Agriculture plays a dominant role in the growth and stability of the economy of Bangladesh and more than three quarters of the total population in rural areas derive their livelihood from the agricultural sector.
The overall objective of this study/report is to formulate development options for interventions to promote inclusive growth by promoting faster economic growth – transformational by moving from the present situation to one of high productivity and commercialisation. The specific objectives were to: (1) Assess the current productivity status of Bangladesh agriculture and its contribution to growth and poverty reduction. (2) Assess the structure of agriculture, its competitiveness, commercialization and value chain development. (3) Assess vulnerability in Bangladesh agriculture due to climate change and investment needs for adaptation and mitigation to agriculture. (4) To identify challenges of Bangladesh agriculture. (5) Suggest interventions for supporting sustainable agricultural development to promote poverty reduction, employment generation and enhance food security in Bangladesh.
The study method includes: (1) Data collection: this used a BRAC Survey data base of randomly selected households in 62 villages of 62 districts, so far surveyed four times (1988, 2000, 2008 and 2014). (2) Collection of secondary information from BBS, DAE, MOA, MOF, etc. and various on-line resources, etc. (3) Estimates based on different econometric models. (4) Analysis and synthesis of information and preparation of report.
The shifting rate of agricultural land to non-agricultural use is about 1% per year. Availability of agricultural land in Bangladesh is gradually declining. About 60 percent of farmers are functionally landless and depend on sharecropping of land owned by the others. Average farm sizes are very small to support a family adequately. The fertility status of Bangladesh soils is extremely variable. Most of the soils are depleted and in urgent need of replenishment with manure and fertilizer if productivity has to be enhanced. It is estimated that more than 100 kg nutrients per ha year are mining out from the soil system. The fertilizer policy of Bangladesh evolved from a heavily subsidized public centralized distribution system to a market oriented one over time, in order to popularize and enhance fertilizer use in the country. There was sharply increasing trend in the use of fertilizer during 1981-2008. As a result of a policy shift towards privatization of irrigation equipment, STWs under private ownership played a significant role for irrigation development during 1980s. The agricultural growth in the country has been largely due to expansion of minor irrigation. There is a sharp increasing trend in the growth of irrigation in Bangladesh during 1982 to 2012. The seed policy of Bangladesh has evolved over time. In the post green revolution period (1960-80s) there was heavy subsidization of seed and public sector role played in the seed market through BADC. During the 1990s to 2000s, the seed market has been liberalized and the market opened for participation. The objective of the agricultural credit policy of the Bangladesh Bank is to ensure easy access to agricultural and rural credit facilities from the scheduled banks of the country. There is an increasing trend in disbursement of agricultural credit during 2005-12, but the demand is much more than that met by institutional sources.
The production of main staple, rice, has a long term growth trend of 2.8 percent per annum over the period from 1981/82 to 2011/12.TFP of milk production of both Cross-breed Cows (CBC) and 11 Local Cows (LC) has been estimated and found that there is an increasing trend in the TFP of milk production for both CBC and LC. During the period 2003-04 to 2013-14 total fisheries production in Bangladesh has shown a sharp increase from about 20 lakh MT to 35 lakh MT. During this period, a structural change has been taken in the composition of the country’s total fisheries production from its three sources – inland capture, inland culture and marine.
Changes in aggregate GDP have been analysed in terms of main components: changes in growth within sectors, and intra-sectoral resource shifts or reallocation effect (structural transformation). It was revealed by the results of the decomposition that agriculture played an important positive role in driving the overall GDP growth of Bangladesh. The contribution of agriculture in overall growth was 2% during the period 1999-2014 while the leading role in overall growth was played by industry (2.6%). The contribution of the service sector to overall growth was at a smaller rate (0.95%). The reallocation effect was also at a smaller rate (1.2%).
Land is the main source of livelihood in rural Bangladesh. It was found that the proportion of both medium and large farmers have both rapidly gone down since 1988. Households owning up to three bighas of land (up to 0.4 ha) constitute about 70 per cent of all households but control only 20 per cent of the total land. As opposed to this, only four per cent of households (with 15 bigha or 2 ha and above land) controls about one-third of the land The average size of owned land stood at 0.61 ha in 1988 and significantly declined over time to peak at 0.48 ha in 2007 - a decline of 21 per cent over the last two decades and further decreased to 0.39 ha in 2014. It was observed that, as with farm size, the proportion of the marginal farmers (owning up to 0.40 ha) has risen from about 21 per cent in 1988 to 24 per cent in 2008 and further increased to 28 per cent in 2014. At the same time, the amount of land under their command almost tripled. The group we identify as functionally landless with tiny farm holdings – comprising 33-35 per cent of all farmers – have also been commanding more land over time. By and large, marginal and small farm households now cultivate more than four-fifths of the total land in rural areas. We observed that the dominance of the share-cropping system in the tenancy market has dwindled over time, and the contributions of other tenancy arrangements have been growing.
Despite modern technology, roughly 40 percent of the cultivated land continues to be single cropped. Quite expectedly, it is the large and medium farms who have more single cropped land than small farms. The database shows that in 62 districts the yield rate in terms of paddy has substantially risen over time. The yield from boro is estimated to be about 6 tons/ha – about twice the yield of 2000, and the yield of MV aman has increased from 3.3 to 3.8 tons/ha over same period of time. The case of the aus yield is similar. The yield of maize increased from barely 1 ton/ha to about 8 tons/ha, which could be contributing to the increased area under maize, and the reduction of the areas of wheat and other crops.
During the last two decades and a half, important changes occurred in the realm of rice production and profitability. First, the cost of producing rice is several times higher than potato but the rate of profit is more than double for potato. Second, the yield of wheat, jute and potato has increased over time but the yield of rice has almost doubled from 2.16 t/ha in 1988 to 3.7 t/ha in 2000 and about 4.6 t/ha in 2014. TVs have gone down from 46 percent of total cultivated land in 1988 to 24 per cent in 2000 and further to only 14 percent in 2014. Third, the yield of MVs has increased partly 12 due to adoption of higher yielding varieties and partly (possibly more importantly also) due to better crop management.
The labour use per hectare has reduced from 164 days in 1988 to 132 days in 2000 and 99 days in 2014. The use of hired labour, however, remained at 50 percent of the total labour; the use of hired labour by small holders and tenants has grown over time. Apparently the fall in labour demand was fuelled by the spread of mechanization in land preparation and threshing. 90 per cent of the farmers in Bangladesh now use machines compared to 60 percent in 2000, and almost none in 1988. During this period, the cost of machine rental has increased five times – indicating the pressure from the demand side.
Bangladesh has a comparative advantage of production for pulse, potato, onion, maize, vegetables, chili and garlic, for both the owner operators and share croppers. So, there is good scope for crop diversification. Sugarcane, however, has a comparative advantage for import substitution only for the owner operators. While looking at the export possibility, it was observed that Bangladesh has a comparative advantage in export of oil seeds, potato, onion, maize, vegetables and chili for the owner operators and it has a comparative advantage for potato, onion, maize, vegetables and chili for the share croppers. The analysis of comparative advantage carried out suggests that the menu of crops that Bangladesh can produce efficiently either for import substitution or for export is quite large.
Current climate change issues are considerably affecting food security of the millions of people of Bangladesh as the country is one of the countries most vulnerable to climate risks. In Bangladesh, damage caused by natural disasters is one of the main sources of crisis for poor households. Every year, natural calamities such as floods, cyclones, erosion, and droughts cause extensive damage to crops, homes, household and community assets, which can lead to illness or death and a decrease in livelihood opportunities for the poor. Disasters hamper physical access to food and food stocks,
destroy crops, disrupt markets and affect household food security. Climate change will diminish rainfall in the dry season and will increase winter and pre-monsoon temperatures significantly, causing more frequent and more severe droughts in Bangladesh. Some part of the Northern region and some part of the hill region will experience moderate drought during the Rabi and Pre-Kharif season (November to February) by 2030.
The major challenges related to agriculture and food security in Bangladesh are: (1) The curse of poverty, food insecurity and malnutrition. (2) Degradation of natural recourses, (3) Low agricultural productivity and limited modernization and/or diversification, (4) Weak research extension linkage and technology delivery, (5) High post harvest losses, (6) Problems of market linkages and value chains, (7) Scarcity of availability of agricultural labour, (8) Farm mechanization, (10) Food quality and safety problem, (11) Inadequate institutional credit, (12) Inadequate availability of quality seeds to the farmers, (12) Increased environmental shocks and livelihood risk. The development options or interventions suggested are: (1) Technology development and dissemination, (2) Improved water resource management and irrigation, (3) Crop diversification, (4) Sustainable supply and use of improved quality of inputs, (5) Farm mechanization, (6) Improving market linkages and development of value chains, (7) Livelihood improvement and food security, (8) Interventions for climate change adaptation and (10) Improved land management.