Urea fertiliser price hiked 37%

The government has hiked the price of urea fertiliser by Tk 6 per kg to Tk 22 for the farmers to prune the whopping farm subsidy.

The Ministry of Agriculture declared the price raise in a statement issued on Monday. The ministry also said that this new price of this vital farm input will be effective from Monday, said the statement.

However, the maximum retail price of urea fertiliser at the dealers’ level is Tk 20, up from Tk 14.

The government wants to keep the use of urea fertiliser at a rational level and at the same time wishes to respond to the unusual hike in the price of fertiliser in the international market for the ongoing global situation, the statement said.

Secretary to the agriculture ministry Md Sydul Islam told Business Insider Bangladesh that the government has decided to increase fertiliser prices for pragmatic use of manures by the country’s farmers.

Most of the farmers believe the more they use urea fertiliser, the better the harvest will be.

“We hope that the local farmers will use DAP instead of urea fertiliser.”

Although the use of DAP doubled to 16 lakh tonnes in several years, farmers kept on using urea fertiliser excessively. Currently, the annual use of urea fertiliser stands at 25 lakh tonnes.

This fiscal year, the farm subsidy has been projected at Tk 16,000 crore, he said.

The government still has to pay Tk 59 as subsidy on per kilogram of the chemical manure as this fertiliser is selling in the international market at Tk 81 right now.

In the 2005-06 fiscal year, the fertiliser subsidy was only Tk 15 for a kilogram, reads the statement.

The current government, under the leadership of Prime Minister Sheikh Hasina, has reduced fertiliser prices four times since 2009, it said.

The government is also encouraging the farmers to use DAP fertiliser as this manure has elements of urea fertiliser, too. The government has cut the price of this fertiliser from Tk 90 and distributed it among the farmers at Tk 16.

Consequently, the use of DAP fertiliser doubled in the past couple of years.

However, the reality is the use of urea fertiliser did not decline. Now, the country needs 26.50 lakh tonnes of urea fertiliser, up 1.5 tonnes in 2019.

Meanwhile, the prices of chemical fertilisers in the international markets increased around 4 times, pushing the government to make upward adjustment in subsidy endowments.

In 2020-21 FY, the government paid Tk 7,717 crore in farm subsidies that sprang nearly four times to Tk 28,000 crore in 2021-22 FY.