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Revitalising Bangladesh’s agriculture sector

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Dhaka, 4 March, 2021: Agriculture has consistently been the largest sector in Bangladesh, as in several other developing economies. About 50 percent of the population are employed in this sector and about 70 percent people overall depend on agriculture for their livelihood. A significant proportion of the poor relies on agriculture as the key source of income and employment. Indirect dependence on agriculture is reflected through employment in agro-based services and rural enterprises. However, for the past three decades the average growth of the agriculture sector has hovered around 3.2 percent—as compared to manufacturing 7.5 percent and the services sector 6.2 percent. For the past two decades, overall average employment in agriculture remained at around 70 percent—as compared to manufacturing 12.4 percent and services 23.5 percent. The average share of agriculture as a proportion of GDP growth for the past decade ranged from 17.5 percent (2009) to 12.68 percent (2019). In comparison, the share of the manufacturing sector steadily rose from 25.3 percent (2009) to 29.65 percent (2019), while the share of the services sector remained almost constant—53.2 percent in 2009 and 58.8 percent in 2019.

60 percent of overall agricultural output comes from the crops sub-sector, followed by fisheries and livestock. A similar trend is evidenced as regards to the contribution of the agriculture sector to GDP in most developing countries during the transition from less developed or developing to upper middle-income status. This scenario also indicates that despite slow or steady pace of growth of agriculture sector per se, and lower share of agriculture in GDP, this sector has the potential to significantly impact the rural income, employment and overall reduction of poverty.

Bangladesh has made effective and sustainable gains in agriculture mainly through government policy support and the enterprising role and contribution of its farmers. Bangladesh's agricultural efficiency is well manifested by exemplary success in food production, and efficient supply and distribution. Keeping in view the perspective to ensure sustainability of the agriculture sector and its potential to contribute to overall growth, there is a need to expand productivity on the one hand, and to assess its multiplier effect on the economy, on the other. Despite limitations in size, scale and magnitude, agriculture continues to support GDP growth through increasing rural income and employment, stimulus to small and medium enterprises (SME)s including agro-based industries, and an efficient blend of labour-intensive and limited capital-intensive manufacturing. Higher farming yield and productivity can generate additional resources that would enable expansion of agro-supportive services. To ensure sustainable and efficient contribution of agriculture to growth, there is a need to prioritise addressing the critical challenges and constraints that this sector faces.

Agriculture is constrained by increased pressure on arable land, unfair prices, middlemen interventions, inadequate access to inputs and resources, and environmental challenges and climate change risks. Studies reveal Total factor Productivity (TIP) that reflects impact of investments in rural infrastructure grew at a modest rate of 0.6 percent to 1.0 percent (from 1950 to 2000). TIP can be improved through expanding farm size, promoting crop diversification and advanced benefits through research and development. Current focus on enhancing TIP is centred on developing agriculture to effectively respond to market signals and increasing overall share of agriculture to GDP. Overall productivity and sustainability can be promoted through commercialisation and farm mechanisation, diversification for high-value crops, promoting agro-processing, conservation of forest resources and environmental sustainability. Constraints relate to structural and functional inadequacies in responding to market requirements, mismatch in supply and demand of inputs and resources and insufficient market infrastructure. Addressing these constraints would enable support to high value crops, mechanisation, wider access to credit and marketing, and improved value chains. Enhanced investment in technology and research would support sustainable development of the agriculture sector. During recession, agriculture, like other sectors of growth, faces prolonged downturns. However, this sector has strong potential to cushion external shocks with lesser resources and at a faster pace. The resilience of the agriculture sector to overcome impact of disaster-related risks has been well evidenced depending on the intensity, nature and thrust of interventions. Recovery in agriculture can promptly minimise losses in income and employment, and serve as a catalyst to absorb deficiencies and setbacks that slows or staggers growth. A recent survey shows, due to the current pandemic, the proportion of extreme poor jumped to 28.5 percent (2020) as compared to 9.4 percent (2018). Prior to 2018 the agriculture sector accounted for most of the new poor. However, due to Covid-19 the proportion of "new poor" increased substantially for the services sector due to unemployment.

CARRYING AGRICULTURE FORWARD

Key strategies in promoting agriculture include addressing shrinking average farm size and diseconomies of scale for marginal farmers. Structured support to subsistence farmers and transition farms in the process of diversifying rural non-farm sector and leasing-in land for commercial crops have resulted in promoting sustainability. Efficiency objectives could be better achieved through commercialisation in agriculture leading to diversification and productivity gains, broadening agro-business, environmental protection and climate change adaptation strategies. Substantive farming incentives enhances potentials for increased bargaining capacity, contract farming, extension support, and reduced transaction costs. Easy and concessional credit will give farmers the leverage to purchase their own output during harvest and reduce middlemen influences. Crop diversification could further be successful through agro ecological zoning, especially in vulnerable groups and areas. Global climate change concerns continue to have adverse impact on water availability, quality and disruptions, and diminishes impact of policy interventions. There is a need to rehabilitate coastal embankment and improve water efficiency through long-term water management strategies, and expand ICT to ease Farm Water Management Technology. The 8th Five Year Plan focuses on GAP (Good Agricultural Practices) and aims at strengthening economic viability, food security, environmental sustainability, promoting farm mechanisation and value chain development. System of Rice Intensification (SRI) enables strengthened mechanisms and technologies, improved market, distribution and storage access. High yielding seeds, efficient irrigation and water resources management, and adaptation to climate change could enhance potentials of sustainability of the agriculture sector. Looking ahead, an inclusive "land policy" should aim at optimum and efficient use of agricultural land, and support overall efficiency in the agriculture sector.

CLIMATE CHANGE

Conventionally, reduction in the use of fossil fuels and afforestation were among the core strategies to mitigate impact of natural calamities and sudden disruptions due to adverse weather and climate impact. Over the years, there was a need to focus on short and long-term adaptation measures to cope with the adverse climate change impact—that includes floating agriculture, saline and submergence tolerant crop varieties and digging of mini-ponds for rainwater harvest. Constraints and deficiencies in "adaptation programmes" were further addressed through the Bangladesh Climate Change Strategy and Adaptation Plan (BCCSAP) adopted in 2009. This gives leverage for community level adaptation to increase resilience of  vulnerable people, accommodating social protection and livelihood diversification. Rehabilitating coastal embankments and climate change resilient techniques should also enable water efficiency and soil fertility. Programmes in implementing sustainable development goals (SDG) as well as moving ahead on the Paris Agreement on Climate Change would strengthen local potentials and adaptation, and this could significantly add value to strengthening and sustainability of the agriculture sector. Bangladesh is well-positioned to achieve this resilience through local adaptation. FOOD SECURITY

PHOTO: STAR

Increased food production (from 11 million tonnes in 1972 to 34 million tonnes in 2014) reflects Bangladesh's agro competencies and skills for sustained agricultural efficiency. The National Commission of Agriculture Report's (2018) projection reflects that growth-induced demand due to high income elasticity will require 3 percent increase in demand for food for every 7 percent growth in GDP, and this demonstrates the strategic focus to gear up efficiency in the agriculture sector as the country moves up towards middle- income and high growth trajectory. Input subsidies, concessional credit, upgraded techniques, reduced pressure on agricultural land, efficient storage, distribution and access could generate self-sufficiency in food and adequate foreign exchange for food imports. Key challenges in food security relate to inadequate production due to crop erosion, uneconomic agricultural sizes, and environmental risks. Food security challenges could also be addressed through monitoring range of fluctuations in production yield, disruptions in supply-demand trends and cropping intensity. In the medium to long-term, measures should be undertaken to address critical deficiencies due to inadequate purchasing power, reduced income and employment, uneven access to inputs, insufficient storage, price fluctuations, and market volatility. In addition, insufficient coordination, inadequate oversight and monitoring and inefficient management could weaken competitiveness and efficiency. Inadequate alignment to regional and global food security mechanisms and institutions could increase risks and vulnerabilities. Sustainable and effective food security can be ensured through retention of efficient supply and market demand, strengthened marketing and distribution mechanisms and market-driven resilience, especially for vulnerable segments of the population in disaster-prone areas.

COMMUNITY ENGAGEMENT AND MEDIA-DRIVEN FOCUS

Media and community support and engagement has contributed to significant momentum to agriculture revitalisation and overall efficiency. This is well reflected through the programmes over the past three decades by media and development personality Shykh Seraj, through popularising policy dialogue based on farmers' views, experiences and insights for incorporation in key national development strategies and programmes. Seraj's efforts also resulted in increased flow of knowledge and information dissemination among stakeholders, promoting urban agriculture. Highlighting success stories in farming beyond national frontiers has added value to the process. Shykh Seraj also popularised the community-driven approach, that is well centred on sharing best practices on agricultural expertise, improved non-farm activities and agro entrepreneurship. On the one hand, this has facilitated mainstreaming agriculture in the comprehensive development discourse. This adds value to skills and entrepreneurship expansion and substantive stakeholder engagement.

EXTERNAL OUTREACH AND ALIGNMENT TO REGIONAL AND GLOBAL INITIATIVES

Bangladesh's agriculture development strategy requires extensive alignment to mid-term frameworks by the World Food Program (WFP) and Food and Agriculture Organization (FAO) especially designed to combat Covid-19 implications. Broader engagement in Regional Cooperation and Integration (RCI) frameworks should facilitate sharing of experiences and best practices.

THE WAY AHEAD

Bangladesh Delta Plan (BDP) 2100 aims at a Delta Vision for an integrated approach for sector plans (incorporating agriculture, water resources, support to food security and mitigating climate change risks). Efficient implementation of BDP will ensure effective and sustainable development of these sectors.

Expatriate and local agro entrepreneurs may be given incentives for increasing remittances and investing in domestic agro industries, agro-based SMEs and agro-supportive Special Economic Zones. Public-private partnerships (PPPs) should be able to strengthen agro-based industries and for promoting agro entrepreneurship. In the post-covid scenario, it is important to strengthen monitoring and evaluation of implementation of the four pillars of GAP (that includes sector viability, economic sustainability, social acceptability and food quality and safety). Investments in agricultural extension and diversification will improve TFP growth and enhance competitiveness in the sector. Land use policy should augment the agriculture policy mechanisms in the Eighth Five Year Plan and Perspective Plan. Added focus on improved governance and efficient management will add substantive value in achieving the envisioned objectives and implementing programmes for agricultural sustainability. Agricultural diplomacy could be used as a core component of comprehensive economic diplomacy. This could not only contribute to strengthening food security, but also strengthen advancing our national economic interests.

Dr Mohammed Parvez Imdad is a senior economist and governance specialist, who is currently engaged in advisory and academic assignments and professional research. Email: mpinayefmimdad@gmail.com

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Posted by on Mar 4 2021. Filed under Environmental livelihood, Food security, News at Now, Organic agriculture. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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