Role of Agriculture in Bangladesh Economy
The economy of Bangladesh is primarily dependent on agriculture. About 84 percent of the total population live in rural areas and are directly or indirectly engaged in a wide range of agricultural activities. The agriculture sector plays a very important role in the economy of the country accounting for 31.6 percent of total GDP in 1997-98 at constant (1984-85) prices. The agriculture sector comprises crops, forests, fisheries and livestock. Of the agricultural GDP, the crop sub-sector contributes 71 per cent, forest 10 per cent, fisheries 10 percent and livestock 9 per cent. The sector generates 63.2% percent of total national employment, of which crop sectors share is nearly 55 %. Agricultural exports of primary products constituted 10.4% of total exports of the country in 1997-98. In the past decade, the agriculture sector contributed about three percent per annum to the annual economic growth rate.
The agriculture sector
is the single largest contributor to income and employment generation and
a vital element in the country’s challenge to achieve self-sufficiency
in food production, reduce rural poverty and foster sustainable economic
development. The Government has therefore accorded highest priority to
this sector to enable the country to meet these challenges and to make
this sectorcommercially profitable.
Basic
Information on Agriculture of Bangladesh
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Area
of Bangladesh
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Total
population (January 1999)
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GDP
(1998-99)
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GDP
Growth rate (1998-99)
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Agricultural
Growth rate (1998-99)
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No.
of Rural Household
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No.
of non-Farm Household
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No.
of Farm Household
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No.
of Agril. Labour Household
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Small
Household
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Medium
Household
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Large
Household
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Cultivated
Area
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Cultivated
Area per Household
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Cropping
Intensity (1996-97)
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Irrigation
Area
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Opportunities and Constraints of Agriculture in Bangladesh
The opportunities and constraints prevailing in the agricultural sector of Bangladesh are as follows :
Opportunities:
- Agricultural sector is the single largest contributor to GDP.
- Crop production system is highly labour intensive and there is an abundance of labour in the country.
- Agriculture is the largest source of employment for skilled and unskilled labour.
- Favorable natural environment generally exists throughout the year for crop production.
- Wide range of bio-diversity exists for different crops.
- Different crops and agricultural commodities are the main sources of nutrition including protein, minerals and vitamins.
- Agricultural commodities have comparatively higher value addition than non-agricultural commodities.
- Agriculture is dependent on the vagaries of nature and is risky.
- Availability of cultivable land is decreasing.
- Widespread poverty among the population engaged in agriculture.
- Lack of required capital for agricultural activities.
- Inadequacy of appropriate technology considering farmers soci-economic conditions.
- Uncertainty of fair price of agricultural commodities due to underdeveloped marketing system.
- Agricultural commodities are rapidly perishable and post harvest losses are too high.
- Limited knowledge of common people about the nutritional value of agricultural commodities including vegetables and fruits.
- Serves as a national coordinating and supervising apex body for planning, integration and implementation of agriculture policies and related projects.
- Establish policies, regulations and projects that will ensure sustainable food production
- Achieve self sufficiency in food grain production through a sustainable growth in rice and wheat production.
- Achieve increasing and profitable production of minor crops and thereby maintain a balanced crop production.
- Increase rural employment through the adoption of modern agricultural practices
- Achieve low and stable consumer food prices and improve the nutritional status of the population.
- Develop food production that is suitable and sustainable.
- Establish macroeconomics policies that enable farmers to be responsive to domestic and world market opportunities.
- Provide high quality infrastructure and government services that will enable farmers to produce and market products at low cost.
- Rely on competitive markets to supply agricultural inputs at low cost.
- Provide incentives to establish labour intensive production and processing agrobased industries.
Organogram of Ministry of Agriculture
The Ministry through its different wings is responsible for the administration and financial supervision, policy directives and monitoring, to carry out various activities of different institutes, directorates and agencies under the ministry.
The organizational of structure of Ministry of Agriculture is given below :
Agricultural Extension System in Bangladesh
The Department of Agriculture Extension is responsible for carrying out extension services at the grassroot level under the supervision of MOA. The DAE carries its activities in the field level with the help of its different wings. DAE is mainly responsible for :
- To motivate and help farmers adopt improved production practices to increase their productivity, meet national consumption requirements, maximize export and minimize import.
- To provide farmers with the latest results of research and farm techniques for their socioeconomic betterment.
- To help develop self reliance and cooperation by training local leadership for organized group action.
- To provide channels for service and information from the MOA and its different departments to the farm people and in turn relay the problems and needs of the farmers that require national level intervention.
- To provide an effective linkage between the various research institutes and the farmers so that along with the flow of technology to the farmers, the farmers level problems are also brought to the relevant research institutes for investigation and solution.
- To serve as liaison agency between farmers and other organisations , both public and private concern with over-all socio economic development of rural people , including the credit giving and input supply agencies.
Agriculture Research System in Bangladesh
The National Agricultural Research System (NARS) of Bangladesh consists of ten research institutes under the umbrella of Bangladesh Agricultural Research Council (BARC). Out of ten research institutes six belongs to Ministry of Agriculture (MOA), two to Ministry of Fisheries and Livestock (MOFL) one to Ministry of Commerce, and one to the Forest and Environment Ministry. In addition the NARS also comprises universities that have casual working relationship with BARC and other related organisations.The ten research Institutes under the NARs are:
(a) Bangladesh Rice Research Institute (BRRI)
(b) Bangladesh Agricultural Research Institute (BARI)
(c) Bangladesh Jute Research Institute (BJRI)
(d) Bangladesh Institute of Nuclear Agriculture (BINA)
(e) Bangladesh Livestock Research Institute (BLRI)
(f) Bangladesh Fisheries Research Institute (BFRI)
(g) Bangladesh Sugarcane Research Institute (BSRI)
(h) Bangladesh Tea Research Institute (BTRI)
(i) Bangladesh Forest Research Institute (BFRI)
(j) Soil Resources Development Institute (SRDI)
The Bangladesh Agricultural Research Council (BARC) is the apex body of the NARS. The Council serves as the national coordinating organization for planning, integration, and implementation of research on crops, livestock, soil, water, crop protection, agricultural engineering, forestry, fisheries, economics and social science. BARC also identifies problem areas in agriculture and prepares national plans for agricultural research within the framework of national policies and development goals. The Council collaborates with international and national research center to ensure a rapid introduction, evaluation and use of improved agricultural technologies. BARC is responsible for planning, developing and upgrading of manpower base of the NARS.
The component
research institutes have their own ordinances and separate mandates. They
are governed by their separate management boards. The role of the institutes
is defined by their respective ordinances. They are responsible for the
task of generating research programs in their respective fields of activity.
All the research institutes have their own network of regional stations,
centers and sub-stations throughout the country. These stations undertake
research on regional and local basis to cover the 30 agro-ecological zones
of the country.
Review of Agriculture Sector Policy Reforms
The ministry has undertaken successfully a number of policy reforms in the past for which it has received considerable recognition both within government and its development partner. Agri sector, by this time has already achieved the cherished and desired long term goal of self sufficiency in the production of rice. The major success of the ministry is its unquestioned success in spurring the growth of crop agriculture while saving considerable amount of local currency through eliminating the subsidies on fertilizer and also allowing private trade in fertilizer, minor irrigation equipment and seed sector. Structural adjustments started with the liberalization of different agricultural input delivery systems of public sector, such as-
(a)
Liberalization of trade in minor irrigation sector and encourage the
private sector for supply of minor irrigation equipment's of the country.
This happenedgradually in stepswith
the removal of restrictionof import
of small diesel engine in1986-87followed
by the withdrawal of duty on such imports in 88-89.The
subsidy on DTW were removed in 1992and
BADC-the government organisation was removedfrom
the procurement and distribution of minor irrigation equipment. These reform
measures had a tangible effect on increasing the demand for irrigation
equipmentand consequently therate
of increase in area under minor irrigation.
(b) Privatization of trade in fertilizer with an objective to transfer the fertilizer management and distribution services exclusively in private sector; Imports of all fertilizers are now being done by private sector except urea. The private sector is not restricted from importing urea. All fertilizers are being distributed through private sector dealers through their network . The Government is providing no subsidy on fertilizers at the farm level and is selling all fertilizers at full cost pricing. The government has issued the revised Fertilizer Control Ordinance in 1995 in consultation with private sector and IFDC for quality control and regulation of fertilizer prices. This has led to the increased availability and wider adoption of chemical fertilizer at the farm level and economic activities in rural areas have also increased manifold due to the withdrawal of government from fertilizer distribution.
(c) Liberalisation of trade and foreign exchange for enhanced participation of private sector in Agricultural machinery of agriculture business. The Government has been continually reviewing conditions affecting competitive trade and taking action to remove barriers.
(d) Liberalisation of production, processing, distribution and import of seeds to ensure the participation of private sector seed dealers in seed industry development. The private sector is now allowed to import any improved germplasm for research and development and to develop its own facilities for producing foundation seeds. They are also allowed to import and sale seeds except five notified crops (rice, wheat, sugarcane, potato and jute). As regard to notified crops, there are procedural formalities to be observed by the private sector before any import. Private sector has now taken up programmes for production of hybrid rice seeds in the country.
(e) Import of agri- machines , including power tiller, was liberalised - resulting in the positive effect on import of power tiller. The area under power tiller utilisation also grew at about 3.5% per annum after introduction of the liberalization policy.
(f) Structural changes were also made in food supply and management system. Open Market Sale (OMS), procurement of food grains from the farmers at market prices, abolition of rural rationing system and allowing import of food grains by the private sector were the measures sofar implemented.
Besides, structural adjustment ,programmes were also undertaken in public sector simultaneously which are as follows :
(a) In order to improve and provide the need felt extension services to the farmers at the grass root level, agricultural extension services were strengthened through introduction of "Agricultural Support Service System" in accordance with the provisions of New Agricultural Extension Policy (NAEP); and
(b) In order to conduct uniform and coordinated research activities, agricultural research system was strengthened following the provision of National Agricultural Research System (NARS) through bringing ten primary research institutes under it with Bangladesh Agricultural Research Council (BARC) at the apex.
The process
of structural adjustments in agriculture sector has been still going on
in Bangladesh. The observed structural adjustments like liberalisation
of investment in minor irrigation sector, privatization of trade in fertilizer,
liberalisation of trade and foreign exchange have already started to effect
favorable impact in the agriculture sector. It is expected that such favorable
trend will continue to prevail in future also.
In order to realize the objectives and targets of the FFYP (1997-2002), the Government will pursue the following major policy directions with a view to maing the country self-sufficient in food production and ensure dependable food security for all.
- an appropriate policy framework for sustainable development of farm mechanization and commercialization of agriculture;
- the agricultural research institutes will strengthen research in order to render full support for augmenting breeder seeds of new variety;
- decision to restructure BADC has already been taken by the Government which has considerably been downside, BADC will continue to support private sector development;
- increased use of organic and bio-fertilizers in association with the popularization of the use of DAP, blended fertilizer (NPK) and urea super granule (USG) will be pursued with a view to reducing pressure on urea and improving soil fertility;
- establishment of an appropriate institutional system to ensure the availability of agricultural credit in time.
- The present Government has accorded highest priority to the agriculture sector. The commitments in this respect are reflected in the National Agriculture Policy (NAP)of 1999 , that includes : (i) timely supply of agricultural inputs at affordable prices, (ii) appropriate action plan for agricultural credit and marketing of agricultural products, (iii) Government support to agriculture, (iv) priority for the development of agro-based small and medium industries, (v) Enhanced rate of private sector- participatation in different sectors of agriculture i.e. seeds, fertilizer, agro-machinery and also in establishing agribusiness. (vi) Agricultural Mechanization (vii) Pest Management (viii) Greater coordination between the Government, NGOS and Private sector (ix) Food based Nutrition (x) Environmental Protection in Agriculture and finally involvement of Women in Agriculture.
- Bangladesh Agriculture is now in the process of transformation from subsistence farming into commercial farming. Meanwhile, Bangladesh has already entered into the European Market for export of vegetables and other high value crops. This process opens a vista to private sector investment in the areas of production of high value crops, production of seeds (especially hybrid seeds), of chemical and blended fertilizers, agro-processing enterprises, etc. The policy reforms that have taken place offer greater scope and opportunities for private sector participation and a suitable environment towards promoting agrobusiness and investment.