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Bangladesh and its Agriculture Sector
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By Super Admin
Published on 10 September 2006
 
Agriculture is the single most important sector of Bangladesh's economy. Agriculture is the driving force behind economic growth in Bangladesh.

Agriculture in the Bangladesh Economy

Overview

Agriculture is the single most important sector of Bangladesh's economy. 80% of the population is engaged in agriculture (66% of the labor force). Fifty-seven percent of the labor force is engaged in the crop sector which represents about 78% of the value added in the agricultural sector. The share of agriculture in GDP has fallen from around 57% in the 1970s to 35% in recent years but is still the largest economic sector. It is also the source of many of the small industrial sector's raw materials, such as jute, and accounts for 32% of the value of exports. In short, agriculture is the driving force behind economic growth in Bangladesh and, as a result, increasing food and agriculture production have always been major concerns of Bangladeshi policy-makers.

The crop sector

Within the crop sector (rice, wheat, pulses and jute), rice dominates, with an average 71% share of the gross output value of all crops. As a result, growth in the agricultural sector essentially mirrors the performance of rice production, although the share of livestock and fisheries has increased steadily in recent years to 22% of the value added in agriculture.

Fluctuations in food grain production

The possibility of natural disasters is a constant threat for Bangladesh. The country is particularly vulnerable to sudden floods, cyclones and even droughts. Vulnerability to natural disasters and a heavy reliance on annual rains for the main crop performance are the cause of severe fluctuations in food grain production and prices and also very erratic GDP growth. Losses of both food and cash crops are a common occurrence, seriously disrupting the entire economy by precipitating unanticipated food import requirements. This in turn reduces the foreign exchange availability necessary for imports of essential inputs for manufacturing and industry and, as a result, causes shortfalls in exports.

Exportation

Bangladesh is the world's leading exporter of raw jute and jute products, including carpet backing, twine and sacking. It accounts for as much as 24% of world jute production.

Export earnings from fish and fish products, in particular shrimp, are also sizeable, and followed by export earnings from the leather industry. Natural gas production is of increasing importance. Its major product, urea fertilizer, has more than doubled in output in the last decade and the country now exports fertilizer mainly to neighboring Asian countries. Within the agriculture sector, tea follows jute as an important cash crop and export product; however it represented only 1% of the country's total export earnings in 1994/95.

Resource base

Bangladesh has a narrow resource base, except of course its human resource potential. Industry in the country is at present not large enough to support the country through export earnings, or by employment generation. The opportunities for diversifying the economic base in Bangladesh are limited and the country continues to run up a heavy trade deficit, reflecting its dependence on imports for most essential goods, such as machinery, equipment and petroleum products, and the decline in the real prices of its traditional staple exports of jute, jute manufactures and tea. Although levels of domestic savings and investment have been growing in the 1990s, they are still low and act as a constraint to the country's economic growth and development.


BIODIVERSITY AND BIOTECHNOLOGY

Crop Diversification

With rice occupying almost 75 percent of the cropped area, followed by wheat which occupies approximately 4 percent and jute which occupies approximately 3 percent, less than 20 percent of the cropped area is devoted to a range of other crops. It appears that the benefits of crop diversification in the country are well known and have been recognized for a long time. However, all efforts seem to have been consumed by the domination of rice production and, as a result, the area under non-cereal crops has continued to diminish. The government has now recognized the urgent need for agricultural diversification, and a shift towards this end is beginning to take place, although - some would argue - at an unprogressive pace.

There are several immediate reasons why the focus of agricultural growth should incorporate more than the emphasis on food grain production alone and include several non-rice crops such as maize, pulses, oilseeds, potatoes and other vegetables as well as poultry, livestock and even sericulture production:

1) Bangladesh's serious nutrition predicament needs immediate attention. While the diet of the average Bangladeshi meets carbohydrate requirements, it is grossly deficient in proteins, vitamins and minerals.

2) Enlarging the cropping possibilities for Bangladeshi farmers will enable them to allocate their productive resources optimally and maximize their income. There are many opportunities to diversify farm products and by-products in support of agro-industries.

3) As already mentioned, the current cropping system, with its overdependence on rice production throughout the year, is detrimental to soil fertility. It also makes the crops easily susceptible to pest attacks. Crop diversification can help maintain a better soil structure for long-term sustainability.

4) A good proportion of the crops that are currently imported could be substituted through domestic production. Wheat is such an example: while the issue of taste was a constraint to increased wheat production and consumption in the mid-1970s, wheat has gradually become part of the rural diet. Not only does it require less irrigation than rice (see: crop water requirements), making it ultimately less costly to produce, but it is also far less damaging to the environment. On the other hand, climatologically constraints limit prospects for increasing wheat yields significantly.

6) With the significant decline in jute production, together with the limited opportunities and intense overseas competition for rice exports, diversification is essential for agriculture to break into export markets and continue to make a significant contribution to GDP.

There are some obvious obstacles to agricultural diversification which need to be addressed. The development of modern technology for rice and wheat has impeded the development of seeds for other crops and reduced the competitiveness of pulses and oilseeds, which are important sources of protein for the poor.

Additional research is needed to develop suitable HYVs and to make them competitive with modern varieties of rice and wheat. There is also an inherent difficulty associated with intercrop conflicts arising from competition for limited land area. Potatoes, vegetables, bananas, onions and spices are all easily produced in Bangladesh. However, up to now, storage and transport infrastructures have not been substantive enough to inspire the adoption of these crops on a large scale. Farmers have been discouraged by the high price risks associated with the marketing of these crops. Moreover, there has been inadequate extension of on-farm water management technology for non-rice crops. For a crop diversification program to be successful, it will be necessary to create effective demand for the output through price support policies, education and consumer motivation and by ensuring a viable market with appropriate import and export policies.


CHALLENGES FACED BY BANGLADESHI AGRICULTURE

Bangladesh has an agriculture-dependent economy with a growing population and one of the world's lowest land areas per caput. Not surprisingly, the most important issue in Bangladesh agriculture is to enhance and sustain growth in crop production, the most pressing problem is therefore the current state of stagnating yields and declining productivity in a range of food and non-food crops. Projections of food grain supply and demand are consistent in their conclusions that there is a widening food grain supply gap.

With negligible scope for area expansion, as most of the arable lands of Bangladesh are already under cultivation, future growth will have to continue to rely on raising productivity per unit of land. For this reason, continuous efforts are being made towards developing new improved seed varieties. It is also felt that the agricultural sector has by no means exploited its full potential for crop production and that there are various opportunities for substantially increasing cropping intensities. Currently only 40 percent of the potential irrigated area is covered by modern varieties and, most important, there are wide gaps between the potential and the realized yields for all crops in the country.

Narrowing gaps between actual and potential yields, however, is easier said than done, for there are various underlying issues and constraints in terms of productivity that are beyond the bounds of technology and another green revolution. To think that the growth of crop production and the goal of self-sufficiency depend almost entirely on technological progress is not only deceiving but also detrimental to the long-term sustainable development of the country. Aside from the fact that Bangladesh is prone to frequent natural disasters, there are significant factors, both institutional and socio-economic, that play a part in determining the productivity of the agricultural sector and food security situation in the country. These include:

Landownership

Environmental degradation

Crop diversification

Social and physical infrastructure and support services


FOOD SECURITY

Towards self-sufficiency

Bangladesh became a perennially food-deficit country in the late 1950s when population pressures began to take their toll. Threats of mass starvation have been felt several times since independence owing to droughts and flooding, but a famine of significant proportion only struck the country in 1974 when world food production fell to an all-time low and world food prices rose sharply. At that time, there was insufficient food aid and the country did not have enough foreign exchange resources to buy all the grain it needed in the world market. With subsequent increase in food aid allotments from donors and the government's import programs and increased capacity to finance food imports, the days of severe famine were put to an end. However the majority of the rural populations are still afflicted by malnutrition and semi-starvation. In fact, a downward trend in the daily per caput intake of cereals, pulses, vegetables, fruits and meat can be seen over the last few decades in rural areas as well as at a national level. For example, rice intake in rural Bangladesh in 1995/96 was 427 g per caput. In 1981/ 82, 1975/76 and 1962-64, the levels of intake were 451, 493 and 505 g, respectively.

Bangladesh's dependence on food imports and, in particular, food aid throughout the years has been cause for concern. Food imports in Bangladesh currently represent approximately 18 percent of total imports and absorb 34 percent of total export earnings. In 1990/91, food aid represented 98 percent of total food imports but this has been reduced considerably to representing 30 percent of total food imports in 1995/96. The significant difference has essentially been made up by private sector imports which began in 1992/93.

The overriding objective of all agricultural policy and development since independence in Bangladesh has been to achieve self-sufficiency in food grains and, in particular, rice production. In reality, what has actually been sought is a substantial acceleration in the growth rate of domestic food production and a decreased dependence on or elimination of food aid in the long term. The emphasis on accelerating food production in Bangladesh stems from the country's excessive dependence on food imports, its precarious external account situation and its perceived comparative advantage in food production. Bangladesh has excellent soils, rechargeable aquifers that are easily tapped for irrigation, an abundance of low-cost labor in its rural areas and a climate that allows crops to be grown the year round.
Source: SOFA 1997

The role of rice

With the availability of high-yielding varieties (HYVs), rice has contributed significantly to the progress towards self-sufficiency. Despite the significant inroads wheat has made in the Bangladeshi diet, rice has been and continues to be the favored food grain in the country and constitutes 95% of the cereals consumed. Rice cultivation is the major source of livelihood for the large majority of farmers of Bangladesh and it accounts for more than 74 percent of cultivated area, 83 percent of all irrigated area and 88 percent of the total fertilizer consumption in the country. In a social, political and economic context, rice is a significant crop in Bangladesh; it dominates all other economic activities and consumes a considerable amount of foreign exchange.
Source: SOFA 1997

Foodgrain production

Although Bangladesh continues to be a net importer of food, importing on average 1.5 million tonnes of rice annually, it has achieved substantial gains in food grain production during the last two decades. From 1969/70 to 1992/93, the cropping intensity increased significantly with food grain production almost doubling. In the crop years from 1989/90 to 1992/93, Bangladesh produced bumper harvests of food grains, with a record production in 1992/93 of 19.5 million tonnes (much higher than the average of 16.4 million tonnes during 1985-89).

In 1993/94 and 1994/95, food grain production declined, as a result of droughts and floods as well as the farmers' response to the fall in the price of rice from the bumper harvest of the previous year. This was evidenced by more than a 2 percent reduction in the area sown, a decline in irrigation demand and more than a 4 percent decline in fertilizer consumption.

The country faced one of its largest food grain shortfalls ever in 1994/95, owing in part to a severe fertilizer crisis and leading to a resurgence of large food imports and high cereal prices. This situation continued until April 1996 when good boro (dry season) harvest prospects started to dampen the market.
Source: SOFA 1997

Current state of the agricultural sector

The recent trend in food grain production has not been positive. The agricultural sector is now confronted with low and stagnating yields of most crops, including rice, and the food gap between domestic production and demand has actually widened. In spite of the fact that rice production has increased at a higher rate than the rate of population growth during the last decade, and despite the fact that there are both public and private imports each year, the daily per caput food availability of food grains in Bangladesh has not reached the standard food grain requirement or target consumption level of 454 g since 1991/92. Given that food availability is not equally distributed, it is clear that the situation is worse for the poor than these figures would lead one to believe.
Source: SOFA 1997


Food preferences

HYV Rice and non-cereal crops
Over the past two decades the principal sources of growth came predominantly from boro rice, followed by aman (wet season) rice and, to a small extent, wheat. The success in accelerating rice production in the 1980s can be attributed almost entirely to the conversion of local varieties to modern HYVs and, as a result of changes in the policy environment, the adoption of irrigation and fertilizer technologies, which has enabled intensive use of the boro months.

As a result of the heavy emphasis on rice production, yields of other non-cereal crops such as pulses, potatoes, oilseeds and vegetables have stagnated. Land used previously for pulses has been converted for rice production. There have been modest increases in the yields of local rice but the average local yields have been 50 percent of those of the HYV rice. However, of late, it is the yield of modern varieties that is showing signs of stagnation.
Source: SOFA 1997

Food preferences

People from different areas, with varying customs, have different food preferences and some examples are:

Irish potatoes have been accepted as part of the staple diet in some areas: Comilla and Munshiganj prefer white while Bogra prefer red skinned varieties.

Indigenous potato varieties, such as Indurkani, are highly priced and popular with the elite families.

Sweet potatoes are consumed as staple food in some of the char (river bank) areas such as Comilla and Narshingdi.

Lentils are widely consumed throughout Bangladesh, while cowpeas are predominantly eaten in the greater Chittagong district.

Chickpeas are used in the preparation of commercial foodstuffs and there is a high consumption of them during Ramadan.

There are many different pulses and they are viewed differently by various sections of the community: lathyrus (kheshari) is eaten widely whereas mungbean is served on special occasions by the elite.

Source: Field 1995


Table of Contents

• Role of Agriculture in Bangladesh Economy

• Basic Information of Agriculture in Bangladesh

• Opportunities & Constraints of Agriculture in Bangladesh

• Objectives & Functions of the Ministry of Agriculture

• Organogram of the Ministry of Agriculture

• Agriculture Extension System in Bangladesh

• Agriculture Research System in Bangladesh

• Review of the Past Agro Sector Policy Reforms

Role of Agriculture in Bangladesh Economy

The economy of Bangladesh is primarily dependent on agriculture. About 84 percent of the total population live in rural areas and are directly or indirectly engaged in a wide range of agricultural activities. The agriculture sector plays a very important role in the economy of the country accounting for 31.6 percent of total GDP in 1997-98 at constant (1984-85) prices. The agriculture sector comprises crops, forests, fisheries and livestock. Of the agricultural GDP, the crop sub-sector contributes 71 per cent, forest 10 per cent, fisheries 10 percent and livestock 9 per cent. The sector generates 63.2% percent of total national employment, of which crop sectors share is nearly 55 %. Agricultural exports of primary products constituted 10.4% of total exports of the country in 1997-98. In the past decade, the agriculture sector contributed about three percent per annum to the annual economic growth rate.

The agriculture sector is the single largest contributor to income and employment generation and a vital element in the country’s challenge to achieve self-sufficiency in food production reduce rural poverty and foster sustainable economic development. The Government has therefore accorded highest priority to this sector to enable the country to meet these challenges and to make this sector commercially profitable.


Basic Information on Agriculture of Bangladesh

1.  Area of Bangladesh
    147570sq.km

2.  Total population (January 1999)
    128.1 million

3.  GDP (1998-99)
    755.73 billion Tk.

4.  GDP Growth rate (1998-99)
    5.2%

5.  Agricultural Growth rate (1998-99)
    5.0%

6.  No. of Rural Household
    17.83 million

7.  No. of non-Farm Household
    6.03 million

8.  No. of Farm Household
    11.80 million


9.  No. of Agril. Labor Household
    6.40 million

10. Small Household
    80% (9.42 million)

11. Medium Household
    17.50% (2.08) million)

12. Large Household
    2.50% (0.3 million)

13. Cultivated Area
    17.77 million acres

14. Cultivated Area per Household
    1.5 acres

15. Cropping Intensity (1996-97)
    174%

16. Irrigation Area
    8.59 million acres

Source: Statistical Year Book of Bangladesh, 98, BBS.


Opportunities and Constraints of Agriculture in Bangladesh

Opportunities and Constraints of Agriculture in Bangladesh

The opportunities and constraints prevailing in the agricultural sector of Bangladesh are as follows:

Opportunities:

Agricultural sector is the single largest contributor to GDP.

Crop production system is highly labor intensive and there is an abundance of labor in the country.

Agriculture is the largest source of employment for skilled and unskilled labor.

Favorable natural environment generally exists throughout the year for crop production.

Wide range of bio-diversity exists for different crops.

Different crops and agricultural commodities are the main sources of nutrition including protein, minerals and vitamins. Agricultural commodities have comparatively higher value addition than non-agricultural commodities.

 Constraints:

Agriculture is dependent on the vagaries of nature and is risky.

Availability of cultivable land is decreasing.

Widespread poverty among the population engaged in agriculture.

Lack of required capital for agricultural activities.

Inadequacy of appropriate technology considering farmers socio-economic conditions.

Uncertainty of fair price of agricultural commodities due to underdeveloped marketing system.

Agricultural commodities are rapidly perishable and post harvest losses are too high.

Limited knowledge of common people about the nutritional value of agricultural commodities including vegetables and fruits.

Objectives & Functions of the Ministry of Agriculture (MOA)

The Ministry of Agriculture is the highest central body of the government in the agriculture sector coordinating and supervising the activities of all the Agricultural Institutes and Directorates all over the country. The development objectives and functions of the MOA are as follows:

Serves as a national coordinating and supervising apex body for planning, integration and implementation of agriculture policies and related projects.

Establish policies, regulations and projects that will ensure sustainable food production.

Achieve self sufficiency in food grain production through a sustainable growth in rice and wheat production.

Achieve increasing and profitable production of minor crops and thereby maintain a balanced crop production.

Increase rural employment through the adoption of modern agricultural practices.

Achieve low and stable consumer food prices and improve the nutritional status of the population.

Develop food production that is suitable and sustainable.

Establish macroeconomics policies that enable farmers to be responsive to domestic and world market opportunities.

Provide high quality infrastructure and government services that will enable farmers to produce and market products at low cost.

Rely on competitive markets to supply agricultural inputs at low cost.

Provide incentives to establish labor intensive production and processing agro-based industries.

The numbers of ongoing projects under the Ministry are at present 92 of which 28 are scheduled to be completed in June 2000.

Organogram of Ministry of Agriculture

The Ministry through its different wings is responsible for the administration and financial supervision, policy directives and monitoring, to carry out various activities of different institutes, directorates and agencies under the ministry.


Agricultural Extension System and Research System in Bangladesh

Agricultural Extension System in Bangladesh

The Department of Agriculture Extension is responsible for carrying out extension services at the grassroots level under the supervision of MOA. The DAE carries its activities in the field level with the help of its different wings. DAE is mainly responsible for:

To motivate and help farmers adopt improved production practices to increase their productivity, meet national consumption requirements, maximize export and minimize import.

To provide farmers with the latest results of research and farm techniques for their socioeconomic betterment.

To help develop self reliance and cooperation by training local leadership for organized group action.

To provide channels for service and information from the MOA and its different departments to the farm people and in turn relay the problems and needs of the farmers that require national level intervention.

To provide an effective linkage between the various research institutes and the farmers so that along with the flow of technology to the farmers, the farmers level problems are also brought to the relevant research institutes for investigation and solution.

To serve as liaison agency between farmers and other organizations, both public and private concern with over-all socio economic development of rural people, including the credit giving and input supply agencies.

The contribution of extension services under the supervision of MOA are reflected in the increased use of chemical fertilizer, increased recommended soil tillage, plant protection measures, use of improved/HYV seeds, irrigation practices, seed preservation practices, post harvest handling process and compost making/green maturing, among the farmers.

Agriculture Research System in Bangladesh

The National Agricultural Research System (NARS) of Bangladesh consists of ten research institutes under the umbrella of Bangladesh Agricultural Research Council (BARC). Out of ten research institutes six belongs to Ministry of Agriculture (MOA), two to Ministry of Fisheries and Livestock (MOFL) one to Ministry of Commerce, and one to the Forest and Environment Ministry. In addition the NARS also comprises universities that have casual working relationship with BARC and other related organizations. The ten research Institutes under the NARs are:

(a)   Bangladesh Rice Research Institute (BRRI)

(b)   Bangladesh Agricultural Research Institute (BARI)

(c)   Bangladesh Jute Research Institute (BJRI)

(d)   Bangladesh Institute of Nuclear Agriculture (BINA)

(e)   Bangladesh Livestock Research Institute (BLRI)

(f)   Bangladesh Fisheries Research Institute (BFRI)

(g)   Bangladesh Sugarcane Research Institute (BSRI)

(h)   Bangladesh Tea Research Institute (BTRI)

(i)   Bangladesh Forest Research Institute (BFRI)

(j)   Soil Resources Development Institute (SRDI)

The Bangladesh Agricultural Research Council (BARC) is the apex body of the NARS. The Council serves as the national coordinating organization for planning, integration, and implementation of research on crops, livestock, soil, water, crop protection, agricultural engineering, forestry, fisheries, economics and social science. BARC also identifies problem areas in agriculture and prepares national plans for agricultural research within the framework of national policies and development goals. The Council collaborates with international and national research center to ensure a rapid introduction, evaluation and use of improved agricultural technologies. BARC is responsible for planning, developing and upgrading of manpower base of the NARS.

The component research institutes have their own ordinances and separate mandates. They are governed by their separate management boards. The role of the institutes is defined by their respective ordinances. They are responsible for the task of generating research programs in their respective fields of activity. All the research institutes have their own network of regional stations, centers and sub-stations throughout the country. These stations undertake research on regional and local basis to cover the 30 agro-ecological zones of the country.


Review of Agriculture Sector Policy Reforms

Review of Agriculture Sector Policy Reforms

The ministry has undertaken successfully a number of policy reforms in the past for which it has received considerable recognition both within government and its development partner. Agro sector, by this time has already achieved the cherished and desired long term goal of self sufficiency in the production of rice. The major success of the ministry is its unquestioned success in spurring the growth of crop agriculture while saving considerable amount of local currency through eliminating the subsidies on fertilizer and also allowing private trade in fertilizer, minor irrigation equipment and seed sector. Structural adjustments started with the liberalization of different agricultural input delivery systems of public sector, such as -

(a)      Liberalization of trade in minor irrigation sector and encourage the private sector for supply of minor irrigation equipment's of the country. This happened gradually in steps with the removal of restriction of import of small diesel engine in1986-87followed by the withdrawal of duty on such imports in 88-89.The subsidy on DTW were removed in 1992and BADC-the government organization was removed from the procurement and distribution of minor irrigation equipment. These reform measures had a tangible effect on increasing the demand for irrigation equipment and consequently threat of increase in area under minor irrigation.

(b)      Privatization of trade in fertilizer with an objective to transfer the fertilizer management and distribution services exclusively in private sector; Imports of all fertilizers are now being done by private sector except urea. The private sector is not restricted from importing urea. All fertilizers are being distributed through private sector dealers through their network. The Government is providing no subsidy on fertilizers at the farm level and is selling all fertilizers at full cost pricing. The government has issued the revised Fertilizer Control Ordinance in 1995 in consultation with private sector and IFDC for quality control and regulation of fertilizer prices. This has led to the increased availability and wider adoption of chemical fertilizer at the farm level and economic activities in rural areas have also increased manifold due to the withdrawal of government from fertilizer distribution.

(c)      Liberalization of trade and foreign exchange for enhanced participation of private sector in Agricultural machinery of agriculture business. The Government has been continually reviewing conditions affecting competitive trade and taking action to remove barriers.

(d)      Liberalization of production, processing, distribution and import of seeds to ensure the participation of private sector seed dealers in seed industry development. The private sector is now allowed to import any improved germplasm for research and development and to develop its own facilities for producing foundation seeds. They are also allowed to import and sale seeds except five notified crops (rice, wheat, sugarcane, potato and jute). As regard to notified crops, there are procedural formalities to be observed by the private sector before any import. Private sector has now taken up programs for production of hybrid rice seeds in the country.

(e)      Import of agro-machines, including power tiller, was liberalized - resulting in the positive effect on import of power tiller. The area under power tiller utilization also grew at about 3.5% per annum after introduction of the liberalization policy.

(f)       Structural changes were also made in food supply and management system. Open Market Sale (OMS), procurement of food grains from the farmers at market prices, abolition of rural rationing system and allowing import of food grains by the private sector were the measures so far implemented.

Besides, structural adjustment, programs were also undertaken in public sector simultaneously which are as follows : 

a) In order to improve and provide the need felt extension services to the farmers at the grass root level, agricultural extension services were strengthened through introduction of "Agricultural Support Service System" in accordance with the provisions of New Agricultural Extension Policy (NAEP); and

(b) In order to conduct uniform and coordinated research activities, agricultural research system was strengthened following the provision of National Agricultural Research System (NARS) through bringing ten primary research institutes under it with Bangladesh Agricultural Research Council (BARC) at the apex.

The process of structural adjustments in agriculture sector has been still going on in Bangladesh. The observed structural adjustments like liberalization of investment in minor irrigation sector, privatization of trade in fertilizer, liberalization of trade and foreign exchange have already started to effect favorable impact in the agriculture sector. It is expected that such favorable trend will continue to prevail in future also.
 
Major Policy Directions In order to realize the objectives and targets of the FFYP (1997-2002), the Government will pursue the following major policy directions with a view to making the country self-sufficient in food production and ensure dependable food security for all.  an appropriate policy framework for sustainable development of farm mechanization and commercialization of agriculture; the agricultural research institutes will strengthen research in order to render full support for augmenting breeder seeds of new variety; decision to restructure BADC has already been taken by the Government which has considerably been downside, BADC will continue to support private sector development; increased use of organic and bio-fertilizers in association with the popularization of the use of DAP, blended fertilizer (NPK) and urea super granule (USG) will be pursued with a view to reducing pressure on urea and improving soil fertility; establishment of an appropriate institutional system to ensure the availability of agricultural credit in time.

Agricultural Development Strategy The present Government has accorded highest priority to the agriculture sector. The commitments in this respect are reflected in the National Agriculture Policy (NAP)of 1999 , that includes :

(i) timely supply of agricultural inputs at affordable prices, (ii) appropriate action plan for agricultural credit and marketing of agricultural products, (iii) Government support to agriculture, (iv) priority for the development of agro-based small and medium industries, (v) Enhanced rate of private sector- participation in different sectors of agriculture i.e. seeds, fertilizer, agro-machinery and also in establishing agribusiness. (vi) Agricultural Mechanization (vii) Pest Management (viii) Greater coordination between the Government, NGOS and Private sector (ix) Food based Nutrition (x) Environmental Protection in Agriculture and finally involvement of Women in Agriculture. Bangladesh Agriculture is now in the process of transformation from subsistence farming into commercial farming. Meanwhile, Bangladesh has already entered into the European Market for export of vegetables and other high value crops. This process opens a vista to private sector investment in the areas of production of high value crops, production of seeds (especially hybrid seeds), of chemical and blended fertilizers, agro-processing enterprises, etc. The policy reforms that have taken place offer greater scope and opportunities for private sector participation and a suitable environment towards promoting agro-business and investment.