The fund shortage in the Bangladesh Bank-operated Equity and Entrepreneurship Fund (EEF) for agricultural projects, as reported, is sure to send a wrong message to those who are tirelessly working for improvement in this crucial sector of the economy. The EEF was in fact set up to provide funds to promote entrepreneurship and create employment opportunities in the risky but promising areas of agro-based industry and information technology (IT). The latest statistics show, only Tk 9.96 billion was disbursed although the ICB sanctioned over Tk 27.40 billion against 1,501 agro-related projects under the EEF till October, 2014. The EEF has reportedly a substantial amount of excess money on account of the IT sector. Misplaced priority is to blame for this. Performance of the agriculture sector has been commendable but it still has a long way to go before attaining self-sufficiency in foods. Production of enough cereals does in no way mean such self-sufficiency or food security.
In fact planned agriculture plays a crucial role in shaping the future of the Bangladesh economy despite its diminishing contribution to the country's Gross Domestic Product. Currently, it contributes 19.6 per cent to the national GDP providing livelihood to 63 per cent of the population. The performance of agriculture thus has an important bearing on employment generation, food security and poverty alleviation. In other words, while the declining share of agriculture in national income is a natural process, the development priorities still need to recognise the primacy of agricultural growth in providing food and income security to rural households in Bangladesh. The reality is that domestic production has to be supplemented by imports of a number of essential foods such as edible oil, sugar and dairy products including milk powder. The demand for all these food items will continue to grow due to both population growth and growth in income. Against this rising demand, the availability of land for growing food is dwindling fast. This implies that an increasing agricultural output including food has to be attained out of an ever-declining area of land to meet the growing demand in order to avoid import on a large scale which Bangladesh can hardly afford.
More funds are, therefore, needed for substituting huge imports by promoting domestic agro projects. This demands an important strategic priority. But such a priority is also fraught with challenges including inadequate provision of funds that could help farm entrepreneurs build sufficient processing capacity, cold storage facilities or a functioning cold chain, and remove transport bottlenecks as these are vital for successfully executing projects that could reduce drainage of huge foreign exchange for agricultural imports. As the EEF has excess funds in IT sector, the money could be transferred to appropriate agro-projects. But then mere disbursement of money will not help unless these are productively used. The Bangladesh Bank, being the regulator of the banking system, should devise ways to ensure strict supervision and monitoring of public money to be diverted to the agriculture sector as in many cases, the Bangladesh Krishi Bank has failed to recover outstanding loans.
More funds for farm projects
FE Team | Published: December 08, 2014 00:00:00 | Updated: November 30, 2026 06:01:00
Share if you like