Duty cut on import of rice meant to curb price spiral in domestic market has not brought about any desired result. Prices of common varieties of rice have continued the upswing. However, observers are hoping that within weeks with increased rice shipments reaching the country, the situation will change-at least in containing the prices, if not pushing them down to earlier levels. But the reality is, despite the substantial duty cut, rice import has also not picked up, as of now. Concerned quarters blame the bureaucratic tangle in the process of issuing permission by the food ministry for not sufficiently encouraging import.
It is indeed intriguing that at the peak of the Aman harvesting season, paddy price, far from falling, is on the rise. As a measure to rein in the situation, the government's move to cut import duties on rice is no doubt timely and wisely taken. But the precondition of obtaining permission from the food ministry for import at reduced duty -- ostensibly to thwart syndication among big importers -- has become an impediment enough to frustrate the objective of duty cut. This year the government has cut import taxes on rice in two phases, from a 62.5 per cent down to 15.25 per cent. In the first phase, the tax benefit was given until October 31, 2022, and later extended until December 31. However, the National Board of Revenue (NBR) has again extended the benefit until March 31 next following requests from relevant ministries. Under the present arrangement, importers of rice are required to pay 5.0 per cent regulatory duty, 5.0 per cent advance tax, and 5.0 per cent advance income tax.
In the wake of global inflationary pressure leading to price hike of most essentials with food stuff leading the pack, the looming threat of food scarcity, particularly of the staple -- rice, has been causing a good deal of worry among many quarters in the country. This is partly because of the less than targeted procurement by the government in the last Boro and the current Aman seasons. This year, too, it is uncertain whether government procurement would succeed to meet the target, as the buying price fixed by the government is way below the current market price.
As things stand now, the only tool in government's hand is to allow import at a lower duty rate for an extended period. At the same time, in order to render the duty-cut meaningful, measures are urgently needed to ease the permission procedure for import. It is also important for the government to know about the actual volume of rice production. The Bangladesh Bureau of Statistics (BBS) and the Department of Agricultural Extension (DAE) often produce varying data on rice acreage and output. For better rice procurement planning, they need to come up with unified and authentic data.