Amid protest over low price, govt ups rice import duty to 55 per cent
Published : Thursday, 23 May, 2019 at 12:00 AM Count : 906
Amidst farmers protest across the country and huge criticism of lower price of paddy due to bumper production in the country and rice import from abroad, the government has decided to increase the duty of rice import to discourage the country's importers.
The National Board of Revenue (NBR) on Wednesday issued an SRO increasing the duty on the import of rice to discourage it for protecting the interest of local farmers.
After the increase, the actual rate of regulatory duty on rice import will be increased at 25 per cent from existing 3 per cent, keeping 25 per cent import tariff unchanged.
In addition, it also imposed 5 per cent advanced income tax on all products, the actual import duty of rice will stand at around 55 per cent from now onwards. The decision of the government will be effective immediately after issuance of the SRO.
The NBR SRO, issued by its chairman Mosharraf Hossain Bhuiyan, said, "Now, the importers have to count a total of 55 per cent tax and duty for rice import, and it will be effective from Wednesday."
NBR has taken the decision against the backdrop of resentment among the farmers over the low price of rice compared to their production cost.
The NBR chairman said, "To protect the interest of country's farmers and minimise their financial loss, we have taken the decision of increasing import duty on rice following the Prime Minister's directives."
In the first 10 months of this fiscal year of 2018-19, Bangladesh imported 330,000 metric tons of rice despite bumper production of paddy in the country. As an outcome, the local farmers are being forced to sell rice at a price lower than the production cost, added the chairman.
According to Food Ministry sources, although the farmers have grown bumper paddy in last Aman season and this Boro, a section of rice importers were importing rice in the country taking the advantages of lower duty in rice import.
Although it's mandatory to take prior permission for exporting rice from the country as it's a sensitive product, there is no bar to import rice from abroad. An importer, who have government permit to import products, can import rice to the country by paying necessary duties.
Taking the advantage, the importers have imported around 44,000 tonnes of rice from different countries in last two months. As a result, the price of local Boro paddy was declining in the country regularly. The situation was getting worst for the farmers. The farmer's resentment was mounting across the country. Some of the farmers have burnt their paddy in the field.
Considering the losses of the farmers, the government has taken decision to buy around 1,50,000 tonnes of paddy directly from the farmers. A total of 11 lakh metric tons of boiled and Atap rice will also be bought from local production, despite having inadequate spaces in the government godowns to ensure incentives for the farmer.
Although the procurement has already been started and the directorate general of food (DG Food) officials are buying paddy from the farmers, the price of paddy was not increasing in the country due to the uncontrolled import.
In this situation, the government was planning to export surplus rice to ensure fair price to farmers along with controlling rice import. With the government decision, the importers of the country would now stop importing rice. It may help the government to increase paddy price in the country, the experts claimed.
While talking to this correspondent, Agriculture Minister Dr Abdur Razzaque told high-ups of the government were trying to find out ways to protect farmers' interest. The government is sincere to protect the interest of the farmers. To ensure it, the government is planning export surplus rice from the country.
Terming the situation as critical as farmers are registering massive losses, he said that they are not getting fair prices in the local markets while harvesting of Boro paddy had begun across the country. Almost 70 per cent of Boro paddy has already been harvested. If the government could not ensure price of Boro paddy, they will lose interest to grow paddy in future.
According to the Food Ministry, despite having shortage of spaces, they have started procurement of rice across the country.
"If possible, we would buy additional rice from the farmers. But, the stock position of government silos are now about 15 lakh tonnes of food grain against its capacity of 21 lakh tonnes," Food Minister Sadhan Chandra Majumder told this correspondent.
He also informed that they have planned to procure 12.50 lakh tonnes of Boro rice this season. The government has decided to establish 200 paddy silos across the country on the occasion of the birth centenary of Bangabandhu Sheikh Mujibur Rahman, which would help farmers to get fair prices.
A rice trader of Mirpur Chitta Ranjan blamed the mills owners for the low paddy prices.
He alleged that most of the mill owners are either reluctant to procure paddy or involved in procuring paddy at low prices to increase their stocks. The price of rice should be Tk 1,000 per sack (50 kg) now if paddy is being sold for Tk 450 to Tk 500 per maund.
Centre for Policy Dialogue (CPD) distinguished fellow Mustafizur Rahman told this correspondent the government has to take some policy to ensure fair price for the farmers' crops.
Regarding immediate remedy of the situation, he said that the government should buy paddy from the farmers directly instead of millers. Besides, the government should further increase the import duty on rice to discourage the import of rice. The import duty on rice was now 28 per cent, he said, adding that this rate should be hiked to safeguard the interest of farmers.
At least 20 lakh tonnes of rice have been imported through private channels so far, said sources in the Directorate of Food.