Price of urea fertiliser hiked by Tk 6 per kg

The government on Monday increased the price of urea fertiliser by 37.5 per cent to Tk 22 from Tk 16 per kilogram for farmers with immediate effect amid the suspension of local production due to the gas crisis and high prices of agricultural inputs in the global market.

The agriculture ministry stated in a release that the price was increased to discourage people from using the fertiliser in an unnecessary and excessive manner in light of its three-to-four fold price increase in the global market.

‘We need around 27 lakh tonnes of urea fertiliser. But we can produce only around 10 lakh tonnes,’ agriculture ministry secretary Md Sayedul Islam told New Age. ‘Furthermore, our domestic production was hampered due to the shortage of gas supply. So we decided to increase the price to discourage people from its unnecessary use,’ he said. 

He said that they were encouraging people to use diammonium phosphate instead of urea.

Sayedul said that the government reduced the price of non-urea fertiliser DAP to Tk 16 from Tk 90 in 2019 to encourage its use.

He said that while eight lakh tonnes of diammonium phosphate were used in 2019, due to the government’s initiative its use rose to 25 lakh tones this year.

The agriculture ministry also raised the retail price of urea fertiliser per kilogram at the dealer level by 42.88 per cent to Tk 20 from Tk 14.

The price of per kilogram urea fertiliser in the global market is now Tk 81, said the ministry, adding that despite the increase of Tk 6 per kilogram, the government has to give Tk 59 as a subsidy for each kilogram.

The government’s subsidy against per kilogram of urea fertiliser was Tk 15 in the 2005-2006 financial year, said the ministry. 

Despite an increase in diammonium phosphate, the agriculture secretary said that the use of urea was yet to decline. Bangladeshi farmers used 26.5 lakh tonnes of urea in 2021, compared to the use of 25 lakh tonnes in 2019, he said.

‘We are not sure how much fertiliser we will need to import this year. It will all depend on the duration of the persisting gas crisis,’ he said.

Experts said that the government had chosen the wrong time to increase the price of fertiliser as it would discourage farmers to cultivate rice.

Agro economist Jahangir Alam said that a large number of farmers would feel discouraged to plough land in Boro and Aman seasons due to the hike in fertiliser prices and it would reduce rice production.

‘The government is looking forward to establishing an import policy in the agriculture sector. We should enhance our capacity to increase domestic production. The government should have waited two or three months before taking the decision,’ said Jahangir, a former director of the Bangladesh Agricultural Research Council.

He said that it was a wrong policy to increase the price of urea to reduce its use.

The former research director of the Bangladesh Institute of Development Studies, M Asaduzzaman, suspected that the government increased the price of urea fertiliser to meet the conditions of an International Monetary Fund loan.

‘I think that the government increased the price of fertiliser to reduce the subsidy to get the IMF loan. IMF does not like subsidies,’ he said.

The incumbent government had reduced the price of fertiliser four times since 2009, according to the release.

The Agriculture ministry’s senior information officer, Md Kamrul Islam Bhuiyan, said that the government last reduced the price of urea fertiliser to Tk 16 from Tk 25 in December 2019.

The government provided Tk 7,717 crore in subsidies in the 2020–21 financial year and the subsidy rose to Tk 28,000 crore in the 2021–22 financial year, the release said.

The ministry, in its release, however, said that there was an adequate stock of fertiliser in the country to meet the demand.

The country has a stock of 7,27,000 metric tonnes of urea fertiliser against a demand of 6,19,000 metric tonnes for Aman cultivation in the July-September period, said the release.

The state-owned urea-producing enterprises Jamuna Fertiliser Company Limited in Jamalpur and Chittagong Urea Fertilizer Ltd suspended their production due to the shortage of gas respectively on July 1 and July 19.

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