Who will benefit from agriculture subsidy?

The government seems to be caught up with the idea of achieving magical growth in the agriculture sector by doubling subsidy to Tk 600 crore this fiscal year from Tk 300 crore last year.

The decision, of course, earned acclamation in some quarters and raised eyebrows in others, as the reason behind such a decision was open to question. Many think the decision was aimed at reaping political gain rather than doing any good for the farmers.

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Will the subsidy money really reach to the genuine farmers? Who are the beneficiaries of such subsidies? How will it help reduce poverty? Will the subsidy create new employment opportunities or cut jobs for agricultural labour?

According to the Bangladesh Bureau of Statistics the number of households in our country is about 14 million (I have no other option but to quote the BBS data despite having little faith). Of this, the number of non-farm households is about 4 million while farm households number 10 million.

The number of small households (0.05 acres to 2.49 acres) is about 7,066,000 occupying 6,573,000 acres of land. On the other hand, the medium (2.5 acres to 7.49 acres) and large-sized households (above 7.5 acres) number 2,997,000, and are holding 16,105,000 acres of land.

From the data, it is seen that more than 70 per cent of farm households occupy roughly 30 per cent of the farmland, while 30 per cent own roughly 70 per cent. In the small household group, the lowest quantity of land is only five decimals and the highest 2.49 acres, with an average of 90 decimals.

It is evident from the above statistics that land distribution in our country is very unequal. A small section of people hold most of the land and the larger section either does not have any land or owns only a meagre quantity.

According to the decision, the government will provide the subsidy in the form of price-cuts in fertilizer, pesticide, electricity, agri-machinery, etc.

Large farms will require a larger quantity of inputs and small farms a smaller quantity. That is, the households having large farms will receive more money from the government in the form of price-cut while purchasing inputs. On the other hand, small farm owners require fewer inputs and will thus receive less money as subsidy.

In fact, an owner of a large farm does not need any help from the government to produce crops because he is an affluent farmer having on average 5.5 acres of land. On the other hand, a marginal farmer having on average only 90 decimals of land really needs outside help to sustain. Most of the marginal farmers are sustenance cultivators. They do not have any capital to purchase agri-inputs during cropping season. They have to rush to the large households, many of whom are moneylenders in the rural area, for cash at high interest rates.

Now we see who is getting how much of the total Tk 600 crore. The medium and large farm holders, who comprise only less than 30 per cent of the total households, will get Tk 426 crore with an average Tk 1421 per household. The remaining more than 70 per cent of small farm households will receive Tk 174 crore at the rate of Tk 246 per household.

There are some 5,495,300 households who are agricultural labourers. The percentage of agricultural labour households to total households is about 40 per cent. These 40 per cent of people are totally deprived of the subsidy. The government is doing nothing for them.

How will the subsidy impact the agriculture sector? Will it increase productivity? Will it create any new jobs? Will there be any other chain of reactions?

Although, the subsidy money is very big in nature, the farmers will be encouraged to apply more chemical fertilizers and pesticides in their crop fields, which have already been diseased due to excessive application of these inputs. The price cut in fertilizer, which is also overpriced due to low-efficiency, widespread corruption, and mismanagement in our fertilizer factories, will only fuel the degradation process of our soil and ecology.

The subsidy money will also go to agriculture machinery i.e. agriculture appliances will be made cheaper. But widespread introduction of mechanised cultivation in our labour-intensive agriculture means more agricultural labour would be out of their jobs.

Our territory achieved independence twice in the 20th century, but there has been no land reform in our country. Land reform is a must for equitable development of a country. If we look at China, Japan, Korea, Thailand, Vietnam, and other Asian countries, we would find that there was massive land reform in these countries. Even some states of India like West Bengal and Kerala have undergone land reform under communist rule.

The genuine farmers are the holders of land in these countries. There was no such widespread inequality in the land ownership in these countries like ours.

On the other hand, moneyed people who have no relation to agriculture are the owners of agri land here. The urban elite and middle class are the descendants of the rural upper and middle class. Although they do not have any direct involvement in agriculture, they are the real beneficiaries.

The 2,979,000 households would be the most benefited section of the government subsidy. The government may provide assistance to them but how will the government help other households who actually need assistance for their sustenance? Has the government undertaken any steps for them?

Our planners, economists, and decision-makers forget one fact: that Bangladesh is totally different from other countries, even neighbouring ones. Bangladesh's society and economy are plagued with high degree of landlessness, large number of small and marginal sustenance farmers, high density of population, lack of industrialisation, and many other bottlenecks. You cannot replicate other's ideas or plans in our condition. You may have a good idea of making our agriculture commercially viable, but nothing can be achieved depriving the marginal and small farmers who are the backbone of our agriculture.

Have you ever seen how a rural small or marginal farmer cares for his single piece of land? He sees it like his child. Unfortunately, they do not have enough land for their own. Although they do not get enough crops from their small holding, they have no option but to stick to the production process. The other groups -- medium and large farm households -- have alternatives like trade and businesses and government and non-government jobs for their livelihood.

It was seen from the above analysis that the lion's share (Tk 426 crore) of the subsidy money will go to the pockets of a small section of people, who are basically affluent. But by earmarking the huge amount for subsidy, the government has managed to suggest to the general population that it is doing a great job for the farmers and toiling masses.

It is the privileged section of society that always gets the upper hand in deriving government benefits.

Nazrul Islam, a graduate of Bangladesh Agricultural University, is a journalist and environmentalist.