Beneath The Surface
Starting over
HAS the old agricultural strategy outlived its utility in the wake of the recent food crisis? If so, what could be the components of a new order? Prominent economists and practitioners from home and abroad gathered at BIDS conference room recently in a brainstorming session on this pertinent issue. Chaired by Quazi Shahabuddin Ahmed (DG, BIDS), the session was attended by S. Fan (IFPRI), Professor Nurul Islam (former Chairman, Planning Commission), Mr. M. Syeduzzaman (former finance minister), Mahabub Hossain (Brac), eminent economists of BIDS, representatives from NGOs, private sector and universities.
IFPRI had long been involved in Bangladesh in supporting indigenous inputs in food and agriculture sector. This time the main objective was to discuss the old strategy -- with distinct theoretical and empirical evidences on strengths and weaknesses -- and set up rationale for new strategy. It is easy to suggest something but difficult to detect what went wrong with past policies. So, a shift of strategy should be followed by sufficient empirical evidence. While there could be a large number of issues to be dealt with, I shall try to discuss below the most prominent ones.
Improving the information base
The issue of the weak and inconsistent information base upon which agricultural policies had been drawn and implemented needs to be addressed very seriously and immediately. Even government agencies have different estimates of the parameters concerned, which are, sometimes, compounded by further information from donors and researchers. Not surprisingly, Bangladesh appears to be both a food deficit and a food surplus country at the same time, depending on which sources you have access to. Sometimes, total land and yield information do not justify the projected production as disclosed by the government. Rampant use of wrong information regarding demand and supply of inputs, costs and returns at farm level had adversely affected policies and performances in the past. Especially, lack of accurate statistics on government stocks of food grains and imports tends to penalise us at times. Since no policy or strategy could be correct under a regime of incorrect information, an exercise on this score could be worth consideration. Recent census/survey data could be collated (and continue to be updated) to arrive at a credible judgment. Self-reliance vs self-sufficiency
The old strategy stood on the paradigm of "self-reliance" in food grain production -- a paradigm that has been in operation for a long time. The recent food crisis -- which in fact started long before at snail's pace -- opened up the door for a second thought, and might drive us towards a "self-sufficiency" paradigm. But every shift in strategy has its costs and benefits, and it needs to be seen that a reversal is not counter-productive. No less important is the fertiliser distribution system. After serving well for a pretty long time, certain cracks seem to have developed in the distribution chain in recent years. Does it need an overhauling, or minor adjustment with more government participation? It would be wiser to review the public procurement and stock system of food grains to make it conform to the emerging complexities. We can also work on a value chain analysis of agricultural crops to determine the margins from the plough to the plate, and the actors affecting the spread. In all these cases, the message is clear: proper diagnosis of the disease is called for, paving the way for suitable prescriptions. Public spending
Admittedly, public spending in agriculture drastically dwindled over the years. Obviously, a large part of that has been due to a reduction in public sector irrigation and withdrawal of subsidy to farmers. Should state subsidy stage a comeback with its old fervour? To address that question, one needs know whom the subsidy is meant for, and for which activity within agriculture. What are the optimal options to see that small and marginal farms actually get them? Further, there may be substitutes of subsidies, which are more cost effective and caring to the poor. Land reforms vs tenancy reforms
In a country where cultivable land has been shrinking at 1% per annum, what are the issues related to land use pattern? Are there any economic and political points in going for redistributive land reforms in the face of technological and other developments taking place over the last two decades? For example, the tenancy market grew thicker with poor peasants growingly engaged in renting land. An important aspect here is how to ensure land rights for them so that incentive for increased investment on land could be induced. Likewise, the missed out small and marginal farms -- a legacy of the past policies on agricultural credit -- need to be brought under credit access through developing credit agencies. Especially, NGOS and other innovative institutions should come to help with agricultural credit. Note from neighbour
New agricultural strategy should take note of the changes in our neighbour's policy, which the old strategy hardly touched upon. India's agricultural policy has decisive impacts on Bangladesh in some cases. We need to know in depth, which polices affect us when and how. We can also work together in the areas of science and technology. A globalised view for the sector is preferable to an autarkic view. Finally, technological breakthrough across ecological space and dissemination of the technology at farm level, existing yield gap and ways to reduce it, the climatic complexities and its impact on our agriculture, should be rigorously researched to meet upcoming challenges. The South Asian countries could work together on this. By and large, a new agricultural strategy for Bangladesh is the call of the hour. The new agricultural strategy will invariably have to be more pro-poor, diversified, equitable, environment-friendly and growth augmenting. Unfortunately, the old strategy -- possibly because of the "doctrine of necessity" -- had to forgo some of them. It is now time to heal the wounds under the umbrella of a new strategy.
The issue of the weak and inconsistent information base upon which agricultural policies had been drawn and implemented needs to be addressed very seriously and immediately. Even government agencies have different estimates of the parameters concerned, which are, sometimes, compounded by further information from donors and researchers. Not surprisingly, Bangladesh appears to be both a food deficit and a food surplus country at the same time, depending on which sources you have access to. Sometimes, total land and yield information do not justify the projected production as disclosed by the government. Rampant use of wrong information regarding demand and supply of inputs, costs and returns at farm level had adversely affected policies and performances in the past. Especially, lack of accurate statistics on government stocks of food grains and imports tends to penalise us at times. Since no policy or strategy could be correct under a regime of incorrect information, an exercise on this score could be worth consideration. Recent census/survey data could be collated (and continue to be updated) to arrive at a credible judgment. Self-reliance vs self-sufficiency
The old strategy stood on the paradigm of "self-reliance" in food grain production -- a paradigm that has been in operation for a long time. The recent food crisis -- which in fact started long before at snail's pace -- opened up the door for a second thought, and might drive us towards a "self-sufficiency" paradigm. But every shift in strategy has its costs and benefits, and it needs to be seen that a reversal is not counter-productive. No less important is the fertiliser distribution system. After serving well for a pretty long time, certain cracks seem to have developed in the distribution chain in recent years. Does it need an overhauling, or minor adjustment with more government participation? It would be wiser to review the public procurement and stock system of food grains to make it conform to the emerging complexities. We can also work on a value chain analysis of agricultural crops to determine the margins from the plough to the plate, and the actors affecting the spread. In all these cases, the message is clear: proper diagnosis of the disease is called for, paving the way for suitable prescriptions. Public spending
Admittedly, public spending in agriculture drastically dwindled over the years. Obviously, a large part of that has been due to a reduction in public sector irrigation and withdrawal of subsidy to farmers. Should state subsidy stage a comeback with its old fervour? To address that question, one needs know whom the subsidy is meant for, and for which activity within agriculture. What are the optimal options to see that small and marginal farms actually get them? Further, there may be substitutes of subsidies, which are more cost effective and caring to the poor. Land reforms vs tenancy reforms
In a country where cultivable land has been shrinking at 1% per annum, what are the issues related to land use pattern? Are there any economic and political points in going for redistributive land reforms in the face of technological and other developments taking place over the last two decades? For example, the tenancy market grew thicker with poor peasants growingly engaged in renting land. An important aspect here is how to ensure land rights for them so that incentive for increased investment on land could be induced. Likewise, the missed out small and marginal farms -- a legacy of the past policies on agricultural credit -- need to be brought under credit access through developing credit agencies. Especially, NGOS and other innovative institutions should come to help with agricultural credit. Note from neighbour
New agricultural strategy should take note of the changes in our neighbour's policy, which the old strategy hardly touched upon. India's agricultural policy has decisive impacts on Bangladesh in some cases. We need to know in depth, which polices affect us when and how. We can also work together in the areas of science and technology. A globalised view for the sector is preferable to an autarkic view. Finally, technological breakthrough across ecological space and dissemination of the technology at farm level, existing yield gap and ways to reduce it, the climatic complexities and its impact on our agriculture, should be rigorously researched to meet upcoming challenges. The South Asian countries could work together on this. By and large, a new agricultural strategy for Bangladesh is the call of the hour. The new agricultural strategy will invariably have to be more pro-poor, diversified, equitable, environment-friendly and growth augmenting. Unfortunately, the old strategy -- possibly because of the "doctrine of necessity" -- had to forgo some of them. It is now time to heal the wounds under the umbrella of a new strategy.
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