Facilitating growth of large-scale commercial farming

Dhaka,  Mon,  25 September 2017
Published : 18 Jun 2017, 21:39:55
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Facilitating growth of large-scale commercial farming

Shamsul Alam
Bangladesh is prone to natural hazards but is not a protracted crisis-ridden country like Sudan, Afghanistan, Fiji and Zimbabwe. The annual gross domestic growth (GDP) rate has been growing 6+ per cent over about last one decade. Last year's GDP growth rate was 7.11 per cent, and for the current year preliminary estimates suggest that the growth rate would be 7.24 per cent. 

Bangladesh has been maintaining a stable macroeconomic stability also for the last one decade. Industry's share to GDP is 31 per cent and of the service sector, 53 per cent. But agriculture's share to GDP has decreased to 15 per cent despite engaging 43 per cent of the total labour force. The country is self-sufficient in rice and tripled its total production since the independence in 1971.

In the context of Sustainable Development Goal (SDG) 2.1 (End Hunger) the percentage of population below lower poverty line in Bangladesh was 12.3 per cent in 2016 and prevalence of under-nourishment was 16.4 per cent as of FAO 2016 data. Prevalence of stunting was 36 per cent and malnutrition 14.3 per cent. 

On the means of implementing SDGs, Bangladesh has integrated the goals and targets in the 7th Five Year Plan, 2016-2020. It will implement SDGs through its national planning tool, i.e. through Five Year Plans. In 2016, mapping of SDG targets was completed by different ministries and a book was brought out showing whose responsibility is what and who will play lead and associated role in implementing the targets. Accordingly, the ministries are preparing action plan proposing projects and interventions that will be undertaken to materialise the goals. 

Action plan for the implementation of the SDG targets will be finalised by June 2017. The operational plan will be prepared but the challenge is enormous, particularly in respect of agricultural growth. In the last year, industrial growth was 11 per cent and service sector's growth was 6.5, but agricultural growth was declining and grew 2.5 per cent. Agriculture has become a relatively slow-growth sector, though agriculture gets all-out public finance support in terms of subsidies in fertiliser, irrigation and electricity, and agricultural machineries with 50-80 per cent subsidy on purchase price. Fertilisers in Bangladesh are even cheaper than salt. Price support programme is also undertaken in case of low market prices. 

One of the problems with agriculture is the prevalence of small farm holdings. Besides, practice of tenant farming is rampant. Crop production is completely weather-dependent. Poor farmers exhaustively use natural resources for maintaining their livelihood having no adequate farm resources. Who pays for environmental damages inflicted by millions of small producers? How millions can be made accountable or accused in a democratic polity? Farm structure itself stands on the way to large-scale farm mechanisation and adoption of improved technologies. Eighty-seven per cent of farm households has non-farm sources of income facilitated by huge expansion of rural road networks and access to electricity (82 per cent rural farm households has access to electricity). The green revolution with 'seed-fertiliser and irrigation' as divisible inputs has thrived. It has made a breakthrough in the previously stagnating small-holder agriculture. It was a turning-point in the late sixties of the last century. 

With the change of economic structure, adverse climate change impact and force of globalisation pushed agricultural activities to the margin. Agriculture has now become a relatively low-wage and low-productive sector. With the changed economic and social scenario, we must look beyond the farm gate. Knowledge-intensive new technological revolution is needed for a thriving commercial agriculture where small holder-dominated farm structure seems not to be compatible. I think now a paradigm shift is necessary in the mindset of the people to see agriculture in the rapidly transforming Twenty First Century in a booming commercial perspective. In the   globalised world, firm enterprises must have access to managing gene editing, tissue culture, GMO techniques with whole-sale farm mechanisation from seeding to harvesting, product packaging and establishing green houses for controlled large-scale production having own firm laboratories for innovation and maintaining product quality. 

Agriculture will be the integral part of industrial economy. It will be controlled by thousands of entrepreneurs not by millions of subsidy-dependent subsistent farmers. Continuous heavy subsidisation made small holder-faming persisting. Market will determine any resource use including land. Role of markets has not received much attention for developing agriculture as business proposition. The suggestions of land reform, tenancy reform, promotion of farming cooperatives, improving value chains, joint farming, valuing local knowledge, etc., have been galore over the last fivesix decades but largely to no avail. 

In Europe, cooperative banks once thrived in agriculture and industry, but all have now become commercial banks. Bangladesh has to think out of the box as the SDG is a well thought-out development agenda. Yes, political will and commitment will be a game changer in this regard. A macro-economic framework, particularly congruent financial policy design and legal reform, would be necessary to facilitate growth of large-scale commercial farming integrating all sectors of the economy.  

The article has been adapted from a speech  delivered by Dr. Shamsul Alam as a panelist in the session on Countries in Special Situations and Protracted Crisis in the Experts Group Meeting on Progress in Achieving SDG2 which was jointly organised by FAO, IFAD and World Food Programme in collaboration with UNDESA in New York during June 12-13, 2017.  Dr Alam is Member (Senior Secretary), General Economics Division, Bangladesh Planning Commission.
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