Increase subsidy to agriculture: Minister

"It has to be changed," he told UNB on his arrival at the Zia International Airport after attending FAO-sponsored two conferences in Bangkok that took stock of agriculture development in the Asia-Pacific region and in Bangladesh in particular.

He said recovery of loans gained momentum as compared to disbursement. According to official figure, the allocation for farm credits gradually came down as low as Tk 2,400 crore in the fiscal 2002-03 from its peak at Tk 3,150 crore in 1998-99.

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The then government had substantially increased the allocation considering the flood damage in 1998. Before that the allocation averaged around Tk 2,000 crore.

"It's not possible to achieve the goal with the current trend of agriculture loans for last few years. We should also increase subsidy," said the minister.

The current budget for the fiscal 2003-04 earmarked Tk 100 crore for agriculture subsidy.

He said the UN agency-sponsored meets attended by the development partners agreed on the urgency of subsidising the sector of least developed countries (LDCs) as the developed and developing countries both have been doing so.

Replying to a question, he said subsidy is not contradictory to the WTO rules as it allows developing countries to provide subsidy, to the tune of 10 per cent of government expenditure of a country, to agriculture.

The WTO rules allowed five percent subsidy for the developed countries while there was no binding for the LDCs.

Deviating from the set rules, many developed and developing countries provide much higher subsidies to their respective agriculture, with Japan giving the highest 200 percent. By contrast, Bangladesh provides less than half percent.

"Why our economy will not be able to afford substantial subsidy if we get 20 percent returns by investing 10 percent," argued the minister, replying to another question if the small economy could afford the farm aid.

Turning to the conferences, he said the participants agreed that agriculture improvement and rural development are key to arresting poverty and hunger. So, the poor countries should subsidise their agriculture, he cited the conference recommendation as saying.

MK Anwar said the development partners assured Bangladesh of supporting its initiative under Agriculture Sector Review (ASR), a stocktaking effort by the government to reappraise the sector's development so far and mapping out future action plan.