• High-value agriculture and agri-business in Bangladesh

    THE demand for food in Bangladesh and around the world is changing rapidly. Driven by economic growth, rising incomes, and urbanisation, demand is shifting away from traditional staples toward high-value food commodities. High value agricultural commodities include fruits, vegetables, spices, fish, and livestock products, many of them processed before reaching the market. In Bangladesh, additional demand for these commodities is projected to be worth about $8 billion by 2020 (in 2005 prices). This represents an enormous opportunity for food producers, processors, and sellers. Owing to the greater labour intensity characteristic of high value agricultural production, it also provides an opportunity to generate rural employment and raise rural incomes. More than 80% of people living on less than $2 a day in Bangladesh live in rural areas. This spatial distribution of poverty makes capitalising on the opportunities afforded by high value agricultural production an important strategic priority for those seeking to reduce poverty in the country. Yet, for all of its promise, capitalising on these opportunities is fraught with challenges. High value agricultural products are generally far more perishable than traditional staples, and require more sophisticated post-harvest technologies and faster and more controlled transport. Insufficient processing capacity, the lack of cold storage facilities or a functioning cold chain, and the persistence of transport bottlenecks are significant constraints to high value agriculture in Bangladesh. The promise of generating higher income and increased export revenues by accessing international markets is matched by the challenges of meeting the exacting quality and safety standards that apply in those markets -- and by the prospect of having to compete with high quality imports from those markets. Most importantly, even assuming that opportunities afforded by high value agriculture are successfully seized upon, there is no reason whatsoever to assume that the benefits of this success will extend naturally or automatically to those who need them most urgently -- Bangladesh's rural poor. A new report published this month by the World Bank and the IFC-SEDF, entitled High-value Agriculture in Bangladesh, examines the opportunities and constraints that Bangladeshi agro-businesses face in shifting to this type of production. The report presents case studies of five high-value agricultural industries/sub-sectors: aquaculture, small-scale commercial poultry, fruits and vegetables, high-value aromatic rice, and dairy, and examines cross-cutting issues that emerge as priorities for promoting high-value agriculture and related agro-business development in Bangladesh. Bangladesh's strong comparative advantage in fish production, together with burgeoning domestic and foreign demand for fish products makes aquaculture an industry of tremendous potential growth. Yet, quality problems and low productivity could blunt the competitiveness of the shrimp export industry. Improvements in pond management and the use of disease-free seed are needed to significantly improve the productivity in brackish water shrimp farms. Genetic improvement of fish stocks, combined with technical advice for farmers, are essential to sustain the freshwater aquaculture industry. Quality advisory services could also transform Bangladesh's poultry industry, where rapid growth in the last 15 years has been concentrated among large, well-established commercial enterprises. Improving technical knowledge, efficiency, control over inputs, and access to credit among small-scale poultry producers could extend this growth, generating employment and helping reduce poverty in rural areas. It will also enable them to better deal with the urgent practical realities surrounding highly pathogenic avian influenza (HPAI). Consumption of fruits and vegetables is growing in Bangladesh. Yet, the limited availability of reliable planting material and hybrid seed keeps productivity low. Post-harvest losses are high. Farmers need better market information to synchronise production with demand. High informal transportation tolls lead to excessive marketing costs. The prospects of profitably adding value through processing are limited by unreliable power supplies, which also afflict rice milling -- including the high-value aromatic rice treated in the report. The variable performance of Bangladesh's fruit and vegetable exports is unlikely to improve unless specific steps are taken to ensure long-term growth. It is important to note that the value added in Bangladesh's domestic market will likely dwarf any value addition obtainable through exports. Production for domestic consumers will also have a far greater impact on farmers' incomes than production for export. Even with relatively slow growth in per capita milk consumption compared to other high value foods, domestic production still cannot meet existing demand and Bangladesh relies heavily on imports of powdered milk. But unless they can significantly improve productivity, dairy producers in Bangladesh are unlikely to compete with imports. Dairying appears to be profitable only in certain parts of the country, where feed is more readily obtained and where there is some milk-marketing infrastructure. In these areas, farmers would benefit from better marketing arrangements as well as more effective animal health and breeding services and improved animal nutrition strategies. The formation of effective dairy producer associations could go far in improving milk marketing. The case studies presented in the report suggest a number of recommendations and policy options for developing agro-business in the country. A number of these relate to improving the investment climate and providing a more enabling environment in which the costs and intricacies of doing business are significantly reduced. Some relate to removing policy distortions, regulations, and informal tolls and costs that make doing business unnecessarily cumbersome. The case studies point unambiguously to the cardinal importance of food quality and safety. Consumers must be confident that the high-value products available to them in the market are not a public health risk if demand for these goods is to continue growing. Improving the awareness and understanding of food safety risks, and how to minimise, them is necessary for producers, consumers, and everyone along the supply chain that connects them. The capacity of institutions with regulatory responsibilities needs to be developed with new skills and technologies. High-value agriculture requires technical skills and knowledge not generally associated with more traditional production, making human capital development and knowledge management important elements in the transition. There is a lack of reliable data on most high-value agricultural commodities that deprives policy makers, planners, and investors of critical information. Systematically benchmarking and monitoring this information will enable planners to identify, document, and scale-up best practices in high value agriculture and related value chains. Access to timely and reliable market information and to new technologies will go far in determining the competitiveness and profitability of agro-businesses. Applied research is needed to build an effective knowledge base that is available to investors who participate and compete in high-value agro-business. The institutions that carry out this research and develop new technologies adapted to conditions in Bangladesh will require combinations of public and private financing and management. Procurement arrangements like contract farming are expanding rapidly in Bangladesh, and provide for more orderly marketing with less price volatility and better sharing of risks and rewards. Contract enforceability remains a major challenge, with breaches common among both producers and purchasers. Building trust and developing positive social capital is ultimately the best way to improve contract enforceability, but this of course takes time. Strengthening producer organisations may help enforce contract terms on the farmers' side, and a variety of other institutions can provide alternative fora for dispute resolution. Associations formed around professions, industries, and commodities are likely to play a very prominent role in developing high-value agro-business in Bangladesh. Effective producer groups often enable small-scale farmers to forge mutually beneficial partnerships with private industry. While the private sector will continue to take the lead in developing high-value agriculture and related agro-business, the role of government remains essential. It is essential in fostering an enabling business environment for market-led growth through stable and undistorted economic incentives and in providing critical public goods and services. The public sector's regulatory role is also very important in ensuring that the growth of high-value agriculture and agro-business does not deepen poverty, accentuate prevailing inequities, or harm the environment. Closer collaboration between the public sector, nongovernmental organisations, and the private sector would be extremely beneficial in addressing the combinations of opportunities, risks, and challenges that the shift to high-value agriculture carries for Bangladesh. Xian Zhu is Country Director, World Bank, Bangladesh, and Mona Sur is Senior Economist, Agriculture and Rural Development Department, World Bank.

  • RBI issues circular, asks banks to help cure flu-hit poultry units

    Loan rescheduling & repayment moratorium will help lower income lost due to bird culling, dip in poultry product demand & price With the poultry industry reeling under the outbreak of Avian Influenza (bird flu) in several parts of the country, banking regulator Reserve Bank of India (RBI) has stepped in to extend relief to the sector. The central bank has proposed rescheduling of loans and a moratorium on repayments in a bid to bail out the poultry sector, which is dominated by hundreds of small scale units.

  • State lifts ban on poultry imports

    The State Government has lifted the ban on the import of poultry and poultry products from the rest of the country, barring West Bengal. The Animal Husbandry and Veterinary Commissioner and Secretary Shyam Lal Mewara signed the order to this effect yesterday. The State Government imposed the ban on the import of poultry and poultry products from the rest of the country through two orders on January 18 and 22 last, following outbreak of the dreaded bird flu in West Bengal and its spread to some of the North Indian states.

  • Bird flu costs poultry sector Tk 4,165cr: report

    Bird flu has caused an estimated loss of Tk 4,165 crore to the poultry sector in the country, said a report of the poultry industry coordination committee on Wednesday. The government formed the committee comprising leaders of poultry related sectors and government officials, and assigned it to assess the loss of the poultry sector caused by the bird flu.

  • 100 chicken found dead near Sarnath

    The spotting of nearly 100 dead chickens on Sunday at two spots near the famous Buddhist pilgrimage site of Sarnath has triggered a bird flu scare in the area. The birds were seen lying along the Varanasi-Ghazipur railway track in Lohia Nagar area under the Sarnath police station. The locals informed the State Animal Husbandry Department, and a team, led by Chief Veterinary Officer (Varanasi) B B Sings, visited the spot. The owner of a nearby poultry farm, Sudhir Singh, has been detained for questioning by the police. Officials also visited the farm, where they found 21 live birds. CVO Sings said the farm owner had denied that the dead birds belonged to his farm. It was while they were making preparations to bury the dead birds and to collect serum and blood samples of the birds alive, that news came of the recovery of more dead birds a short distance from Lohia Nagar. Fifty birds were found dead near a culvert at Nevadhi Sandaha village under the Chaubeypur police station, a kilometre from the Sarnath railway station. Villagers told officials that the birds had been lying there since Saturday. Since the birds were suspected to have been dead for more than 48 hours, they couldn't be used for collecting samples and the officials are in the process of burying them. "The dead birds from Lohia Nagar will be sent to the High Security Diseases Control Lab in Bhopal, while serum and blood samples taken from the living birds at the poultry will be sent to the lab in Pune. Only after the samples are tested at Pune and Bhopal can anything be said about possibility of bird flu,' the CVO said. While he added that the birds may have died due to overcrowding during transport or lack of water at a time when temperatures are on the rise, Sings did not rule out chances of bird flu. Additional City Magistrate Devi Das, who accompanied the team, has directed inspection of all the 14 poultry farms in a 5-km radius around Sarnath. Incidentally, on January 26, a consignment of 5,000 birds had arrived at Varanasi railway station on the Vibhuti Express from the bird flu-infected district of Birbhum in West Bengal. The consignment was brought by a local poultry owner, Dipu Sonkar, and immediately sent to poultries in Shahjahanpur (Uttar Pradesh) and Buxar in Bihar. The birds were later culled in Bihar and Shahjahanpur. "Though there are remote chances of bird flu at a time when summer is setting in, we are not taking any chances,' said the CVO.

  • Organic or factory, chicken tastes same

    Sydney: Organic chickens might have a better life but when it comes to the end, there is no difference in the taste between free range and factory-raised birds, according to a taste test by Australian food experts. Consumer advocate Choice lined up a panel of four food experts to taste eight different roast chickens

  • State fails to curb chicken transport

    The highly pathogenic avian influenza could reach new areas in the state after the state animal husbandry department officials received reports that poultry owners of the notified areas in Malda have

  • Tornado lashes 15 villages

    injured and 600 houses damaged as a tornado lashed 15 villages of three unions of Juri upazila in Moulvibazar Thursday afternoon.

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