Food and agriculture in bangladesh: a success story

FOOD AND AGRICULTURE IN BANGLADESH: A SUCCESS STORYBy Gordon West, Deputy Assistant Administrator, Asia and Near East Bureau,United States Agency for International DevelopmentBangladesh’s thriving agricultural sector, benefiting from a new global partnership between the people of Bangladesh and foreign aid agencies, international research institutions, and nongovernmental organizations, has become a South Asian success story. Further agricultural gains realized through greater crop diversification, free market policies, investments in seed research and irrigation, infrastructure developments, and new approaches to food aid have helped move the country to a position of near self-sufficiency in rice, its main crop. The views expressed herein are those of the author and do not necessarily reflect the views, opinions or ideas of the U.S. Government, the U.S. Agency for International Development (USAID), its management, or those serving within the agency’s Asia and Near East Bureau. Bangladesh’s accomplishments in transforming its devastated agricultural sector into one of the most productive farm economies in all of South Asia is a major development success story. Once racked by famine and dependent on food imports, the country is now essentially self-sufficient in rice, is emerging as a significant exporter of high-value agricultural products, and enjoys the second highest percentage growth in per capita income in South Asia. Its success is largely a story of close cooperation between the government of Bangladesh and its people with foreign aid agencies, international research institutions, and indigenous nongovernmental organizations. THE ECONOMY OF BANGLADESH Bangladesh has a population of 131 million — about 1,007 persons per square kilometer. Almost 26 percent of its gross domestic product (GDP) comes from agriculture, including fisheries, which also accounts for more than 13 percent of its export earnings. Over 70 percent of the population is directly engaged in farming or related activities. Within the past few years, Bangladesh has reached self-sufficiency in its main cereal, rice. Rice production increased from 11.7 million metric tons in 1974 to 23.1 million tons in 2000, an average annual increase of 3.6 percent. Wheat production climbed from 0.11 million metric tons in 1974 to 1.8 million metric tons in 2000. Cereal prices are low and stable, and production continues to increase. The economy also is showing rapid diversification, particularly in the livestock and poultry sectors. Agricultural exports, both bulk commodities and higher-valued processed products, grew by nearly 5 percent over the last five years. In 2000, the value of shrimp exports alone was $296.3 million. And unlike the garment industry, where the bulk of the export earnings go back out of the country to pay for imported raw materials and machinery, with agribusiness the value added stays in the country. AGRICULTURAL RESEARCH Much of the success in Bangladesh’s agricultural sector can be attributed to the development and implementation of dry-season irrigated rice. Thirty years ago, almost all of Bangladesh’s cereal production was from the monsoon crop. Now almost half is dry season, made possible by the development and release by the public research institutions of high-yielding rice varieties adapted to shorter days and cooler temperatures. The introduction of this rice was aided by the decision of the Bangladesh government not to intervene in the market. Prices reflected market forces, and the private sector imported pumps to irrigate dry-seasons crops. The fertilizer system was privatized, resulting in a tripling in the use of fertilizer in 10 years. Bangladesh farmers took the challenge by planting and irrigating the new high-yield seed. The entire rural population has benefited: peasant farmers now get two or even three crops per year, and landless peasants find that their income-earning possibilities have expanded. It was through publicly supported agricultural research working in tandem with private investment for irrigation that made the jump in rice production possible. Similarly, organizations like the International Rice Research Institute (IRRI) and the International Maize and Wheat Improvement Center (CIMMYT) collaborated with the Bangladesh’s agricultural research system to introduce more sustainable and efficient rice, wheat, and maize cropping systems into Bangladesh. ADOPTING FREE MARKET POLICIES Bangladesh’s decision, supported by the U.S. Agency for International Development, to liberalize its food import policy is another important side to the country’s success story. The government has removed many agricultural subsidies, eliminated quantitative restrictions, reduced tariff levels, and created an open-market economy that makes agricultural inputs readily available for farmers and guarantees fair commodity prices. Today, Bangladesh’s agricultural sector is the most open and least subsidized of South Asia. One of the keys to this success has been the decision by the government to liberalize the import of food. Over the last 10 years, private traders have stepped in to import food grains during times of domestic shortfall, often driven by floods. These actions by private traders have provided both supply and price stabilization and have removed a major financial burden from the government. During fiscal year 1999, private sector food imports to address needs arising from the 1998 flood reached 2.26 million metric tons, mainly from India. Had the government of Bangladesh imported this grain itself, the total fiscal cost would have been about $185 million. The private sector’s share in food imports climbed from zero in 1991 to 50 percent in 1996 and 100 percent in 2000. The government of Bangladesh also reoriented its large public food distribution system away from mass distribution in favor of a targeted food “safety net” program for the poor. In fiscal year 2000, 85 percent of public food was targeted for the poor, an increase of about 46 percent over 1992. INFRASTRUCTURE DEVELOPMENT One of the major roles played by foreign development agencies in Bangladesh has been the financing of rural infrastructure, which has made it easier to move products from field to market. During 1995-2000, U.S. financing helped rehabilitate over 15,000 kilometers of farm-to-market roads, creating jobs and improving year-round access to markets and to basic human development services. The cost of food transportation has dropped, and freight traffic has increased 94 percent. Foreign financing also facilitated efforts to improve water flow, which led to a quicker recession of floodwaters and a subsequent 16 percent increase in agricultural production — by value — in the affected areas. Rural electrification, aided by funding from foreign aid agencies, has been another important factor in the agricultural productivity gains. During 1977-2000, nearly 2.42 million domestic connections were provided and over 80,000 irrigation pumps electrified. The 57 local electric cooperatives now reach over 20 million rural people. Crop yields are up in electrified villages, as are both the number of agricultural jobs and the wages received by agricultural labor. The rural electrification program has a 95 percent rate on collection of payments, compared to only 60 percent nationwide. A GLOBAL PARTNERSHIP Food security and safety in Bangladesh benefited from the effort of global partnerships. USAID and the U.S. Department of Agriculture provide wheat, which is sold on the Bangladeshi market for local currency. Funds raised from the sale of grain are allocated to local development activities, and the government of Bangladesh uses food grain monetization for its social safety net activities. One specific program provides a food provision to poor families when they send their children to school rather than to work. This Food for Education program increases overall educational levels, decreases child labor, and provides food to poor families. Under the local development programs, men and women in the most food-insecure areas in Bangladesh are given the opportunity to work for a wage and/or food through programs administered by CARE and World Vision. These programs improve the rural infrastructure and increase community assets by building environmentally sound, all-season roads. Program participants also plant trees to prevent soil erosion, and poor women are employed to care for the trees. Similarly, the United Nation’s World Food Program (WFP) has provided food assistance for nearly 3 million Bangladeshis. Some of these receive WFP rations as payment for their efforts to reclaim rural roads, community fishponds, plantations, and flood-protection embankments. CHALLENGES AHEAD While there have been impressive successes in Bangladesh, important challenges remain. Rates of malnutrition in the country are among the highest in the world, and nutritional standards are poor. Production from dry season farming is leveling off, in large part due to problems of scale — farms are simply too small to make possible or feasible the kind of capitalization necessary to bring about further significant increases in yields. A further transformation of Bangladeshi agriculture, mostly in terms of diversifying into higher value products such as maize, legumes, livestock, and vegetables, both for domestic and export markets, is the next logical step for the country. Rice uses four or more times more water than crops like wheat and maize, and the lack of adequate water will be a major impediment to future agricultural productivity. Also, Bangladeshi diets lack essential amino acids, fats and minerals, and vitamins. By making products such as wheat, fruits, milk, pulses, and meats widely available at affordable prices, it would help improve overall health. The good news is that there are no major obstacles to diversification and there are a host of new seeds to address a broad range of environmental challenges. The close cooperation between the government of Bangladesh, the research institutions, and international development agencies suggest that Bangladesh can move beyond self-sufficiency and that agriculture and agribusiness are going to remain the bedrock of Bangladesh’s economy for years to come.