Fertilizer price hike: Why farmers face extra burden?

EditorialProthom Alo illustration

The government has raised the prices of urea, DAP, TSP and MOP fertilisers by Tk 5 per kilogram at the dealer and farmer levels.

The order announcing price hike of fertilisers issued from the agriculture ministry on 10 April stated that fertiliser prices have gone up in the international market in context of the ongoing global economic conditions.

So, the selling prices of fertilisers are being re-fixed to retain fertiliser import on a rational level and to ensure best use, it continued.

The government announced the price hike at such a moment when the fertiliser prices are coming down in the international market.

According to the data of World Bank’s Pink Sheet (regular report on international market), updated this month, the price of urea fertiliser has reduced about 62 per cent in the international market in the course of last one year.

At the same time, DAP, TSP and MOP prices have decreased by 24, 25 and 47 per cent respectively.

After the price hike, prices of urea and TSP have gone up from Tk 22 to Tk 27, DAP price has rose from Tk 16 to Tk 21 and MOP fertilizer price has reached Tk 20 from Tk 15 a kg on the farmer level now.

On the other hand per kg of urea and TSP costs Tk 25, DAP costs Tk 19 and MOP costs Tk 18. Earlier, the prices of urea and TSP were Tk 20, DAP was Tk 14 and MOP was Tk 13. The price hike rate is 15 to 20 per cent.

Agriculture minister Md Abdur Razzaque had said on 3 April, “There are no plans to increase fertilizer prices this year.” So, there’s no chance of considering this announcement of hiking the price just a week after that as usual.

The government didn’t increase the prices when the prices were high in the international market. Hiking the prices when they are coming down in the international market; we are seeing this as backtracking on government’s part.

According to many, the government has increased fertilizer prices only to lift off the subsidies for fulfilling IMF’s conditions. Earlier, electricity and gas prices have also been increased several times.

The question is, instead of reforming the revenue and financial sectors, why the easy path of lifting up subsidies provided for farmers and general public is being taken?

The government must remember that if fertiliser prices are increased it will not harm farmers alone but also have a negative effect on agriculture as well.

Experts too have raised questions about the rationality of hiking fertiliser prices, when agriculture has kept the country’s economy stable and met the public’s food demand under the current global crisis caused by the Covid pandemic and the Russia-Ukraine war.

Former research director at Bangladesh Institute of Development Studies (BIDS) and economist M Asaduzzaman told Prothom Alo, “We do not take into consideration the fact that the production cost of agricultural items is increasing due to this price hike.”

Due to the prices of fuel oil and electricity being increased earlier, farmer’s irrigation cost has risen as well. Prices of other components of agricultural production have increased too.

Media has reported that last year many farmers used less fertiliser than required. They will use even lesser amount of fertiliser this time for the prices being hiked. There’s a risk of crop production plummeting down in case of using less fertiliser.

In this condition, the government could’ve handled the situation by reducing expenditure in the non-productive sector instead of reducing subsidies on fertilisers. Instead of doing that why the farmers were burdened with this extra load?

If production costs of agricultural products can be kept at tolerable level it will benefit not only the farmers but also general consumers. So, the government should re-evaluate the issue of hiking fertiliser prices.