Foreign Adviser Md Touhid Hossain has said the government will take effective steps within two months to declare cotton an agricultural product and to increase cotton production in the country. He also urged the National Board of Revenue (NBR) to withdraw urgently the tax imposed on domestic cotton.

He was speaking as chief guest on Monday (17 March) at an event titled "Importance and prospects of cotton cultivation in Bangladesh for saving foreign currency", held at the Economic Reporters Forum (ERF) auditorium in Paltan.

The foreign adviser said tobacco cultivation is destroying soil fertility. If cotton were grown on part of the tobacco land, farmers would profit and the country would also benefit economically.

He said the government led by Dr Yunus will not hesitate to take decisions that are good for the country even if they go against some group. He assured that steps would be taken to provide policy support in this area.

Domestic cotton, which saves import costs and should be given incentives, has instead been subjected to tax and VAT. NBR member (Customs Bond) Moazzem Hossain said he had recommended to the NBR chairman that this tax be reduced, and expressed hope that good news on withdrawing the tax and VAT on domestic cotton would come soon.

The foreign adviser also said the deadline for graduation from LDC status should not be postponed. The government and businesses had not made much preparation for graduation earlier, he said, but that is no reason to stand still; there will be three years after graduation, and businesses will prepare then.

Golam Saber, general secretary of the Bangladesh Cotton Ginners Association, said tobacco is an agricultural product in Bangladesh, yet cotton has still not been recognised as one. As a result cotton farmers are denied agricultural loans and have to pay extra interest to borrow. With government policy support, cotton could be grown on at least two lakh hectares, producing a quarter of imported cotton at home, he said. Bangladesh is about to overtake China as the top cotton importer.

He said that just as tanners get low-interest loans in the leather season, low-interest loans for cotton would free farmers from uncertainty about getting a price for their crop.

The country has to import about Tk 45,000 crore worth of cotton. Dr Fakhre Alam Ibne Tabib, executive director of the Cotton Development Board, believes a quarter of this could be produced at home to save foreign currency. He said cotton is not grown on paddy land; it is grown mainly on high land in the chars, the Barind area, the saline south and the hills. With policy support, 20 to 25 lakh tonnes of cotton could be produced in the country without hurting food security.

Cottonseed yields edible oil and oilcake for livestock, so more cotton cultivation would reduce imports of edible oil and oilcake, the executive director said.

Md Abul Khayer, managing director of Bangladesh Sudan Cotton Ginning Industry and an expatriate entrepreneur who has grown cotton successfully in Sudan, said he would help increase cotton cultivation in Bangladesh. Three improved high-yielding cotton varieties have already been grown on a trial basis, and if they are adopted, more cotton can be produced from less land, he said.

Presiding over the event, ERF president Doulot Akter Mala said many people did not know that cotton is still not an agricultural product or that domestic cotton faces discriminatory tax. The necessary policy support should be given, considering the importance of this sector, she said.

The event was moderated by ERF general secretary Abul Kashem and jointly organised by the ERF, the Bangladesh Cotton Ginners Association and Bangladesh Sudan Cotton Ginning Industries.

Source: Jagonews24. First published in Bengali on The Agro News.