Risks loom in agriculture as gas price for fertilizer production increased

Bangladesh’s agricultural sector is facing a new wave of uncertainty. This sector is coming under pressure at a time when overall inflation has already made life miserable for the common man. Particularly, farmers and general consumers will be the most affected.

According to media reports, the price of gas used in fertilizer production has been increased by 83 percent to 16 to 29 taka 25 paisa per cubic meter.

However, the Ministry of Agriculture is assuring that the price of fertilizer at the farmer level will not increase.

It is doubtful how long this assurance will last in the face of pressure to reduce subsidies as per the conditions of the International Monetary Fund (IMF).

Agricultural economists say, about 20 percent of the total agricultural production cost is spent on fertilizer.

An increase in the price of fertilizer will directly increase the cost of production for farmers.

As a result, farmers may become discouraged and reduce fertilizer use, which will have a negative impact on overall agricultural production.

If the production costs of all types of agricultural products, especially rice, pulses, and vegetables, increase, the ultimate burden will fall on the consumer, which will further complicate the situation in this time of high inflation. Currently, about 80 percent of the fertilizer in the country is imported.

However, the decision to increase the price of gas used in fertilizer production will definitely increase the cost of 20 percent of the fertilizer produced locally.

Petrobangla said the purpose of increasing gas prices is to ensure supply to fertilizer factories by importing additional LNG.

But this decision is acting like a double-edged sword — on the one hand, there is an initiative to reopen fertilizer factories that have been closed due to a lack of gas and on the other, there is the risk of increasing cost pressure on farmers.

To maintain self-reliance in food production, farmers must be kept free from excessive pressure.

Even while complying with IMF conditions, it is crucial to strategically maintain subsidies to protect the agricultural sector.

The Ministry of Agriculture and the Ministry of Finance must work together to ensure that the burden of fertilizer price increase does not fall on the shoulders of farmers.

The question remains, should farmers bear the responsibility for the long-term weaknesses in energy planning and management? In this situation, the government should restructure the subsidy structure and keep fertilizer prices stable, encouraging productive farmers and reducing the dominance of middlemen.

Saving agriculture means protecting the country’s food security. Therefore, effective steps to control fertilizer prices are the need of the hour.