Fertilizer shortages deepen as Bangladesh prepares new dealer system

Farmers in several parts of Bangladesh are struggling to obtain fertilizer at government-fixed prices as the government prepares to overhaul the country’s fertilizer distribution network by appointing thousands of new dealers.

The application deadline for the revised dealership system is September 10, with each applicant seeking a wholesale dealership required to deposit Tk5 lakh as security.

The government says the new system will bring fertilizer closer to farmers and reduce the distance they need to travel to collect supplies. However, shortages have already triggered protests, road blockades and incidents of fertilizer being taken from dealers’ warehouses.

Stakeholders have cited several factors behind the shortages, including changes to the dealer network, restrictions on moving fertilizer between districts, delayed imports and alleged attempts to disrupt the new distribution policy.

The Bangladesh Chemical Industries Corporation currently has around 5,600 wholesale dealers. Under the proposed system, each union will have a wholesale dealer, while retail dealers will operate at the ward level.

The Bangladesh Agricultural Development Corporation has around 5,000 wholesale and retail dealers.

Bangladesh Fertilizer Association Chairman Md Mosharraf Hossain said the increase in the number of dealers had reduced the profit margins of existing dealers, while seasonal traders were benefiting from shortages. He also pointed to restrictions on transporting fertilizer between districts.

Such restrictions can leave fertilizer available in one area while farmers face shortages in another, he said.

In Kurigram’s Roumari upazila, farmers in Bandaber Union recently broke into a dealer’s warehouse following delays in distribution and took at least 150 sacks, according to warehouse manager Saiful Islam.

Farmers in Bhurungamari also blocked a road on the same day to protest inadequate supplies. The upazila agriculture officer was reportedly confined for some time. The incident came about 15 days after another warehouse in the upazila was broken into and fertilizer was taken.

Farmers in several areas have also complained about being charged more than government-fixed prices and having to wait for hours without receiving the required quantities.

Stocks under pressure

The government maintains that Bangladesh has sufficient fertilizer stocks, but Agriculture Ministry documents indicate that supplies could come under pressure in the coming months, particularly for diammonium phosphate (DAP).

According to a Bangladesh Agricultural Development Corporation stock statement submitted to the ministry, total fertilizer stocks stood at around 332,000 tons. After the planned distribution of 100,000 tons in September, stocks could fall to around 232,000 tons.

BADC had around 141,000 tons of DAP as of September 3, according to a summary prepared for the Cabinet Committee on Government Purchase. With projected October demand at around 150,000 tons, stocks could fall to approximately 41,000 tons after September distribution.

A vessel carrying 30,000 tons of DAP from Morocco has departed. If it arrives on schedule, stocks would rise to around 71,000 tons. Two additional consignments are reportedly being processed.

Officials said imported fertilizer can take 40 to 45 days or more to enter the distribution network, while private-sector imports typically take 80 to 90 days to reach farmers.

The government plans to import 500,000 tons of DAP, 200,000 tons of triple superphosphate and 250,000 tons of muriate of potash.

Private-sector fertilizer tenders were generally initiated in April or May in previous years, with work orders issued by June. This year, however, the process moved into August. Importers have alleged that final approvals and work orders are still pending, preventing them from opening letters of credit.

Several Agriculture Ministry officials have blamed procurement delays for putting additional pressure on supplies. They also alleged that similar delays occurred during the previous interim government’s tenure. These allegations could not be independently verified, and comments from the former officials named were not immediately available.

Agriculture Secretary Md Salim Khan said an organised group may be attempting to obstruct the new distribution system.

He said the situation appeared to be planned and that a monitoring committee comprising two joint secretaries and two deputy secretaries had been formed. According to him, several people had already been removed and a group was working to disrupt implementation of the new policy.

The situation highlights the gap between overall fertilizer stocks and actual availability at the farm level. Having fertilizer in government warehouses does not by itself ensure that farmers receive the required supplies at the right place, at the right time and at government-fixed prices.