of the global export market through value addition and diversification of agricultural products, he added.
“Taking these into consideration, I propose to offer tax exemption, subject to certain conditions, for 10 years to industries engaged in processing locally grown fruits and vegetables, producing milk and dairy products, producing baby food entirely from locally grown agricultural products, and manufacturing of agricultural machinery,” the minister said.
Continuous effort in agriculture sector
In 2009, the government set a target to increase the food grain storage capacity at the government level to 2.7 million tonnes to ensure food security.
In this context, the construction of modern food warehouses and silos was undertaken in coordination with the 7th Five Year Plan and Vision 2021. As a result, the existing storage capacity of food grains at the government level in the country has increased to about 2.18 million tonnes.
A number of projects are currently ongoing to construct modern food warehouses and silos with a capacity of about 600,000 tonnes to achieve this target.
“The government is taking various steps for the development of the agriculture sector. We will continue with the ongoing interventions, such as agricultural subsidies, incentive and assistance cards for agricultural inputs including fertilizers and seeds, irrigation facilities, crop diversification and marketing, agricultural rehabilitation assistance, etc., to enhance agricultural production,” Kamal said.
According to the Medium-Term Macroeconomics Policy Statement 2021-22 to 2023-24 of the Finance Division, agriculture is one of the top priority sectors of the government, as it plays a leading role in advancing the growth path of the economy by enhancing productivity and employment opportunities.
Therefore, addressing the adverse effects of the COVID-19 pandemic on agriculture is considered urgent, the statement reads.
The government has taken various initiatives in this sector for ensuring food security, income generation and employment opportunities to improve the living standards of the rural poor.
Total spending for this sector is projected to grow on an average by 10% annually to Tk37,707 crore in FY24, the statement adds.
It is also stated that the share of agriculture to GDP in Bangladesh is currently more than 13% and it is the main source of generating income and employment for the rural people, particularly the poorer segment.
The government has also declared a number of stimulus and incentive packages to enable this sector to weather the adverse impacts of the Covid-19 pandemic.
In the outgoing fiscal year, it allocated a Tk5,000 crore stimulus package for the pandemic-hit agricultural sector. Banks lent the money at just 4% interest to farmers in line with the central bank’s guidelines.