Farming in Bangladesh is generally termed as 'mono-crop' agriculture where a single crop-paddy-- seemingly occupies most of the cultivated lands. The reasons behind mono-cropping system have been documented in available literature but, suffice it to say at the moment that the majority of the rural people want to ensure food security through growing staple crops in their small quantity of lands. It is thus no wonder that the land use pattern is dominated by growing food crops only. Food insecurity always remains instrumental in allocation of scarce resources like land. Again, as most of the farms are of subsistence nature; staples crops are grown largely for home consumption.
However, contrary to expectations, almost half of the produced output is reported to be marketed. Data pertaining to production and sales of different crops also show that there is an increasing pattern of marketing of paddy output implying crop diversification. Farmers also grow cash crops (with an increasing tendency in recent years) to meet cash needs where 75-80 per cent of these crops are marketed. In this context, we can perhaps recollect the food crisis of the most recent past to add further meat to our discussion on marketing. After two decades of relative calm, rice prices began to soar very fast since 2004. From around $300 per metric ton (mt), the international price of rice reached $1000/mt in 2008, an all-time high. Since Bangladesh is poised for an open economy, it took little time for transmission to take place.
Let us look at trends in marketing of paddy, the staple crop. Marketing has increased over time despite farm size getting smaller. For example, a quarter of the total paddy output produced by households found its way to markets in the distant past but by 2014, the share rose to claim half of the total output. A number of factors could be adduced to this market orientation by the rural households, and let's take a few: (a) an increase in land productivity resulting from new technology has helped households reap a better harvest from the same quantity of land; (b) improvements in communications - including telecommunications, and media - have widened the base of market information; (c) a reduction in household size has reduced home consumption to leave some outputs for the market and (d) perhaps people are facing changing pattern of their consumption behaviour from paddy to non-paddy.
However, the proportions of marketing of other crops have historically been high, but only got higher over time. This is not unusual given that most of these are perishable products and traded for cash income. Farmers usually meet their non-rice demands by selling these commodities. Potato is a particular case ( decreased marginally recently) where substantial expansion of marketing has taken place because of the fact that cold storage facilities have expanded, modern varieties have been introduced, and cultivation of potato has spread from a few regions to all over the country. Â
A cursory look at marketing of paddy/rice crop by socio-economic groups provides some interesting insights into the changing marketing environment. It could be observed that and as also said before, half of the paddy output is now being marketed in contrast to one-fourths of the 1980s. The rise in marketed output over time may sound surprising because, as a strategic and staple commodity, the marketed output of paddy is always likely to be lower in a country like Bangladesh. This also applies to the international market where only 6 per cent of the total rice produced in the world reportedly finds way there. In Bangladesh, it has been observed that poor households (owning up to 1 acre of land) have increased their contribution to total paddy production - accounting for 44 per cent now from 16 per cent in 1980s. This could be due to increase in their number, and a greater access to land through the tenancy market. However, the degree of market orientation for this group tends to hover around 40-44 per cent with very little change over time. The important point to note is that despite deficits in terms of production and consumption, small farmers also sell paddy in the market although they buy back at a later stage.
Marketing of paddy in this country is mostly done by medium and large landowning households. Nearly one-half of the total marketed paddy comes from 13 per cent of rural households who appear to own more than two and a half acres of land. As opposed to this, about one-thirds of the marketed output comes from about two-thirds of the rural households owning land up to one acre. From the angle of economic status, we observe that solvent households, comprising one-sixths of rural households, supply 41 per cent of the marketed paddy; 'self-sufficient' or 'break-even' households comprise 42 per cent and they supply 47 per cent of output. Over time, however, the share of marketed output from both the groups increased. Finally, the 'poor' segment of constitutes about half of rural households, but supply only a little over one-tenths of the total marketed output.
The policy implication of this precarious position is that we need to keep the price of paddy at a remunerative level to encourage the actors in the market. At the same time, the impact of that on the poor households should not take a back seat in our mind.
The writer is a former Professor of Economics at Jahangirnagar University.
abdulbayes@yahoo.com
The marketing mileage
Abdul Bayes | Published: October 04, 2016 00:00:00 | Updated: February 01, 2018 00:00:00
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