Costly fertilisers, diesel threaten Bangladesh farmers’ hope of reaping profits

Transport and labour costs have increased as well

A slow chilly wind is marking the late autumn with farmers harvesting the paddy that looks golden. With the dew drops resting on the grass blades, nature is indicating to the farmers in Bangladesh that it is the time to sow seeds of Rabi crops for the farming season that runs from October to March-April. 

In the northern part of Bangladesh, farmers began to sow the seeds of different types of pulses, oil seeds, spices and vegetables besides the grains like wheat and corn. 

But the skyrocketing prices of fertilisers and diesel have become a big headache for the farmers to make a profit. 

The production target of crops like wheat, corn, sweet potato, peanut, flaxseed, sesame, sunflower, black pea, moong, matar, garlic, chilli and black cumin in the fiscal year 2021-22 was never met, according to the Department of Agricultural Extension. 

To prepare the fields in the dry season, they need irrigation and also more fertilisers, said the farmers. Mostly, they depend on shallow well water pumps to keep the irrigation uninterrupted. The groundwater or water from the nearby river, lake or any waterbody is drawn by these pumps. In some places, electricity is used to run the pumps, but due to a power shortage, farmers these days depend on diesel-run pumps. 

On Aug 6, the government increased the diesel prices by Tk 34 to Tk 114 per litre. Later on Aug 29, they announced dropping the price by Tk 5 per litre for all types of fuel and the price stood at Tk 109 per litre.  

At the same time, the government increased the price of urea fertiliser by Tk 6 per kg in August in a bid to reduce subsidies for the sector. The Ministry of Agriculture had said that the farmers would need to pay Tk 22 for 1 kg of urea fertiliser, up from Tk 16. The dealers were able to buy the fertiliser at Tk 20 per kg, which they bought earlier at Tk 14. 

The price hikes pushed up the production cost, said the farmers. Transportation and labour costs have increased as well, they said. 

Therefore, the country may not reach the target of producing the seasonal crops, believes 

Professor Selim Rahman, executive director of the South Asian Network on Economic Modelling or SANEM, thinks the rise in production cost will discourage farming, and make it difficult for the country to achieve the target in the Rabi season. 

“We’ll face a challenge due to fertiliser and diesel price rises during the upcoming food crisis,” he said. 

Md Benojir Alam, director general of the Department of Agricultural Extension was hopeful that the target would be reached. “The government has provided enough subsidies for the farmers, so it won’t be an issue to meet the target,” he said. 

DOUBLE COST FOR CULTIVATION AND IRRIGATION 

Farmer Md Sajedur Rahman in Natore's Boraigram village has cultivated paddy on over 4 hectares of land. He is frustrated for not getting as much price of his produce as needed to cover the production cost. Despite the fear of loss again, he will invest again in farming in the Rabi season and cultivate wheat, lentil, corn, garlic and onion. 

"It's not economically feasible. It needs irrigation to cultivate wheat, even if the price of diesel goes up.” 

Sajedur said the farmers are destined to be stressed and tense. "We can't calculate the profit

or loss. We have farming land and this is what we have to do. There's no alternative."   

Another farmer in the same village, Selim Hossain, said his family have been farming for generations. He lamented the low profit or sometimes losses from farming, which has become "quite expensive". The cost has doubled in a few years, he said, adding he could just make both ends meet. 

Selim, however, decided to cultivate the seasonal crops this year and he already sowed the mustard seeds. 

"Higher farmlands need more irrigation and the increased price of diesel has become a distress for us. Earlier, we spent Tk 600 for irrigating 1 Bigha [0.13 hectares] of land. Now the cost is Tk 1,000. Labour costs have gone up as well. Now we're paying Tk 400 in daily wage, which will be Tk 600 soon," he said. 

Zahirul Islam, a farmer from Porar Char shoal in Kurigram, cultivated mustard and corn. Shoals are naturally wet and therefore, he did not have to take much trouble for irrigation. But Zahirul has to bring in or out anything and everything to and from Jatrapur union in Kurigram in trawlers. His transportation cost for five power tillers, fertilisers and seeds have gone up with the diesel price hike. 

Earlier they spent Tk 300 to irrigate 1 Bigha of land which now costs Tk 500, he said. It would be a big loss if his products were sold for the same price as the last year, the farmer said. "We’re really frustrated. Any government initiative could have boosted our morale," he said.  

As he cannot earn enough by only cultivating crops, Zahirul rears cattle. "Maybe that's how I am surviving the price hike."   

Wahidul Islam, a farmer in Cumilla, said he would cultivate mustard, chilli and potato instead of paddy this year.  

“I'll definitely need fertiliser if I am cultivating crops. This year it costs Tk Tk 7,000 to Tk 8,000 to produce chilli in 10 decimals of land on the shoal. Earlier it took only Tk 4,000. The cost has doubled," he said. 

Like other farmers, Wahidul said he does not expect profit for sure. "Only Allah knows if we can make a profit. We haven't received any support from the government yet, although they had promised." 

ALLEGED FERTILISER SYNDICATE 

Although the government fixed the fertiliser price, farmers complained they were not able to buy it from the dealers at that price. They blamed the dealers for creating a false crisis in the supply chain. 

The farmers require a good amount of urea fertiliser to produce the seasonal crops, said farmer Selim Hossain of Boraigram village. "The fertiliser market is under total control of a syndicate of dealers. They deny having any stock to raise the price.” 

"We can't even haggle to buy fertiliser as it's a must for us. Whatever price they ask, we have to pay," said farmer Akram Ali of Sherpur.  

Amir Hossain, a farmer in Gaibandha's Saghata, received a government award for agriculture. He too expressed his frustration over the fertiliser price. “Farmers are in deep trouble. Neither can they express the disappointment, nor can they endure it. The fertiliser market and seed market, all are running very badly. We have to pay whatever the dealer asks for. The farmers are becoming penniless,” he said. 

“We buy fertilisers for Tk 25 and Tk 28 which cost Tk 20 and Tk 22 earlier. When you go to the market, you’ll find everything becomes pricier. Only our product has no value.” 

The dealers denied the allegations. They have been selling fertiliser at the price fixed by the government, said Sushanta Pal, a dealer in Saghata. 

Traders used to sell fertiliser at a little higher price, citing the damage caused during transportation and a rise in operational cost, said Mohammad Shah Alam, an additional director of the Department of Agricultural Extension in Rangpur. 

HOW TO ADDRESS THE LOSS? 

To address the financial loss, the government must focus on providing subsidies for agricultural products that have an increased price, believes Prof Selim of SANEM. “The farmers are already getting fertiliser at a subsidised price. But the price has increased. They are facing trouble due to the increasing price of diesel. I recommend subsidies on diesel for the farmers.” 

The economist suggested that the farmers can be provided with a card enabling them to buy diesel at a lower price. The cards can be given to the deserving farmers after scrutiny, he said. “This will bring down the production cost.” 

Prof Hasneen Jahan, head of the Department of Agricultural Economics at Bangladesh Agricultural University, suggested farmers become more strategic when the economic crisis is prevailing in the country. “Actually our farmers use urea fertiliser more than needed in the farming lands. As the prices of urea and other agricultural products have gone up, they should use as much as needed. It’ll help them to save,” she said. 

She encouraged the idea of providing subsidies for diesel. “It would be great if the government can provide subsidies on the diesel used for agricultural purposes. But I would suggest the farmers stop using groundwater all the time and use surface water instead. This will reduce their dependence on diesel and decrease the production cost,” she said. 

GOVERNMENT HOPEFUL 

The increased prices of diesel and fertilisers would not have an impact on the harvest of the current Rabi season, believes Shah Alam, the additional director of the Department of Agricultural Extension in Rangpur. 

“Price hike of diesel and fertiliser will have no impact on the farmers as we are having bumper production. The market is full of winter vegetables. Also, we’re expecting a good harvest of mustard and wheat. Good harvest coupled with a good price will ensure that farmers face no problem,” he said. 

The farmers are experiencing a slight increase in the production cost as the prices of diesel and fertilisers went up in the Rabi season, said Director General Benojir. 

“But the farmers won’t face any problems. The increase in fertiliser prices is very nominal compared to the subsidies and incentives provided by the government. We, however, have no control over the diesel price,” he said.  

“Last year the government provided Tk 280 billion in subsidies to the fertiliser sector and this year the figure will be Tk 400 billion.” 

Although some crop production did not reach the target last year, this Rabi season will yield more harvest than the target, he hopes. “We’ve seen the farmers are in a good state in the fields. Harvest of Aman paddy was great. We’ll be having more production than the target in the Rabi season.” 

[Writing in English by Sabrina Karim Murshed]