Rice import duty doubled

The government, in order to protect the local farmers, has imposed double duty on rice import. The National Board of Revenue on Wednesday issued a Statutory Regulatory Order (SRO) increasing the duty to 55 percent from 28 percent. The NBR as per the SRO, upholding the existing 25 percent customs duty on rice import, increased the Regulatory Duty (RD) from 3 percent to 25 percent, and imposed 5 percent Advance Income Tax (AIT) on it.

In the declaration signed by NBR Chairman Mosharraf Hossain Bhuiyan it was said that in the first 10 months of the current fiscal some 3.3 lakh tons of rice was imported that led the local farmers selling their produced rice less than that of their production cost. This is because, following the Prime Minister's order, NBR has imposed additional duty on the import of rice to protect the local growers, the SRO reads.

The move, however, will not be much of a benefit to the farmers as there are already huge stocks of the staple to keep the rice prices stable. Experts believe that the government could have taken such decision much earlier, perhaps at the beginning of this Boro harvesting season, and the duty imposition now will not benefit the farmers immediately.

Khondaker Golam Moazzem, Research Director of Centre for Policy Dialogue, in connection with addition of extra tax, told Bangladesh Post that the extra duty imposition is overall favourable of local growers though it would not immediately benefit them as the country still has a huge stock of rice. "If the decision was taken at the eve of Boro harvesting season it would now favour the country's local rice producers," he said adding that such duty imposition would benefit the farmers in the next harvesting season.

He also said that the government with a special move now could increase its rice procurement under the public food distribution policy and could adopt a pro-food programme like distributing rice at lower prices to the marginal or vulnerable groups or people and thus the authority will be able to purchase more rice from local markets at a reasonable price.

"Apart from this, the government immediately could allow the rice merchants to export their stocks at a small range," he said adding that such move, however, could not bring more prosperous situation as the rice prices in international market is also at downward trend now. The government followed by the devastating floods in haor regions in May 2017, causing immense losses of harvests, withdrew the duties from rice imports.

The government then said the floods caused damage of rice of 10 lakh tons where in the last two years around 60 lakh tons of rice was imported in the country. The government later in November last year reinstated the 28 percent import duty again to lower the upward trend of rice import. However, the rice import, even after imposing duty did not decline, creating additional pressure on the local market, letting the local farmers on the verge.

According to government estimation, currently there are some 25-30 tons of rice remaining as stock in the country. Agriculture Minister Abdur Razzak few days ago told media that due to surplus stocks in rice its price is not on the upward trend. He also said that the government would take decision of exporting rice if any serious natural disaster does not occur in the near future.