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Private sector in agribusiness
Apart from rice production, the private sector should have a greater role in other areas where it can generate both income and employment, writes Syed Ishtiaque Reza
4/12/2004
Disturbing news are coming from the countryside that in this peak season of boro cultivation farmers are finding it difficult to irrigate their fields due to severe power shortage. In some areas of North Bengal, farmers do not get power even for an hour during the whole day. Scarcity of kerosene has become a routine event. However, the supply of seeds and fertilisers is satisfactory during the current boro season.
People always want to hear good news from the agriculture sector as the economy is still largely dependent on this sector. Agriculture is also the largest source of employment for skilled and unskilled labourers.
This nation has a very large population, but the economy is underdeveloped. The country has high reliance on agriculture although production is relatively low here. These are the traditional challenges for Bangladesh.
The agriculture sector in Bangladesh has both opportunities and constraints. The sector is one of the largest contributors to the country's GDP. The crop production system is highly intensive and there is an abundance of labour in the country.
The constraints that affect the growth of agriculture include dependence on the mercy of nature, shrinkage of cultivable land, lack of required capital for agricultural activities and inadequacy of appropriate technology. The most serious problem is uncertainty in ensuring fair prices for agricultural commodities.
Government policy planners always recognise the importance of the greater role of the private sector in the economy. International donor agencies which are providing assistance to agriculture in Bangladesh also feel that the country has prospects for the development of agribusiness. Seeing the potential for agribusiness expansion, many donors are being attracted to work in this agriculture sector.
Rice is traditionally the staple food here. One can think of a greater role of the private sector in agribusiness where it can generate both income and employment.
After rice and wheat, potato is the third largest food crop in Bangladesh. It has major contribution to the total food supply of the country. Potato yield started increasing with the introduction of improved seed potatoes from Holland, India and Myanmar after 1960. The use of seeds produced locally by BADC after independence has also played a significant role in increasing the acreage and yield of potatoes, leading to further development of the Bangladesh potato industry. The country's annual potato seed requirement is estimated at 180,000 tons.
The Crop Diversification Programme (CDP) initiated seed potato production on a small scale through the private sector in 1990. CDP production covered only a very small portion of the total seed potato requirements. With the involvement of the private sector in seed potato production, the coverage raised to around six per cent (from only two per cent) of the needed quality seed potatoes.
The huge gap still suggests that the private sector has a major role to play. Besides diversified usage for potatoes, including processing, there are areas where the business is ready for the private sector.
The fisheries sector is the third largest export earner for Bangladesh after ready-made garments and knitwear. Shrimp now constitutes 88 per cent of frozen seafood exports or almost 82 per cent of total fisheries exports. It is believed that Bangladesh has tremendous potential for the expansion of marine and freshwater shrimp farming. Vast areas of salty water suitable for marine shrimp farming, and flood plains (low-lying fields, dead rivers and ponds) suitable for freshwater shrimp culture have still remained unutilised. Increasing shrimp production is possible if the necessary infrastructure and technical facilities are established. With increased production and productivity, the processing capacity could be fully utilised and exports increased. Shrimp farming and shrimp processing could be emphasised in order to realise the full potential.
The major market for Bangladesh's frozen food is Europe and other developed countries. These countries follow stringent health certification policy for import of fish products. The policy deals with the biological, social and economic dimensions of fisheries. The exporting country has to maintain high quality standard from the catching of fish, processing and export of the finished product. Standard quality certification has been a pre-requisite for export and that is aimed at conservation management of resources, distinction between fishery products and aquaculture products. In this regard, the responsibility of the government and its various departments is to monitor the private sector shrimp producers and exporters as well as provide them with required facilities to carry on their business smoothly.
Local soybean cultivation can greatly benefit farmers and the national economy of Bangladesh. Farmers benefit from soyabeans because they are a profitable cash crop and they help add nitrogen to the soil. Soyabean not only brings money to farmers, it also requires less amount of urea. National Agri-Products Limited has been doing a brisk business by promoting local soyabean cultivation. The opportunity is there to avoid foreign exchange losses that industry incurs by importing crude soybean oil. Currently, Bangladesh imports more than 700,000 tons of crude soybean oil annually.
The private sector needs business, whatever sector it might be. It wants support from the government. The government needs to ensure that necessary conditions exist for the development of business in the country - be it agriculture or any other sector. The agriculture sector rather needs special attention.
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