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Bangladesh and Agricultural Sector

Essay by   •  July 13, 2011  •  Case Study  •  6,769 Words (28 Pages)  •  2,338 Views

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Agriculture is the single most important sector of Bangladesh economy. 80% of the population is engaged in agriculture (66% of the labor force). Fifty-seven percent of the labor force is engaged in the crop sector which represents about 78% of the value added in the agricultural sector. The share of agriculture in GDP has fallen from around 57% in the 1970s to 35% in recent years but is still the largest economic sector. It is also the source of many of the small industrial sector's raw materials, such as jute, and accounts for 32% of the value of exports. In short, agriculture is the driving force behind economic growth in Bangladesh and, as a result, increasing food and agriculture production have always been major concerns of Bangladeshi policy-makers.

The crop sector

Within the crop sector (rice, wheat, pulses and jute), rice dominates, with an average 71% share of the gross output value of all crops. As a result, growth in the agricultural sector essentially mirrors the performance of rice production, although the share of livestock and fisheries has increased steadily in recent years to 22% of the value added in agriculture.

Fluctuations in food grain production

The possibility of natural disasters is a constant threat for Bangladesh. The country is particularly vulnerable to sudden floods, cyclones and even droughts. Vulnerability to natural disasters and a heavy reliance on annual rains for the main crop performance are the cause of severe fluctuations in food grain production and prices and also very erratic GDP growth. Losses of both food and cash crops are a common occurrence, seriously disrupting the entire economy by precipitating unanticipated food import requirements. This in turn reduces the foreign exchange availability necessary for imports of essential inputs for manufacturing and industry and, as a result, causes shortfalls in exports.

Export earnings from fish and fish products, in particular shrimp, are also sizeable, and followed by export earnings from the leather industry. Natural gas production is of increasing importance. Its major product, urea fertilizer, has more than doubled in output in the last decade and the country now exports fertilizer mainly to neighboring Asian countries. Within the agriculture sector, tea follows jute as an important cash crop and export product; however it represented only 1% of the country's total export earnings in 1994/95.

Resource base

Bangladesh has a narrow resource base, except of course its human resource potential. Industry in the country is at present not large enough to support the country through export earnings, or by employment generation. The opportunities for diversifying the economic base in Bangladesh are limited and the country continues to run up a heavy trade deficit, reflecting its dependence on imports for most essential goods, such as machinery, equipment and petroleum products, and the decline in the real prices of its traditional staple exports of jute, jute manufactures and tea. Although levels of domestic savings and investment have been growing in the 1990s, they are still low and act as a constraint to the country's economic growth and development.


Crop Diversification

With rice occupying almost 75 percent of the cropped area, followed by wheat which occupies approximately 4 percent and jute which occupies approximately 3 percent, less than 20 percent of the cropped area is devoted to a range of other crops. It appears that the benefits of crop diversification in the country are well known and have been recognized for a long time. However, all efforts seem to have been consumed by the domination of rice production and, as a result, the area under non-cereal crops has continued to diminish. The government has now recognized the urgent need for agricultural diversification, and a shift towards this end is beginning to take place, although - some would argue - at an unprogressive pace.

There are several immediate reasons why the focus of agricultural growth should incorporate more than the emphasis on food grain production alone and include several non-rice crops such as maize, pulses, oilseeds, potatoes and other vegetables as well as poultry, livestock and even sericulture production:

1) Bangladesh's serious nutrition predicament needs immediate attention. While the diet of the average Bangladeshi meets carbohydrate requirements, it is grossly deficient in proteins, vitamins and minerals.

2) Enlarging the cropping possibilities for Bangladeshi farmers will enable them to allocate their productive resources optimally and maximize their income. There are many opportunities to diversify farm products and by-products in support of agro-industries.

3) As already mentioned, the current cropping system, with its overdependence on rice production throughout the year, is detrimental to soil fertility. It also makes the crops easily susceptible to pest attacks. Crop diversification can help maintain a better soil structure for long-term sustainability.

4) A good proportion of the crops that are currently imported could be substituted through domestic production. Wheat is such an example: while the issue of taste was a constraint to increased wheat production and consumption in the mid-1970s, wheat has gradually become part of the rural diet. Not only does it require less irrigation than rice (see: crop water requirements), making it ultimately less costly to produce, but it is also far less damaging to the environment. On the other hand, climatologically constraints limit prospects for increasing wheat yields significantly.

6) With the significant decline in jute production, together with the limited opportunities and intense overseas competition for rice exports, diversification is essential for agriculture to break into export markets and continue to make a significant contribution to GDP.

There are some obvious obstacles to agricultural diversification which need to be addressed. The development of modern technology for rice and wheat has impeded the development of seeds for other crops and reduced the competitiveness of pulses and oilseeds, which are important sources of protein for the poor.

Additional research is needed to develop suitable HYVs and to make them competitive with modern varieties of rice and wheat. There is also an inherent difficulty associated with intercrop conflicts arising from competition for limited land area. Potatoes, vegetables, bananas, onions and spices are all easily produced in Bangladesh. However, up to now, storage



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