Agriculture's share in budget shrinks, tariff cuts offer limited benefit
In FY25, the agricultural allocation accounted for 5.94% of the original budget, which slightly increased to 5.99% in the revised budget
The proposed budget for FY26 has allocated Tk46,268 crore for agriculture, which is 5.86% of the total budget and Tk1,064 crore less than the original allocation in the previous fiscal year.
In FY25, the agricultural allocation accounted for 5.94% of the original budget, which slightly increased to 5.99% in the revised budget.
In the FY25 budget, a total of Tk47,332 crore was initially allocated for the sector comprising the ministries of agriculture, fisheries and livestock, environment, forest and climate change, land, and water resources. This was later revised down to Tk44,568 crore.
For the agriculture ministry, Tk27,224 crore has been allocated in the proposed budget, which is Tk2,528 crore more than the revised budget for FY25.
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In his budget proposal, Finance Adviser Dr Salehuddin Ahmed recommended reducing tariffs on agricultural machinery, fruit bags, and raw materials used in pesticides. However, stakeholders have expressed concern that these measures are unlikely to yield significant benefits for the agriculture sector.
Dr F H Ansarey, managing director and CEO of ACI Agribusinesses, told TBS that the proposed budget offers nothing new for the agriculture sector.
"There are already no duties on the import of parts used to manufacture combined harvesters or on key raw materials for pesticide production. Moreover, about 95% of fruit bags are now produced locally. So, the proposed duty cuts offer no real benefit," he said.
The proposed FY26 budget includes a recommendation to issue a new notification offering concessional import facilities for equipment required to set up cold storage facilities.
Additionally, to encourage local production of agricultural machinery, the budget proposes reducing existing tariffs on the import of parts used in manufacturing combined harvesters.
The proposal also includes reducing tariffs on the import of fruit bags, which are used to produce pest-free and blemish-free fruits. Furthermore, it recommends the complete withdrawal of all duties and taxes on the import of key raw materials used in pesticide production.
Engineer Sadid Jamil, managing director of Metal Group, told TBS, "Since the subsidy was discontinued, sales of agricultural machinery have dropped by nearly 30%. We had urged the government to reinstate the subsidy. It would have also helped if the VAT on agricultural machinery sales was removed."
Commenting on the overall situation, Dr Mohammad Jahangir Alam, professor at the Department of Agribusiness and Marketing, Bangladesh Agricultural University, said, "Given the changing circumstances and the government's emphasis on controlling inflation, the agriculture sector deserved greater attention."
Plans to boost agri-infrastructure, food security
In his budget speech, the finance adviser said the government is strengthening agricultural production by enhancing packaging, cold storage and cold chain infrastructure, improving agri-transportation systems.
He mentioned plans to develop a comprehensive supply chain database, establish specialised agri-processing zones, and upgrade port infrastructure to facilitate agricultural exports.
He also said the government is continuing its Open Market Sales (OMS) and Food-Friendly Programmes to ensure food security for low-income groups. Currently, OMS is being run through 1,901 centres nationwide, distributing 5kg of rice per month at Tk30 per kg to 1.22 crore families.
Additionally, he said the food storage capacity will be raised to 37 lakh tonnes in the next fiscal year, along with institutional improvements in grain management.
