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The Financial Express

Agriculture: A paradigm shift necessary

Shamsul Alam | Published: June 15, 2016 20:28:43 | Updated: October 23, 2017 12:25:02


Agriculture: A paradigm shift necessary

The green revolution based on 'seed, fertilizer and irrigation' that began in the mid-60s of the last century was a 'turning point' in the history of agriculture and over the course of time its tide had gradually washed Bangladesh shores as well. After independence, the production capacity of cereals was little over 10 million tons, whereas production has now increased to around 40 million tons. What was once a country with continuous food deficit is now food surplus. The agricultural sub-sectors like fishery and poultry sub-sectors experienced market based commercialization. At the same time, the scope of expansion of our forests also increased rapidly. Diversification has also been taking place in the sub-sectors of crop production. Fruit cultivation has increased and vegetables are now being produced round the year and not limited to seasonal cultivation only. Small, marginal and share cropping farmers are now assigned with the tasks of crop production. Farm size is declining fast. In 1983-84, small farms (measuring between 0.05 to 2.49 acres) made up 70 per cent of total farms, which increased to 84 per cent in 2008 and currently account for more than 92 per cent.
Although large and medium farmers are still engaged in farming, they are now rapidly entering into non-farm activities. Eighty seven per cent of rural farming households are now associated with non-farm activities. Probably the rural households are being encouraged to seek non-farm employment in order to avoid the natural and price related risks posed in agricultural activities. Non-farm job opportunities have been created by the electrification of rural areas, roads, expansion of growth centres and local markets. Electricity connections have increased rapidly in the last six to seven years. Mobile connections have not only made it possible for each village to be interconnected to markets and cities. Each village is now a global village connected to the rest of the world. Village and city dwellers are no longer distinguishable according to their ways of life. But the use of physical labour and dependence on nature are still very prominent in agriculture. Forty five per cent of the labour force is still employed in agriculture and this class of workers bear the entire weight of the crop sector on their shoulders. This large share of labour employment proves that the level of innovation and mechanization in agriculture is still far below desired levels. Agriculture could not still be brought out of its dependence on weather, and large portion of labour force is still employed in low productivity and low paying jobs. In Japan, only 4 per cent of the total labour force is accountable for the production of the entire agricultural output. Similarly, in the Netherlands, only 2 per cent of the labour force is related to agricultural production and is the major exporter of agricultural products in the entire European continent. In Canada and the USA, the respective figures for agricultural employment are 2 and 1.4 per cent. To come out from nature dependent agriculture, increasing per unit land productivity by using factor inputs with advanced technology like use of tissue culture, G.M. seeds and adopting automation in processing,  packaging and  storage is not possible for the marginal, share cropping and small farmers of our country. Small farmers have to depend on production of crops for subsistence primarily. If they have the opportunity and the physical ability, they move to other forms of employment. But the question remains, in this privately managed agricultural system, even with the aid of government input subsidies, low interest loans and training assistance, without a change in the structure of the agricultural sector, it will not be possible with the existing technology of 'seed-fertilizer-water and nature dependent agriculture' to increase output by a few times. A change in perception of agriculture towards high tech is necessary to make for another 'turning point' in the history of agriculture of Bangladesh,.
During the period from FY 2001-02 to FY2005-06, the average annual growth rate of the agricultural sector was 2.98 per cent which was 3.15 per cent from FY 2011-12 to FY 2015-16. In FY2015 the agricultural growth rate was 3.33 per cent, which was 2.6 per cent in the fiscal year 2016. Providing substantial amounts of subsidy and other incentives, low interest loan, trainings and even with wholehearted support by the government, Bangladesh has reached the threshold level of increasing agricultural productivity through the use of current 'high yielding variety seeds, fertilizers and irrigation' which cannot be pushed further, especially in the crop sub-sector. A large scale structural change has become a prerequisite to push ahead agriculture sector. In the current fiscal year, the projected growth in the industrial sector is 10.10 per cent, 6.7 per cent in service sector, only 2.6 per cent in service sector while the overall growth of the economy is projected to be 7.05 per cent. We were able to hit the 7.05 per cent growth mark thanks to the double digit growth in the industrial sector. It is expected that the growth in the industrial and service sectors will be higher in the coming days. The problem will remain in the nature dependent agricultural sector (especially the crop sub-sector) where growth may experience fluctuations or even downward trends. It is true that the country is experiencing industrialization, with 31.28 per cent of our gross domestic income coming from the industrial sector. The contribution of the service sector is the highest with 53.39 per cent while agriculture contributes 15.33 per cent, and its contribution will have to gradually increase. In raising the per capita income rapidly the contributions of the three sectors will need to be increased. Simultaneously, the country needs to be self-sufficient in its agricultural sector. The importance of the agriculture can hardly be over-emphasized to ensure the food and nutrition security/sustainability. The Netherlands with one-third of our land area has a population equivalent to one-tenth of Bangladesh. For Netherlands 72 per cent of GDP is contributed by the service sector, 26 per cent by industry and only 2 per cent by agriculture. Only 2 per cent of the labour force is engaged in agricultural sector. In Japan 72 per cent of GDP comes from service sector, 26.7 per cent from industry while contribution of agriculture is 1.5 per cent. By engaging just 2 per cent of its labour force, the Netherlands is a leading exporter of agricultural products.
In Bangladesh 45 per cent of the total labour force is engaged in agriculture and per capita product remains very low which indicates our backwardness in technology compared to Japan and the Netherlands. Thus the question is what sort of a breakthrough we need to push up the agricultural growth rate? Perhaps we have very little option besides switching to a high tech agriculture.
For transforming to high-tech agriculture (Hybrid seed, GM seed, environmentally sustainable green house, drip irrigation, tissue culture, harvesting & husking tools, drying-winnowing machines, green houses) it is really a challenge for small, marginal and share cropping farmers of Bangladesh to undertake such costly investments without much skill enhancement. Probably Bangladesh has reached the highest level of labour intensive and inputs based production (attained a threshold level). Predominance of small farming and lack of investment is a big impediment for skill-based, hi-tech agro firms. As a paradigm shift we have to promote large scale agro-firms in Bangladesh. Kazi Farms has invested in Tea gardens. PRAN, AGORA and SWAPNO have invested in agro-products marketing and exporting and attained successes. But in the crop production sector (e.g. corn, rice, wheat, potato, vegetables, banana farms) large scale agro-firm is yet to emerge in Bangladesh.
Now a days, agriculture has to transform to business based entity like agri-business. Agriculture of Bangladesh has to adopt modern technology by enhancing skill and developing a holistic agriculture marketing system with export connectivity. A large firm only can afford such ventures.
We need to transform quickly in order to increase export of agricultural products. The private sector should come forward with big investment to establish large scale firms in crop sub-sector to impact the "second turning point". Investment has to be increased for developing large agro-firms. To make this transformation, the government has to provide the highest level of policy support to the private investors. For example, providing tax holidays for 5-7 years to establish green houses for crop production, low interest fund supports to create go-downs with latest technologies. Currently the government has employed couple of agriculture officials at the upazila level, but firms will also come forward to appoint agriculturists if large firms are developed in the country by the private sector. As an example, many private fisheries have employed fishery graduates with high salaries (example - Gachihata Aquaculture Firm, commercial Fisheries in Trishal and Valuka).
If the scenario changes as suggested, many agriculture graduates will be employed in the private firms at village level. In the phase of high-tech transformation by changing peasant farm structure, the government should also continue to provide subsidies and cash transfers for the marginal and small farmers and share croppers as well until they disappear gradually.
Prof. Shamsul Alam is Member (Senior Secretary), General Economics Division, Bangladesh Planning Commission. He is President of the Bangladesh Agricultural Economists Association.
sabau47@yahoo.com
 

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