At some stages of our economy, we thought, we had become self-sufficient in agriculture, especially in rice, and lived in a world of complacency - and removed major, if not all, subsidies and supports to agriculture. Then came the worldwide rise in fuel prices in 2007-2008 that spiked international prices of food grains to an unprecedented height. Poverty increased following that spike. It should not be forgotten that the livelihoods of a large proportion of population still hover around agriculture despite migration to cities and opening up of non-farm activities.
Bangladesh has made notable progress over the past two decades, lifting millions out of poverty and sustaining expanding levels of economic growth. The progress has been achieved despite major internal and external challenges - extreme scarcity of land, an agrarian structure dominated by small and marginal farmers with high levels of illiteracy, exposure to volatile global external market for agriculture, frequent natural disasters and unstable political situation - affecting normal operation of the economy. Agriculture played a useful role in this economic transition. The agricultural growth rate accelerated from less than two per cent per year during the first two decades after Independence to an average of about four per cent over the last decade. The sector still contributes 18 per cent to the gross domestic product (GDP) and employs nearly 45 per cent of the labour force. If we include agriculture-related activities such as trade, transport and processing, the sector may employ nearly two-thirds of the labour force and contribute nearly 40 per cent to the gross national product. The good performance of the agricultural sector is the main contributor to accelerating economic growth in recent years.
Despite economic progress and continued prosperity of majority of the people, sustained food security remains a challenge for Bangladesh. About one-third of the population still remains poor by the national standard of poverty line, and about 40 per cent with an income of less than US$ 1.25 per day at international purchasing power parity prices. Although remarkable progress has been made in population control, Bangladesh is still adding 1.8 million people every year for whom providing food, education, health care and employment still remains formidable challenge for the policymakers. For achieving the ambitious target of eight per cent economic growth, agriculture must release lands for industrial and commercial establishments and for expansion of infrastructure facilities. Thus, agriculture faces the challenge of producing more food with less land and less labour, and generate marketable surplus for the fast-growing urban population. But the easy means of growth in production has almost been exhausted; nearly three-fourths of cultivated lands have been brought under modern irrigation, thanks to private sector investment in minor irrigation equipment; more than four-fifths area is now cropped with improved varieties developed under the R&D system and the production of potato and vegetables has almost met the demand of the domestic market. The country spends a substantial amount of hard-earned foreign exchange for import of essential food items such as edible oil, pulses, sugar and milk.
Agriculture deserves attention on other counts. Studies conducted by the International Food Policy Research Institute (IFPRI) indicate that a one percentage growth in agriculture is at least two to three times more effective in reducing poverty than the same rate of growth achieved in the non-agricultural sectors. Given that Bangladesh is home to a large number of poor and undernourished people in the world, a higher priority to agriculture will achieve goals of reducing poverty and malnutrition which is at the centre-stage of development discourse in recent years.
Bangladesh is adding about 1.5 million new entrants to the labour force every year. Although some of them find employment opportunities abroad (sometimes in inhuman living conditions), the challenge of finding job opportunities for these people in the formal sectors of the economy is daunting. Agriculture and agro-based activities (trade, transport and processing) are still the employers of last resort. So agriculture should not be viewed just as a farming activity alone, but as a holistic value chain that includes farming, trading, warehousing, processing and retailing. It also needs to support the growth of other sectors of the economy by generating market for their products and services and supplying food at affordable prices to industrial workers. The Bangladesh Planning Commission estimates that to sustain an 8-9 per cent growth of the gross domestic product, agriculture must sustain a growth of at least four per cent. All these factors point to the fact that agriculture has to be kept at the centre of development agenda in order to achieve inclusive development, sustained food security, and reduction of poverty and malnutrition.
But to do that, we also need some empirics. While there have been a number of studies on the agriculture sector of Bangladesh in recent years, a formal inclusive growth diagnosis - with a comprehensive assessment of agricultural performance, drivers of progress and the challenges for the future, the country's capacity to address those challenges - is seriously lacking. The joint DFID/USAID inclusive growth diagnostic study (2014) highlighted that. Despite being Bangladesh's most inclusive sector in the past four years, the agriculture and forestry sector has seen a substantial decline in its share of GDP growth, contributing less than 18 per cent to GDP and 12 per cent to exports. With population increasing by 1.2 per cent each year, the amount of agricultural land decreasing by 1.0 per cent per year, removal of obstacles to investment in agriculture to increase productivity is crucial for Bangladesh.
The writer is a former
Professor of Economics at
Jahangirnagar University.
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