Balancing act: Farm subsidies freeze as agricultural development ramps up
According to budget documents, Tk20,935 crore has been proposed for the Ministry's operational expenditure while Tk7,946 crore for development expenditure in the next fiscal year.
The proposed budget for fiscal year 2026-27 has set aside Tk17,000 crore as incentives or subsidies for fertilisers and other agricultural activities, the same amount allocated in both the original and revised budgets of the current FY2025-26.
However, the proposed budget puts forward a significant increase in the Ministry of Agriculture's total development expenditure.
According to budget documents, Tk20,935 crore has been proposed for the Ministry's operational expenditure while Tk7,946 crore for development expenditure in the next fiscal year.
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In the current FY2025-26, the Ministry's operational budget stood at Tk20,891 crore and the development budget at Tk6,333 crore. However, in the revised budget, development expenditure fell to Tk4,044 crore while operational expenditure was slightly reduced to Tk20,781 crore.
The proposed budget keeps Tk17,000 crore earmarked for fertiliser and other agricultural incentives, retaining it as the Ministry's single largest operational expenditure item, a figure consistent with both the original and revised budgets of the current fiscal year.
Consequently, approximately 81% of the Ministry of Agriculture's total operational budget will be spent on agricultural subsidies and incentive programs.
The decision came amid continuing volatility over international fertiliser prices, import costs, and agricultural production expenses. The government has stressed maintaining the subsidy program to sustain farm output, ensure food security, and keep production costs manageable for the farmers.
Meanwhile, the Ministry's development allocation for the next fiscal year has been proposed at Tk7,946 crore, which is about 25% higher than the current year's original budget and nearly double the revised development allocation. This reflects the government's priority on implementing projects related to agricultural infrastructure, research, irrigation, mechanisation, and productivity improvement.
Analysts see the dual approach, holding subsidies steady while scaling up development expenditure as an attempt to balance short-term production support with long-term agricultural capacity building."
