Frozen hilsa fish. (Photo: Stock File)

Fisheries sector tries to keep govt from removing cash incentive

BANGLADESH
Wednesday, September 19, 2012, 02:30 (GMT + 9)

The Bangladeshi Fisheries Ministry said it is strongly against the government’s wish to withdraw a cash incentive granted to the frozen fish export. The sector has been enjoying 10 per cent cash support from the government, but now the Ministry of Commerce (MoC) has proposed scrapping it and the Fisheries Ministry fears the move will set the industry back.

"The move to lift the cash support to the frozen fish sector will be unjustified. Most countries pay cash incentives to different sectors to patronise export. If the support is lifted, the sector will lose competitiveness," explained Joint Secretary of the Ministry of Fisheries and Livestock (MoFL) Shamsul Kibria.

And he added: "I gave a note of dissent as the sector will suffer a lot if the cash support is withdrawn."

He said the fisheries and livestock minister will soon write a letter to the MoC requesting it not to lift the cash incentive, Financial Express reports.

Director General of EPB Salahuddin Mahmud said that most stakeholders, ministries and departments he has spoken with have opposed the government's plan.

Exporters worry that earnings will drop by half if the government takes this measure, especially in light of the sector’s struggle during the current global economic recession.

“The government should continue the cash support as it had announced the incentive to promote the sector which was badly affected by global recession," said Director of Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Maksudur Rahman. "This would decrease our competitiveness not only in the global market but also in the local ones leading cost of production up."

President of the Bangladesh Frozen Food Exporters Association (BFFEA) Kazi Shahnewaz also said he had boldly rejected the move to lift the government’s cash support.

"If the cash incentive is withdrawn, our members will lose competitiveness in the global market, and earnings from the sector will fall drastically," Shahnewaz elaborated.

BFFEA Senior VP Ashraf Hossain Masud said that the cancellation of cash support will have a harsh impact on the sector.

If Bangladesh loses competitiveness in the global market due to the support withdrawal, the result will be that competitors like India, Myanmar, Thailand and Vietnam will take over the market.

Originally, the government introduced cash support for the frozen fish sector in fiscal year 2002-3 to boost growth. The sector earned USD 598.42 million during  the last fiscal year with a negative growth of over 4 per cent year-on-year, and also fell short of target by more than 17 per cent, which exporters attributed to the recession, a failure to introduce the vannamei variety of shrimp and a drop in output.

By Natalia Real
editorial@fis.com
www.fis.com

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