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MIRZA AZIZ TURNS DOWN WB’S PLEA TO CUT FARM SUBSIDY – The farmers will not be able to use adequate inputs like fertiliser if the agricultural subsidy is withdrawn (Bangladesh)

Posted by Gilmour Poincaree on November 16, 2008

Sunday November 16 2008 11:34:06 AM BDT

Finance and planning adviser Mirza Azizul Islam has turned down a donor agency suggestion to cut Newly appointed Advisor for Ministry of Finance, Planning, Commerce and Posts and Telecommunications Dr. A B Mirza Azizul Islam was born in Sujanagar, Pabna on 23 February 1941. He studied BA (Hons.) and MA in Economics from Dhaka University. He studied M A in Development Economics at Williams College, Masachusetts, USA in 1975. He also obtained Ph.D in Economics from Boston University, USAagricultural subsidy saying “it would be risky in the prevailing global situation”.( The Financial Express)

“I am afraid that’s not a feasible option unless we have the land reforms done,” he said at a launching session of the two-day South Asia regional conference on managing food price inflation in a city hotel Saturday.

“The farmers will not be able to use adequate inputs like fertiliser if the agricultural subsidy is withdrawn. It will bring down the production. The country’s food security will be affected,” Dr. Aziz said in response to a suggestion made by World Bank (WB) in the conference.

WB South Asia Regional Director Sadiq Ahmed said a country like Bangladesh should address food security concerns by focusing on farm productivity rather than through subsidised inputs.

“The saved subsidy could be redirected to areas that support farm productivity including spending on rural infrastructure, farm technology, research and extension,” Mr. Ahmed said.

The World Bank and local research firm Power and Participation Research Centre (PPRC) jointly organised the conference.

Economists, policymakers, bureaucrats, agriculture experts, and political leaders from six South-Asian THE MEANING OF SUBSIDIES IN THE DEVELOPED COUNTRIEScountries, and representatives from donor agencies spoke at the function, with economist Professor Wahiduddin Mahmud in the chair.

Mirza Aziz said: “We can think on the issue of diverting subsidy fund to develop the rural infrastructure. But it could be a long-term programme. At this moment, we can not take the risk of withdrawing subsidy from agriculture.”

About the food inflation, the finance adviser said: “Agricultural credit growth during the last financial year has lifted the retention capacity of the farmers. It has been affecting the domestic food price despite bumper boro production.”

He, however, said the government will encourage the growth of the agricultural credit in future days.

The adviser said food stock in the country is satisfactory as it now stood at over 1.4 million tonnes compared to 0.4 million tonnes that this government inherited.

Senior economists Prof. Mahmud said: “Adequate food stock does not mean that the price will come down in the market. I think the prices of rice and wheat will not decline to the level that prevailed a AUSTRALIA AND THE EUROPEAN SUBSIDIESyear ago.”

“In the open market economy there are some complexities. Prices of food grain are not down despite adequate supply.”

“The market price depends on the purchase price of stock by the businessmen. I think the businessmen stock-piled at high prices. For this reason, the food price in local market is still high,” he said.

Prof Mahmud suggested raising the employment opportunities and wages of poor people for establishing balance between food inflation and entitlement to foods.

“Apart from food inflation, another risk of global recession has emerged recently. So, the government will have to take prudent steps for future food security,” he said.

Former education minister Osman Farruk said: “The donors always press the government to withdraw agricultural subsidy. But it is an effective measure to improve the productivity of foodgrain and income SUBSIDIES IN THE DEVELOPED COUNTRIES - GETTING PAID FOR NOT DOING ANYTHINGtransfer to the rural poor farmers.”

Former Agriculture Minister MK Anwar said: “If we want to keep the farmers in the field, we need to ensure agriculture as a profitable venture.”

Awami League leader Abdur Razzak laid emphasis on adequate supply of agricultural inputs to the farmers in time and at reasonable prices.

The Financial Express

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PUBLISHED BY ‘NEWS FROM BANGLADESH (NFB)’

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