The declining growth rate in agriculture sector of Bangladesh

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[Abstract: This paper mainly shows the decline in agricultural growth rate of Bangladesh for the last couple of years. In comparison to other two broad sector including industry and service, agriculture sector’s performance is not satisfactory at all. Here, the researcher tried to find out core problems lies behind the failure. The researcher also tried to give some proposals and policy implications for the government.]

Introduction:

Bangladesh is an agriculture based country. About 47% of labor force involved in the agriculture sector and it comprises 16% of country’s total GDP. Historically, for the attainment of macroeconomic objectives, agriculture plays an important role in the country’s economy through the generation of employment, poverty alleviation, and also by supplying of food security. As we have fertile land and numerous crops produced all over the country with the cheap labor, there are much possibilities of high agricultural growth within few decades. Fisheries, livestock and forestry sub-sectors are also contributing to make the agriculture much more stable. Besides, with the modern method of agriculture, the possibilities smiles and huge opportunities being created almost in numerous sector. But, the result of last few years, the agricultural growth of Bangladesh is not satisfactory at all. Flood, drought, seasonal unemployment, high price of seed and insecticides, irrigation problem, lack of government support, little knowledge of modern cultivation etc. made the situation worse and resulted in as a barrier to high economic growth.

The most concerning situation for Bangladesh is that, we have continuous decline of growth in agriculture for the last couple of years. Though the government is taking numerous steps to enhance agricultural growth, but we cannot achieve satisfactory level of growth.

 

Objectives:

The objectives of this paper is to find out the reasons behind the decline of agricultural growth rate of Bangladesh. Besides, some proposals and policy implications has given as the possible solutions to achieve the expected level growth rate.

Methodology

The researcher has followed both the quantitative and the qualitative research methodology during the research. Though the researcher used mainly the qualitative data, quantitative data was used for showing mathematical and graphical representation.  

Books, Journal Articles, documents, literature and report were used for acquiring the academic review as sources of secondary data. While citing anything from secondary sources references were used properly.

Data were used in both mathematically and graphically to make it easier to understand the whole thing in brief.

Literature Review:

While conducting the research, the researcher has used books, journal article, newspaper article, statistics and many other secondary sources to make the research more useful. Some key points has been analyzed that were taken from the literature.

The GDP growth in Bangladesh has increased particularly in three sectors. In agriculture the growth is increased to 3.40% in the FY-17, in comparison to 2.79% in the FY-16.In addition, the growth increased in comparison to last couple of years, but growth rate fall significantly for the last couple of years.  (1], 2017)

In the economy of Bangladesh, the contribution of agriculture sector is decreasing constantly for a long time. Though the government is increasing subsidy in agriculture the result is totally different than assumed. In case of industry, the opposite situation happened. In service sector there exists a constant

(Mof.gov.bd, 2017)

Graphical representation of contribution of different sector:

Propensity of Agricultural Growth Rate in Bangladesh:

Statistics shows that agricultural growth in Bangladesh for the last couple of years is not satisfactory at all. There is a decreasing trend in agricultural growth and average growth is also low. Following table shows the performance of growth rate from the Fiscal year 2010 to 2015.

     Growth Performance of Agriculture in Bangladesh

The above graph shows that there is a constant decreasing trend of agricultural growth from the fiscal year, FY80-81 to FY16-17. In FY05-06 there is a significant growth occurred in comparison to FY00-01. The growth rate is almost doubled in FY05-06.But again in FY15-16 the growth rate has fall significantly. Last but not the least, the average growth is about 3.46 which is under 4. The data set shows the unsatisfactory growth rate in agriculture sector of Bangladesh.

Propensity of Agricultural Growth in Bangladesh:

Here, the following table shows the constant agricultural growth from the (Fiscal Year) FY-10 to FY-17.

The above graph analyzes the growth in agriculture sector for the last couple of years. Here, we can see the upward sloping curve and constant growth from the FY-10 to FY-17. Though in case of percentage it is not much than expected, but it reflects a stable growth which is a positive indicator for the economy.

Research Findings: While conducting the research the researcher found some interesting points.

Those points made the research more effective. Following the researcher has discussed those points.

Decrease of available land for agriculture

The above graph shows the availability of agricultural land in Bangladesh. Here, the graphs include land area, cultivable land and the percentage of cultivable land from the fiscal year 1976-77 to fiscal year 2010-11. Land area of Bangladesh is almost the same from FY77 to FY11. But cultivable land has decreased comparatively. Moreover, in terms of percentage cultivable land has fall significantly. The overall situation shows agricultural land is decreasing significantly. As a result, growth rate falls as well.

Loss of agricultural production due to natural calamities:

The graph illustrates the subsidy given by the government in agriculture sector as % of total subsidy. In this graph the rate of subsidy given by the government has decreased significantly. As the subsidy works like an incentive for the farmers, when subsidy falls, agricultural growth rate falls as well.

 

Climate Change

Climate change has become a concerning issue for agriculture in the 21st century. The Greenhouse gas (GHSs) including CO2, CFC etc. are affecting the fertility of the soil. With the increase of temperature in the atmosphere many crops are on the verge of extinction. Moreover, many areas of Bangladesh are being inundated due to the increase of temperature.

Besides, due to increase of salinity, huge area of Bangladesh particularly in the coastal region, about 1 million hector of land has become crop less. Devastating flood and drought sometimes made the situation worse.

According to the report of IPCC (Intergovernmental Panel on Climate Change), 2001, coastal area of Bangladesh will go under water by the year of 2050.

So, Climate change is one the most highlighted reasons for which agricultural growth rate is decreasing significantly.

High use of Chemical fertilizer

The over use of chemical fertilizer for the more production of crops is spoiling the fertility of the land. As a consequence of the high use of fertilizer after a certain period made the land barren and thus badly affects the growth of the agriculture.

Lack of Credit supply to the farmers

In Bangladesh, Maximum of our farmers are mainly small and marginal level farmers. As a result, they did not get any institutional loan because of the rigorous conditions are applied. With the increase of the price of seeds, insecticides and pesticides they cannot cope themselves with the situation for the high price. As a result, the production of crops is not at satisfactory level. So, lack of credit supply make them inefficient and thus growth rate reaches not at expected level.

Unfair price of Agricultural products

As almost 90% of our famers are mainly small and marginal level farmers, they cannot sell their agricultural products right to the wholesalers. They have to make them themselves gone through the intermediaries or thorough brokers. Consequently, they did not get the proper wage of their produced products.

For this, some farmers alter their designation which have a negative impact on the growth rate of agriculture.

Lack knowledge of modern method of cultivation:

With the passage of time science and technology has reached to its peak level of success. In agriculture, technology is also a great blessing for us. Now, around the world modern method of cultivation is being used to attain the highest level of production. But, as maximum of our farmers are illiterate, they are not aware of the modern method of cultivation. So, this is another cause of decreasing growth.

Inefficient investment in agricultural research

Though agriculture contributes about 50% of total labor force and 20% of total GDP, the investment in agricultural research in very low. For this, it is not possible to get the expected level of yield without proper research. Institutions like Rural Development Academy (RDA) should be developed more to have new method of cultivation for farmers within cheap cost. So, to have expected level growth rate investment in agricultural research could be increased.

Impacts on food security due to decline in agricultural growth

Food is one of the basic right of a human being. Food insecurity is not just an economic problem but it is both social and political problem too. For a country’s overall development and also for the development of human capital ensuring food security is a must. As the rate of agricultural growth is decreasing remarkably, now it has become a concerning issue for the people of Bangladesh. According to FAO, there are four pillars of food security: food availability, food access, food use and stability of the first three pillars. By establishing those pillars a country can ensure the food security for its people.

With that, the challenges of 21st century including, climate change, modern method of cultivation, affordable green cultivation, and high yielding variety use should be kept in mind to ensure the food security. Besides, dependence on import should be reduced and internal agriculture sector might be strengthened to ensure stability. Otherwise, insecurity will bring misery for us with overall hazard in every significant sector.

Proposal and policy implication

Based on the above discussion, the researcher have some proposals and policy implications.

  • In agriculture sector, if technological advancement can be brought, the more growth will be achieved and more employment will be created.
  • Subsidy will give farmers incentive to be consistent in their work and stable workforce in agricultural sector will be created.
  • New method of cultivation for example, green cultivation with low cost will make new workforce to join in agriculture sector.
  • If the farmers get the proper price of agricultural products, they will be encouraged to be consistent in agriculture sector and encouraged thereby. Besides, if crop insurance could be made than the farmers will get more incentive as well.
  • Crop diversification in one side will increase the fertility of the soil and on the other side will have huge profit as well.
  • If the farmers could be trained in a systematic way then they will be able to apply their knowledge to achieve the return at expected level.
  • Government in collaboration with private sector will be able to strengthen the agriculture sector in attaining stable food security.
  • If it is possible to supply credit to the farmers in the minimum requirement then farmers will be benefited in times of their crises.
  • Budget allocation should be increased in research of the agriculture, so that there should be a linear growth rate.

Conclusion: Bangladesh has huge possibility in agriculture as we are traditionally engaged in agriculture. It is high time we should take necessary steps to boost up growth rate in agriculture otherwise we will not be able to mess up the decline of the growth rate. Policy implication could be some possible solutions to stop the declining condition.

 

References

1.Anon, (2017). [online] Available at: http://www.lged.gov.bd/…/1/322/11.%207th%20Five%20Year%20Plan(Final%20Draft).pdf

2.[1], B. (2017). Bangladesh= Economic Review 2017[ 1] : Free Download & Streaming : Internet Archive. [online] Internet Archive. Available at: https://archive.org/details/BangladeshEconomicReview20171 [Accessed 9 Nov. 2017].

3.Mof.gov.bd. (2017). Cite a Website – Cite This For Me. [online] Available at: https://www.mof.gov.bd/en/budget/16_17/ber/bn/Chapter-2_(Bangla-2016)%20Final%20Draft.pdf [Accessed 9 Nov. 2017].

4.Hossain, M. (2017). Sustaining food security. [online] The Daily Star. Available at: http://www.thedailystar.net/sustaining-food-security-15429 [Accessed 5 Nov. 2017].

5.Bangladesh Economy in FY 2015- 16. Dhaka, Bangladesh.

6.Bangladesh Bureau of Statistics (BBS). (2016). Yearbook of Agriculture Statistics- 2015. Serize No. 27. Dhaka, Bangladesh.

7.Bangladesh Bureau of Statistics (BBS), (2016).

8.Statistical Pocket Book Bangladesh – 2016.  Dhaka, Bangladesh.

9.Unnayan Onneshan (2014). Bangladesh Economic Update, Recent Trends in Agriculture, Industry and Service Sector. Vol. 7, No. 2.

10.Unnayan Onneshan (2017). Bangladesh Economic Update, Debts and Deficit: Trends and Challenges. Vol. 8, No. 3.

11.Bangladesh Economic Review (2016). Agriculture. Ch. 7. Ministry  of Finance. GOB, Dhaka, Bangladesh.

12. Bangladesh Economic Review (2016). Domestic Production, Saving and Investment. Ch. 2. Ministry  of Finance. GOB, Dhaka, Bangladesh.

1 COMMENT

  1. Hello, the article you have written is very informative. I kindly would like to request you to please send me the paper as I am unable to read the graphs which you have presented in your paper; don’t know whether its the site problem or my browser problem.

    Thank you very much in advance. Please keep up the good work.

    my email: sun_1_an@yahoo.com

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