According to the government decision, 30 per cent of around 10 lakh tonnes of fertiliser with import subsidy would be imported and marketed by Bangladesh Agriculture Development Corporation (BADC).

The BADC would import and market 1.25 lakh tonnes of Triple Super Phosphate (TSP) and one lakh tonnes of Muriate of Potash (MoP) this fiscal year (2006-07). And the demand for Di Ammonia Phosphate (DAP) that used to be imported in the past would now be met from local production. Bangladesh Chemical Industries Corporation (BCIC) would start production of DAP next month.

Government estimates said the demand for fertiliser this fiscal year is 4.5 lakh tonnes of TSP, 2.5 lakh tonnes of DAP and three lakh tonnes of MoP. The government would give Tk 594 crore subsidy on them.

A top official of the agriculture ministry said the government is resuming import and marketing of subsidised fertiliser through the BADC on a trial basis to detect any loopholes in the subsidy process.

"The government wants to reach the benefit of subsidy to the door steps of the farmers. But there are allegations from different quarters that the subsidy benefited traders, and not farmers. So we resume operation of the BADC in this field," he said preferring anonymity.

Earlier, the parliamentary standing committee on agriculture ministry criticised the government subsidy policy, indicating that around half of the total subsidy are pocketed by the middlemen.

Bangladesh Fertiliser Association President Kafil Uddin Ahmed has welcomed the government move to resume BADC's operation in fertliser import and marketing, saying it will now be able to involve directly with the international market.

He however denied the allegations of misuse of fertiliser subsidy and claimed that farmers got fertiliser at reduced price.

Sources said the agriculture ministry will prepare a full-fledged pricing policy to ensure that all the subsidised fertilisers are marketed at similar prices.

The government has decided to allocate Tk 210 crore as subsidy for TSP, Tk 250 crore for DAP and Tk 134 crore MoP this year.

Meanwhile, the Steering Committee on Agriculture Subsidy at a meeting on Monday decided to release Tk 211.18 crore subsidy against import bills immediately to ensure smooth import and distribution of fertiliser in the Aman season.

Earler, fertiliser importers had threatened to withdraw the letters of credit (LCs) if the government failed to release their due subsidy.

Till June, the government released Tk 160 crore subsidy out of the Tk 371.28 crore for 9.25 lakh tonnes of fertiliser for fiscal 2005-06.

The finance ministry sought pre-audit report from the agriculture ministry before releasing the subsidy money, and the agriculture ministry then asked the importers to submit necessary documents for conducting the audit.