The recent increase in diesel prices is expected to significantly raise production costs in Bangladesh's agriculture sector, adding an estimated Tk 1,566 crore annually to farmers' expenses. Experts warn that the hike, coming at a time when farming remains heavily dependent on diesel-powered irrigation and machinery, could reduce farm profitability, push up food prices and deepen inflationary pressure across the economy.
The government on Saturday raised the retail price of diesel by Tk 15 per litre, taking it from Tk 100 to Tk 115. Agriculture, which remains highly reliant on diesel, is expected to bear the brunt of the increase.
At present, Bangladesh's annual diesel demand stands at around 43.5 lakh tonnes, of which nearly 10.44 lakh tonnes-about 24 per cent-is used in agriculture. Around 80 per cent of irrigation depends on diesel, alongside its use in land preparation, harvesting, threshing and crop transportation.
At the previous price level, farmers spent approximately Tk 10,440 crore annually on diesel. Following the latest hike, this cost is projected to rise to around Tk 12,006 crore, significantly increasing cultivation expenses across the country.
Agricultural experts say the impact will be twofold: reduced farmer profitability and upward pressure on food prices, particularly rice, which could intensify strain on household budgets already affected by inflation.
Former Agriculture Secretary Anwar Faruq said the effects would quickly spread through the supply chain. "When fuel prices rise, everything becomes more expensive. Farmers will face higher costs for harvesting, threshing and transport, and ultimately rice prices will increase," he said.
Economists also caution that the adjustment could further fuel inflation, especially for low-income households.
Although the current Boro season is nearing completion, farmers say they are already experiencing rising costs. Abdul Matin, a farmer from Sapahar in Naogaon, said irrigation expenses had increased even before the official hike due to shortages. He added that total production costs per bigha, previously around Tk 16,000, could now exceed Tk 20,000.
In Bogura's Dupchanchia upazila, farmer Halim Mia said irrigation charges have risen sharply, with costs nearly doubling compared to last season. He estimated that diesel-related expenses alone could add about Tk 3,000 per bigha this year.
Farmers and analysts warn that if crop prices do not rise in line with production costs, many growers may scale back cultivation in future seasons, posing risks to national food security.
According to official estimates, around 60 per cent of Bangladesh's annual rice output comes from the Boro crop, which is entirely irrigation-dependent. The Agriculture Ministry notes that the sector relies heavily on diesel, with around 75 per cent of agricultural machinery powered by the fuel.
Agricultural economist Jahangir Alam Khan called for urgent policy support. He said the government must ensure stable diesel supply and consider subsidies or incentives to offset rising production costs and protect agricultural output.
