The National Board of Revenue yesterday nearly doubled the import duty on rice to discourage importers, as tens of thousands of farmers are incurring losses with paddy prices plummeting in the year’s biggest season, Boro.
Importers from now on would have to pay 55 percent duty and tax to bring in the cereal. It was 28 percent earlier, according to a statement issued by the revenue authority.
The NBR kept intact the customs duty at 25 percent but increased regulatory duty to 25 percent from 3 percent and introduced 5 percent advance income tax on rice imports.
The move came amid public outcry as prices of paddy dropped so low that many farmers were unable to recover production costs.
The government estimates production cost of a kg of boro paddy to be Tk 24.83 but the grains were selling for almost half that in some regions.
The Department of Agricultural Marketing (DAM) data showed that average wholesale price of coarse paddy was Tk 12.97 per kg on May 20. The lowest was Tk 10.25 in Nilphamari, a major rice producing district of the northwestern region.
Prices of the staple plummeted due to good harvests of crops this season and the previous three as well as higher private and public stocks. Imports made the stocks even greater, said rice millers and traders.
The NBR said 3.03 lakh tonnes of rice was imported in the first 10 months of the current fiscal year (2018-19).
NBR Chairman Md Mosharraf Hossain Bhuiyan said, “This compels farmers to sell their produce below production costs. As a result, farmers are suffering huge financial losses.”
He said the revenue authority hiked the import duty in line with the directive of the prime minister.
Bangladesh is expected to hit a new high in rice production this fiscal year after growing 3.62 crore tonnes in fiscal year 2017-18 thanks to favourable weather and various government support, according to the Department of Agricultural Extension.
Lalit Kasara, a rice importer of the northwestern region, said imports of the cereal would stop after the duty hike.
He said imports declined substantially because of good production at home and the 28 percent duty imposed at the beginning of the fiscal year. “Fine grains such as Kataribhog were mainly imported this year.”
Nirod Boron Saha, president of the Naogaon Dhan O Chal Arathdar Babshayee Samity, an association of rice wholesalers and commission agents of the district, said the duty hike would not have any major effect on prices the farmers are now selling for.
“Prices of fine and aromatic rice may rise ahead of Eid,” he said.
Prices of rice dropped to nearly a three-year low, according to DAM and Food and Agriculture Organisation data.
Torikul Islam, a farmer in Jessore, expects that the move would benefit growers. “Immediately, there may not be any impact but the prices may increase after some days,” he said.