Commercialization of agriculture--that needs to add wheels to the dreams
Published : Wednesday, 1 May, 2019 at 12:00 AM Count : 298
Commercialization of agriculture has been a long nourished dream of our new agriculture minister Dr Abdur Razzak. He spelt it out in electronic media news recently. Our agriculture saw a revolution to turn Bangladesh into a country of food autarky, particularly in rice production within a decade. Once agriculture did support seven and a half crore and now not only it supports nearly 17 crore people with food production. Sometimes it tends to become necessary to export some portion of rice due to other causes.
Just at present a concerned section proposed to government to permit to export a portion of high quality of rice which is of limited marketability. Kudus to present government for their decade long pursuit of dynamic agriculture friendly policy support and to our brave farmers who stride defying many a adversities including unfriendly marketing at times. Dr Abdur Razzak did not articulate the purpose and structure of his dream of commercialization.
But we definitely think it might be the outcome of necessity to address some key issues or variables to bring agriculture from perennial imbalances that are causing agro-marketing being unfriendly to both farmers and the end consumers. Such dream if it is blessed with political commitment, is commendable. Though ever squeezing in the play to contributing gross domestic products (GDP), still agro-economy is the main source of employment, creation of demand, formation of savings and also area of investment.
So creations of a modern and dynamic market that will be able to keep up the real interest of farmers and ultimate consumers and other concerned stakeholders in agro export sectors without having any distortion in its true sense are the time tested phenomena. So we wait to see. Here we put up the prevailing scenario of our agriculture particularly in rice production sector being prioritized from the idea of food security and add certain economic analysis to the entire gamut of commercialization.
Growing agricultural products for the sale purpose with the help of new technology to earn money is called commercial agriculture. In commercialized agriculture, farmers produce products with the intent of selling in market. They are engaged in commerce. Commercial farms are often larger than regular family farms because of competition. At the eve of the independence, Indian agro-economy was subsistence economy. The Britishers encouraged for production of the cash crops which made the agro-economy commercialized. It means production not only for self- consumption but also for sale in the market.
Commercialization is to be made of certain aims. (A) allocative efficiency of peasants. (B) Intrusion of foreign capital and (C) It is to be seen and ensured employments, incomes, food production and food security, consumption, health and nutrition of the poor. Relevant things accompanied with commercialization to be done, are (1) Facility of institutional loans (2) Training on agriculture base education to farmers (3) Sufficient storage facility (4) Facilities like irrigation and technology (5) Skill development projects and (6) Organizing business fairs etc.
Apart from all, Bangladesh agriculture has come a long way over the last few decades in terms of the production of food, particularly rice, vegetables and in some commercial form culture fisheries and development of dairy, particularly poultry. As being told before, the country is no longer dependent on food aid as such for a long time, although it still has to import food of specific types. Against such advancements, there are some old challenges often impact negatively on production and marketing. Markets face lack of competitive edge due to sometimes by authority intervention, sometimes by pricing mechanism by so many manoeuvrings due to lack of monitoring, accountability and existence of middlemen distorting the entire process of market mechanism that goes against farmers and consumers.
There lacks competitive pricing which sees on one side discouraging to produces. They fail even to cover cost of production particularly of rice and on the other end consumers find market not favouring them and goes beyond their near reach. Things are happening the same to other commercial agricultural produces. Over the last decade, agricultural GDP had been rising far slowly at about 3.4 per cent per annum only compared to that of the national GDP. Indeed, the movement in agriculture during the last decades was basically determined by what happened to crop production and even more specifically, by what happened to rice output.
For that we are focusing on the trend of rice production and its synergy effect on market for its representativeness to understand agriculture. Rice remains the major crop in terms of not only output but also area under cultivation. Since 2000, rice accounted for near about 80 per cent of total gross cropped area. This indicates a general lack of diversification of crops. Of course, while this is so, it does not mean that area under crops is not changing. They do and for the last decade or more, while wheat and pulse acreages have fallen, those of jute, potato and oilseeds have risen.
A complex array of factors, technical and economic, may have given rise to these changes. On noticeable fact on changes in rice output is that the fluctuations by season are usually compensatory in that a fall in Aman rice production is more often than not counterbalanced by the movement in Boro rice production. So far data shows, fisheries production remains more or less constant at 6 per cent. Forestry output remains as it is same. However, what remains a mystery is the growth rate of livestock and poultry.
In this presentation we are not looking for the trends of agricultural production and movement of its subsectors. We are here prioritizing the challenges in the way of making it dynamic economically. In the present form, we have neither a perfect market for agro economy, nor has it cent per cent presence of private sector initiatives in market mechanism of both output and input. But powerful presence of millers and owners of "Chatal" and their manoeuvring determine pricing of staple which even nullify government initiatives of market control. Government procurement price does fail its operational effectiveness to real producers. In other agro-produces, tyranny of middlemen is rampant due to absence of chain market.
What we generally see then the government takes several fiscal and monetary measures to tackle food price inflation. These include active participation and intervention in the food grain market, expand operations of existing safety net programmes and takes provision of incentives to farmers for increasing rice production. Government has been traditionally participating in food grain marketing in order to reduce price fluctuations and to provide safety net to food insecure people.
The government typically declares a minimum support price for rice and wheat at which it procures grains from the market. It build up food stocks with which it operated a public food grain distribution system aimed at providing relief during natural disasters, subsidized food to target groups while operating a safety net programme for the poor. On 25th April, electronic media report said, agriculture minister thinks for total monetization of agro economy. Chain market is to be developed and expanded. A positive competitive market will ensure price incentives to producers. Otherwise they will leave agriculture.
In various researches, the challenges of agriculture have been picked up in this way. (1) In every year 1 per cent of agricultural land is losing. (2) Farmers are losing interest in rice production. Also rice production is being shrunken aged slowly. Some dire challenges ahead are also being seen in demand side. That is one major driver for demand for food is population growth. The other is raising income and the third is fast urbanization. These are all on the demand side. While population rise will lead to growing demand for all food, impact of income growth and urbanization will be manifested in the demand for different kinds of food.
It is found that, except for rice and surprisingly for sugar or 'gur', Bangladesh men and women consume far less than whatever is necessary for proper and balanced nutrition in case of all food items. It also means that not simply do they have to move away from rice, involving a shift in production in relative terms but a move towards non-crop foods will also be required. The question here is, can Bangladesh agriculture deliver on this? Doing so will be a major challenge. A related issue is the part of reflection of shortage in terms of prices of food commodities.
If we look at the price indices of the last few years, we cannot see a surge in prices of food commodities. With increased demand for non-rice food, the inflation may pick up again. The question now is, as indicated above, can the demand be satisfied with prices remaining affordable to the poor. These challenges are perennially linked with our agro-economy that must have ways for solution and total commercialization.
The writer is a freelance contributor