Transition to new dealer policy disrupts fertiliser supply despite ample stocks

Highlights:

• Bangladesh has ample fertiliser stocks, but distribution disruptions persist
• New dealer policy disrupted supply during peak Aman demand
• Dealer uncertainty and vacancies reduced fertiliser collection from warehouse
• Farmers faced shortages, long queues and inflated prices
• Officials blame rumours, hoarding and deliberately reduced fertiliser lifting
• Government increased monitoring while appointing new dealers nationwide

Bangladesh has 51.83 lakh tonnes of fertiliser in government stocks against a projected demand of 35.20 lakh tonnes through February, leaving a surplus of around 16.63 lakh tonnes, according to the Ministry of Agriculture. Yet farmers in several districts are struggling to buy fertiliser, with some waiting in long queues or paying above government-fixed prices.

The Business Standard found that the disruption lies in the distribution chain after the government began implementing a new dealer policy during peak Aman demand. Existing dealer vacancies, uncertainty over the transition and rumours of dealership cancellations have reduced lifting from warehouses, disrupting last-mile supply to farmers.

The disruption has since led to farmer protests and allegations of overpricing and hoarding, despite adequate fertiliser stocks at the national level.

Infograph: TBS

The agriculture ministry gazetted the Comprehensive Policy on Fertiliser Dealer Appointment and Distribution 2026 on 27 August, seeking to reorganise a system the government says had suffered from discrimination and weaknesses in distribution.

Under the new arrangement, each union can have up to three dealer units. One additional dealer is to be appointed while existing eligible dealers remain, and one person cannot hold more than one dealership. Fresh appointments are also being made against vacant dealer points.

The government says the changes are intended to make fertiliser distribution more efficient, transparent and accessible to farmers.

An unbecoming time

Implementation of the new dealer appointment and distribution system began when Aman cultivation was already under way and fertiliser demand was high, with the Rabi season also approaching.

Officials said work on revising the dealer system began in June, but repeated changes pushed the appointment process into the peak demand period.

Mohammad Hamidur Rahman, former director general of the Department of Agricultural Extension (DAE), said the timing was inappropriate.

"Aman cultivation, the country's main rice crop, starts from the beginning of August. Farmers need a huge amount of fertiliser at this time. But the new dealer appointment process was started at this very time, which was not right. As a result, existing dealers have reduced fertiliser collection from warehouses. Some are not collecting fertiliser at all. This has created the crisis," he said.

The government should have started the dealer appointment process during the off-peak season after assessing the situation, he added.

Rumours over dealerships unsettle distribution

Sector insiders said the policy transition created uncertainty among dealers, while rumours spread that existing dealerships would be cancelled.

The policy itself retained eligible existing dealers, and the agriculture ministry had also issued instructions allowing existing chemical fertiliser retailers to continue operating.

But insiders said the uncertainty was enough to make some dealers reduce or stop lifting fertiliser from government warehouses.

Agriculture Secretary Md Salim Khan acknowledged that internal disputes over the new integrated policy had affected lifting by dealers of the Bangladesh Chemical Industries Corporation (BCIC) and Bangladesh Agricultural Development Corporation (BADC).

He also blamed rumours for creating panic among farmers.

"Effectively, there is no fertiliser shortage. A section of people are artificially creating various incidents. Many rumours have been spread at the district level about fertiliser. They have agitated farmers by spreading the claim that there is no fertiliser," he said.

An already weak dealer network

The policy transition came on top of another problem: thousands of dealer points were already vacant.

State Minister for Local Government Mir Shahe Alam told parliament on 9 September that around 3,759 dealer points had become vacant after dealers appointed under the previous government left their positions. The government plans around 4,918 new appointments as it seeks to fill gaps and expand the network.

The vacancies were not created by the new policy, but agriculturists say they left the distribution network more vulnerable when the government began changing the system during peak demand.

Dealers had sought a delay

The Bangladesh Fertilizer Association (BFA) also raised objections to the timing and implementation of the new policy.

After seeking clarification over provisions it described as unclear, unlawful and contradictory, the association asked the agriculture ministry in September to suspend the dealer appointment process for two months.

The request followed a High Court order asking the ministry to dispose of the BFA's objections within 60 days. The association argued that appointments should remain suspended during that period so the Aman season could be completed without further disruption.

BFA Chairman Md Mosharraf Hossain had separately instructed dealers in August to lift allocated fertiliser on time and sell it at government-fixed prices.

Reduced lifting hits local supply

Agriculture ministry officials said the disruption became more acute after dealers lifted only around half of their allocated fertiliser from government warehouses in July and August.

Officials said agriculture officers in 15 districts failed to report the reduced lifting to the ministry. After two consecutive months of low collection, shortages began appearing in local markets.

The ministry later concluded that some dealers had deliberately refrained from lifting allocations to create an artificial shortage, officials said.

Show-cause notices were subsequently issued to agriculture officials in the affected districts, while some faced withdrawal and stand-release orders.

Agriculture Secretary Md Salim Khan said some farmers were also trying to stock more fertiliser ahead of the Rabi season, adding further pressure on local supply.

Farmers feel the impact

The effect has become visible in districts including Rajshahi, where farmers have repeatedly visited dealer warehouses only to return without fertiliser.

Some supplies are also being sold outside the authorised dealer network at substantially higher prices. TSP, officially priced at Tk1,350 per sack, has reportedly been selling for around Tk2,000 in the open market.

More than 100 farmers from Baneshwar and surrounding areas blocked the Rajshahi-Natore highway for about an hour earlier this week, protesting what they described as an artificial shortage and demanding increased supplies.

Enough fertiliser nationally

Government figures, however, continue to show sufficient supply at the national level.

The government told parliament this week that projected demand for urea, TSP, DAP and MOP from October through February stands at 35.87 lakh tonnes, against 51.71 lakh tonnes of prepared supply – around 15.84 lakh tonnes above projected demand.

State Minister for Commerce Md Shariful Islam said the government was maintaining domestic production, imports and buffer stocks to keep supplies uninterrupted.

The figures reinforce the central problem identified by officials and sector insiders: fertiliser is available nationally, but disruptions in the dealer network are preventing it from consistently reaching farmers.

Govt steps up monitoring

The government has intensified enforcement as it tries to stabilise distribution.

Agriculture ministry officials said 230 mobile courts were conducted between 28 August and 10 September, with fines totalling Tk38,68,824. Authorities also recovered 1,700 sacks of fertiliser and sentenced four people to imprisonment.

Monitoring arrangements have been strengthened across all 64 districts, while the government is moving ahead with new dealer appointments.

The challenge now is to complete that transition without further disrupting a distribution system already under pressure during one of the busiest periods of the agricultural calendar.