CPD recommends compensation for farmers

The Center for Policy Dialogue (CPD) Tuesday suggested the government give Taka 5,000 in compensation to each of the farmers who did not get the desired price of their paddy this season. It said this amount of compensation could easily be provided for the farmers through the bank accounts of some 1.80 crore agri-input assistance card holders for which the government would have to bear an expense of Taka 9,100 crore, reports BSS.

The CPD made the recommendations at a press conference today at the CIRDAP Auditorium in the city where it presented an economic review on the outgoing fiscal year (FY19) and shed light on the upcoming budget for (FY20). Speaking on the occasion, Distinguished Fellow of CPD Dr Debapriya Bhattacharya said some export sectors are now demanding that the government provide 5 percent cash incentives.

“If the government agrees to do so, it will have to bear Taka 15,000 crore as additional expenses. As a result, the overall subsidy to the export sector would reach around Taka 20,000 crore,” he added. The noted economist said the affected farmers could surely demand a financial subsidy, adding, “I don’t see any problem towards providing Taka 9,000 crore for the farmers which will be a rationale and just gesture in the economy.”

Senior Research fellow of CPD Dr Toufiqul Islam Khan highlighted the economic review of the CPD through a power-point presentation.
He said the production cost of farmers during the boro season has increased a lot, but on the contrary, the price has decreased. “There has also been wage hike in the agriculture sector for which there is a need for mechanization in this sector. Side by side, there is a need to reduce the production cost to enhance the productivity,” added Toufiqul.

Referring to the recent subsidy provided for the Bangladesh Jute Mills Corporation (BJMC), Dr Debapriya said the subsidy that the government gives to different State Owned Enterprises including BJMC and the banking sector is higher than the subsidy for the farmers.
He also suggested discontinuing the operations of the mills of the BJMC through providing continued government subsidies and advocated undertaking large-scale reform programmes to reduce the default loans and thus making the banking sector more disciplined.

“As part of the reform initiatives, the issue of formation of the banking commission and the interest rate should be kept on the market management,” he said. Recommending depreciation of Taka against dollar, the CPD distinguished fellow said that the government is now trying to keep Taka stable through selling dollars. “There is no rationality for keeping Taka at a stable level. There is a need to depreciate the value of Taka to keep up the competitive edge which is also very important for the macro economy,”

Citing that shortfall in revenue collection is a big weakness of the macro economy, the CPD has suggested undertaking a specific working strategy to mobilize more revenue. Besides, they also placed a set of recommendations that include checking misuse in public expenditure, adjusting the interest rates of the savings certificates and raising allocations in the social sector. CPD Research Director Khandker Golam Moazzem and Dialogue Director Anisatul Fatema Yousuf were present among others.