POLICY OPTIONS FOR SUPPORTING AGRICULTURAL DIVERSIFICATION IN BANGLADESH Bangladesh Agricultural Research Institute (BARI) United International University (UIU) IMPLEMENTING INSTITUTION ToR # 06 Bangladesh Agricultural Research Institute 29 November, 2012
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POLICY OPTIONS FOR SUPPORTING AGRICULTURAL DIVERSIFICATION IN BANGLADESH
ToR # 06. POLICY OPTIONS FOR SUPPORTING AGRICULTURAL DIVERSIFICATION IN BANGLADESH. IMPLEMENTING INSTITUTION. Bangladesh Agricultural Research Institute (BARI) United International University (UIU). Outline of the Presentation. Rationale of the study Methodology - PowerPoint PPT Presentation
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POLICY OPTIONS FOR SUPPORTING AGRICULTURAL DIVERSIFICATION
IN BANGLADESH
Bangladesh Agricultural Research Institute (BARI)United International University (UIU)
IMPLEMENTING INSTITUTION
ToR # 06
Bangladesh Agricultural Research Institute 29 November, 2012
Outline of the Presentation
Rationale of the study Methodology Profitability and comparative advantage of major commodities Growth performance of major crops Diversification in food consumption, agril.
production, agril. trade Constraints to agricultural diversification Conclusion and Recommendations
Bangladesh Agricultural Research Institute 29 November, 2012
Rational of the study
29 November, 2012
Agriculture is an important sector of the economy of Bangladesh. It comprises crop, livestock, fisheries and forestry sub-sectors accounting for 55.7%, 13.24%, 22.37% and 8.68% of agricultural GDP respectively
AD towards products with higher value-added contributed to more rapid agricultural income growth and might contribute to local employment creation by stimulating small farmers’ participation in the market.
Diversification in production is also likely to lead to diversification in consumption, which is required for healthier and more balanced diets.
Bangladesh Agricultural Research Institute
Rationale ---------
29 November, 2012
HIES data shows the overall demands for fruits, vegetables, dairy products, fish, and edible oils have been increased.
Prices of most non-cereal food commodities have been increased significantly.
Imports of non-cereal food commodities have also been increased to a large extent.
Yet, progress in agricultural diversification is not very encouraging.
Bangladesh Agricultural Research Institute
OBJECTIVES
Bangladesh Agricultural Research Institute
1. To assist policy makers in identifying policy interventions that will allow agricultural households to diversify their agricultural production into micro-nutrient rich foods and/or those with a strong income generating potential.
2. To examine the past trends of diversification of crop and non-crop agriculture, and compare the rates of growth to those in neighboring countries to gain some perspective on how rapid (or slow) growth in Bangladesh has been.
3. To examine the socioeconomic and agro-climatic determinants of and constraints to agril. diversification.
29 November, 2012Bangladesh Agricultural Research Institute
Bangladesh Agricultural Research Institute 29 November, 2012
Primary Data Examine the determinants of agril. diversification. Explore the constraints and opportunities to AD.
Secondary Data Financial and economic profitability over time. Trend and growth rate in domestic production. Diversification in consumption, agril. production, and
agricultural trade.
Data Sources Primary data- Field survey Secondary data- Res. reports, thesis, j. articles, HIES,
BBS, and FAOstat
DATA AND METHODOLOGY
Bangladesh Agricultural Research Institute
Bangladesh Agricultural Research Institute 29 November, 2012
2. The profitability of non-cereal crop production is higher than cereal crop production.
3. Perennial fruit prod. are the best and livestock & poultry are the least profitable agricultural commodities.
Bangladesh Agricultural Research Institute
Bangladesh Agricultural Research Institute
Economic Profitability of different crops at Export Parity Level, 1997-99
Jute
BoroGram
Brinjal
Barboti
Tomato
0
100
200
300
400
500
600
11 10 7 3 5 8 10 27
322352
207
329
554
498
‘000
’ Tk/
ha
Source: Shahabuddin, & Dorosh, 2002
Cereals VegetablesPulses
Bangladesh Agricultural Research Institute 29 November, 2012
In economic point of view, the production of cereals, pulses and vegetables are profitable at export parity level.
Bangladesh Agricultural Research Institute 29 November, 2012
Economic Profitability of Different Crops at Import Parity Level, 1997-99
Wheat
AmanBoro Aus
Sugarcane
VetchGramLen
til
Mustard
Sesame
Linseed
PotatoChilli
Onion
-50
0
50
100
150
200
720 18 11
33
9 12 15
-3 -6-1
185
7
86
'000
' Tk/
ha
Source: Shahabuddin, & Dorosh, 2002
Pulses SpicesOilseedsCereals
Bangladesh Agricultural Research Institute
Except oilseeds, the production of cereals, pulses and spices are also profitable at import parity level.
Bangladesh Agricultural Research Institute
Comparative Advantage of Agricultural Commodities
29 November, 2012
Fine Rice Aromatic Rice
Coarse Rice
Wheat Maize Lentil0
0.10.20.30.40.50.60.70.80.9
0.561
0.406 0.433
0.822
0.5680.429
DR
C
0
0.2
0.4
0.6
0.8
0.16 0.17 0.170.25 0.27
0.3100000000000
02 0.370.48
0.55
0.6000000000000
01
0.6300000000000
09
DR
C
Source: Rashid et al.2009 Karim et al. 2011
Bangladesh Agricultural Research Institute
The values of DRCs for cereal, lentil and vegetables are less than unity.
It implies that BD has comparative advantage in producing these crops for import substitutions and export promotion.
Bangladesh Agricultural Research Institute
Major findings:
1. The overall impressive growth performances were observed in maize, onion, garlic, potato, pointed gourd, okra, banana and pineapple.
2. Although the GRs of area and production of pulses were negative, but yield GRs were found positive in BD, India and Pakistan due to adoption of improved technologies.
3. The overall GRs of oilseeds were positive in BD and Pakistan, but it was negative for India. The GRs of vegetables, egg and mutton were found inspiring for Bangladesh compared to other two countries.
4. Fisheries sector also performed better both in Bangladesh and Pakistan.
Growth Rates of Area, Production and Yield of Different Crops, 1990-2009
29 November, 2012Bangladesh Agricultural Research Institute
Bangladesh Agricultural Research Institute 29 November, 2012
DIVERSIFICATION IN FOOD CONSUMPTION
Bangladesh Agricultural Research Institute
Bangladesh Agricultural Research Institute
Major findings:1. The highest GR registered in maize availability (36.47%)
followed by egg (12.75%), potato (9.77%), and meat (7.38%) during 1990-2009.
2. The per capita availability of mango, jackfruit, papaya, pointed gourd, sugar, onion and garlic also registered impressive GRs during that period.
3. The GRs of some vegetables (okra, cabbage, brinjal, cauliflower, bittergourd) were found to be positive that ranged from 2.20% to 5.14%.
Growth Rate of Per Capita Food Availability
29 November, 2012Bangladesh Agricultural Research Institute
Bangladesh Agricultural Research Institute
Major findings:1.The overall consumption of non-poor people was 24.5%
higher than that of poor people.
2.The PCC of livestock products, fruits and fish of non-poor households were much higher (46-87%) than that of poor people.
3.The consumption differences were found less in rice, potato, and vegetables between two groups.
Per Capita Consumption of Major Food Items by Poor and Non-poor
29 November, 2012Bangladesh Agricultural Research Institute
Bangladesh Agricultural Research Institute
Share of Cereal Consumption
29 November, 2012
Rural Urban National10
20
30
40
50
60
70
5648
5551
444948
4146
HIES_2000 HIES_2005 HIES_2010
% S
hare
Bangladesh Agricultural Research Institute
The share of cereal consumption to total food consumption has decreased over the time at rural, urban and national levels.
Bangladesh Agricultural Research Institute
Share of Calorie Intake (kcal) from Non-cereals
29 November, 2012
Rural Urban National1015202530354045505560
23
32
2525
332729
39
31
HIES_2000 HIES_2005 HIES_2010
% S
hare
Bangladesh Agricultural Research Institute
The share of calorie intake from non-cereal foods has increased over the time at rural, urban and national levels.
Bangladesh Agricultural Research Institute 29 November, 2012
DIVERSIFICATION IN AGRICULTURAL PRODUCTION
Bangladesh Agricultural Research Institute
Trend of Agricultural Diversification in Bangladesh, 1993-2010
1. The overall agricultural diversity is increasing with fluctuating nature. 2. A sharp increase that took place in 2007 which was due to the combined effect of sharp
increase in the productions and prices of some vegetables, spices, fruits, and fishes.
29 November, 2012
19931994
19951996
19971998
19992000
20012002
20032004
20052006
20072008
20092010
0.45
0.5
0.55
0.6
0.65
0.7
0.52
0.66
0.58f(x) = 0.00439628482972144 x + 0.515013071895424R² = 0.417683227532848A
DI
Bangladesh Agricultural Research Institute
ADI of Different Regions (1993-2010)
1. The highest AD took place at Chittagong and Barisal region over the time due to the increase of the productions and prices of some non-cereal commodities.
2. The lowest AD took place at Rangpur and Rajshahi region. Its implying a wide scope for diversifying agriculture through introducing high value crops and non-crop commodity to the existing agricultural farming in future.
Note: +ve sign represents net import and –ve sign represents net export
Bangladesh Agricultural Research Institute
Bangladesh Agricultural Research Institute
Share of Non-cereal Commodity Trade to Total Agricultural Trade, 1990-2009
29 November, 2012
Bangladesh
Pakistan-500
50100150200250300
77.3-1.6
68.2
25.1
67.5
49.7
66.6
45.1
1990-94 1995-992000-04 2005-09
% S
hare
Note: +(ve) sign represents net import and –(ve) sign represents net export
India
Bangladesh Agricultural Research Institute
The share of net import of NCC to TAT has decreased over the years in BD.
But, opposite scenario is found in Pakistan.
India is a net exporter in this case.
Bangladesh Agricultural Research Institute
Share of Non-cereal Food Trade to Total Food Trade, 1990-2009
29 November, 2012
Bangladesh
India Pakistan-104090
140190240290
65
-7
35
5510
35
67
12 38
69
6
38
1990-94 1995-992000-04 2005-09
% S
hare
Note: +(ve) sign represents net import and –(ve) sign represents net export
Bangladesh Agricultural Research Institute
In the case of non-cereal food trade to TFT, BD, India and Pakistan are net importers.
But, the shares of net import of NCFC have increased in BD and Pakistan over the time.
India is found to be an exporter during 2005-09.
Constraints to agricultural diversification
Constraints Respondent
(N = 360)% of
responsesLack of suitable land/land far away 163 45.3Lack of sufficient capital 159 44.2Scarcity of labour and its higher price 95 26.4Higher cost of production 89 24.7Lack of fair price of the produces 63 17.5Lack of training facility 33 9.2Infestation of insects and diseases 32 8.9Higher price of fertilizers 30 8.3Required higher labour 29 8.1Lack of HYV seed/seedling/check 26 7.2Lack of short duration crop 14 3.9High risk in production (bird flu, etc) 14 3.9Lack of irrigation facility 12 3.3Higher price of seed/seedling/feed/cheek/fingerling 11 3.1Natural calamities (drought, rainfall, storm, fog) 6 1.7Lack of credit facility 5 1.4Lack of transport facility 5 1.4Load shading of electricity 4 1.1
29 November, 2012Bangladesh Agricultural Research Institute
Bangladesh Agricultural Research Institute
1. The cultivation of agril. commodities are profitable both in financial and economic point of view. But, non-cereal productions are more profitable than cereal production.
2. Maize, potato, pointed gourd, okra, onion, garlic, and mango show impressive growth performance both in area and production during 1990-2009. The overall growth performance of maize, oilseeds, vegetables, potato, mango & fish found better in BD compared to India and Pakistan.
3. The share of cereal food consumption has gradually decreased over the time. Again, the share of calorie intake from non-cereal foods has increased at all levels. The PCC of livestock products, fruits and fish of non-poor households was much higher (46-87%) than poor people.
4. Despite expanding food supply, agril. production is not becoming more diversified. The average level of ADI has grown from 52% to 58% over the last 18 years (1993-10). The average ADI of BD is 39% lower than Pakistan and 9% lower than India. So, there is scope for rapid diversification in Bangladesh.
29 November, 2012
CONCLUSION
Bangladesh Agricultural Research Institute
Bangladesh Agricultural Research Institute
5. Labour wage, road density, rainfall and agricultural credit disbursement significantly affect the level of AD at the district level. Besides, Agricultural diversity at the farm level is affected by irrigated land, agricultural training, extension linkage, family influence, and credit facility.
6. Except vegetables, BD is a net importer of most food commodities. With demand for non-cereal foods faster than domestic supply, the balances of agricultural trade and food trade in BD have deteriorated manifolds in the past decades. Pakistan’s scenario is little bit similar to BD, but India’s balance of trade for both agriculture and food are mostly positive.
7. Non-diversified farmers have identified different constraints related to production, marketing and social in diversifying their agriculture.
29 November, 2012
CONCLUSION
Bangladesh Agricultural Research Institute
Bangladesh Agricultural Research Institute
1. Development of rural infrastructure
2. Strengthening extension services
3. Facilitating agricultural credit
4. Facilitating crop insurance
5. Formulating price support policy
6. Linkage with international market
7. Development of new technologies
8. Encouraging farm mechanization
9. Assuring quality input supply
29 November, 2012
RECOMMENDATIONS
Bangladesh Agricultural Research Institute
Bangladesh Agricultural Research Institute
THANKS
29 November, 2012Bangladesh Agricultural Research Institute