Agriculture-Government program should boost public investment in agriculture
BANGLADESH AGRICULTURE :
The Economy of Bangladesh is predominantly agrarian. Despite the decline in relative importance of the agriculture sector in the national economy since independence, the sector still produces about half of the economy's output and employs nearly three-fifths of the labour force. The crop agriculture alone accounts for about two-fifths and rice almost a quarter of the national output. This reveals the direct impact of agricultural performance on output and income in other sectors and the close link between the government's macro-economic objectives and strategies and its goals and policies for development of agriculture.
Agricultural performance has a major direct impact on important macroeconomic objectives like employment generation, poverty alleviation, human resources development and food security. Meeting the nation's growing food requirements remains a central objective of public policy and there has been substantial progress in terms of increasing food grain (rice and wheat) production. However, loss of food and cash crops due to floods and other natural calamities has become a common phenomenon seriously disrupting the entire economy. The experiences during the past have revealed the basic nature and vulnerability of the agriculture sector, and the economy itself, to the exogenous dependence on factors with adverse impact on steady growth.
The pace of technological transformation has accelerated over the years with progressive adoption of modern techniques, inputs and equipments. Yet the modernization process is far from complete with only about one-third of the cultivated area under irrigation. Many traditional and inefficient practices still persist with considerable scope for research to extend modern technologies under field conditions. In fact, many of the constraints to agricultural growth and development persist because of farmers' lack of resources for investment and deficient input delivery and supportive infrastructures. In general, there persists under-investment in agriculture.
Accelerating agricultural growth in order to maximize the beneficial interactions between such growth and overall expansion of the economy through the adoption of an agriculture-led development strategy is important for Bangladesh. Since agriculture is the major source of income and employment, the linkages between agriculture and non-agricultural sectors in the economy are such that a given increase in agricultural value added usually leads to a more than proportionate increase in non-agricultural value added. Moreover, the sector must continue to supply the necessary foodstuffs for a balanced nutritional diet and provide more jobs to ensure sufficient rural incomes. Other sectors are unlikely to grow sufficiently in the medium run to absorb the growing labor force, especially in rural areas. At the same time, for the majority in agriculture who live in poverty, the only escape from poverty is also through much increased agriculture and related activities. The agricultural growth rate has to significantly exceed the population growth rate in order to break out of the presently deepening poverty trap. Fortunately, the scope of achieving high growth rates in agriculture in Bangladesh exists through the adoption of appropriate strategies and policies and, in some areas, the potential gains could be substantial.
1. Increased investment in the development of rural transport infrastructures to support agriculture development and non-farm enterprises in rural areas and improved integration of rural markets and production centres.
2. Evaluation of appropriate and balanced institutional framework to support both public and private sectors in sector development activities with public sector investment mostly directed to create and sustain adequate incentives through the market for the private -sector to realize production targets and stipulated objectives.
3. Expansion in sectoral investment absorptive capacity and effective increase in public and private sector investment reflecting development needs and priority of the sector is being made effective and kept limited to key areas as required to supplement private initiatives. Efforts are being made to consolidate and optimize the use of manpower and other facilities already created for sectoral development along with the establishment of a system accountable and responsible enough to accomplish the stipulated objectives.
4. Improved access of rural households, especially small/landless farmers, to resources, inputs, extension services and employment.
5. Evolution of appropriate rural institutions and strengthening of existing ones to support and cater to the varied needs and problems of different farmer classes, especially the initiatives of small/marginal farmers and other target groups, in order to ensure their dynamic involvement and effective participation in sector development activities.
6. Removal of economic inefficiencies and distortion and creation of macro-economic environment necessary for efficient resource allocation and optimal realization of sectoral objectives with governmental intervention limited only to judiciously selected areas emphasizing on maximization of returns from public investment.
For the successful planning and implementation of the above strategies, an appropriate framework incorporating macro-economic and other strategic planning is being developed for creating proper policy environment. The basic tenet of such policies is to make best possible use of the private initiative of the farmers by providing them with necessary resources and services. This is being achieved through proper identification of the potentials of various groups of farmers and specific policy measures directed to them. The major thrust of such policies is promotion of efficient market forces to direct private initiatives along with desired directions through planning, research, extension and regulatory measures of the public sector.
A. Proper diversification with less dependence on cereal crops B. Achieving sustained growth.
In order to build a sound agricultural economy, emphasis is being placed on 3 basic foundations : a productive technology package, efficient delivery services and remunerative and stable market prices. Emphasis is being placed on policies for maintaining adequate terms of trade for agriculture to ensure profitability of agricultural production in order to reduce necessary migration of rural people to the cities and promote establishment of production relations needed to sustain development impetus, ecological balance and social justice. The production strategy emphasizes identification of priority areas and sub-sectors on the basis of balanced nutritional requirements of the people and fix targets and policies needed to direct investment and other efforts to such areas. Production planning on the basis of such nutritional requirements reveals that deficiencies are acute in areas like pulses. oilseeds, vegetable compared to cereals. The strategy is, therefore, to meet the cereal requirements fully from domestic production and maximize production in other areas to minimize import requirements.
In the case of the major crop, rice, the strategy encompasses increasing production largely through improvement in yields by substitution of local varieties with HYVs, and other measures rather than increasing the area under rice cultivation. In this respect wider adaptability of the HYVs is being promoted by considering location specific characteristics (e.g. soil characteristics, input requirements, sowing time etc.) for achieving desired result, such strategies are focussing on ecological rather than administrative zones.
Stabilization of soil fertility is vigorously pursued through recycling of organic matters, supplying balanced doses of fertilizer especially zinc and other micronutrients to increase fertilizer use efficiency. In addition to input considerations, improved farming practices are promoted for desired yield increases. Planting and harvesting of crops at the right time is not only crucial for deriving optimum yields but also important for crop rotation according to desired schedules. Special efforts are being made for transplanting/harvesting of crops at right time through appropriate measures e.g. supplementary irrigation, use of power tillers, transplanting machines etc. The programme emphasizes specially wheat, maize, barley, millets, oilseeds (including oil palm plantation), pulse, vegetable and fruits along with required post harvest facilities like marketing, processing and storing facilities.
The agriculture development strategy of the present government is emphasizing the following:
l. Changing the nature of Bangladesh agriculture from one of high risk, monsoon dependence to one with a lower risk, irrigated agriculture.
2. Stimulating crop diversification and the soil would be beneficial because crop rotation is a proven management technique.
3. Relying more on competitive markets to ensure an efficient allocation of national, sectoral and farm resources.
4. Greater resilience to~ climate adversities in the face of continuing dominant impact of floods, drainage congestions and drought of sector performance.
5. Strengthening of the agricultural research and extension systems in order to develop new technologies and diffusion of the proven technologies to the farmers.
Recent Policy Incentives : The government made a number of important policy and programme changes in order to stimulate agricultural growth. Most of the changes involved the unleashing of competitive market forces.
The biggest and most immediate impact on agricultural growth resulted from policy and programme changes that led to increased sales of major irrigation equipment. These policy changes opened the door to genuine private sales of minor irrigation equipment. Private traders were allowed to import diesel engines without taxes, couple these engines with domestic pumps and pipes, and sell the equipment to farmers. In addition, promotion of private trade in minor irrigation equipment was accompanied by an energetic and aggressive programme to boost sales of these equipment.
Other policy changes included : removal of all import duties and standardization restrictions from power tillers, elimination of restrictions on pesticide importation ; and decontrolling of fertilizer distribution and sales by allowing dealers to purchase directly from all factories and approval of national seed policy wherein best quality seeds of improved varieties of crops conveniently and efficiently has to be made available to tlve farmers with a view to increasing crop production, farmers productivity and per capita farm income and export earning. These policies have stimulated private traders and farmers to invest and have also given a big boost to local industries.
While these policy changes stimulated private investment, changes in government programmes also boosted public investment in agriculture.
In addition, the government took steps to encourage more intensive and productive crop agriculture with programmes like demonstration plots (about 1000) to show farmers the benefits of applying gypsum to replenish sulphur deficiency, which is widespread in Bangladesh.
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