Bangladesh should shift agricultural public spending from broad fertiliser and rice support to research, irrigation, market access, climate resilience, and farmer services to create a more productive and diversified agrifood system, a World Bank report suggested.
The report, ‘Repurposing Agricultural Public Spending for Quality Growth and Jobs in Bangladesh’s Agrifood System,’ unveiled on Monday at Hotel Sheraton Dhaka, highlights that despite allocating about 10 per cent of public expenditure to agriculture, Bangladesh’s sector growth has slowed, productivity has weakened, and there’s a lag in diversification to meet consumer demand.
The report noted that a significant portion of agricultural spending focuses on fertiliser subsidies and rice support, leaving critical investments for productivity and farm incomes underfunded.
Approximately 80 per cent of the Ministry of Agriculture’s budget is allocated to fertiliser subsidies. While these subsidies stabilise production, they disproportionately benefit those who purchase larger quantities of fertiliser.
As a result, the top 20 per cent of landholders receive about half of all fertiliser subsidy benefits, whereas the bottom 40 per cent receives only around 15 per cent.
The report highlighted inefficient fertiliser use, with only about 5 per cent of farmers applying a balanced mix of nutrients. This imbalance hinders crop yields and productivity.
It also noted that public spending is heavily focused on rice production, which occupies 72 per cent of cultivated land and receives 80 per cent of subsidy benefits, despite better opportunities in sectors like livestock, fisheries, and vegetables.
WB senior economist Mansur Ahmed and research analyst Jonaed Sohol presented the keynote presentation at the event.
They warned that excessive fertiliser use degrades soil quality and contributes to declining groundwater levels, and that agricultural productivity has slowed since 2010, with $2.5 billion annually spent on rice subsidies.
World Bank division director for Bangladesh and Bhutan, Jean Pesme, said agriculture remained vital to Bangladesh’s economy, but productivity had recently stagnated.
Agriculture minister Mohammad Amin Ur Rashid, who attended the programme as chief guest, announced plans to establish 2,000 mini cold storages across the country within the next one to two years.
He said the facilities would help farmers preserve perishable products and obtain fair prices for their produce. The cold storage facilities will be operated by cooperatives comprising 15 to 20 farmers and powered by solar energy.
Rashid also said the government was adopting a database-based agricultural planning system to better align production with market demand and ensure a stable supply of products to consumers.
A panel discussion moderated by WB regional practice director Dina Umali-Deininger featured South Asian Network on Economic Modeling executive director Salim Raihan, Food and Agriculture Organisation Bangladesh country representative Jiaoqun Shi, Bangladesh Institute of Development Studies research director Mohammad Yunus and PRAN-RFL Group director Uzma Chowdhury.
The panellists observed that as incomes rise and the economy develops food consumption patterns are shifting away from rice toward fruits, fish, meat and processed foods.
