Recently, a drought surfaced in parts of the country hampering preparation of seedbeds. On top of that, floods are likely to affect the low-lying crop fields as the Teesta River is swelling, risking the coming Aman season. The farmers have already been struggling to cultivate their lands due to high costs of agricultural inputs, including diesel and fertilisers.
On 1 August, the government raised the price of urea fertiliser by Tk6 to Tk22 a kilogram for farmers in view of global price hike. Amid production fall at local fertiliser factories due to gas shortage and impacts of Russia-Ukraine war on fertiliser import, how can the urea price hike be justified? Will it impact our food security? The Business Standard talked to agricultural economists to delve into the issue.
'If farmers become demotivated and decrease cultivation, clouds of uncertainty will shroud our food security'
Dr Mohammed Asaduzzaman
Former Research Director,
Bangladesh Institute of Development Studies (BIDS)
The government officials are repeatedly assuring us that there will be no food shortage in the country amid concerns over the international political crises and the local extreme weather events. I am a bit sceptical about the assurance.
My forecast is that the production of Aman rice this year may fall following the recent drought and the approaching floods in the northern part. Moreover, irrigation for Boro may be affected because of the drought.
Amid the existing concerns, the government has raised the price of urea. If the farmers become demotivated and decrease crop cultivation, clouds of uncertainty will shroud our food security.
From the government's side, a suggestion came up for the citizens to consume rice flour instead of wheat flour. This is meaningless. People need conventional food within their purchasing capacity and the government is mandated to make the food supply smooth.
Because of the Russia-Ukraine war, import of urea became tougher. Local production of urea too has shrunk due to shortage of gas and power. At this time, the government has increased the urea price by 37% at distribution level, saying the price hike has been done on logical ground.
The logic, though, is not clear to me.
This is true that farmers often apply excess urea than the recommended dose and they are reluctant to adopt the use of balanced fertilisers. I wonder why the Department of Agricultural Extension fails to motivate the farmers for balanced fertiliser use even after working for all these years.
The government may have thought that the farmers will reduce the use of urea consciously if the price goes high amidst a shortage of this fertiliser in the market.
At this moment, I am doubtful if this will be the case. Because, a common perception suggests that the farmers, either will use less urea and non-urea fertilisers or shorten the coverage of crop cultivation.
A farmer who used fertilisers worth Tk3,000 in the previous season, will now have to pay Tk1,000 more.
If I calculate the new price per kilogram, the increase is negligible. The production cost per kilogram will not be high. But the farmers will consider the additional costs as a burden. They will panic. This is a psychological issue.
And if they become concerned and shorten the cultivation coverage, food production nationally will definitely be affected. Therefore, the price of all commodities will rise and poor people will suffer.
The country has witnessed a heat wave recently. Fortunately, there were no standing crops. But in some places, farmers have faced difficulties with preparing seedbeds due to less rainfall.
The urea price hike and heat wave are different things. But less rainfall and low recharge of groundwater would impact the next Boro cultivation since irrigation is mostly dependent on groundwater.
Boro is a cash intensive crop consuming the lion share of fertiliser and irrigation. Hence, urea price hike too may impact Boro harvest.
The concerned ministry has claimed that there is enough stock of fertiliser. But this is not the government stock. Distributors or dealers hoard the fertiliser. There is concern over unfair distribution of it.
A campaign on organic fertiliser has been going on here. But focusing only on organic fertiliser will not be wise and it will create a crisis that has worsened Sri Lankan agriculture. It should not be done in Bangladesh.
Within this month, it can be assessed how many lands the Aman farmers have brought under cultivation. If they plant Aman on less land, the government will need to stock adequate grains through quick import.
In that case, dependency on private traders will not work. The government, specifically the Trading Corporation of Bangladesh, needs to hold the responsibility of food import.
'I don't see any food crisis in Bangladesh in near future'
Professor Dr Hasneen Jahan
Head, Department of Agricultural Economics
Bangladesh Agricultural University
For several years, different programmes to address food and nutritional security have been going on in Bangladesh. But the consequences of the Russian-Ukraine war, while the global communities are still struggling to recover from the Covid impacts, have threatened global food security. Bangladesh is not spared from the crises.
On the bright side, food grain export has resumed from the war-torn Ukraine, which is considered a food basket. Bangladesh will benefit from the new development. Moreover, Bangladesh has imported a considerable amount of wheat from India. These are signs of hope and I don't see any food crisis in Bangladesh in near future.
But continuation of the food supply from external sources is still dependent on many related issues. Countries aiming for food security always prefer to be self-sufficient. When there is a crisis - though temporary I guess - in the import of cereals like wheat, Bangladesh should open avenues for food diversity. Here, government incentives are crucial for the farmers.
Logically, a profit motive drives the farmers to produce food. The government can assure the farmers of procurement of whatever crops they produce so that the producers don't incur loss if the market of diversified products is not created.
Farmers may witness crop damage because of flood, drought and other natural calamities. Farmers better understand that occurrences of extreme weather events are a regular issue. Now the concerned authorities should utilise the advanced weather forecasting systems, which I believe Bangladesh already has, to ring alarm earlier so that farmers can harvest their crops before any damage happens.
Meanwhile, social safety nets, especially for the extreme weather-affected farmers should be introduced. Because, security of the farmers is a prerequisite to ensure food security.
Some concerned sections have criticised the urea price increase. I think the concerned ministry has increased the urea price for some logical reasons including problems with import. My personal opinion is urea price hike will not hamper rice production.
In our studies on nutrient management in Bangladesh agriculture, we have found proof that our farmers overuse urea. Many of them don't know exactly the recommended dose.
Fertilisers including urea, TSP and other non-urea are recommended for crop cultivation but farmers use urea excessively because use of the fertiliser makes the leaves greener and plants grow faster. This is an eye soothing phenomena to the farmers.
The economic condition and professionalism of the farmers suggest that they can somehow afford the price.
We need to consider that urea is already heavily subsidised fertiliser. The government pays Tk59 as subsidy for each kg of urea. Such a high amount of subsidy is exceptional in the world.
Now, the government must ensure a sufficient supply of fertiliser even though there is a problem with fertiliser import from Russia. Other sources should be explored because dependency on a single country is not wise as the international political situation changes frequently.
Product availability is more important than price issue. I think if there is a smooth supply of urea in the market, farmers can afford this and a minimal price hike will not be a big deal.
Fertiliser dealers are the dominant actors in the distribution channel. If unscrupulous dealers try to cash in on this situation by hiking prices and hoarding fertiliser illegally, it will definitely affect the farmers and threaten the country's food security.
We have seen earlier that any crisis in fertiliser distribution turned into a national concern. Hence, the government, the concerned ministry and the local administration should strictly monitor this.