Shahjalal University of Science & Technology, Sylhet

Department of Industrial & Production Engineering

Course No: IPE-354
Course Title: Business Communication Seminar

OBSTACLES OF AGRICULTURAL INDUSTRY EXPOSURE IN

BANGLADESH

Submitted to
Chowdhury Md Luthfur Rahman
Assistant Professor,
Dept. of Industrial and Production Engineering,
Shahjalal University of Science and Technology, Sylhet

Jahid Hasan
Assistant Professor,
Dept. of Industrial and Production Engineering,
Shahjalal University of Science and Technology, Sylhet

Submitted by
Group: E
Mohammad Abu Sayed 2014334041
Joy Dweep Das 2014334014
Tanmoy Palit 2014334042
Md. Musfiqur Rahman 2014334054
Abdur Razzak Chowdhury 2013340003

Date of Submission: 10/12/2017

 TABLE OF CONTENTS

CONTENTS PAGES
Introduction 02

Agricultural Industry 03

Agricultural Industries in Bangladesh 04

Agricultural Industry Exposure in Bangladesh 04

Role of Government 06

Most Daunting Challenges Our Agricultural

Industries Are Facing 07

Opportunities of Development 08

Discussion and Conclusion 09

References 10

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Introduction
Agriculture is the cultivation and breeding of animals, plants and fungi for food, fiber,
biofuel, medicinal plants and other products used to sustain and enhance human life.
Agriculture was the key development in the rise of sedentary human civilization, whereby
farming of domesticated species created food surpluses that nurtured the development of
civilization. The history of agriculture dates back thousands of years, and its development has
been driven and defined by greatly different climates, cultures, and technologies. Industrial
agriculture based on large-scale monoculture farming has become the dominant agricultural
method.

The major agricultural products can be broadly grouped into foods, fibers, fuels, and raw
materials. Specific foods include cereals (grains), vegetables, fruits, oils, meats and spices.
Fibers include cotton, wool, hemp, silk and flax. Raw materials include lumber and bamboo.
Other useful materials are also produced by plants, such as resins, dyes, drugs, perfumes,
biofuels and ornamental products such as cut flowers and nursery plants. Over one third of
the world's workers are employed in agriculture, second only to the service sector, although
the percentages of agricultural workers in developed countries has decreased significantly
over the past several centuries.

Civilization was the product of the Agricultural Neolithic Revolution; as H. G. Wells put it,
"civilization was the agricultural surplus." In the course of history, civilization coincided in
space with fertile areas such as The Fertile Crescent, and states formed mainly in
circumscribed agricultural lands. The Great Wall of China and the Roman empire's limes
(borders) demarcated the same northern frontier of cereal agriculture. This cereal belt fed the
civilizations formed in the Axial Age and connected by the Silk Road. [1]

Agriculture is the largest employment sector in Bangladesh. As of 2016, it employs 47% of

the total labor force and comprises 16% of the country's GDP. The performance of this sector
has an overwhelming impact on major macroeconomic objectives like employment
generation, poverty alleviation, human resources development and food security. [2]

A plurality of Bangladeshis earns their living from agriculture. Although rice and jute are the
primary crops, wheat is assuming greater importance. Tea is grown in the northeast. Because
of Bangladesh's fertile soil and normally ample water supply, rice can be grown and
harvested three times a year in many areas. Due to several factors, Bangladesh's labor-
intensive agriculture has achieved steady increases in food grain production despite the often-
unfavorable weather conditions. These include better flood control and irrigation, a generally
more efficient use of fertilizers, and the establishment of better distribution and rural credit
networks. With 35.8 million metric tons produced in 2000, rice is Bangladesh's principal
crop. National sales of the classes of insecticide used on rice, including granular carbofuran,
synthetic pyrethroids, and malathion exceeded 13,000 tons of formulated product in 2003.
The insecticides not only represent an environmental threat, but are a significant expenditure
to poor rice farmers. The Bangladesh Rice Research Institute is working with various NGOs
and international organizations to reduce insecticide use in rice.

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In comparison to rice, wheat output in 1999 was 1.9 million metric tons. Population pressure
continues to place a severe burden on productive capacity, creating a food deficit, especially
of wheat. Foreign assistance and commercial imports fill the gap. Underemployment remains
a severe problem, and a growing concern for Bangladesh's agricultural sector will be its
ability to absorb additional manpower. Finding alternative sources of employment will
continue to be a daunting problem for future governments, particularly with the increasing
numbers of landless peasants who already account for about half the rural labor force. [3]

Agricultural Industry
The agricultural industry, which includes enterprises engaged in growing crops, raising fish
and animals, and logging wood, encompasses farms, dairies, hatcheries, and ranches

In other words, industries that involve a large-scale business operation related to agriculture
including the production, processing, and distribution of agricultural products and the
manufacture of farm machinery, equipment, and supplies, are called agricultural industry. In
addition, agricultural industries are those having the activities of providing agricultural goods
and services involving financial and commercial and industrial aspects. From this definition,
this can be said that an agricultural industry does one of these following jobs:

1. Agricultural Products Related: the production, processing, and distribution of

agricultural products; such as- fertilizers, seeds etc.

2. Manufacturing Industries: the manufacture of farm machinery, equipment, and supplies;

such as- tractor, irrigation pump and other general tools used for cultivation. [4]

Figure 1: Diversity of agricultural industries. [5]

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Agricultural Industries in Bangladesh
Following types of agriculture related industries can be found in Bangladesh:

1. Agricultural Machineries and Equipment: They manufacture farm machineries and

equipment, and supply them. Example: Chittagong Builders & Machinery Ltd., Old
Dhaka, Dhaka-1100, Bangladesh; M/s. Kamal Machine Tools, Bogra, Bangladesh; Tohor
Enterprise, Dhaka, Bangladesh; Uttara Engineering Works (Pvt) Ltd., Dinajpur,
Bangladesh; Semco Pvt. Ltd; Tejgaon, Dhaka-1205, Bangladesh.
2. Agro Vet Company: They focus on poultry, fish, cattle, and shrimp feed manufacturing.
Example: Dream Integrated Agro Complex Ltd.; EH (Environ. Health) & AgroVet Ltd.;
Core International; D.M. International; Bloomest Company Limited.
3. Feed Mills: They produce a processed food for fish, animal etc. Example: Provita Feed
Ltd.; Sunny Feeds Ltd.;Saudi Bangla Fish Feed Ltd; Quality Feeds Limited.; Aftab Feed
Products Ltd.
4. Fish Hatchery: They do artificial breeding, hatching, and rearing of several types of
fishes. Example: Alam Group of Companies; Kazana traders Phoenix Hatchery Ltd.;
Phenix Poultry Limited; Bengal Group of Industries; Kazi Firms Group.
5. Fruits, Vegetables and Allied Products Exporters: They export diverse types of fruits,
vegetables and products that are allied to them. Example: a. r. international; athay
enterprise; nr marine and general services; s.m. agro trade bd; tassnim marketing; the
xebec int'l.
6. Nurseries: They have the job to plant, grow, water, transplant, prune, and generally care
for plants, shrubs, and trees. Example: Gardenia Nursery; Garden Center; Shakh
Nursery; Torukunja Nursery (Pvt.) Ltd.; Neem Organic Ltd.
7. Poultry Business: They raise domesticated birds such as chickens, ducks, turkeys and
geese for farming meat or eggs for food. Example: Alam group of company; A.K.
Enterprise; Euroasiatic; Mak Hatchery Ltd; Phenix Poultry Ltd.
8. Seafood Exporters: They exports seafood. Example: Bright Star Corporation Ltd; Core
International; A.K. Khan & Co. Ltd.; Ornate Trade International; Orbis Trade
International Ltd.
9. Seed and Fertilizer Company: They produce, process, and distribute seeds and
fertilizers. Example: Shahjalal Fertilizer Factory Limited; Karnaphuli Fertilizer
Company Limited; Jamuna Fertilizer Company Limited; EH & Agrovet Ltd; Fairdeal
Enterprise; Krishok Bandhu Agro-Systems Ltd. [6]

Agricultural Industry Exposure in Bangladesh

Agriculture is undoubtedly the largest employment sector in Bangladesh. As of 2016, it
employs 47% of the total labor force and comprises 16% of the country's GDP. The
performance of this sector has an overwhelming impact on major macroeconomic objectives
like employment generation, poverty alleviation, human resources development and food
security. [7]

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 Figure 2: Rate of Growth in Agriculture of Bangladesh. [8]

A declining trend in the growth of agricultural sector has recently been noticed, which, in
turn, contributed to decelerating growth in GDP in the country. Though there was an
increasing trend in growth in agriculture from 1990 to 2010, since the FY2010-11 (A fiscal
year (FY) is a period that a company or government uses for accounting purposes and
preparing financial statements) the rate of growth has been falling. The rate of growth in
agriculture declined to 3.04 percent in FY 2014-15 from 4.37 percent in FY 2013-14,
representing 1.33 percentage points decrease. The rate of growth in agriculture was 5.24
percent in FY2009- 10, whereas in FY2010-11, FY2011-12 and FY2012-13 the ratewas5.13
percent, 3.11 percent and 2.17 percent respectively. This falling growth in agriculture has
been causing the share of agriculture in GDP to decline over the recent years. For instance, in
FY2009-10, the share of agriculture in GDP was 20.29 percent, whereas in FY2010-11,
FY2011-12 and FY2012- 13the share was 20.01 percent, 19.42 percent and 18.70 percent
respectively. Because of this declining contribution of agriculture to national income, the
growth of GDP in the country has also been found decelerating. If the current trend persists,
the agricultural growth rate might reach as low as 2.09 percent in FY 2013-14. [8]

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Role of Government
The Government of Bangladesh proposed national budget for FY 2016-17 (July-June) is BDT
3.41 trillion ($43 billion USD), which is 28 percent higher than the revised budget of last
year. Of that, the Ministry of Agriculture received an allocation of BDT 136.75 billion ($1.73
billion). Stated goals for this money include: expand agricultural subsidies; improve access to
low-cost credit; establish what they are calling an “agriculture processing and marketing
center”; encourage more diversity of crops produced; and subsidize more farmers purchase of
agricultural inputs, such as better-quality seed and fertilizer. The budget allocated for the
Ministry of Fisheries and Livestock is BDT 18 billion ($0.22 billion); for Ministry of Food it
is BDT 24 billion ($0.28 billion). These both are higher than last year’s revised budget.
Noteworthy detail in the budget includes the duty schedule for essential commodities and
other inputs including: a) edible oils, pulses, onions, garlic, sugar; b) fertilizer, insecticide and
seeds; c) pharmaceutical supplies; d) industrial raw materials such as cotton; and e) poultry
and dairy.

The Minister outlined the government’s plans for the next year regarding this key
sector:

Subsidies for fertilizer, seeds, irrigation and other agricultural inputs will continue

Share-croppers will continue to be provided with collateral-free agricultural loan. Moreover,

agricultural loan and input assistance will continue. In addition, a database containing all
information of farmers will be established

Agricultural Rehabilitation Assistance and Incentive Program will continue as before

Supply of high yielding seeds to the farmers will be increased further

Special emphasis will be given on innovation and use of organic technology and genetic
engineering

Development of agro- based industry will be encouraged with right incentives

Agricultural research will be given highest priority as before. Like jute, steps will be taken to
decode genome sequence of other cash crops. Again, research for inventing drought, salinity
and water logging resistant high yielding varieties will be intensified. Special attention will
be given to minimize the adverse effect of climate change while conducting agricultural
research and emphasis.

Regarding fisheries and livestock, the Finance Minister outlined the following plans of
the government for the coming days:

Programs for increasing commercial production of egg, fish, meat, milk etc. will continue

Ongoing integrated actions to increase the production of national fish Hilsha will continue

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The National Shrimp Policy, 2014 will be formulated as soon as possible

Steps will be taken to ensure sustainable management of aquatic resources in the newly
earned 1 lakh 11 thousand 631 square km of territorial sea at the Bay of Bengal.

Genuine fishermen will be registered and provided with identity cards

Manufacturing vaccine for domestic animals, providing veterinary treatment, developing

species through artificial insemination will continue. [9]

Most Daunting Challenges Our Agricultural Industries Are

Facing
The constraints and problems affecting exposure of agricultural industries in Bangladesh
could be grouped into five overall factors including:

1. Policy
2. Institutions
3. Capacity
4. Women and
5. Infrastructure.

Policy: Despite agricultural industries being indicated as a “thrust” sector for poverty
reduction and economic growth, there does not seem to be a comprehensive policy defining
the key objectives and strategies needed to achieve these objectives. In the New Agricultural
Policy, the terms agricultural industry is used but never defined. For policies to be
implemented effectively, well-performing institutions need to be in place.

Institutions: Market reformation are not going to induce the expected growth and poverty
reduction unless there are mechanisms that support the functioning of the market. In the case
of agribusiness, the key institutional weaknesses are related to finance, market information,
marketing, business development services, technology dissemination and quality assurance
systems.

Capacity: The weak capacity is often thought to be remedied with training and capacity
strengthening programs. The elements of effort and evaluation of both trainees and trainers
are given low emphasis; the overall learning process occurring during training is hardly tested
and evaluated.

Women: Women participation in agriculture and agricultural industries are increasing.

However, their role as input providers, commercial farmers, traders, and agro-entrepreneurs
is still minimal. Several constraints limit their participation, including low awareness of the
role of women in the sector and social barriers.

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Infrastructure: As any other industry, agricultural industries rely on the existence of
adequate infrastructure. Over the past decade considerable improvements have occurred in
the road and bridge infrastructure of the country. Lack of power connection, disruption in
power supply, and excessive cost of power is affecting all the manufacturing industry
including agro-industry. Delays in building new infrastructure are linked to poor governance,
weak capacity in planning and implementation of projects, and inappropriate policies that
discourage private investment.

Opportunities of Development
The acceleration of agricultural industries is not just a desirable goal, but it is also a feasible
proposition considering several opportunities. The opportunities relate to five main aspects.
These are

1. Large population
2. Natural and comparative advantage
3. Policy reforms and shift in the role of the government and private sector
4. Entrepreneurship and
5. Associations.

Large population: The large population, while it is a source of pressure on the availability of
cultivable land, provides an abundant source of low cost labour. The growth of the urban
middle class also represents a potentially large domestic market for processed foods.

Natural and comparative advantage: Agro-climatic conditions in Bangladesh, combined

with some of the most productive soils in the world, make possible the production of a wide
variety of agricultural products. Several agricultural commodities grown in Bangladesh
appear to have at least some degree of comparative advantage. With a very few exceptions,
however, this comparative advantage has not been translated into competitive advantage at
the farm and firm levels. Among the commodities with export potential are shrimp, fish, jute,
tea, vegetables and fruits (fresh and processed) and possibly herbs and spices and medicinal
plants.

Policy reforms and shift in the role of the government and private sector: Agriculture
sector reforms during the past two decades, including the dismantling of state intervention
and liberalization of trade in production inputs and commodities, have helped create a policy
environment that is more conducive to agricultural industries. Much remains to be
accomplished, however, particularly in the area of policy implementation.

Entrepreneurship: There appears to be a large pool of Bangladeshi agribusiness

entrepreneurs, who lack the access to information, resources, and mechanisms that would
make it possible for them to lead successful business enterprises. The number of
entrepreneurs engaged in expanding medium scale enterprises is particularly encouraging.

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Associations: Bangladesh has a long history of local and national industry associations, but it
was only in the second part of the 1990s that many of these organizations were created. Many
of the associations related to agriculture are members of the Agribusiness Development
Association of Bangladesh. A primary activity for most of these associations consists of
serving as a mediator between their membership and local and national governments.

Discussion and Conclusion

Agricultural industries in Bangladesh remain a largely untapped area for diversification of
economic activities. It has not developed properly, considering the country’s prospects in this
field. The economy is yet largely dependent on agriculture, though the sector’s share in the
country’s GDP has steadily been on the decline. Most of rural population is directly or
indirectly engaged in a wide range of agricultural activities. Given this situation, there are
urgent needs for drawing up a proper land use plan and implementing it in earnest.
agricultural industries should work as a social business since it will fulfill the three core
elements of business i.e. legality, social obligation and profit maximization. More emphasis
should be given on continuous research and development so that agricultural industries can
be properly handled. Improved public private partnership in developing various agricultural
inputs i.e. seeds, fertilizers, agro-machineries and improving environment agro-business are
required. Finally, a holistic approach backed by strong political desire and implementation of
the plans are needed.

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References
1. https://en.wikipedia.org/wiki/Agriculture
2. https://en.wikipedia.org/wiki/Agriculture_in_Bangladesh
3. http://www.assignmentpoint.com/science/zoology/agriculture-sector-
of-bangladesh.html
4. http://www.economywatch.com/agriculture
5. http://agriculture.govmu.org/English/Pages/default.aspx
6. http://www.bdtradeinfo.com/yellowpages/des_data.php?subcategory_i
d=102
7. http://www.thedailystar.net/news-detail-63295
8. https://www.mof.gov.bd/en/index.php?option=com_content&view=arti
cle&id=304&Itemid=1
9. http://www.thedailystar.net/Bangladesh-Budget-2017-
18/frontpage/subsidy-expense-go-173pc-1414411

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