Review of input and output policies for cereal production in Bangladesh

In Bangladesh, supportive government policies have played a crucial role in the rapid growth of the cereals sector, and rice in particular. Despite this growth, the country remains a net importer of rice. Even as Bangladesh struggles to achieve food security, the country’s cereal sector faces new challenges. What are these challenges and what should be the country’s response? With these questions in mind, this paper reviews the key policies of agricultural inputs and outputs in Bangladesh that are crucial for improving cereal production in the country. On the input side, the review covers seed, fertilizer and agrochemicals, irrigation/water, farm equipment, research, extension, and agricultural credit. The paper also provides an overview of the policies concerning agricultural output markets, with a particular reference to rice, the main staple crop in the country.

The review shows that agriculture, especially rice output, in Bangladesh has grown impressively in the last two decades. A combination of factors seems to have driven these gains: increased access to irrigation; widespread adoption of high-yielding varieties; growth in the use of inputs such as fertilizer, pesticides, and others; and increased efficiency in the output markets. These drivers of agrarian growth received an impetus from the government’s shift in policy of moving away from a largely public sector–controlled structure to one in which private-sector participation gained significance in both input and output markets.

The review also shows that despite large gains in efficiency of both input and output markets, several traditional problems continue to plague Bangladesh’s agricultural sector. Landholdings are mostly small and often fragmented, which limits the capacity of farmers to access credit, quality inputs, and modern technology. In addition, the input sectors themselves continue to face many of the traditional problems. The seed sector, for example, is dominated by the informal sector, which is outside any legal, regulatory, or quality-monitoring systems. The agricultural research system, dominated by the public sector, continues to face shortages and volatility in its funding, weak management, and ineffective institutional arrangements for undertaking high-quality and relevant research. The public extension system too faces similar funding, manpower, and institutional shortcomings. Ease of access and the coverage of the formal financial sector are still major problems, despite the rapid growth of a diverse set of players in the financial system, such as banks, cooperative societies, and microfinance organizations. Besides these sector-specific problems, overall infrastructure bottlenecks in the country, such as with transportation and electricity sectors, pose problems in accessing inputs and technologies.

Policymakers in Bangladesh are now confronted by numerous new and emerging challenges, which can prove to be a threat to the future of agriculture. Some of these challenges are the result of the negative fallout of current agricultural practices and policies, such as excess groundwater withdrawals for irrigation; decline in soil fertility, some of which is the result of excessive and unbalanced use of fertilizers, pesticides, and other agrochemical inputs; and other problems caused by intensive mono-cropping of rice. Past policies that aimed at promoting growth have not paid much attention to regulating input use patterns, resulting in some of these negative consequences.
Other emerging problems relate to wider changes in the natural environment as well as shifts in world markets and trade, which have consequences for Bangladesh’s agricultural sector. In reassessing its agricultural policies, Bangladesh now has to balance the twin challenges of ensuring sufficient growth in output while promoting judicious use of natural resources to maintain good environmental health. At the same time, the country has to evolve strategies for coping with volatility in world markets through regional solutions with neighboring countries.

Pullabhotla, Hemant
Ganesh-Kumar, A.
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International Food Policy Research Institute (IFPRI)
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