BB’s refinancing program to boost wheat and corn production
August 27, 2022 9:52:15 p.m.
The importance of producing sufficient volumes of cereals and other food crops locally is now more acute than ever before. The Russian-Ukrainian war has not only disrupted the supply of fuel and edible oils, but the availability of wheat has also become uncertain as both countries produce a large volume of the staple food. Flour on the Bangladeshi market has become 40% more expensive in recent months. The situation, however, has improved slightly, as restrictions on the shipment and sale of Ukrainian or Russian wheat, oilseeds and fertilizers, among others, no longer exist.
In this context, the Bangladesh Bank (BB) has devised a refinancing program worth 10 billion taka to stimulate local production of wheat, the second most consumed cereal in the country, and maize and help to reduce dependence on imports of these two products. Under this program, regular banks willing to participate in the loan program will receive funds from the BB at a very nominal interest rate of 0.5% and will lend the same to marginal small farmers and sharecroppers at a annual rate of 4.0%. unsecured interest.
However, low-interest loans will partially meet the needs for increased wheat or maize production. Other issues deserve the attention they deserve from policy makers and other actors involved in food production. Maize enjoys an advantage over wheat, in terms of factors contributing to its production. The history of wheat production in the country has been rather bumpy. Wheat acreage began to increase in the mid-1970s. Since then, both wheat production and wheat acreage have followed a fluctuating trajectory. But cereal production has always been well below requirements. Locally produced wheat covers only 17% of the country’s estimated needs.
Two factors – an increase in the area of other competing rabi crops and a low yield – are responsible for the shrinking area sown to wheat. The availability of quality, high-yielding, heat-tolerant and disease-resistant seed may be the most important option for reversing the trend in wheat production. Climate change, which is now wreaking havoc in many countries, has made the wheat growing season hotter in this part of the world. In addition, outbreak of leaf rust or leaf rust is also a problem. The reduced use of machinery in wheat production is also an issue that deserves priority attention.
The production and area of maize in the country has witnessed phenomenal growth in recent years, mainly due to the growing demand for animal feed from the fish and poultry sectors. Locally produced maize meets more than 60% of demand. With proper support, it would not be so difficult to produce enough maize to meet national needs. If the government is really interested in boosting the production of wheat and maize, it will have to give loans to real farmers engaged in the production of the items. In addition, competent authorities will have to address other issues that have forced farmers to switch to other competing crops for economic reasons.