The national budget for FY2026-27 has identified agriculture as a key priority among its strategic objectives. The budget aims to elevate agriculture into a pivotal driver of national prosperity by fostering a self-reliant, climate-resilient, and technology-driven modern agricultural sector.
Under this vision, the agriculture sector and its interconnected areas, including livestock, environment, land, and water resources, have been allocated Tk 46,821 crore, with 60 percent designated for operational expenses and 40 percent for development initiatives. This budget represents a modest 2.3 percent rise from the previous fiscal year. However, the proportion of the national budget allocated to agriculture has decreased to 5 percent, marking its lowest level in the past 14 years.
Despite the diminishing share of GDP, agriculture remains the cornerstone of Bangladesh’s economy, playing a crucial role in ensuring food security, rural livelihoods, employment, and poverty alleviation. The sector has attained self-sufficiency in rice and fish production, made significant strides in livestock, fruits, and vegetables, and exhibited resilience during the challenges posed by the Covid-19 pandemic and the Russia-Ukraine conflict. Nevertheless, agriculture faces a myriad of obstacles such as escalating input costs, post-harvest losses, market price fluctuations, climate-related disruptions, inadequate market access, slow adoption of mechanization, deficient agro-processing infrastructure, diminishing arable land, soil fertility decline, escalating pest and disease pressures, and the impacts of climate change. These hurdles are further exacerbated by sluggish productivity growth, limited crop diversification, tardy technology uptake, and inadequate institutional coordination.
**Agricultural Diversification**
The agriculture sector in Bangladesh is witnessing a shift towards higher-value food products driven by changing consumer demands. Despite this transition, rice cultivation still dominates approximately 72 percent of the country’s agricultural land. The prevailing agricultural subsidies primarily benefit rice farmers, with a recent World Bank study indicating that nearly 80 percent of subsidy benefits are directed towards rice cultivation. This bias towards rice cultivation impedes diversification efforts despite a growing demand for fruits, vegetables, fish, livestock items, and processed foods. The distribution of subsidies also reveals disparities, with the top 20 percent of farmers receiving a significant share compared to the bottom 40 percent. Overuse of fertilizers and pesticides has led to reduced productivity and heightened environmental costs. While this year’s subsidy allocations have remained unchanged, there has been a notable 96.5 percent increase in the agriculture ministry’s development budget, offering an opportunity for a strategic realignment of expenditure.
Instead of blanket subsidies, there should be a shift towards targeted support and investments that facilitate diversification, including advancements in mechanization, adoption of efficient irrigation methods like solar-powered systems and alternative wetting and drying techniques, innovations in livestock and aquaculture, agricultural insurance beyond crops, soil testing, AI-driven advisory services, and climate-smart agricultural practices. Data from the Household Income and Expenditure Survey (HIES) and the World Bank underscore the evolving consumer preferences towards higher-value products, necessitating a reevaluation of budget allocations for livestock and fisheries sectors to align with a demand-driven diversification strategy.
**Export Promotion and Import Substitution**
Despite notable strides in agricultural production, Bangladesh remains reliant on imports while its agricultural exports remain limited. To diversify the export portfolio and reduce import dependence, policies need to be guided by a comparative advantage analysis and address key constraints such as food safety standards, quality regulations, inadequate infrastructure, and trade barriers. The current agricultural budget focuses minimally on these aspects, with limited measures aimed at enhancing export competitiveness and fostering import substitution.
**Mechanisation**
Bangladesh is experiencing a shift away from being labor-abundant in agriculture, leading to acute shortages during critical farming seasons. Addressing these labor challenges necessitates increased investment in appropriate mechanization to enhance labor productivity across various agricultural activities. While mechanization efforts have predominantly concentrated on rice cultivation processes, there is a growing need to expand mechanization to include transplanting, weeding, harvesting, and operations related to non-rice crops, livestock, and fisheries. However, the budgetary provisions fall short in adequately addressing this imperative, with minimal emphasis beyond the mention of mechanization under the Farmer Card program.
**Research and Development**
Recent data from the Bangladesh Bureau of Statistics (BBS) and the World Bank highlight a deceleration in agricultural growth, particularly in rice productivity, posing a threat to poverty alleviation and food security goals. The agriculture sector also confronts mounting challenges from climate-related adversities like floods, droughts, cyclones, and salinity intrusion. Addressing these complexities necessitates heightened investments in agricultural education, research, extension services, and technological advancements to develop high-yielding, climate-resilient crop varieties, livestock breeds, and fish species. There is a critical need to overhaul the National Agricultural Research System (NARS) through merit-based recruitment, promotion strategies, and incentive frameworks to bolster research and innovation in agriculture.
