Prospective food industries
Monday, 7 July 2008
One thing which continues to favour Bangladesh in its export trade is its comparative advantage in the production of certain products for exporting them to the world's markets. Value-addition to agricultural produces for export happen to be one such hugely prospective area. But it does not seem that even a small part of the potentials of this very promising area has been exploited so far though the few entrepreneurs in this field cannot be blamed for the most part for failing to launch this sector vigorously. For example, a report in this paper on Friday focused on the plight of three producers of potato flakes and potato starch who are having great difficulties to go into production for the last four years though they invested some Taka 3.0 billion in their projects.
Potato based food and allied products such as flakes, starch, chips and other products have not only a limited market in Bangladesh. The same have a huge international market which can be tapped by Bangladeshi producers. The aspect of comparative advantage also should give an edge to entrepreneurs in this field because potato growing is almost an effortless and inexpensive exercise in this country due to the fertility of its soil. The potatoes are also of good quality and suitable in terms of nutrition value for overseas markets. A record quantity of potatoes were produced in the current year far in excess of the total local demand . If the excess amounts could be added value by turning them into various potato based food products and exported, then the same could open up a rich new vein of export earnings for the country. But as the report in this paper highlighted, three pioneering entrepreneurs in this field are struggling for the take-off of their projects
The main hurdle seems to be the law suit that a bank which financed one of these projects is about to start and for similar pressure from the other banks for meticulous servicing of their loans. But given some cooperation by these banks through rescheduling of the loans and easing somewhat the terms and conditions of their payment in the face of valid requests from the borrowers, the three industries can be mightily helped to go into production and start exporting their products. In that case, everybody may expect a good return : the entrepreneurs are very likely to start production and start servicing their loans, the banks would not have to bear the burden of non-performing loans, considerable employment from the growers' level to the workers in the producing plants can be created and, more significantly, a breakthrough will have been made in this sector which might attract the notice of other potential entrepreneurs into this field and encourage them as well.
Not only potatoes, there are other agricultural products such as tomatoes, gherkin, baby corn, mushroom, various types of vegetables and fruits etc., which can be commercially grown, processed and exported successfully from Bangladesh. The doing of the same can also add much to employment generation because of value-addition and chain activities at different stages from the farms to the factories. But a supportive policy environment would be required for the private sector to be more and more interested to try their hands in this field. Banks can treat enterprises in this sector with care and flexibility to help it to gain a momentum. Once the enterprises in this area start cropping up, the same can be a source of good and reliable customers of the banks like the garments industries. Therefore, the banks should see the merit of supporting this sector leniently even if that requires a somewhat bending of the rules for them now. Government can lease out lands to entrepreneurs in this sector for growing the basic produces such as potato. Government's fiscal and other policies should also aim to help in the stimulation of this prospective sector.
Potato based food and allied products such as flakes, starch, chips and other products have not only a limited market in Bangladesh. The same have a huge international market which can be tapped by Bangladeshi producers. The aspect of comparative advantage also should give an edge to entrepreneurs in this field because potato growing is almost an effortless and inexpensive exercise in this country due to the fertility of its soil. The potatoes are also of good quality and suitable in terms of nutrition value for overseas markets. A record quantity of potatoes were produced in the current year far in excess of the total local demand . If the excess amounts could be added value by turning them into various potato based food products and exported, then the same could open up a rich new vein of export earnings for the country. But as the report in this paper highlighted, three pioneering entrepreneurs in this field are struggling for the take-off of their projects
The main hurdle seems to be the law suit that a bank which financed one of these projects is about to start and for similar pressure from the other banks for meticulous servicing of their loans. But given some cooperation by these banks through rescheduling of the loans and easing somewhat the terms and conditions of their payment in the face of valid requests from the borrowers, the three industries can be mightily helped to go into production and start exporting their products. In that case, everybody may expect a good return : the entrepreneurs are very likely to start production and start servicing their loans, the banks would not have to bear the burden of non-performing loans, considerable employment from the growers' level to the workers in the producing plants can be created and, more significantly, a breakthrough will have been made in this sector which might attract the notice of other potential entrepreneurs into this field and encourage them as well.
Not only potatoes, there are other agricultural products such as tomatoes, gherkin, baby corn, mushroom, various types of vegetables and fruits etc., which can be commercially grown, processed and exported successfully from Bangladesh. The doing of the same can also add much to employment generation because of value-addition and chain activities at different stages from the farms to the factories. But a supportive policy environment would be required for the private sector to be more and more interested to try their hands in this field. Banks can treat enterprises in this sector with care and flexibility to help it to gain a momentum. Once the enterprises in this area start cropping up, the same can be a source of good and reliable customers of the banks like the garments industries. Therefore, the banks should see the merit of supporting this sector leniently even if that requires a somewhat bending of the rules for them now. Government can lease out lands to entrepreneurs in this sector for growing the basic produces such as potato. Government's fiscal and other policies should also aim to help in the stimulation of this prospective sector.