Fuel price hike: a threat to agriculture?
THE government is again planning to raise the price of fuel oils while also working to cut subsidy on fertilisers, according to the finance minister. We are in such a position that even the amount of subsidy on commodities, as well as the prices of those commodities, needs to be fixed or guided by the International Monetary Fund. The government did not need more than ten days for signalling this price hike after the perusal by the International Monetary Fund which has set this condition for disbursement of loan under its extended credit facility.
As recently as last September, the government of India decided to increase the price of diesel by 12 per cent but, upon being confronted by the opposition and common people who blocked roads and expressed their anger, the government of Manmohan Singh withdrew the decision. But in Bangladesh, nothing like this happens when the government is taking a decision which will affect the whole population.
Imposing government decisions on the people seems to be very easy in this country, especially when it does not directly harm the opposition. So, when the opposition does not have anything concrete to do for the issues concerning the mass people, it is mandatory that the people protest against it. But we do not do so, as we have some more crucial issues to look into. And when the attention of the common people is drawn into a particular issue or issues, the government gets the scope for taking decisions. And often, it seems that the government uses the people’s distraction to make decisions and get tasks done before the common people become conscious of the situation.
At the same time, the country has such a rapidly increasing rate of accidents that it has become difficult for the people to track and concentrate on those. When hundreds of people die, as though as a regular scene, at garment factories and when the government fails to come up with some stringent law that ensures the security and benefit of the workers, while the media and anti-corruption commission are busy with the Padma bridge scandals of ministers, while the opposition is demonstrating for their demand of election under a non-political government, and the law enforcing agencies are struggling to handle the Shibir demonstrators, the common people rarely get a scope to look into matters where the interest of the nation’s impoverished population, especially the farmers, are manipulated in such a manner.
I have tried to suggest several times that increasing price of sensitive commodities, especially such as electricity and fuel, has multi-faced effects in the economy. Apart from this, the continuous increase has some severe implications in the social life of the people. An example of this is seen in our our people’s audacity to move to Malaysia by boat only for economic solvency. It was not that these youths were extremely poor and had risked their lives for survival. Rather, some social factors motivated them to move to Malaysia using such a dangerous mode. Even just one and half decade ago, many people from northern Bangladesh dared not come to Dhaka crossing the Jamuna mainly due to their homesickness — a typical Bengali feeling. And now those Bengalis are voluntarily sailing to Malaysia!
However, our food policy mainly considers two groups of people among the others in the cycle. One group is the farmers and agri-labours while the other group includes the poor urban consumers of agricultural commodities. Helping both of these groups for their sustenance is one of the core agenda of food policies of a country. Now, before justifying this price hike, let us have a look at how we are failing to address the wellbeing of these two groups.
In the last few years, we have seen a very satisfactory growth trend in agricultural production but on the other hand, this did not put a smile on our farmers as they did not receive proper price for rice even when they had a huge input expenditure for the production. Similarly, the urban poor have suffered with the continuous price hike of rice and other food items in the urban areas. Even our recent observation shows that these contradictory picture-poor farmers in the villages are not receiving proper price for the vegetables whereas in the urban markets, these are becoming beyond affordability even for the middle income people. Some newspapers and television reports showed that this difference is created due to the huge transport cost and the money charging involved on the route, by different groups, especially those affiliated with the ruling party.
So, the poor farmers are receiving a low price and, on the other hand, the urban population is struggling to meet the food demand, while, in the middle, some people are illegally making money — which is absolutely unacceptable. Instead of addressing this issue, our government is again being obliged to increase fuel price and cut subsidy on fertiliser. Even a one taka increase in fuel price shakes the entire economic cycle tremendously as it increases transport cost which in turn pushes the food price. And again, on the other side, increase in input cost will lead to a demand for higher prices for food grains that the farmers are not habituated to receiving these days. Now, where will our farmers and millions of agri-labours go? Even if they are given proper incentives and thus abstain from agri-production, what fate will the country succumb to?
The Sub-Saharan Africa witnessed a severe output from this type of suicidal decision. As the subsidy programmes were dismantled and input markets liberalised as a part of the structural adjustment process in the 1980’s and 1990’s, input use and agricultural productivity declined (Crawford et al, 2006). So, economic adjustment does not necessarily require us to always increase fuel price since it not only has an economic value, but some social value as well.
Whenever our policy makers talk about fuel price, they compare it with the international market but they forget the purchasing ability or per capita income of the countrymen. Our government needs to be more conscious and cautious about spending public money, keeping in consideration the net benefit of the country. First, we need to rein our unnecessary costs and then we can opt for cutting subsidy. I firmly believe that cost minimisation in a more transparent way, preventing corruption, promoting an accountable environment for public expenditure, would lessen the pressure on our economy and thus, we would not need to cut subsidy to harm the farmers and the poor people.
content aggregation:healthPrior21
source:newage
http://newagebd.com/detail.php?date=2012-12-10&nid=32857#.UMV2SqyCrIU

