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ToR # 06. POLICY OPTIONS FOR SUPPORTING AGRICULTURAL DIVERSIFICATION IN BANGLADESH. IMPLEMENTING INSTITUTION. Bangladesh Agricultural Research Institute (BARI) United International University (UIU). STUDY TEAM. Outline of the Presentation. Definition of agricultural diversification

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POLICY OPTIONS FOR SUPPORTING AGRICULTURAL DIVERSIFICATION IN BANGLADESH

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Policy options for supporting agricultural diversification in bangladesh

ToR # 06

POLICY OPTIONS FOR SUPPORTING AGRICULTURAL DIVERSIFICATION

IN BANGLADESH

IMPLEMENTING INSTITUTION

Bangladesh Agricultural Research Institute (BARI)

United International University (UIU)


Policy options for supporting agricultural diversification in bangladesh

STUDY TEAM


Policy options for supporting agricultural diversification in bangladesh

Outline of the Presentation

  • Definition of agricultural diversification

  • Rationale of the study

  • Methodology

  • Profitability and comparative advantage

  • of major commodities

  • Growth performance of major crops

  • Diversification in food consumption, agril. production, agril. trade

  • Constraints to agricultural diversification

  • Conclusion and Recommendations


Policy options for supporting agricultural diversification in bangladesh

Agricultural Diversification

  • Agricultural diversification implies a shift of resources from primary staple crop, namely rice and wheat to othernon-cereal crops, and/or to live-stock, poultry, fisheries & forestry.

  • It has been used around the world as a strategy to minimize risk, minimize income variability over seasons, optimize the use of land and other resources, change the food habit, increase protein intake, improve food security, promote exports, substitute imports, conserve natural resources, create employment opportunities and alleviate poverty for the farming households.


Rational of the study

Rational of the study

  • Agriculture is an important sector of the economy of Bangladesh. It comprises crop, livestock, fisheries and forestry sub-sectors accounting for 55.7%, 13.24%, 22.37% and 8.68% of agricultural GDP respectively.

  • AD towards products with higher value-added contributed to more rapid agricultural income growth and might contribute to local employment creation by stimulating small farmers’ participation in the market.

  • Diversification in production is also likely to lead to diversification in consumption, which is required for healthier and more balanced diets.


Rationale of the study

RATIONALE OF THE STUDY

  • Consumption pattern has been changed from cereal to non-cereal food in the last 3 decades.

    - Expenditure on cereals decreased 28.87% to 28.41% in urban areas and 41.23% to 39.62% in rural areas between 2000 and 2010.

  • Overall demand for fruits, vegetables, dairy products, fish, fats & edible oils have been increased.

    - Expen. on fruits rose from 4.10% to 5.29% and from 2.59% to 3.49% in urban and rural areas.

    - Expen. on fish, meat & eggs and spices rose at national level from 12.48% to 13.71%; 8.02% to 10.31% and 7.13% to 9.99%.


Rationale

Rationale ---------

  • The prices of fruits, vegetables, fish and other non-cereal products have also been increased significantly.

  • Imports of non-cereal food commodities have also been increased to a large extent.

  • Yet progress in agricultural diversification is not very encouraging.

  • Therefore, policy formulation is essential for diversifying our agriculture to enhance the production of non-cereal crops and non-crop commodities.


Objectives

OBJECTIVES

  • To assist policy makers in identifying policy interventions that will allow agricultural households to diversify their agricultural production into micro-nutrient rich foods and/or those with a strong income generating potential.

  • To examine the past trends of diversification of crop and non-crop agriculture, and compare the rates of growth to those in neighboring countries to gain some perspective on how rapid (or slow) growth in Bangladesh has been.

  • To examine the socioeconomic and agro-climatic determinants of and constraints to agril. diversification.


Key research questions

KEY RESEARCH QUESTIONS

What are the past trends of acreage and production of major food commodities and to what extent they differ from the trends of neighbouring countries like India and Pakistan?

What are the changes in the consumption of different food commodities and how they are related to domestic food production?

What changes have been taken place in financial and economic profitability of different food commodities over time and how they affect their production?

What are the constraints to and opportunities for agricultural diversification in Bangladesh?

What are the determinants of agricultural diversification in Bangladesh?


Policy options for supporting agricultural diversification in bangladesh

DATA AND METHODOLOGY

  • Primary Survey on Farm Households

  • Examine the determinants of agril. diversification.

  • Explore the constraints and opportunities to AD.

  • Analysis of secondary data/study results

  • Financial and economic profitability over time.

  • Trend and growth rate in domestic production.

  • Diversification in consumption, agril. production, and agricultural trade.

  • Data Sources

  • Primary data- Field survey

  • Secondary data- Res. reports, thesis, j. articles, HIES, BBS, and FAOstat


Policy options for supporting agricultural diversification in bangladesh

SAMPLING DESIGN


Policy options for supporting agricultural diversification in bangladesh

PRESENTATION OF RESULTS


Policy options for supporting agricultural diversification in bangladesh

PROFITABILITY AND COMPARATIVE ADVANTAGE OF AGRICULTURAL PRODUCTIONS


Policy options for supporting agricultural diversification in bangladesh

Figure 4.3 Benefit cost ratio of modern variety rice production in Bangladesh


Policy options for supporting agricultural diversification in bangladesh

Figure 4.5 Benefit cost ratio of wheat production over time in Bangladesh


Policy options for supporting agricultural diversification in bangladesh

Figure 4.6 Benefit cost ratio of maize production over time in Bangladesh


Policy options for supporting agricultural diversification in bangladesh

Figure 4.8 Relative profitability of cereal, fibre and pulse crops production


Policy options for supporting agricultural diversification in bangladesh

Figure 4.11 Benefit cost ratio of fruits production in Bangladesh


Policy options for supporting agricultural diversification in bangladesh

  • Financial Profitability of Agricultural Commodities

The productions of all crops and non-crops enterprises are profitable

2. The profitability of non-cereal crop production is higher than cereal crop production.

3. Perennial fruit prod. are the best and livestock & poultry are the least profitable agricultural commodities.


Policy options for supporting agricultural diversification in bangladesh

  • Comparative Advantage of Agricultural Commodities

  • The values of DRCs for cereal, lentil and vegetables are less than unity.

  • It implies that BD has comparative advantage in producing these crops for import substitutions and export promotion.

Source: Rashid et al.2009

Karim et al. 2011


Policy options for supporting agricultural diversification in bangladesh

Growth in Production, Acreage and Yield and their decomposition

Comparative Analysis of Bangladesh performance with India and Pakistan


Policy options for supporting agricultural diversification in bangladesh

Table 5.1 Index of area, production

and yield of rice crops


Policy options for supporting agricultural diversification in bangladesh

Table 5.3 Index of area, producton

and yield of maize


Policy options for supporting agricultural diversification in bangladesh

Table 5.4 Index of area, production

and yield of sugarcane


Policy options for supporting agricultural diversification in bangladesh

Figure 5.1 Changes in yields (t/ac) of selected

spice crops over the years


Policy options for supporting agricultural diversification in bangladesh

Table 5.26 Growth decomposition in production of

cereals in Bangladesh, 1990-2009 (%)


Policy options for supporting agricultural diversification in bangladesh

Table 5.28 Growth decomposition in production of sugarcane

in Bangladesh, 1990-2009 (%)


Policy options for supporting agricultural diversification in bangladesh

Table 6.1 Comparative indices of area, production and yield

of cereal crops, 1990-2009


Policy options for supporting agricultural diversification in bangladesh

Table 6.2 Comparative indices of area, production and yield of fruits


Policy options for supporting agricultural diversification in bangladesh

Table 6.3 Comparative indices of area, production and yield

of vegetables


Policy options for supporting agricultural diversification in bangladesh

Table 6.4 Comparative indices of area, production and yield of pulses, oilseeds and spices


Policy options for supporting agricultural diversification in bangladesh

Table 6.5 Comparative indices of production and yield

of livestock products


Policy options for supporting agricultural diversification in bangladesh

DIVERSIFICATION IN FOOD CONSUMPTION


Policy options for supporting agricultural diversification in bangladesh

Table 7.2 Trend of per capita availability of major food items in Bangladesh, 1990-2009


Policy options for supporting agricultural diversification in bangladesh

Figure 7.1 Per capita consumption of major foods in Bangladesh


Policy options for supporting agricultural diversification in bangladesh

Table 7.3 Per capita per day intake (gm)

of major food items by residence


Policy options for supporting agricultural diversification in bangladesh

Table 7.4 Per capita intake (gm/day) of major food items by poor and non-poor


Policy options for supporting agricultural diversification in bangladesh

7.5 Per capita consumption (gm/day) of major food items by operated land


Policy options for supporting agricultural diversification in bangladesh

  • Per Capita Consumption of Major Food Items by Poor and Non-poor

  • Major findings:

  • The overall consumption of non-poor people was 24.5% higher than that of poor people.

  • The PCC of livestock products, fruits and fish of non-poor households were much higher (46-87%) than that of poor people.

  • The consumption differences were found less in rice, potato, and vegetables between two groups.


Policy options for supporting agricultural diversification in bangladesh

  • Per Capita Consumption of Major Food Items by Operated land

  • Major findings:

  • The PCC of most food items except fruits has decreased to a large extent for marginal, small and medium category farmers in 2010 compared to 2000 and 2005.

  • For large farmers, the PCC of fish, meat, fruits, and edible oils has considerably increased and cereals, pulses and milk have decreased in 2010. Cereal consumption shows declining trend but it is still much higher than both national and desired levels.

  • Substantial gap remains in the consumption of quality food items (fish, meat, fruits & oils) between large farmer and other categories of farmers.


Policy options for supporting agricultural diversification in bangladesh

  • Per Capita Consumption of Major Food Items by Diversified and Non-diversified Farmers

  • Major findings:

  • The PCC of major food items for diversified farmers was higher than non-diversified farmers. It was found highest for meat (14.5%) followed by pulses (11.3%), fish (10.4%), edible oil (10.3%), and fruits (6.7%)..Only the PCC of cereals and milk was 11.1 and 14.7% lower for diversified farmers compared to non-diversified farmers respectively. .

  • Substantial gap remains in the consumption of quality food items (meat, fish, edible oils & pulses) between diversified and non-diversified farmers.

  • Although the level of consumption of diversified farmers is much higher compared to non-diversified farmers, but the consumption level is not balanced at all.


Policy options for supporting agricultural diversification in bangladesh

  • Per Capita Consumption of Major Food Items by Bottom and Top Quintile Groups

  • The level of consumption of vegetables, pulses, and fish is much higher for high-income group compared to low-income group.

  • Therefore, the balanced consumption of different food items remains an issue for the low-income households.


Policy options for supporting agricultural diversification in bangladesh

  • Share of Cereal Consumption

  • The share of cereal consumption to total food consumption has decreased over the time at rural, urban and national levels.


Policy options for supporting agricultural diversification in bangladesh

  • Share of Calorie Intake (kcal) from Non-cereals

  • The share of calorie intake from non-cereal foods has increased over the time at rural, urban and national levels.


Policy options for supporting agricultural diversification in bangladesh

DIVERSIFICATION IN AGRICULTURAL PRODUCTION


Trend of agricultural diversification in bangladesh 1993 2010

Trend of Agricultural Diversification in Bangladesh, 1993-2010

The overall agricultural diversity is increasing with fluctuating nature.

A sharp increase that took place in 2007 which was due to the combined effect of sharp increase in the productions and prices of some vegetables, spices, fruits, and fishes.


Adi of different regions 1993 2010

ADI of Different Regions (1993-2010)

The highest AD took place at Chittagong and Barisal region over the time due to the increase of the productions and prices of some non-cereal commodities.

The lowest AD took place at Rangpur and Rajshahi region. Its implying a wide scope for diversifying agriculture through introducing high value crops and non-crop commodity to the existing agricultural farming in future.


Policy options for supporting agricultural diversification in bangladesh

Comparative ADI of Bangladesh, India and Pakistan, 2010

  • In 2010, the ADI of Pakistan was much higher than BD & India.

  • The ADI of BD was little bit higher in that period.


Determinants of ad at household levels

Determinants of AD at Household Levels

Marginal effect of different variables included in the probit model

Dependent variable = ADI (0 to 1)


Determinants of ad at national levels

Determinants of AD at National Levels

Marginal effect of variables determining AD at national level


Policy options for supporting agricultural diversification in bangladesh

DIVERSIFICATION IN

AGRICULTURAL TRADE


Policy options for supporting agricultural diversification in bangladesh

Figure 9.3 Share of cereal net import over total agricultural trade for Bangladesh, India and Pakistan, 1990-2009

Note: +ve sign represents net import and –ve sign represents net export


Policy options for supporting agricultural diversification in bangladesh

4 Share of non-cereal net import over total agricultural trade for Bangladesh, India and Pakistan, 1990-2009

  • Note: +(ve) sign represents net import and –(ve) sign represents net export


Policy options for supporting agricultural diversification in bangladesh

  • Note: +(ve) sign represents net import and –(ve) sign represents net export


Constraints to agricultural diversification

Constraints to agricultural diversification


Policy options for supporting agricultural diversification in bangladesh

CONCLUSION


Policy options for supporting agricultural diversification in bangladesh

Acknowledgement

NFPCSP-FAO

David Dawe, Agricultural Economist, FAO

Mr. CiroFiorillo, CTA, NFPCSP-FAO

Dr. ShahinIaqukb, TAT member, NFPCSP-FAO

Dr. ShaheAlam, TAT member, NFPCSP-FAO

BARI authority


Policy options for supporting agricultural diversification in bangladesh

THANKS TO ALL

FOR LISTENING


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