Mon 3 Dec 2007
Those who have been following the news carefully over the last two months may have noticed that there have been several instances of farmers clashing with Upazila Nirbahi Officers (UNOs) and other government officers “over fertilizer”. This has not attracted much attention yet among the Dhaka chatterati. The problem is of a local nature at the moment, with some sporadic incidents in Northern Bangladesh mostly. As a result, it has gone severely under-reported and badly reported in the Dhaka-centric media so far, with the New Age being the honourable exception (links below).
The big confusion that still persists is if the new system still needs more paperwork (thus involving more ‘transaction costs’) than the previous system. Given the same monetary price as in previous years (Tk. 4,800/MT), this added transaction cost has effectively increased the cost to farmers. So has the lack of information given to them about the new system, as is documented below.
From what I have gathered - and I emphasize any corrections to facts will be highly appreciated - it all started with the current CTG deciding to correct the previous system of distribution. One newspaper reported on it, that too without the date and on their back page. Only a glance at the other news items that accompanied it on the back page allows us to date it: 18th July:
The caretaker government is going for introducing fertiliser distribution through buffer-godown system across the country by appointing qualified dealers one each for all unions for smooth and timely delivery of the essential farming input to farmers
The report also mentions the “farmer’s card”:
Distribution of fertiliser through buffer-godown system (with godown in each district) is for timely availability and easy approach of farmers through proper utilisation of the farmers’ card system
True to the state of the media, it does not tell us what the farmers’ card system is.
Fast forward a few months, a few national crises and a few clashes over fertilizer. The earliest report of clashes was on October 17th, right after Eid.
That clash prompted this most readable op-ed by AMM Shawkat, a former Agriculture secretary, considering the current distribution system in view of Bangladesh’s historical experiences with different systems. It says that dealers have been appointed at every union, and these dealers have in turn appointed sub-dealers, causing confusion among the farmers who are frustrated with their unfamiliarity with the new system. (I highly recommend the rest of the article for its attempt to take a macro-look at the history of fertiliser distribution programs in Bangladesh, even though I do not agree with all its conclusions.)
In the meantime, ten days before the first reported clashes, CPD and BRAC carried this report of their findings in “seven flood-affected districts including Tangail, Sirajganj, Dhunot (Bogra), Gaibandha, Rangpur, Kurigram, and Lalmonirhat” (source: Daily Star). Page 6 of CPD-BRAC the report tells us:
Farmers do not like the present system of fertilizer distribution through fertilizer card that needs certification from representative of local government and local level extension officials. It is not an efficient system on the ground of time loss and delay in fertilizer procurement.
On November 15th, the government decided to stop the farmers’ card system in view of the floods:
The government suspended involvement of around 25,000 small traders in fertiliser distribution from March this year to introduce ‘farmers card system’. But later the initiative for card system was suspended until April next year due to recurring floods this year.
Which seemed the right thing to do.
YET:
November 24th, New Age:
The government suspended sub-dealership and made the collection of slips from deputy assistant agriculture officers mandatory to buy fixed amounts of fertiliser from the limited number of dealers, which has made the process more difficult than before.
These steps have been taken to streamline distribution and check smuggling, but the farmers have to vault so many hurdles to get fertiliser that they need far more time than before. That is why many of them, in spite of sufficient stock as claimed by the government, have not been able to lay their hands on the much-needed fertiliser.
November 30th, Amader Shomoy also mentions the “slip system”.
So a question obviously arises: what use was the abandoning of the “farmers’ cards” idea if the farmers still needed extra paperwork in the form of “slips”? In the end, it comes out to the same thing. Extra paperwork, new system catching them off-guard. These are the small details that the government, the media and we should be looking for since the unanimous consensus is that distribution is the problem. The sooner we do it the better, because the peak season of robi is approaching. If adequate supply of fertiliser does not reach the farmers by then, things could get much uglier.
Meanwhile, Naya Diganta carried a report on shortages that were apparently not due to the paperwork involved, but due to a phyical shortage of fertiliser. These were in Rongpur and Potuakhali, and also resulted in farmer’s blockading roads and confining government officials. I could point out that a private provider could distribute fertiliser more efficiently and on time (though at a price) than the government but lets save that long-term issue for another post.
Further Reading:
December 4th, 2007 at 10:49 am
This is a critical issue, and as I’ve mentioned elsewhere, it is absolutely vital that the government do everything in its power to provide enough fertilizer to the farmers - up to and INCLUDING subsidies to maintain affordable prices. The free market can go to hell on this one. Look how Malawi turned its fortunes around by telling the World Bank and the US to take a hike. Learn something, BD government!
Malawi beats famine by kicking aside the market
http://www.nytimes.com/2007/12/02/world/africa/02malawi.html
December 4th, 2007 at 10:59 am
Zub,
that’s a great piece in NYT. Excertps here:
In a withering evaluation of the World Bank’s record on African agriculture, the bank’s own internal watchdog concluded in October not only that the removal of subsidies had led to exorbitant fertilizer prices in African countries, but that the bank itself had often failed to recognize that improving Africa’s declining soil quality was essential to lifting food production.
“The donors took away the role of the government and the disasters mounted,” said Jeffrey Sachs, a Columbia University economist who lobbied Britain and the World Bank on behalf of Malawi’s fertilizer program and who has championed the idea that wealthy countries should invest in fertilizer and seed for Africa’s farmers.
There should be more write ups on this in mainstream news and op-eds.
December 6th, 2007 at 12:39 am
Zubaer bhai,
Thank you for the link to the NYT article. I came across it on Addafication. You will find a discussion on the issues involved in subsidies by following these links:
Link 1
Link 2
Link 3
The fact of the matter is that fertilizer is already highly subsidised. This leads to arbitrage, aka smuggling, between Bangladesh and its immediate neighbours. The price of urea fertiliser is 9.5 tk/kg in India I believe, whereas in Bangladesh it is 6 tk/kg (figures quoted on CPD report pg. 6). So obviously there is an incentive to buy cheap in Bangladesh and sell dear in India.
To combat this tendency, the government has decided to introduce the farmer’s card system. Not having any good media reports on what that is, I stress that the following is my educated guess: the system allows farmers to obtain a card by showing the deed for their land registration, thus showing the authorities that they intend to USE the fertilizer rather than sell it off illegally. I leave the amount of red-tape and possibility for corruption of this system to your imagination.
Following the floods, the government declared that it has abandoned the idea to implement this system, since obviously such a new system was causing farmer’s a lot of trouble. However, it seems from media reports that farmers still need to collect a “slip” from officers, which is causing all the grief. That is the essence of my post.
The government’s current problem stems not from trying to follow the “donor” recommendations, especially those of the WB and IMF. Rather they stem from trying to combat the human urge to make a profit where arbitrage is possible. Though tremendously short-sighted as a whole, I found one recommendation from CPD-BRAC report linked above to be workable: raise the price to 9tk/kg. Arbitrage becomes less attractive and farmers don’t mind paying the extra according to their opinion polls. Short-term measure I’m afraid.