The Lowdown

Food import cost ballooning owing to scanty local output

Although Bangladesh has almost achieved self-sufficiency in rice production, its dependence on the international market remains high for food items with import cost rising two and a half times to Tk 80,800 crore from a decade ago.

The country, which produced 3.81 crore tonnes of rice in the fiscal year of 2021-22, had to spend the money to buy rice, wheat, spices, edible oil, oil seeds, pulses, sugar and dairy and milk products, according to Bangladesh Bank data.

In the first seven months of the current fiscal year, private and public agencies coughed up Tk 50,000 crore to import food items, an increase of 10.5 per cent from a year ago.

This would be the fourth year in a row that Bangladesh has paid a higher amount to import essential foods to meet its domestic consumption amid inadequate local production.

Agricultural analysts say the country’s import dependence has remained high in the absence of focus from policymakers to diversify agricultural production through a planned use of its 88.29 lakh hectares of cultivable land in a bid to cut import dependence.

As rice is a “politically sensitive commodity”, successive governments gave priority to increasing its production and directed more resources to research to develop improved varieties of the crop and take them to farmers in order to ensure staple security.

They say the options for diversified agricultural production have either not been used or less explored. As a result, other crops and foods, namely oilseeds, pulses and dairy, did not get an adequate push from the policy level. This caused the country to remain dependent on the global market for these commodities.

As rice is a “politically sensitive commodity”, successive governments gave priority to increasing its production and directed more resources to research to develop improved varieties of the crop and take them to farmers in order to ensure staple security. Photo: Star/file

The reliance has augmented although the international market itself suffered from a supply shortfall and subsequent price volatility owing to the export restrictions imposed by producing countries.

For example, in the weeks following Russia’s invasion of Ukraine in late February 2022, several countries introduced export restrictions, including licencing requirements, taxes, and some outright bans, on a variety of feed and food products.

These fueled war-related disruptions in global markets and contributed to higher prices and deepened price volatility, according to a blog post on the website of the International Food Policy Research Institute.

Mohammad Jahangir Alam, a professor at the Department of Agribusiness and Marketing at the Bangladesh Agricultural University in Mymensingh, said although Bangladesh follows the principles of an open market economy, it should concentrate on its domestic production.

“Unless we do that, how could we handle situations like the Covid-19 pandemic and the dollar crisis?” he asked.

Bangladesh has been suffering a shortage of US dollars for the last one year due to spiralling import costs of various commodities.

“Bangladesh should adopt a long-term plan by prioritising major food commodities to reduce the import dependency,” Prof Alam said.

Wais Kabir, a former executive chairman of the Bangladesh Agricultural Research Council, said considering its political dimension, governments had to stress increasing rice production and availability.

“So, we are doing considerably well in rice.”

There are 300 agricultural scientists working full-time on rice in the country. The number of scientists dedicated to other commodities is not that high.

Kabir said not all food commodities can be produced in Bangladesh because of its agro-climatic limitations, lesser availability of land and global competitiveness.

“This is true for other countries as well. So, we need to import to some extent and it may grow as the income of consumers grows.”

Kabir, however, thinks that the production of food commodities can be increased in certain areas, namely the southern coastal region, through proper water management.

“This will need strong collaboration among the concerned ministries.”

According to Kabir, Bangladesh can reduce the import of pulses by increasing the cultivation of the newly developed short-duration mung bean in the southern belt.

He cited that the government took development projects to incentivise growers with quality seeds and intensify extension efforts to increase the production of crops such as pulses, spices and oilseeds.

Bangladesh also has good prospects in diversified dairy products thanks to the increasing milk production by the expanding dairy industry.

“The government should patronise private operators to raise high-end dairy output like cheese and butter. This will require technical efficiency to compete with the competitors in the market,” said Kabir.

Anwar Faruque, a former agriculture secretary, said, “There is no alternative to giving importance to the production of import substitute foods.”

Of the eight major commodities, edible oil and oil seeds account for a major portion of the import cost.

Faruque said the government can devise a plan to encourage the use of rice bran oil as it could be easily produced by auto rice mills.

“Currently, we can utilise 20 per cent of the rice bran produced in the country. The rest 80 per cent is going outside of the country.”

MA Sattar Mandal, a former vice-chancellor of the Bangladesh Agricultural University, suggested diversification of production through increased use of technologies.

“This will facilitate raising production and bringing down imports.”

The government is taking a Tk 7,214-crore project to modernise and improve the agriculture sector.

“This will enhance the diversified production of crops,” said Prof Alam.

In Bangladesh, about 73 per cent of cropland is currently used for rice cultivation, down from more than 80 per cent in the past.

“This is positive. But the main challenge is to increase productivity,” Prof Alam said.

“After ensuring high productivity of rice, we will have to focus on other high-value crops.”

Agriculture Minister Muhammad Abdur Razzaque said: “Bangladesh is not the lone country that is facing a high cost for importing foods. Other countries are also facing the same situation.”

He said every year, around 20 lakh people are added to the population, which means a higher requirement for food. At the same, the arable land is decreasing gradually for non-agricultural use such as building houses.

“This is a challenge. As the land is shrinking, scientists are trying to develop high-yield varieties of crops.”

According to the minister, Bangladesh does not have a favourable climate for increasing wheat production, so the country needs to rely on imports.

He describes maize and mustard as very promising crops.

In the past, it was difficult to grow mustard after the aman harvesting because of the long duration of the paddy.

Earlier, it took 140-160 days for the aman paddy to be ready for harvesting. Now, scientists have developed a new variety of the crop, which could be harvested in 110-115 days.

“This has created the scope for mustard cultivation after the aman harvest,” Razzaque said.

Scientists have also developed improved varieties of mustard with yields standing at eight to nine maunds per acre.

“Our mustard cultivation target has exceeded this year. We want to reduce edible oil imports by half by the next three years,” the agriculture minister said.

He said there are some high-yielding varieties of pulses.

“These are already being grown. I hope they will bring good results.”

Source: The Daily Star

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