CHAPTER 2

Agriculture in Bangladesh

Introduction
The chapter ushers that the economy of Bangladesh has made inroads
in agricultural production. However, productivity in agriculture has
declined. Land is now more fragmented because of inheritance by
descendants. Additionally, agriculture is still the sector with the highest
employment and remains a ways from achieving structural transformation.
The prices of inputs have increased, impacting profitability of the farmers.
The green revolution has undoubtedly increased the yield but only in
cereal production, and has thus created a concentrated output basket. The
cereal production may have allowed Bangladesh to achieve self-adequacy,
but high retail prices, mostly due to high margin gobbled up by the inter-
mediaries, serve as a major hindrance in attaining food security for the
huge majority of people, including the poor. Fertilisers and pesticides in
the production process result in higher outputs but only at the cost of
degradation of land and loss of biodiversity. In addition, the increased
use of deep tubewells and pumps in irrigation has led to a significant
decrease in the subterranian water levels. In such a scenario, the agricul-
tural sector has fallen into the crisis of meeting sustainability conditions
which are progressively looming ominously. This chapter, thus, attempts
to examine the sustainability of agricultural growth in Bangladesh.

© The Author(s), under exclusive license to Springer Nature 33

Singapore Pte Ltd. 2021
R. A. M. Titumir, Numbers and Narratives in Bangladesh’s
Economic Development,
[Link]
34 R. A. M. TITUMIR

Since its independence, Bangladesh has depended on agriculture for

both the growth of its GDP and the employment of its population. Agri-
culture contributed almost 60% of the GDP in the 1970s (Ministry of
Finance 2019). However, the contribution of agriculture to the GDP
started to fall at the start of the 1980s, as the doors for the manufac-
turing sector opened. During this period, the agricultural sector employed
almost 70% of the population whilst agricultural total factor produc-
tivity index (TFP) was only around 98 (Fuglie 2015). Bangladesh started
moving out of the subsistence level in the 1990s. The share of employ-
ment in agriculture fell at the start of the twenty-first century and
currently stands at around 40% (BBS 2018). The slow decline in agri-
cultural employment shows that the country is still in the transition stage
in attaining structural transformation.
In terms of output, the government of the newly born country directly
participated in pricing and distribution by erecting import tariffs on food
products, demonstrating its commitment to promote the agricultural
sector. The Government set policies like the minimum price programme
in the distribution of agricultural produce only to forfeit the programme
later. The output of agriculture was still very concentrated within cereal
production. The production of jute declined greatly, thus making cereals
the only major crops of the country.
During this period, the government established institutions like BRRI
and BARI to carry out research and innovation in agriculture. The
outcome of these research institutions was the high-yielding varieties
of many crops. The growth in farm mechanisation in Bangladesh was
mainly generated by enabling policy reforms. Rural mechanisation gained
momentum in the 1990s and spread all over the country. Rural labour
shrank as workers migrated to the formal sector and other non-farm jobs,
raising rural real wages and thereby enhancing total labour earnings. As
a result, rural farmers got the opportunity to get escalated real wages,
which later improved food security and livelihoods, and helped the poor
escape poverty.
The fertilisers used in agriculture were imported for the most part,
distributed and subsidised by the Bangladesh Government until the
1990s and thus farmers received fertilisers at much lower prices. The
fertiliser sector, however, was greatly affected by the market liberalisa-
tion and privatisation efforts of the Government in the 1990s. As a
result, private businesses started selling fertilisers in the market extensively
after importing them from abroad. This allowed mass use of fertilisers in
 2 AGRICULTURE IN BANGLADESH 35

agricultural production and resulted in higher outputs. However, such

initiatives had negative outcomes as well. The privatised market for the
inputs often created price fluctuations due to uncertainty (Islam 2003).
In addition, they were impacted by the asymmetric information charac-
teristics of the market, which affected the use of fertilisers in the 1990s
(Islam 2003). The price of fertilisers soared and government again took
back control of the market to stabilise prices. After several years, urea,
the most widely used fertiliser, was produced in the country, resulting in
lower prices due to the subsidies provided by the Government.
Higher growth in agricultural outputs propels the growth of the
manufacturing sector of a country through shifting surplus labour and
capital from agriculture to manufacturing (Lewis 1954). In Bangladesh,
the structural transformation has been occurring at a dawdling pace.
Employment in the agricultural sector is still 40.1% of the population.
Technology and mechanisation are only at the primary level of produc-
tion. Coupled with low productivity, this implies that there exists some
form of underemployment in this sector.
Poverty rate among agricultural workers was 50% in 2005, which
decreased to 32.6% in 2016. The rate of reduction in poverty, however,
declined during this period. From 2005 to 2010, rural poverty reduc-
tion was 69% and in the next five years, it dropped to only 27% (World
Bank 2019a). Lower farm wages exacerbate the situation, creating income
inequality and have minimised access to public goods and services.
Farmers have been deprived of fair prices due to the engineering of
middlemen and powerful syndicates.
Food supply per capita has increased in Bangladesh over the years and
has surpassed the average dietary energy requirement. The availability of
food though does not ensure food security as prices of food has gone up,
hampering its affordability. Because of higher prices, there is a severe food
insecure population in Bangladesh. The unavailability of nutritious food
and the variability of intake puts them in a vulnerable condition.
Agriculture is dominated by small farms. The number of small farm
holdings increased in the 1990s and there was a sharp slump in large farm
holdings. Nevertheless, land fragmentation started gaining pace since
average farm sizes decreased significantly. However, only one fifth of the
agricultural land was arable under some form of irrigation system.
The availability of agricultural land is on the decline because of rapid
urbanisation. Arable land in the country has shrunk to 7.7 million
hectares from 9.133 million hectares in 1972 (FAO 2019). As land
36 R. A. M. TITUMIR

becomes more fragmented over time, the number of smaller land hold-
ings increase. Households with smaller land holdings fail to specialise and
create enough surplus to buy more land and inputs. Eventually, they fall
victims to a vicious cycle.
During the covid-19 pandemic, the farmers of Bangladesh have faced a
loss of more than BDT 565 billion in the last one and half months (BRAC
2020). As Bangladesh is heavily dependent on food imports, it may face
a severe crisis in food availability as the pandemic severely impacts agri-
culture production across the world. Global prices of farm produce will
be increasing as a result. The scenario indicates that food security may
be in serious threat if the limited drive for diversification in agriculture is
persistent (Unnayan Onneshan 2020).
The objective of this chapter is to discuss the conditions that have
caused low agricultural productivity and frustrated sustainability condi-
tions. The factors related to agricultural production include the inputs,
outputs and technology. Each of these determines the productivity of
agriculture. A decline in agricultural productivity can be imputed to these
factors. The inputs in the agricultural sector primarily comprises agricul-
tural land, labour, capital stocks, fertilisers, seeds and energy. On the other
hand, the goods produced are the outputs gained from the inputs. Tech-
nology has been treated as a separate factor due of its sheer importance in
production. Machineries, irrigation methods and harvesting methods are
a few elements of technology.
Both the absolute values and the price of inputs have consequen-
tial effects on productivity. The use of more inputs than necessary will
lower productivity. The chapter proceeds to find the conditions required
to increase the productivity to a level which will meet the current
demands and propel agriculture towards sustained growth. These condi-
tions include output diversification, efficient use of land, optimum use
of fertilisers, formal credit to smaller farms, land irrigation etc., which
can maximise agricultural output. Finally, the conditions which help to
sustain the productivity levels to fulfil future demand as well as income
sources from agriculture are also delineated. Higher spending in research,
reduction in the use of ground water, use of bio fertilisers and sustainable
agriculture methods are required to keep up with the higher production
requirements in the face of upcoming challenges.
The framework denotes three conditions—stability, transformability
and sustainability. Stability conditions can be derived from three factors
which are inputs, outputs and farm mechanisation. Inputs comprise price
 2 AGRICULTURE IN BANGLADESH 37

condition of inputs, land, fertiliser and agricultural credit. The variation in

the output basket is included in output and farm mechanisation consists
of the use of technology and machines (Fig. 2.1).
The appropriate functioning of stability indicators contributes to the
efficient use of land, optimum use of fertiliser and credit to small farms,
which ultimately leads to transformation. When variation in the output
basket satisfies stability conditions, it results in output diversification and
the production of cash crops, creating output transformation. In terms of
technology and machines, transformation occurs when the prevalence of
increased land irrigation and mechanisation in all levels of farming takes
place. The outcomes that result from the transformation process march
towards sustainability, signifying the presence of sustainable methods of
production, reduction in the use of ground water, use of bio fertilisers,

Stability Condition Transformability Condition Sustainability Condition

Price Condition of Inputs

Efficient use of Lands
Land
Optimum use of fertilisers
Fertilisers
Inputs Credit to small firms
Agricultural credit Sustainable methods
of production

Outputs Reduction in the use

of ground water
Output Diversification
Farm Variation in output basket Use of bio fertilisers
Mechanisation
Production of Cash Crops

Institutional
arrangements
Use of technology and
machines Increased land irrigation Market reform

Mechanization in all level

of farming

Food
Security

Availability Affordability Utilisation Stability

Fig. 2.1 Stability, transformation and sustainability framework (Source Author)

38 R. A. M. TITUMIR

institutional arrangements and market reforms. It is to be noted that

institutions play a crucial role during all the stages, as without institu-
tional support, rules, regulations and policies as well as the achievement
of transformability and sustainability become precarious and gruelling.
Sustainability ensures food security which is comprised of four elements—
availability, affordability, utilisation and stability. Food security can be
ensured once all of these elements are aligned and achieved.

Stability Conditions
Stability condition determines the current state of different indicators
and associated risks of the agricultural sector. The analysis of the stability
conditions includes inputs and outputs of agricultural production. Inputs
include traditional factors like land and labour as well as modern tech-
nology used in agriculture.

Fragility in Food Security

In terms of food security, comprised of four pillars—availability, afford-
ability, utilisation and stability, Bangladesh has only achieved the first
pillar—availability of food. The threshold for undernourishment in
Bangladesh is 1,960 kcal/per capita per day and the average dietary
energy requirement for Bangladesh is 2,290 kcal/per capita per day. The
food supply per capita per day has increased in the country in the last
decade. Food supply per capita now stands at 2,450 kcal/per capita per
day (FAO 2019). The supply of food is now well beyond the minimum
and average requirement for the country. Even though the net produc-
tion of food in the country may have surpassed the demand, the prices
of food may hamper its affordability—the second pillar of food security,
to all households. The prevalence of severely food insecure populations
is 10.2% in Bangladesh, even though the country has a net production
of food well above the minimum required (FAO 2019). This means that
one in ten people cannot afford the minimum food requirement. For
European countries, the percentage is less than one.
The utilisation of food in Bangladesh is also in a pitiable condition.
The diminishing rate of undernourishment has slowed down due to the
lack of a comprehensive increase in crop production. As a result, intake of
essential nutrients has worsened simultaneously, signified by an increase in
wasting in children under 5, from 11.8% in 2005 to 14.3% in 2016 (FAO
 2 AGRICULTURE IN BANGLADESH 39

2019). The share of dietary energy derived from cereals and roots and
tubers is 80% in Bangladesh. In high income countries, it is 31% (FAO
2019). From 2010 to 2018, milk production increased 237 times, yet the
consumption of milk has reduced to 27.31 grams in 2016 from 33.72
grams in 2010. During the same time, production of meat has increased
277 times, but the consumption increased slightly by 0.7 grams.
The stability of food security is vulnerable, as a high percentage of the
population remains undernourished and suffers from fatal food insecurity.
Bangladesh ranks 88th among 117 countries in the Global Hunger Index
and thus has serious hunger problems (GHI 2019). In the Global Food
Security Index, Bangladesh stands 83rd among 113 countries, the lowest
in South Asia (The Economist 2019). Thus, these indices indicate that
food adequacy has not ensured food security in Bangladesh.

Slow Rate of Structural Transformation

The growth that the agriculture sector has seen in Bangladesh over the
last 25 years needs to converge to a level where the outputs from agri-
culture will not only ensure food security but also provide income for the
population involved in it. The goal of agriculture is not only to ensure
food security but also to speed up structural transformation. The share
of agriculture in GDP stood at 13.32% in 2017–2018, declining from
17.71% in 2010–2011 (Ministry of Finance 2019). The rate of growth in
the agricultural sector is in decline. The rate of growth has gone down
to 3.51 in 2018–2019 from 4.19 in 2017–2018 (Ministry of Finance
2019). Employment in agriculture has also been shrinking but at a slower
rate than the contribution to GDP.
The beginning of structural transformation is evident from the
percentage of labour employed in agriculture. The share of total employ-
ment in agriculture was 45.1% in 2013 and it has gone down to 40.6%
in 2016 within 3 years (ILO 2019). The rate of employment in the agri-
cultural sector has declined in the last decade (Fig. 2.2). In 1999–2000,
employment in the sector was 50.76% which came down to 45.1% in
2013. The growth in persons employed in the agricultural sector has
been in reversal since 1999–2000. In 1999–2000, the rate of growth of
employment was 1.53% per year which became 4.29% in the 2005–2006
to 2010 period, and again decreased to 0.60% in 2010–2013 (ADB and
ILO 2016).
40 R. A. M. TITUMIR

a b
70 70

60 60
50 50
40 40
30
30
20
20
10
10
0
0
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
1989 1991 1996 2000 2003 2005 2006 2010 2013 2016 2017

Share of Agriculture GDP Value

Fig. 2.2 a Share of agriculture in GDP (World Bank 2019b); b Share of

employment in agriculture (Source BBS, Labour Force Survey 2016)

The output growth in the agricultural sector has lessened to 3.28% in

2010–2013 from 5.32% during the period of 1995–1996 to 1999–2000.
Although the manufacturing sector has become more labour intensive
than before, the agricultural sector has not been on the same path. The
employment elasticity plunged to 0.1951 in 2010–2013 from 0.7293
during the period of 1995–1996 to 1999–2000 (ADB and ILO 2016).
Non-agricultural sources now contribute more than agricultural sources
in rural households. The contribution from agricultural income is now
38.21% (BBS 2019).

Increasing Land Fragmentation

Land has been on the decline as a result of aggressive industrialisation and
urbanisation. Agricultural land can be categorised in two ways. Croplands
are those in which different types of crops are grown regardless of the
quality of the land as Bangladesh is situated in the Ganges delta and thus
has one of the most fertile lands in the world. In Bangladesh, there has
been a decline in all types of land over the years. Size of lands are getting
smaller due to fragmentation as a parcel of land being divided amongst
the descendants due to inheritance. This process has also caused waste of
land used to create boundaries for demarcation amongst the successors
of the family land. Smaller lands make farm mechanisation difficult and
inefficient, as tractors and tillers cannot function efficiently in lands with
smaller and irregular dimensions. Most importantly, this restricts achieve-
ment of economies of scale, causing a massive impediment to enhancing
growth in productivity.
 2 AGRICULTURE IN BANGLADESH 41

Table 2.1 Farm holdings

Farm holdings 1983/84 (million) 1996 (million) 2008 (million)

Small farms (0.5–2.5 acres) 7.07 9.42 12.53

Medium farms (2.5–7.5 acres) 2.48 2.08 2.11
Large farms (7.5+ acres) 0.50 0.30 0.23
Average farm size 0.81 0.60 0.50

Source BBS (2009)

The number of small farms has almost doubled in 25 years and at the
same time, the number of large farms has reduced to half (Table 2.1).
The number of medium farms has also declined, but at a slower rate. The
average farm size has waned in this period, currently standing at 0.50
acres. The percentage of rural households without any land is 7.84% and
the percentage of rural households in tenancy is 22.06%. Average farm
sizes have decreased over the years for most of the developing countries
but increased for the OECD countries and a few East Asian countries
(FAO 2014). The average farm size of Bangladesh is lower than that of
Japan, Thailand, and Vietnam where it was 1.2, 3.2 and 0.7 hectares
respectively in 2000, compared to only 0.3 hectares in Bangladesh. At
the same time, the average farm size in the United States and the United
Kingdom is 178 and 70 hectares respectively.
The risk in the agriculture sector is associated with the size of farms
in the country. The nature of risk often determines the outcome in this
sector. Small farmers tend to be risk averse and hence opt for products
which have the least risk and variability. Small farmers emphasise more on
rice and wheat because of the least price volatility of these two goods in
Bangladesh. As a result, small and medium households have the highest
percentage in growing rice only (Hoque and Ahmed 2020). This works as
a significant impediment towards diversification in the agricultural sector.
The landless population has increased over the years and thus contrac-
tual renting of land has increased. As the contracts usually span from one
to three years, farmers have little incentive in investing in the lands. This
also adds to the risk averse nature of the farmers as they have to pay rents
regardless of any natural calamities or shocks that hamper production.
The smaller farmers have higher productivity but only within a very
narrow range of productivity. The compulsion to maintain subsistence
42 R. A. M. TITUMIR

forces peasants to resort to intensive production and smallholding agri-

culture continues to increase in Bangladesh. These problems are not
addressed by market reforms, although agriculture in the country is
already largely liberalised, deregulated and privatised. If markets are to
drive productivity growth, the expectation is that land transfers should be
to smaller farmers. The peasants do not have the capacity to buy land due
to high land prices as a result of purchases made by people who are either
remitting income from cities or abroad, or people who are buying for
industry or other purposes. Thus, the land has become an instrument
of savings rather than investment, and the latter could have increased
productivity (Titumir 2021).

Overuse of Fertilisers
The agricultural production process now depends more on fertilisers
because of two reasons: firstly, the amount of land for agriculture has been
decreasing, and land crops are now grown round the year with major
and minor seasonal crops. Such high intensity of crop production has
significantly deteriorated the quality of agricultural land. Secondly, there
are high yielding varieties of crops grown in the country requiring large
amounts of fertilisers, causing deterioration in the long run.
Bangladesh uses a greater quantity of fertilisers per hectare of arable
land than India, while the rate of consumption has also increased
significantly in recent years. Fertiliser consumption as a percentage of
production is the highest in Bangladesh (Table 2.2). The overuse or
inefficient use of inputs leads to increased cost of production and thus

Table 2.2 Fertiliser consumption

Fertiliser consumption (% of Fertiliser consumption

fertiliser production) (kg per hectare of
arable land)
2005 2015 2005 2015

Bangladesh 165 477 198 299

South Asia 136 155 124 164
East Asia and Pacific 136 109 270 328
OECD 86 90 121 132

Source World Bank (2019b)

 2 AGRICULTURE IN BANGLADESH 43

raises the output prices. Subsidies in agriculture mostly go to the procure-

ment of fertiliser and thus keeps the price within the capacity of the small
farmers. This too has been a key factor in the overuse of fertilisers in the
country. The Government provided subsidies worth USD 700 million
in 2018–2019 season which accounts for almost 25% of the Ministry of
Agriculture’s budget. Government policy regarding subsidies in fertilisers
has also contributed to the apparent concentration of output as 80% of
the fertilisers is being used in rice production (World Bank 2020).

Differential Access to Credit

Higher credit allocation in the agricultural sector allows farmers to use
better and higher quality inputs such as seeds, fertilisers etc. While the
availability of credit has increased over the years, they fail to adequately
reach the small farms. Agricultural land and productivity have an inverse
relationship (Fan and Chan-Kang 2005). The smaller farms tend to have
a higher productivity. The productivity is likely to increase with access to
credit since credit allows access to better inputs needed for production.
The majority of farm holdings in Bangladesh are small, with land areas
less than 2.5 hectares. Farmers with small land holdings do not produce
enough surplus output to be invested for the following year (Fig. 2.3).
Agricultural credit has seen a rise in recent years both in terms of its
target and the disbursement amount. The disbursement exceeded the
target for credit allocation. Recovery rate of credits is also higher in
the recent years. Access to financial services is still skewed towards large
farmers. 13.35% of the large and medium farmers have access to agricul-
tural credit whereas only 7.15% of the small and marginal farmers have
access to credit according to a nationwide household survey by IFPRI
(The Daily Star 2017).

Declining Agricultural Productivity with Concentrated Output Basket

Agricultural production has, no doubt, increased in quantity during the
last decade but the growth rate of output has declined. Agricultural
output growth dwindled to 2.1% during 2010–2014 from 3.7 during the
2001–2010 period. Total Factor Productivity, an indictor measuring the
efficiency of inputs, has therefore also decreased to 0.7 from 0.9 in the
same period (IFPRI 2018). The production of rice, the main agricultural
product of the country, has soared to 50 million tonnes in 2017 from
44 R. A. M. TITUMIR

25000

20000

15000

10000

5000

Disbursement Recovery Target

Fig. 2.3 Credit in agriculture (Source BBS 2019)

18 million tonnes in 1975, while the value of agricultural production has

tripled in the same period.
In terms of agricultural production, rice paddy is the most grown crop
in the country. Other crops consist of maize, roots and tubers, pulses and
vegetables. In 2017, the quantity of rice paddy produced in the country
was around 50 million tons. Maize amounted to 10 million tons and was
the second highest agricultural good produced (FAO 2019). Bangladesh
ranks high in the Crop Production Index compared to other regions.
Once renowned for jute production, the country has shifted towards crop
production because of the ability to grow all through the year. In recent
years, Bangladesh has achieved food adequacy through the production of
rice, which has increased significantly because of the introduction of the
High Yielding Varieties (HYV) of rice.
Crop production of Bangladesh has greatly improved in the last decade
and has surpassed South Asian and East Asian countries (Fig. 2.4). This
is due to the high crop production intensity. Yield per hectare of land
significantly increased after 2005, as farms started using technologies and
 2 AGRICULTURE IN BANGLADESH 45

120

100

80

60

40

20

0
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
Bangladesh World East Asia

Fig. 2.4 Crop production index (Source FAO 2019)

HYV seeds in their production processes. High intensity production has

enabled the country to attain self-adequacy in foods. An increase in the
production of rice does not necessarily signify an increase in the produc-
tion of all other crops. However, export earnings from agriculture are
currently facing a steep decline. The cereal produced in the country is
used primarily for consumption. Although jute has contributed most to
the export value in agriculture, in recent years, the export value from jute
has been on a downward trajectory.
The lack of farmers’ capacity to bargain for fair prices of produce results
in lower profits. As the small and medium farm holdings do not have
access to better management, they are dominated by intermediaries. Strin-
gent requirements for agricultural procurements by the government also
force them to sell their produce at lower prices to intermediaries as small
farmers often fail to fulfil those requirements (Mondal 2010).

Low Utilisation of Technology

High population density, fertile soil and deltas, the monsoon economy
and the distribution of land and other assets have also shaped the crop
farming system technologies (Mandal et al. 2017). The mechanisation
process started from the irrigation of lands and has slowly spread to
other farm activities. Agricultural mechanisation to a large part depends
46 R. A. M. TITUMIR

on R&D in the agriculture sector. Mechanisation in the country was the

result of scientific research in institutes such as BARD, BADC, BRRI,
BARI. In Bangladesh farm machinery includes machines driven by diesel
engines or electrical motors and manually-operated modern farm imple-
ments. Engine- or motor-driven equipment includes shallow tube wells,
deep tube wells, and low-lift pumps for irrigation; two-wheel power tillers
and four-wheel tractors for land preparations; and combines harvesters
and reapers for harvesting. Manually operated modern farm machineries
include pedal threshers, pesticide and weedicide sprayers, briquette (guti)
urea fertiliser applicators, seed drillers, weeders, and so on. Although
mechanisation has increased rapidly, most machines concentrate on irriga-
tion and land preparation. Even within the irrigation process, most of the
machines are run by diesel and fuel which increases cost and is susceptible
to shocks. Low cost sources of irrigation tools are still underused. Size
of farms and incapabilities of small farmers handicap the use of modern
technologies in crop harvesting. Hence, manual labour is required during
harvesting period which increases the cost of production.

Loss from Covid-19

The covid-19 pandemic has hit the economy on all fronts. The agricul-
tural sector suffered the worst blow as disruption in the supply chain due
to the shutdown has caused massive losses for the producers. A study
by BRAC suggests, around 88% of the farmers incurred losses during the
lockdown in the country and amounts to BDT 565 billion (BRAC 2020).
Nationwide shutdowns disrupted supply to the consumers resulting in a
price hike. Increased food prices coupled with income erosion has wors-
ened food insecurity in the country. The same study mentions that food
expenditure in both rural areas and urban slums reduced by 28%.
Lockdown has also affected the production side because of disruption
in the supply of inputs. Restrictions on movement has affected labour
migration and caused a labour crisis in rural areas. This has caused an
income erosion for the migrant agricultural labourers. At the same time,
production cost rose as a shortage of migrant labour has increased the cost
of labour. The cost of labour rose by 17% and the overall production cost
increased by 13% according to a survey by BRAC (The Financial Express
2020). Mechanisation is still limited to land preparation and irrigation.
Harvesting tools and machines are not widely used, which is also a reason
behind the high cost of production. Further, producers of vegetables and
 2 AGRICULTURE IN BANGLADESH 47

non-rice crops, which are perishable items, also faced a declining price
due to market shutdowns from the pandemic.
The Government has intervened to tackle the crisis in the agricultural
sector. Most of the problems are now a result of institutional fragilities,
which existed before the pandemic hit. The agricultural market has been a
cause for concern as farmers faced low prices of outputs while consumers
were paying higher prices in the market. The government’s initiative to
stabilise the market is limited within setting a price, direct purchasing and
trade restrictions. During the pandemic, only 1% of the farmers sold rice
at the price set by the government (The Financial Express 2020). The
governments’ rice procurement plan does not benefit the small farmers
as it mostly procures ‘boiled’ rice from rice mills owned by large farmers.
The state’s policy to set output price accrues little benefit in the absence
of any market monitoring.
The Government has come forward with a set of fiscal policies to
mitigate the shock vide its stimulus package announcement for the agri-
cultural sector with a focus on providing agricultural credit to the farmers.
It plans to continue providing subsidies to this sector, especially in farm
mechanisation. Such policies though fail to reach small and medium
farmers. Access to financial services is critical for the small farmers. The
ongoing crisis will no doubt lead to income losses for the farmers if this
is not tackled. Without the proper financial ammunition, the ability to
invest in the next farming season will remain an uncertainty.

Transformability Conditions
Transformability conditions entail the factors which are required for over-
coming the major challenges identified in the previous section. In a bid to
achieve food security and structural transformation, the issues discussed
in the section merits meticulous startegies and actions.

Diversification of Output
To enhance farmers’ income through the production of high-value crops
and maintain a better soil structure for long-term sustainability, the
country needs a departure from “rice-led” growth to a more diversified
production base that includes several non-rice crops. Most of the produc-
tion, other than rice, are minor crops and are only grown in a particular
season (Table 2.3).
48 R. A. M. TITUMIR

Table 2.3 Crop production

Year (‘000 tonnes)

1985 1995 2005 2015

Rice, paddy 22556 26399 39796 51805

Maize 3 3 356 2272
Pulses 546 532 316 384
Roots and tubers 1842 1903 5167 9509
Vegetables 1074 1390 2471 5058

Source FAO (2019)

In addition, the present yield potential of non-rice crops is very low. It

can be increased to the level of HYV wheat if hybrid varieties are used,
adequate demand is created and fair prices to the growers can be ensured.
The Bangladesh Agricultural Research Institute (BARI) has already devel-
oped five high yielding medium duration maize varieties with grain yield
potential of 5–7 Mt/hectare. These are suitable for flood prone areas.

Integrated Irrigation
Irrigated land is twice as productive as rain fed land after controlling for
other factors (Fuglie 2008). One of the key factors in agricultural produc-
tivity growth in the Green Revolution of India was public investments in
irrigation (Evanson et al. 1998). In sub-Saharan Africa, average yields on
irrigated fields are 90% higher than on nearby rain fed fields (Fuglie and
Rada 2013).
In Bangladesh, the percentage of irrigated land has increased in the
1990s. Availability of irrigation equipment allowed barren lands in the
country to be converted into arable land. However, a large portion of
land still remains out of the irrigation process (Fig. 2.5).
Irrigation in the country mostly depends on tube wells and power
pumps, which is not sustainable as it causes groundwater table depletion.
Therefore, an integrated water management system which combines rain
harvesting and water from canals and rivers is required.
Bangladesh also suffers from lack of water management systems as 80%
of the country gets flooded during the monsoon season. On the other
hand, the north-eastern part of the country suffers from a deficiency in
irrigation water during the non-monsoon seasons. Diversification towards
 2 AGRICULTURE IN BANGLADESH 49

12000

10000

8000

6000

4000

2000

Agricultural land Cropland Irrigated Land

Fig. 2.5 Land pattern (Source FAO 2019)

non-cereal crops like vegetables and fruits also require better water
management systems.

Optimum Use of Fertilisers

As the amount of agricultural and arable land is decreasing and the
same land is used throughout the year for production, the soil is losing
its quality. This has led to an increased need for fertilisers to retain
productivity.
Bangladesh consumes more fertilisers compared to other South Asian
nations but less than the East Asian nations who have higher produc-
tivity than Bangladesh (Fig. 2.6). The overuse of chemical fertilisers has
a negative impact on the land, reducing its fertility and most importantly,
making produced crops detrimental to human health in the long run. Soil
salinity from excessive use of fertilisers may cause a decline in output by
15.6% (Dasgupta et al. 2014).
The marginal efficiency of fertilisers also decreases with increased use
in production. When a similar parcel of land is used several times a year
by means of intensive chemical fertilisers use, it will become infertile
and fragile leading to a lower production of crops. If this phenomenon
continues, the land can no longer be used.
50 R. A. M. TITUMIR

Fig. 2.6 Cereal crop yield vs fertiliser application (BGD = Bangladesh, IND =
India, LKA = Sri Lanka, NPL = Nepal, CHN = China, JPN = Japan, VNM =
Vietnam, KOR = Korea Republic, GBR = Great Britain, USA = United States of
America, EAS = East Asian Average, OED = OECD Average) (Source Author’s
calculation)

OECD countries have higher crop yields than Bangladesh and use less
fertiliser (Fig. 2.6). In comparison, East Asian countries have higher yields
with higher use of fertilisers. Bangladesh’s performance surpasses other
South Asian countries in terms of crop yield per hectare. However, the
efficiency of fertilisers is decreasing as the persistent use of these products
eventually leads to diminishing returns.
The efficiency of fertilisers has declined in the last few years. Efficiency
is the ratio of output per hectare and fertilisers used per hectare (Fig. 2.7).
It is evident that the higher use of fertiliser is reducing agricultural output.
Fertilisers are overused in the production process which raises the produc-
tion cost and causes significant degradation of the land. This reduction in
land fertility forces farmers to use more fertilisers. This has increased the
overall use of fertilisers in Bangladesh, causing the land to lose fertility
and increasing the cost of production. This eventually creates a vicious
cycle which impacts soil productivity.
 2 AGRICULTURE IN BANGLADESH 51

25

24

23

22

21

20

19

18

17

16
02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17
20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20
Fig. 2.7 Efficiency of fertilizers (Source Author’s calculation)

Formalising Credit
Although informal sources of agricultural credit charge higher interest
rates than their formal counterparts, they are widespread in rural areas.
Borrowing from informal sources is popular among landless and marginal
farmers. Medium and large farms borrow more from formal sources like
the specialised state-owned Krishi Bank, NGOs and private banks. The
proportion of agricultural credit borrowed from NGOs are much higher
than the amount that is borrowed from banks (Table 2.4). This provides
evidence of the tendency of households to opt for less formalised credit
sources. Small farmers believe that the limited number of bank branches
and less cooperation from branch officers are the main reasons behind
their decision to opt for informal sources of credit (Barkat et al. 2010).
Since most farm holdings in Bangladesh are small, informal credit is
significantly more popular.

Mechanisation in Harvesting
While irrigation, tillage and threshing operations are almost fully mecha-
nised, there has been modest mechanisation of two important operations
52 R. A. M. TITUMIR

Table 2.4 Disbursement of agricultural credit according to division

Name of division Number of Agricultural credit Agricultural

households with from banks (%) credit from NGOs
agricultural loan (%)

Barisal 413142 37.74 52.47

Chattogram 953300 31.82 58.80
Dhaka 1043585 29.03 59.79
Khulna 844554 23.36 70.51
Mymensingh 493598 23.30 48.39
Rajshahi 1084697 20.06 72.00
Rangpur 998860 20.36 74.81
Sylhet 481149 32.48 46.57
Total 6312885 26.03 63.28

Source BBS (2019)

i.e., transplanting/seeding and harvesting operations. These operations

usually require more labour in the production process and it is often
difficult for producers to hire labour during the off season. In addition,
research on the size of farm holdings have shown that fragmentation
has not significantly affected the expansion of irrigation and tillage
mechanisation or productivity gains (Mandal et al. 2017).
The number of tillers and pumps portrays the use of technologies in
irrigation (Table 2.5). Other machines like tractors and harvesters are not
commonly used in Bangladesh. Bangladesh needs to opt for a full-scale

Table 2.5 Machineries

Machines Number Number/’000 ha
used in agriculture
Tractor 35000 2.32
Power tiller 700000 46.42
Pump (DTW) 35322 2.34
Pump (STW) 1523609 101.04
Pump (LLP) 170569 11.31
Rice transplanter 400 0.03
Reaper 500 0.03
Combine harvester 200 0.01
Closed drum thresher 220000 14.59
Open drum thresher 15000 9.95

Source Alam (2016)

 2 AGRICULTURE IN BANGLADESH 53

modernisation of the agriculture as the factor inputs of land and labour

are expected to decline in the future.

Integrated Agricultural Marketing System

A fragile and complicated supply chain of agricultural products exists
in the country. Agricultural products reach consumers after travelling
through various intermediate markets; from village markets to the rural
wholesale markets to the wholesale markets in the cities and finally from
the wholesale markets to the corner shops in the cities. Intermediaries in
various points of the supply chain in the agricultural markets results in rent
seeking activities. Because of intermediaries, information asymmetry exists
between producers and sellers. As a result of the above factors, producers
do not get the right price for their products. Producers in the recent years
have been regularly facing losses, especially in the boro seasons. Farmers
on an average lost BDT 1.2 per kg in boro rice during the 2018–2019
season (World Bank 2020).
The price for consumers on the other hand has only increased in
the same period. Hence, intermediaries are taking away profits from the
producers because of the existing market structure and distribution system
in the country.

Sustainability Conditions
The existing process of accumulation has resulted in a non-sustainable
agriculture because of market failures caused by asymmetries of power,
diseconomies of scale, and unstable property rights, resulting in arrested
productivity growth. This has been further aggravated by climate change.
Certain indications of climate change are already visible in the forms of
salinity intrusion, river erosion, excessive rains, changes in the seasonal
patterns, etc. It is imperative for the country to move towards sustainable
agriculture.

Sustainable Irrigation Methods

There can be no denying the imperative to move towards sustainable
irrigation methods. Increased land irrigation has a negative impact on
the environment as irrigation generally involves use of groundwater and
therefore causes decline in groundwater levels. At present, around 75% of
54 R. A. M. TITUMIR

the irrigation water comes from under ground whereas only 25% comes
from surface sources like rivers and canals (FAO 2019). Increased use
of surface water in irrigation is therefore needed for sustainable agricul-
tural production. The daily use of water will increase by 0.8 mm/day
at the end of this century because of climate change in the northwest
region of the country. Irrigation rate will be 8.8 mm/day in the year
2025 (Shahid 2011). This will significantly lower the groundwater level,
leading to desertification. Decline in the level of groundwater also affects
the cost of production as pumping water from deeper levels will require
more energy.
Ground water levels decline every year at the rate of 0.01 to 0.5 metres,
particularly in the regions where boro rice is cultivated. Excessive use of
groundwater has caused a 32% decline in the 10 years between 2003 and
2013 (Khaki et al. 2018). Ground water is primarily used for irrigation
for boro rice cultivation, where around 25–75 deep tube-wells are planted
per square kilometer—a process that originated in the 1960s. During the
1980s and 1990s, the installation of shallow tube-wells spiked, leading
to a further increase in the groundwater extraction rate (Timsina et al.
2018).

Shifting Towards Bio-Fertilisers

For Bangladesh, developing sustainable conditions for agriculture remains
a challenge due to a reduction in land and high input costs. By 2050,
agricultural land is expected to be reduced by 17%, which will lower
food production by 30% (Field 2014). Productivity and income from
agriculture will only increase if the prices of inputs are lowered. Much
of the demand is met by importing these fertilisers, raising input costs.
Bangladesh has a much higher fertiliser consumption as a percentage of
fertiliser production, which greatly increases the cost of production.
While analysing the quantity of fertilisers produced in Bangladesh
and imports of fertilisers, it is clear that only the production of urea
locally is more than the quantity imported (Fig. 2.8). Important fertilisers
like muriate of potash (MoP) and superphosphates are mainly imported.
To maintain sustainable productivity in agriculture, increased fertiliser
production in Bangladesh is essential in reducing prices. By 2050, the
demand for paddy rice will be 68.09 million tons. 1.71 million tons of
chemical fertilisers will be required in order to meet this demand. The
 2 AGRICULTURE IN BANGLADESH 55

1600000
1400000
1200000
1000000
800000
600000
400000
200000
0
DAP Urea MOP Superphospates
above 35%
Production quantity Import quantity

Fig. 2.8 Fertilisers by product (Source IFA 2018)

Table 2.6 Differences between recommended and actual fertiliser usage

Type of crop Recommended usage Actual usage of Percentage of

of fertiliser fertiliser over-use/under-use
Urea TSP MoP Urea TSP MoP Urea TSP MoP

[Link] 141 101 69 135 28 17 4.26 72.28 75.36

[Link] 166 101 69 135 30 24 18.67 70.30 65.22
Boro 269 131 121 192 47 37 28.62 64.12 69.42

Source Basak et al. (2015)

increased use of chemical fertilisers reduces the fertility of lands in the

long run.
The use of bio slurries or organic fertilisers has the ability to contribute
more than 30% of nutrient supply and more than 15% of the total demand
of urea, TSP and MoP (Basak et al. 2015) (Table 2.6).

Diversification Towards Cash Crops

Sustainability also requires greater emphasis on the production of cash
crops like jute and tea. This raises the value of products as these goods
are both exported abroad and consumed in Bangladesh. The production
56 R. A. M. TITUMIR

a b
700000 12000000

600000
10000000
500000
8000000
400000
6000000
300000
4000000
200000
2000000
100000

0
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47

Year Total Export Cereal Jute Tea year Import Value Export Value

Fig. 2.9 Agricultural trade value (Source FAO Statistics 2019)

of jute and minor crops declined in previous decades, but growth has
recently increased. Jute has the highest Revealed Comparative Advan-
tage (RCA) score for Bangladesh with a score of 446.3 (UNCTAD
2019). RCA measures the relative comparative advantage of a country in
producing and exporting a good to other countries. Hence, production
and export of jute accrues the highest benefit for Bangladesh (Fig. 2.9).
To sustain agricultural mechanisation and the process of rural devel-
opment, more research is needed in mechanisation to reduce drudgery
in smaller scale rural enterprises, machinery safety, changing food systems
and cropping patterns and the diversification of rural enterprises. It is
imperative to maintain the mechanisation process and investments in
R&D must increase.

Concluding Remarks
The pace of structural transformation is slower than expected. Traditional
methods are still used in agriculture, which requires more labour. The
migration from agriculture to manufacturing and service sectors has slowd
down in recent years, but in the future, it is likely to create additional
pressure in maintaining a sustainable productivity level.
The productivity level is declining in Bangladesh. The reduced farm
sizes, coupled with high intensity of crop production, cause land degra-
dation. In the case of agricultural inputs, price is the main concern in
Bangladesh because the price of fertilisers and seeds raise the cost of
production. Lower fertility of land and higher input prices result in lower
agricultural productivity. Agricultural output can also increase total factor
productivity since a diverse crop basket may generate more income for
 2 AGRICULTURE IN BANGLADESH 57

Table 2.7 Summary of the major indicators in agricultural sector

Indicators Remarks

Stability
Land fragmentation Land is getting fragmented. In 1983–1984
period, average farm size was 0.81 million acres
which came down to 0.50 million acres
Efficient use of fertilisers Fertiliser consumption has increased in 2015
(477% of fertiliser production) from that of
2005 (165%)
Access to credits Small farms do not get sufficient access to credit
Variation in output basket Concentration of crop production, particularly
on rice. Declining export earnings. Incapability
of bargaining is lessening profit for farmers
Use of technology Increased mechanisation and less innovation in
machineries
Transformation
Import and production of fertilisers Increased demand of fertilisers met through
import thus raising the production cost
Land irrigation Quantity of irrigated land has increased but by
mostly using ground water
Credit formalisation Most of the small farms borrow money from
informal sectors at higher interest rate due to
lack of access to formal banking
Mechanisation in farming at Tillage and threshing are almost fully
different levels mechanised but transplanting/seeding and
harvesting operations are still very moderate.
There is a lack of efficient labour force to use
modern mechanisation methods
Sustainability
Use of ground water Ground water level is
declining every year at the
rate of 0.01 to 0.5 meter
in the regions where boro
rice is cultivated. Increase
in installation of deep and
shallow tube wells has
exacerbated the problem
further
Use of bio fertilisers Random import and use
of chemical fertiliser is
occurring in lieu of using
bio fertilisers. Detrimental
impact of chemical
fertilisers on soil, water,
flora and fauna

(continued)
58 R. A. M. TITUMIR

Table 2.7 (continued)

Indicators Remarks

Food security Bangladesh has ranked

83rd, lowest among South
Asian countries in the
Global Food Security
Index-2019. Specially,
quality and safety of food
indicator is very moderate

the producer. Lastly, technological progress can greatly reverse the trend
in productivity through mechanisation in all forms of agriculture.
Productivity plays an immense role in creating a surplus for the
producers since the majority of the agricultural producers reside in the
rural areas and live below or close to the poverty line. Increased agri-
cultural productivity can serve as a major vehicle to eradicate rural
poverty.
An important objective of agriculture is to ensure food security for
the population. Food security cannot be ensured just through higher
production; the price of foods must be kept at a level that people
from all economic classes have access to these products. Food prices
in Bangladesh have been increasing steeply but the primary producers
of the food barely get the price due to a lengthy supply chain where
non-producer-intermediaries get the majority of the profit.
Current production methods are not suitable for sustainable agricul-
ture in Bangladesh. The high use of chemical fertilisers negatively impact
biodiversity and land fertility. Chemical fertilisers increased production in
the short run. However, its high use in the long run will lower production
due to reduced land fertility. Groundwater levels in the country are also
receding due to intensive land irrigation methods. The impact of climate
change on Bangladesh will cause a loss of land, due to rising sea levels.
The use of bio fertilisers and underground water to keep nature safe must
be managed to ensure that sustainable production is maintained and food
security is assured.
There is also a need to maintain statistical coherence for better policy
formulation. Agricultural statistics relies on a single survey and census,
last published in 2008. In terms of statistics for consumption and food