Diesel Price Hike Threatens Agriculture

The energy crisis and rising fuel prices are currently the most discussed issue in the country. This is no longer just a Bangladesh or regional problem. It has become a global crisis.

The crisis has deepened mainly due to the war in Iran and the Middle East and the dispute over control of the Strait of Hormuz. Earlier, the Ukraine war raised fears of food and energy shortages in the country for the first time.

That crisis was manageable through alternative routes and inflation control, since the war was prolonged. However, in this Middle East conflict, the Hormuz shipping route under Iranian control has become a major factor in global politics and economics.

Bangladesh is one of the countries that receives priority access from Iran for energy and commercial shipping through the Strait of Hormuz. Even so, Bangladesh’s energy security and inflation have reached new levels of concern.

The government generally struggles to control commodity prices on its own. Business syndicates often raise prices using various excuses and make excessive profits. The recent decision to raise diesel prices by 20 taka per liter shows how far this inflationary pressure can spread. This effect is now visible across markets throughout Bangladesh.

This week’s 20 taka increase in diesel prices has placed a heavy additional burden on the lives of rural and marginalized poor people. Nothing runs without fuel. Vehicles, electric fans, factories, power plants, tractors, irrigation machines, motorized boats, and rice harvesting machines all depend on it.

As international fuel prices rise, it is natural that prices in Bangladesh will rise too. However, it is important to ensure that this does not stop vehicles, kitchen stoves, or factories from running. The sharp rise in diesel prices has already caused negative reactions among the public.

Fugitive collaborators of the fallen authoritarian regime, both at home and abroad, remain engaged in efforts to destabilize the country. Given the ongoing power crisis, unusual load shedding, and rising fuel prices, there is a risk that public anger and frustration could be exploited to further destabilize the country.

If rising diesel prices increase production costs in the agricultural sector, this could seriously affect the country’s food security. Since independence, Bangladesh’s ability to consistently meet the food needs of a growing population has been a major milestone in its socioeconomic development.

Although the previous government was marked by widespread corruption, financial irregularities, and human rights violations, it did treat agricultural development as a priority sector. It provided subsidies on electricity, fertilizer, and diesel to help control production costs.

However, due to lack of transparency and corruption, genuine farmers often did not receive these benefits. Farmers also missed out on the benefits of government rice and paddy procurement programs. Allowing imports of low quality rice from India during peak harvest season further denied farmers fair prices in the local market. As a result, the position of farmers weakened considerably over time.

Under stable democratic governance, there is a strong expectation of building a transparent and accountable system in place of political criminalization and an oligarch controlled economy. Bilateral tensions and lack of cooperation with a neighboring country have added further challenges for the current government.

In this context, the government must take effective steps to protect agricultural production, fisheries, poultry, dairy, and livestock farms from the negative effects of the power and energy crisis. Bangladesh’s ability to ensure food security and nutrition for 180 million people through domestic production is a major national achievement. This success must be protected as a top priority.

At the same time, the energy crisis has added extra pressure on efforts to revive long stagnant investment and employment, which had been a key expectation from the new government. People want to see real progress in bringing back trillions of taka in laundered funds and channeling them into domestic investment.

Steps must be taken to attract both domestic and foreign investment. International lending institutions such as the World Bank, IMF, and ADB are also imposing new conditions on expected loans, adding further pressure on the country’s economy.

However, global recessions have never significantly affected Bangladesh’s agricultural production. To address the current global and regional crisis caused by war, the country must focus on boosting domestic investment and agricultural output.

The government must ensure that rising diesel prices, along with shortages of fertilizer, seeds, pesticides, and electricity, do not damage the agricultural sector. Climate change and global warming have already negatively affected agricultural production worldwide.

If natural disasters cause crop failures or food shortages, it may not always be possible to meet demand or control inflation even by paying higher prices. For this reason, protecting the agricultural sector from the effects of the global energy crisis is essential for ensuring the country’s socioeconomic stability and development.

The government must ensure subsidized diesel and fertilizer supplies for genuine farmers, while also taking effective steps to guarantee fair prices for agricultural products at both the farmer and consumer levels.