Bangladesh increases cash incentives for potato export

January 28, 2011

Source

The government of Bangladesh has planned to give 20 per cent cash incentive to potato shipment for the next five years in an effort to boost production and make it a top export item, officials said Thursday.

A high-level meeting led by Commerce Minister Muhammad Faruk Khan took the move in view of potato's recent export surge and soaring orders from some of the Asian nations.

Potato shipment fetched US$3.5 million in the 2009-10 fiscal year -- one of the best export shows by the vegetable in years. Exporters said the figure could cross $100 million if incentives are doubled.

At present, potato export is entitled for 20 per cent cash incentive if the shipment is made between February and April. In other months, the incentive is halved to 10 per cent to boost supply in the local market.

Commerce ministry officials said the minister has now agreed to double the cash incentives for up to 10 months a year following consultations with the agriculture ministry, for the next five years.

The incentive will be slashed to 10 per cent only in November and December, when the price of potato spikes in local market just ahead of the harvest.

The government of Bangladesh has set a target to grow 8.4 million tonnes of potato this fiscal year. Cold storage owners told the meeting that the yield would surpass 10 million tonnes in favourable conditions.