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  • High-value agriculture and agri-business in Bangladesh

    THE demand for food in Bangladesh and around the world is changing rapidly. Driven by economic growth, rising incomes, and urbanisation, demand is shifting away from traditional staples toward high-value food commodities. High value agricultural commodities include fruits, vegetables, spices, fish, and livestock products, many of them processed before reaching the market. In Bangladesh, additional demand for these commodities is projected to be worth about $8 billion by 2020 (in 2005 prices). This represents an enormous opportunity for food producers, processors, and sellers. Owing to the greater labour intensity characteristic of high value agricultural production, it also provides an opportunity to generate rural employment and raise rural incomes. More than 80% of people living on less than $2 a day in Bangladesh live in rural areas. This spatial distribution of poverty makes capitalising on the opportunities afforded by high value agricultural production an important strategic priority for those seeking to reduce poverty in the country. Yet, for all of its promise, capitalising on these opportunities is fraught with challenges. High value agricultural products are generally far more perishable than traditional staples, and require more sophisticated post-harvest technologies and faster and more controlled transport. Insufficient processing capacity, the lack of cold storage facilities or a functioning cold chain, and the persistence of transport bottlenecks are significant constraints to high value agriculture in Bangladesh. The promise of generating higher income and increased export revenues by accessing international markets is matched by the challenges of meeting the exacting quality and safety standards that apply in those markets -- and by the prospect of having to compete with high quality imports from those markets. Most importantly, even assuming that opportunities afforded by high value agriculture are successfully seized upon, there is no reason whatsoever to assume that the benefits of this success will extend naturally or automatically to those who need them most urgently -- Bangladesh's rural poor. A new report published this month by the World Bank and the IFC-SEDF, entitled High-value Agriculture in Bangladesh, examines the opportunities and constraints that Bangladeshi agro-businesses face in shifting to this type of production. The report presents case studies of five high-value agricultural industries/sub-sectors: aquaculture, small-scale commercial poultry, fruits and vegetables, high-value aromatic rice, and dairy, and examines cross-cutting issues that emerge as priorities for promoting high-value agriculture and related agro-business development in Bangladesh. Bangladesh's strong comparative advantage in fish production, together with burgeoning domestic and foreign demand for fish products makes aquaculture an industry of tremendous potential growth. Yet, quality problems and low productivity could blunt the competitiveness of the shrimp export industry. Improvements in pond management and the use of disease-free seed are needed to significantly improve the productivity in brackish water shrimp farms. Genetic improvement of fish stocks, combined with technical advice for farmers, are essential to sustain the freshwater aquaculture industry. Quality advisory services could also transform Bangladesh's poultry industry, where rapid growth in the last 15 years has been concentrated among large, well-established commercial enterprises. Improving technical knowledge, efficiency, control over inputs, and access to credit among small-scale poultry producers could extend this growth, generating employment and helping reduce poverty in rural areas. It will also enable them to better deal with the urgent practical realities surrounding highly pathogenic avian influenza (HPAI). Consumption of fruits and vegetables is growing in Bangladesh. Yet, the limited availability of reliable planting material and hybrid seed keeps productivity low. Post-harvest losses are high. Farmers need better market information to synchronise production with demand. High informal transportation tolls lead to excessive marketing costs. The prospects of profitably adding value through processing are limited by unreliable power supplies, which also afflict rice milling -- including the high-value aromatic rice treated in the report. The variable performance of Bangladesh's fruit and vegetable exports is unlikely to improve unless specific steps are taken to ensure long-term growth. It is important to note that the value added in Bangladesh's domestic market will likely dwarf any value addition obtainable through exports. Production for domestic consumers will also have a far greater impact on farmers' incomes than production for export. Even with relatively slow growth in per capita milk consumption compared to other high value foods, domestic production still cannot meet existing demand and Bangladesh relies heavily on imports of powdered milk. But unless they can significantly improve productivity, dairy producers in Bangladesh are unlikely to compete with imports. Dairying appears to be profitable only in certain parts of the country, where feed is more readily obtained and where there is some milk-marketing infrastructure. In these areas, farmers would benefit from better marketing arrangements as well as more effective animal health and breeding services and improved animal nutrition strategies. The formation of effective dairy producer associations could go far in improving milk marketing. The case studies presented in the report suggest a number of recommendations and policy options for developing agro-business in the country. A number of these relate to improving the investment climate and providing a more enabling environment in which the costs and intricacies of doing business are significantly reduced. Some relate to removing policy distortions, regulations, and informal tolls and costs that make doing business unnecessarily cumbersome. The case studies point unambiguously to the cardinal importance of food quality and safety. Consumers must be confident that the high-value products available to them in the market are not a public health risk if demand for these goods is to continue growing. Improving the awareness and understanding of food safety risks, and how to minimise, them is necessary for producers, consumers, and everyone along the supply chain that connects them. The capacity of institutions with regulatory responsibilities needs to be developed with new skills and technologies. High-value agriculture requires technical skills and knowledge not generally associated with more traditional production, making human capital development and knowledge management important elements in the transition. There is a lack of reliable data on most high-value agricultural commodities that deprives policy makers, planners, and investors of critical information. Systematically benchmarking and monitoring this information will enable planners to identify, document, and scale-up best practices in high value agriculture and related value chains. Access to timely and reliable market information and to new technologies will go far in determining the competitiveness and profitability of agro-businesses. Applied research is needed to build an effective knowledge base that is available to investors who participate and compete in high-value agro-business. The institutions that carry out this research and develop new technologies adapted to conditions in Bangladesh will require combinations of public and private financing and management. Procurement arrangements like contract farming are expanding rapidly in Bangladesh, and provide for more orderly marketing with less price volatility and better sharing of risks and rewards. Contract enforceability remains a major challenge, with breaches common among both producers and purchasers. Building trust and developing positive social capital is ultimately the best way to improve contract enforceability, but this of course takes time. Strengthening producer organisations may help enforce contract terms on the farmers' side, and a variety of other institutions can provide alternative fora for dispute resolution. Associations formed around professions, industries, and commodities are likely to play a very prominent role in developing high-value agro-business in Bangladesh. Effective producer groups often enable small-scale farmers to forge mutually beneficial partnerships with private industry. While the private sector will continue to take the lead in developing high-value agriculture and related agro-business, the role of government remains essential. It is essential in fostering an enabling business environment for market-led growth through stable and undistorted economic incentives and in providing critical public goods and services. The public sector's regulatory role is also very important in ensuring that the growth of high-value agriculture and agro-business does not deepen poverty, accentuate prevailing inequities, or harm the environment. Closer collaboration between the public sector, nongovernmental organisations, and the private sector would be extremely beneficial in addressing the combinations of opportunities, risks, and challenges that the shift to high-value agriculture carries for Bangladesh. Xian Zhu is Country Director, World Bank, Bangladesh, and Mona Sur is Senior Economist, Agriculture and Rural Development Department, World Bank.

  • Three best performing project teams get ADB award

    Bangladesh Resident Mission of the Asian Development Bank (ADB) yesterday awarded three best performing project teams implementing projects in Bangladesh. The 2007 award-winning project teams are the Northwest Crop Diversification Project (NCDP) implemented by the Department of Agriculture Extension and Bangladesh Bank, and the Urban Governance and Infrastructure Improvement (Sector) Project (UGIIP) and the Rural Infrastructure Improvement Project (RIIP), both implemented by the Local Government Engineering Department (LGED).

  • $65m Japanese loan for disaster rehabilitation

    Japan and Bangladesh signed an agreement in Tokyo yesterday concerning Japanese loan assistance of US$ 65 million for 'emergency disaster damage rehabilitation' project in the country. Foreign Adviser Iftekhar Ahmed Chowdhury, who is now visiting Japan, and Masahiko Koumura, minister for foreign affairs of Japan, signed the agreement after their bilateral meeting, said a release from the Japan embassy. Japanese Ambassador Masayuki Inoue pledged the loan to Finance Adviser Dr Mirza Azizul Islam last month. The rehabilitation project under the loan will be started following the signed agreement. Asian Development Bank (ADB) is co-financing the loan. The objective of the project is to support 'quick restoration of economic and social activity' in the areas damaged by the floods and cyclone, through providing quick-disbursement type of import financing for essential agricultural commodities. Rehabilitating and reconstructing damaged public infrastructure, thereby contributing to sustainable economic growth, are also among the objectives. Japan has been assisting disaster mitigation and damage recovery of Bangladesh for long. For recovery from the damage caused by cyclone Sidr, Japan already has provided emergency relief goods equivalent to about US$ 327,100 and emergency grant aid through UN agencies equivalent to US$ 3.7 million. Japan has already started the assessment procedure for construction of additional cyclone shelters in affected area. In addition, Japan International Cooperation Agency (JICA) is planning to support for rehabilitation of rural infrastructures with Local Government Engineering Department (LGED) and water supply facilities with the Department of Public Health and Engineering (DPHE) under technical cooperation projects.

  • Wheat farming expands in Faridpur

    FARMERS in Faridpur are getting interested in wheat cultivation due to its increasing demand, high price and favourable weather. The land for wheat farming in the district has been increased significantly over the past few years. According to the Department of Agricultural Extension in Faridpur, 25,545 hectares of land have been brought under wheat cultivation this season while the figure was 20,310 hectares in the previous year. The wheat production might be about 53 thousand tonnes this season which was about 34 thousand tonnes in the previous season. In 1999-2000 season, 12,904 hectares of land were brought under wheat cultivation in the district and the production was 24,634 tonnes, according to the regional statistical office. DAE officials said in the current season cold weather and rain made a good contribution to the expected production which could increase by 5 to 10 per cent. The officials said some 10 years back the cultivation of wheat was not on a large scale in the district. In the winter, farmers used to remain satisfied with vegetables' cultivation as well as other rabi crops. A vast tract of land remained fallow. In course of time, the scenario has been changed. Dr Sirajul Islam, scientific officer of On Firm Research Division of the Bangladesh Agricultural Research Institute in Faridpur, said in the last few years the land under wheat cultivation had got almost double. He attributed the increase of land to rising demand of flour in the domestic market. He also added that in the past years agriculture researchers had invented some high yielding varieties of wheat, which had become very popular to the farmers. The varieties are Sonali, Akbori, Bolaka, Waghrany, Protiva, Sourav, Shotabdi, Behari Kalyan etc. Old local varieties like Sona Digha, Kanchon, Elyas etc can no longer attract farmers with their low productivity, Dr Sirajul Islam said. Oasiul Islam, deputy director of the Faridpur DAE, said his department had tried heart and soul to ensure proper supply of fertiliser, seeds and technological support. Abdul Kuddus, a farmer of village Parchar at Machchar union in the district headquarters, said he was expecting a good harvest of wheat in the current season because of favourable weather. He also added that farmers in the area got sufficient quantity of fertiliser. The farmers said they had taken to wheat farming due to its growing demand and increasing price in the market. Besides, cultivation of wheat is very easy in comparison with many seasonal crops. In the market wheat is now selling at Tk 1,100 to 1,200 per mound which was only Tk 700 to 800 in the previous year.

  • $62.6m IDA aid to revitalise agri technology

    Bangladesh yesterday signed a loan agreement with International Development Association (IDA) under which it will receive 62.6 million US dollar to improve agricultural productivity and farm income by revitalising the national agricultural technology system. Additional ERD Secretary Mohammad Mesbahuddin and World Bank acting country director Mohamed Alhousseyni Toure signed the agreement for their respective sides at the NEC auditorium. The National Agricultural Technology Project (NATP) is designed to promote generation, dissemination, adoption and use of appropriate agricultural technologies through a number of policy reforms, institutional development and investment to support agricultural research, extension and supply chain development. The development of supply chains will focus on strengthening farmer-market linkages, knowledge management and human resources development. The credit from the IDA, the World Bank's concessionary arm, has 40 years to maturity with a 10-year grace period and carries a service charge of 0.75 percent.

  • $62.6m IDA loan to give boost to farm sector

    Bangladesh on Thursday signed a loan agreement with International Development Association under which it will receive $62.6 million to improve agricultural productivity and farm income by revitalising the national agricultural technology system. The additional ERD secretary, Mohammad Mesbahuddin, and the World Bank acting country director, Mohamed Alhousseyni Toure, signed the agreement for their respective sides at the NEC auditorium. The National Agricultural Technology Project is designed to promote generation, dissemination, adoption and use of appropriate agricultural technologies through a number of policy reforms, institutional development and investment to support agricultural research, extension and supply chain development. The development of supply chains will focus on strengthening farmer-market linkages, knowledge management and human resources development. The credit from the IDA, the World Bank's concessionary arm, has 40 years to maturity with a 10-year grace period and carries a service charge of 0.75 per cent.

  • India

    India bails out small farmers in pre-election budget

    India's Congress-led government announced on Friday a 15 billion dollars loan bailout for small farmers in a populist pre-election budget targeting the party's traditional poor rural supporters. Finance minister Palaniappan Chidambaram, releasing the budget for the year starting April 1 as India's blistering economic growth has begun to slow, announced a 600 billion rupees ($15.05b) relief plan. Some 30 million indebted farmers' loans would be fully waived and another 10 million would receive aid, said Chidambaram, who presented the budget ahead of nine state elections slated this year followed by national polls in early 2009. He pledged to wrestle down the fiscal deficit and tame inflation. But the lack of any big corporate incentives along with the debt giveaway dismayed the stock market which tumbled nearly 1.4 per cent.

  • Fertiliser crisis affects Boro in Kishoeganj

    Farmer Shamsul Huq said he went to Alongjury union of Itna upazila eight times but did not get any fertiliser. He lanted Boro in four acres of land in Dhuldia Beel in Itna upazila, which need fertiliser now. He did not get any fertiliser as he is not on the list in Alongjury union because he is a resident of nearby Karimganj upazila with lands in the Bhuldia Beel. Aminul Islam, a teacher of Alongjury Government Primary School in Itna said he got only 600 kilograms of urea against a requirement of 1100 kgs for his 12 acres of Boro land. He also needs at least 600 kg TSP but got only 60 kgs, he told this correspondent during a recent visit to Boro fields in Haor areas. Same is the situation in other haor areas in Kishoreganj district. This correspondent talked to at least 50 farmers who said they are not getting required quantities of fertiliser due to short supply and alleged mismanagement in distribution. They alleged that they may miss their production targets for the third consecutive year, mainly due to fertiliser crisis now. Boro is the lone food crop in Kishoreganj Haor areas. The crop was damaged in last two seasons due to flood and 'cold injury' during winter. In Bhairab upazila, farmers at a recent press conference at the local press expressed resentment over fertiliser crisis. They were cooled down by the Upazila Nirbahi Officer by assuring adequate supply of the input. About 500 farmers from Abdullahpur union in Austogram upazila in an application to Kishorganj Deputy Commissioner Sultan Ahmed alleged that they did not get any fetiliser in January and that their Boro crops are being affected now for this. Transplantation of Boro seedlings in Haor areas started in January but many farmers did not get any fetiliser till now, they alleged. Farmers alleged that the crisis was created mainly due to mismanagement in distribution process. Farmers who do not live in Haor areas have not been listed for fertiliser, they said. The Agriculture Extension Department (AED) made lists of farmers in Haor areas in May and June when landowners living elsewhere were not included, they said. During the visit, it was found that at least 407 acres of Boro land owned by Jirati farmers were deprived of fertiliser only in Alongjury union of Itna upazila. Farmers having land in Haor areas living elsewhere are locally called Jirati. AED block supervisor in Alongjury union Md. Pabon Ali also acknowledged that many farmers were not on the lists prepared in May and June. AED sources said that in last season Boro production target in six haor upazilas was 4,07,598 tonnes but the yielded was 3,02,558 tonnes. A total of 1, 58,567 hectors of land were brought under Boro cultivation in the district this year. Farmers said, they may not get the targeted production this year also if the fertiliser crisis is not resolved right now. Deputy Director Abdul Baten of Kishoreganj AED however said there was no crisis of fertilier in the district. Other AED sources said they got 38,422 tonnes of urea against the demand for 42,669 tonnes. They howver said Jirati farmers were being listed for fertiliser. There is no sanction for Jirati farmers but they are terying to manage fertiliser for them, the officials said.

  • Hailstorm damages huge crops in Gaibandha

    A violent hailstorm, accompanied by rains, yesterday hit Sadar upazila of the district, leaving 13 people injured and over 200 houses damaged. Locals said the hailstorm that struck at about 6:30pm also damaged standing crops on a vast track of land during its fury. The 13 people, including five children, were injured as their thatched houses collapsed during the storm. Kamarjani, Kunderpara, Prodhaner Bazar, Jhakurer Bhita, Goghat, Kharjani, Dariapur, Karaibari, Counciler Bazar and Nayagai were among the worst affected 19 villages in the hailstorm.

  • Food prices rising relentlessly

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