“Review of
Input and Output Policies for Cereals Production in Bangladesh”
Citation: Pullabhotla,
H. and A. Ganesh-Kumar. 2012. “Review of Input and Output Policies for Cereals
Production in Bangladesh”. Report prepared for the Cereals System Initiative
for South Asia (CSISA), Discussion Paper 01199, International Food Policy
Research Institute, Washington D.C.
Abstract:
Supportive
government policies have played a crucial role in the rapid growth of the
cereals sector, and rice in particular, in Bangladesh. Despite this, the
country remains a net importer of rice. Even as Bangladesh struggles to achieve
food security, new challenges are staring at the cereals sector in the country.
What are these challenges, and what should be the country’s response? With
these questions in mind, this paper reviews the key policies of agricultural
inputs and outputs in Bangladesh that are crucial for improving cereal
production in the country. On the input side, the review covers seed,
fertilizer and agrochemicals, irrigation/water, farm equipment, research,
extension, and agricultural credit. The paper also provides an overview of the
policies concerning agricultural output markets, with a particular reference to
rice, the main staple crop in the country.
The review
shows that agriculture, especially rice output, in Bangladesh has grown
impressively in the past couple of decades. A combination of factors seems to
have driven these gains: increased access to irrigation; widespread adoption of
high-yielding varieties (HYVs); growth in the use of inputs such as fertilizer,
pesticides, and others; and increased efficiency in the output markets. These
drivers of agrarian growth received an impetus from the government’s shift in
policy of moving away from a largely public sector–controlled structure to one
in which private sector participation gained significance in both input and
output markets.
The review
also shows that despite the large gains in efficiency of both input and output
markets, several traditional problems continue to plague Bangladesh’s
agricultural sector. Landholdings are mostly small and often fragmented, which
limits the capacity of farmers to access credit, quality inputs, and modern
technology. In addition, the input sectors themselves continue to face many of
the traditional problems. The seed sector, for example, is dominated by the
informal sector, which is outside any legal, regulatory, or quality-monitoring
systems. The agricultural research system, dominated by the public sector,
continues to face shortages and volatility in its funding, weak management, and
ineffective institutional arrangements for undertaking high-quality and
relevant research. The public extension system too faces similar funding,
manpower, and institutional shortcomings. Ease of access and the coverage of
the formal financial sector are still major problems, despite the rapid growth
of a diverse set of players in the financial system, such as banks, cooperative
societies, and microfinance organizations. Besides these sector-specific
problems, overall infrastructure bottlenecks in the country, such as with
transportation and electricity sectors, pose problems in accessing inputs and
technologies.
Policymakers
in Bangladesh are now confronted by numerous new and emerging challenges, which
can prove to be a threat to the future of agriculture. Some of these challenges
are the result of the negative fallout of current agricultural practices and
policies, such as excess groundwater withdrawals for irrigation; decline in
soil fertility, some of which is the result of excessive and unbalanced use of
fertilizers, pesticides, and other agrochemical inputs; and other problems
caused by intensive mono-cropping of rice. Past policies that aimed at
promoting growth have not paid much attention to regulating input use patterns,
resulting in some of these negative consequences.
Other
emerging problems have to do with wider changes in the natural environment as
well as shifts in world markets and trade, which have consequences for
Bangladesh’s agricultural sector. In reassessing its agricultural policies,
Bangladesh now has to balance the twin challenges of ensuring sufficient growth
in output while promoting judicious use of natural resources to maintain good
environmental health. At the same time, the country has to evolve strategies
for coping with volatility in world markets through regional solutions with neighboring countries.