April 12, 2013

Agricultural export in Bangladesh



Abstract
Agriculture is the main factor to develop our country. The agriculture sector of our country is not so good. Lack of scientific method of cultivation is the main reason. In Europe the agricultural sector is very well developed due to the scientific method of cultivation. The trade relationship with the European Union (EU) is seeing important changes in recent years. The EU has unilaterally eliminated in 2001 tariff barriers for products originating in Less Developed Countries through the Everything But Arms
(EBA) agreement, which includes the highly protected agricultural products. This creates important export opportunities for Bangladesh. Rice dominates the cropping pattern throughout the country as almost 90 percent population is rice eaters. Rice contributes to over 63 percent of the caloric intake for urban consumers and over 71 percent for the rural population, on average. Wheat is the second alternative cereal crop in Bangladesh next to rice. Wheat production has been declining over recent years, from 1.51 million tonnes in 2002-03 to 0.844 million tonnes in 2007-08. Bangladesh has seen a resurgence of exports in leguminous vegetables, and other frozen vegetables such as beans and spinach, where there was no trade, or the trade had stopped for a few years. The sugar policy is based on high price support combined with a regime of production quotas and has remained practically unchanged for 40 years. Industrial crops are also a part of agricultural export like jute, cotton, hemp and kenaf etc. Agricultural productivity at the household level is very important for household food and nutrition security. Around 50 percent of the population of Bangladesh remains below the established food-based poverty line, one third are in extreme poverty and severly undernourished despite the notable increases in aggregate national food grain production. Vegetables are important for food security in Bangladesh. Nearly 100 different types of vegetables, comprising both local and exotic types, are grown in Bangladesh.



Introduction:

Bangladesh is an agricultural country. 80% people are dependent on agriculture. It is the main base to develop our country. Bangladesh has a positive trade balance on agricultural products with the EU and has seen a rise in the total value of exports in recent years. For Bangladesh, the EU represents the most important export market. Presently, among LDCs (Least Developed Countries), Bangladesh is the most prominent exporter to the EU, representing 20% of the total exports from all LDCs to the European market. The principal exports to the EU are textile products (90% of the EU imports from Bangladesh). In the last decade Bangladesh has enjoyed a growing overall trade balance surplus with the EU, which stood at around US$3 billion in 2002-2004. However In Bangladesh the major cereal crops are rice and wheat although main focus is on rice production, with 79.4 percent of the total cultivatable land area under rice crop, as mentioned in FAO/WFP CFSAM 2008 Report. Three separate rice crops are recognized, the rain fed Aus crop with 10 percent of area, the rain fed Aman crop with about 51 percent area and the increasingly important irrigated Boro crop with about 39 percent of the cropped area. Rice dominates the cropping pattern throughout the country as almost 90 percent population is rice eaters. Rice contributes to over 63 percent of the caloric intake for urban consumers and over 71 percent for the rural population, on average.







AGRICULTURE OF EU TRADE AGREEMENTS AFFECTING BANGLADESH


The EU-EBA agreement has been introduced into the EU Generalized System of Preferences (GSP) in 2001. The GSP agreement came into force in 1971, because trade discrimination practices were not allowed under the GATT (General Agreement on Tariffs and Trade), a waver was introduced for developing countries (the so-called "enabling clause") creating the legal framework for the Generalized System of Tariff Preferences. Under this framework, developed countries are authorized to establish individual "Generalized Schemes of Tariff Preferences". The countries covered by the EU-GSP include all developing countries and the EU member states. The present format of the policy originated in 1998. The main objective of this agreement is to grant special trade preferences to developing countries in order to foster development and help them to compete on international markets (EU Commission, 2001). The agreement has been renewed every three years. Presently there are 49 countries recorded as LDCs2 and covered by the EBA agreement. The aim of this agreement is to provide more favorable treatment to the group of LDCs than to other developing countries benefiting from the GSP, by extending duty-free access to all products from LDCs without any quantitative restrictions, except to arms and munitions. Thus, the EBA provides the most favorable regime available. The particular importance of the EU-EBA agreement is that the EU excluded most agricultural products from the GSP. Access to the EU for agricultural products is very important for any LDC, given the importance of the agricultural sector for their economies. The EU has thus added 919 tariffs lines  to the list of duty-free access, including such sensitive products as: beef and other meat; dairy products; fruit and vegetables, including processed fruit and vegetables; maize and other cereals; starch; oils; processed sugar products; cocoa products; pasta; and alcoholic beverages.


Limitations to Agricultural Productivity

Limits to agricultural productivity growth are caused by a number of interrelated problems. Some of the major ones include: loss of arable land due to infrastructure, housing, and rural industrialization, lack of good quality HYV and hybrid seeds, degradation of soil fertility due to unbalanced use of chemical fertilizers, lack of scientific irrigation application, problems related to delivery of agricultural credit, poor marketing, processing and storage facilities of agricultural products, poor agricultural extension services, and weak farm and non-farm sector linkages.

1.      High Costs of Agricultural Production
The prices of fertilizers and fuel have risen continuously and steeply in recent years, but the prices of farm products have not kept pace. This deteriorating input-to-output ratio for all crops decreases farmers’ profitability. As a result, for next season, farmers cannot afford to use fertilizers and improved hybrid quality seeds to increase yield. 

2.      Addressing Problems of Low Soil Fertility
To increase crop production in response to increasing population, forests are constantly being cleared to make room for new, arable land. This large scale removal of forests is resulting in the reduction of soil fertility. These cleared lands are not fertile enough to support high-yielf crops, resulting in low-yield and crop failure. On the other hand, cultivatable lands lose their fertility after a certain number of cultivation cycles. These lands require soil treatment.

3.      Lack of Diversity:
Land diversity is very much needed to maintain the fertility of soil. A large percentage of cultivatable land is allocated to rice despite the country having the environment to produce a number of crops, trees and horitcultural species.



4.      Adverse Effects of Natural Disaster:

Much of Bangladesh lies in disaster-prone, floodplain areas. Annual flooding and occasional flash flooding, together with other periodic natural disaters, often cause crop damage and food shortage for vulnerable populations. Consecutive floods in August- September and Cyclone Sidr in November 2007 caused severe losses to crops, lives, infrastructure and properties. The natural disaster risks and uncertainities also lead to transitory food insecurity, known as Monga, in certain northern districts of Rangpur, Kurigram, Gaibandha and Lalmonirhat.




Vegetables
Vegetable farming in Bangladesh can be grouped into 3 categories based on scale of production and objectives of farming: vegetable production on homestead, vegetable production for commercial market and vegetable farming for seed production. The area under vegetable farming has increased over time. The production of vegetables has also increased from about 1.47 million metric tons in 2002-03 to about 1.89 million metric tons in 2006-07. The major winter vegetables are cabbage, cauliflower, tomato, brinjal, radish, hyacinth bean, bottle gourd, and major summer vegetables are pumpkin, bitter gourd, teasle gourd, ribbed gourd, ash gourd, okra, yard-long bean, and Indian spinach among others. Some vegetables like brinjal, pumpkin, okra, and red amaranth are found to grow in both the seasons.

Industrial Crops

Fiber crops such as jute, cotton, hemp and kenaf are some common industrial crops. Jute dominates among fiber crops, having about 737,000 metric tons of annual production. Jute leads the country's list of export crops. It is confined mainly to the low-lying areas of the Brahmaputra-Jamuna and Padma floodplains. Other cash crops of Bangladesh include tea, tobacco, rubber, ornamental flowers, and plants that produce perfumes, pharmaceuticals, and dyes. Tea comes second as an export cash crop. It is mainly grown in the hills of Maulvi Bazar district and small areas of Habiganj, Sylhet, Chittagong, and Cox's Bazar districts. Three other minor cash crops are tobacco, betel nut, and betel vine. Lalmonirhat, Nilphamari, Rangpur and Kushtia have the maximum share in tobacco cultivation. Betel nut cultivation is generally concentrated in the seaward districts, while betel vine is an important crop in certain areas of Barisal, Cox's Bazar, Rajshahi, Maulvi Bazar, and Satkhira.

 The Future Reforms of the Sugar Sector


The EU is presently a major participant in the world sugar market, being one of the top producers, importers and exporters in the world. The reform of the EU sugar regime will affect not only the EU member states but also countries that are associated with the EU through preferential, regional and multilateral trade agreements. In the EU sugar regime, the unique features of the trade concessions are that sugar under preferential import quotas can enter the EU market duty free, and the price paid for sugar equals to the high EU price for sugar. The proposed reform of the sugar policy is not a full liberalization of the sugar market in Europe, even if it proposes to eliminate import quotas by 2009. It reduces the price over the years from 2005 to 2008 to per metric ton €421 per metric ton, which is still double the world price. The price level for imports of raw sugar would decline to €329 per metric ton by 2009, nearly halving the value per ton of imports for the countries benefiting from the sugar protocol and EBA. This is accompanied by the internal production quota reduction, calculated based on estimated consumption and expected imports, while remaining import tariffs for non ACP and LDCs would have to remain high even after a WTO agreement. Thus, EU production would fall from today’s excess of 1 million metric ton to a deficit of 1.4 million metric ton by 2009, which would match the ACP-LDC import quota and balance the market, as import quotas increase during the reform period and are then abolished.



National Food Balance

Bangladesh agriculture has grown at 3.2 percent annually during 1991-2005 and the dominant source of this growth has been the crop sub-sector growing at 2.3 percent per annum. During the same period, livestock and fisheries productions have grown annually at about 3 percent and 5.7 percent, respectively. Total food grains production, according to Bangladesh Bureau of Statistics/BBS, in 1991/92 was 19.32 million metric tons, which has gradually increased to 29.77 million tons in 2007/08, 6.13 percent higher than previous year’s production. Total rice production rose to 28.929 million metric tons in 2007-08, some 5.9 percent above those in the previous year and 12.7 percent above the five-year average.


Summary

Agriculture is the main factor to develop our country. The agriculture sector of our country is not so good. Lack of scientific method of cultivation is the main reason. Our farmers are not so well trained. In Europe the agricultural sector is very well developed due to the scientific method of cultivation. Bangladesh has advantage of agriculture over 50% of population are engaged with this sector. GDP save is 18.4% in this sector. In agricultural sector rice, wheat & vegetables is most important product. These agricultural products are bringing benefit to our country and thus reflect a size in standard of living. One the other hand this agriculture item is normally exported to Middle East from where a huge parching somewhere is flow in the country.


Conclusion

Finally we can say that only agriculture can make our country well developed because it is the main base to develop our country so our government must take essential steps & they also must train the farmer of our country to use scientific method of cultivation. They must make easy loan for farmer and make less complicated formalities which are related with loan, they must pay them properly so that they can produce more crops in the future not only for local but also for international. Beside the government should raise subsidy on those project which is needed compulsorily during production. If they do so the export of agricultural item will be increased.     


References

1.      Increasing the Market Access for Agricultural Products from Bangladesh to the EU- Jorge Nufiez Ferrer. (PDF FILE)
2.      www.foodsecurity.org/bgd/country/availability/agricultural-production.(WEBSITE)


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