The document discusses the growth of agro-based industries in Bangladesh. It notes that demand for high-value agricultural products is increasing, creating opportunities for industries that process foods like fruits, vegetables, and seafood. Agro-based industries are important as they can raise incomes in rural areas, diversify the economy, and generate export revenue. While the sector has grown, challenges remain such as small landholdings, seasonal production, and lack of infrastructure. The government is working to promote the industry through policies and incentives.
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Growth of Agro based industries in Bangladesh
1. Growth of Agro Based Industries in BD
Introduction
The global and Bangladeshi food markets are undergoing fast change. Demand is reorienting
toward high-value food commodities and away from traditional staples as a result of economic
expansion, growing incomes, and urbanization. Fruits, vegetables, spices, seafood, and livestock
products are examples of high value agricultural products; many of these products are processed
before being sold.
By 2020, it is anticipated that Bangladesh would experience an increase in demand for these goods
worth roughly $8 billion (in 2005 prices).
For those that produce, process, and sell food, this creates a huge opportunity. Due to the higher
labor intensity associated with high value agricultural output, it also presents a chance to increase
rural incomes and create jobs in the countryside.
In Bangladesh, more than 80% of those who make less than $2 a day reside in rural areas.
Capitalizing on the potential provided by high value agriculture output is a crucial strategic focus
for those aiming to eliminate poverty in the nation due to the spatial distribution of poverty
Industry and Market Overview
Bangladesh is an agricultural nation with a tropical environment ideal for growing a wide range of
crops, fruits and vegetables, livestock, fisheries, and a burgeoning agro and food-processing sector.
With a total agricultural output of roughly 70 million metric tons in the 2019–20 era, Bangladesh
is endowed with a tropical climate and fertile soil. Around 80% of the output was made up of rice,
potatoes, and sugar crops, while the remaining 17% was made up of fruits, vegetables, and spices.
2. Nearly 40% of the workforce is employed in the agricultural industry, which also makes up 14.23%
of the GDP. Currently, the GDP-contributing agro-food processing sector employs about 250,000
people and accounts for 1.7% of total employment. Its percentage of global exports is currently
around 3.5%.
More than 140 countries receive Bangladesh's exports of more than 700 products, including 63
basic agro-processed goods, the majority of which are cereal grains, frozen fish, processed meat,
tea, vegetables, tobacco, cut flowers, fruits, and spices. Bangladesh also exports other processed
agricultural goods, such as livestock, poultry, and fish feed. Currently, the nation has 486 agro
processing manufacturers, of which 241 export and 235 serve the domestic markets. The
agricultural industry generated export revenue of $1.41 billion in FY 2018–19. Fish, shrimp, and
other frozen food items, tea, spices, fruits, including dry fruits, and a few other processed
agricultural products are the principal exports. The European Union (EU), the United States, the
Middle East, and the Gulf are the main export markets.
In 2018, there were roughly 5.2 billion packaged foods sold domestically. By 2023, that number
is expected to rise to 7.3 billion. In terms of sales value, snacks, dairy goods, and edible oils rule
the packaged food sector. Up to 2023, these products are anticipated to rise gradually by about 6%
year. Processed fruits and vegetables, fish, and meat are among the products that are predicted to
develop quickly, with annual growth rates of 8%, 13%, and 13%, respectively.
Agro Products Are Being Processed In The Industry
4. Figure: Some Agro-Based Industries
Industries producing processed fruit foods (Jam, Jelly, Juice, Pickles, Syrup, Sauce, etc.)
The industries that process vegetables, legumes, and fruits (such as tomatoes, mangoes,
guavas, sugarcane, jackfruit, litchi, pineapples, and coconuts)
Industries that produce bread, biscuits, vermicelli, chanachur, noodles, etc.
Flour, maida, and semolina production
Processing of spirulina and mushrooms
The industries that produce starch, glucose, dextrose, and other starch-based goods
Industries that process milk (milk pasteurization, powdered milk, ice cream, condensed
milk, sweets, cheese, ghee, butter, chocolate, curd, etc.)
Businesses that produce meals using potatoes (potato chips, potato flakes, starch etc.)
Businesses that produce spices
The hydrogenation and refinement of edible oils
Industries that process salt
Shrimp and other fish processing and freezing
Industries that produce herbal and traditional medicines
Industries that produce homeopathic, ayurvedic, and unani medicines
BAKERY INDUSTRY
BEVERAGE INDUSTRY
5. Businesses that produce food for fish, animals, poultry, and ducks
Seed preservation and processing
Industries that produce jute products, such as thread, cloth, bags, carpet, sandals, etc.
The industries that produce silk fabrics and clothes
Manufacturing industries for agriculturally based product processing machinery
Industries that process rice, including puffed rice, beaten rice, popped rice, etc.
Industries that process aromatic rice
Industries that process tea are
Industries that produce coconut oil
The industries that process lakkha and rubber tape
Cold storage (processing and preservation of edible and seed potatoes, fruits, vegetables
etc. produced by farmers)
Making furniture out of cane, bamboo, and wood (except cottage industries)
Companies that export and preserve flowers
Businesses that process meat
Production of mixed and organic fertilizers, guti urea, etc.
Neem pesticide and biopesticide production number
Businesses that collect and maintain beeswax
Businesses that manufacture products using rubber
Particle board manufacturing is number
Sectors producing mustard oil (if local mustard is used)
Electricity and biogas production (produced from paddy shell, poultry and cattle wastes)
Industries that produce edible oil (rice bran)
Poultry and dairy farming
Export of Processed Foods
Bangladesh exports a wide range of agricultural and processed food items to over a hundred
nations worldwide. Over the past four years, Bangladesh's export of processed foods has increased
at an average pace of 16.6%. In the fiscal year 2019–20, the industry exported more than 700
commodities, including 60 processed food items (such as frozen fish and shrimp, processed meat,
fruit, and vegetables, processed food in dry form, and tea). The United States, the Middle East,
6. and Gulf countries are among the major export destinations. Currently, over 250 agricultural and
food processing businesses export food items.
While frozen fish and shrimp continue to be a popular export, processed foods such edible oil,
snacks, juice, sauce, confectionary, and noodles are among the industries that are expanding the
quickest. Over the previous four years, frozen fruit and vegetable exports have likewise displayed
a strong development pattern, averaging over 7% annually. The OECD-FAO agricultural forecast
predicts that until 2028, the demand for agro/food products will increase at a rate of 15 percent
annually. This anticipated growth suggests an additional opportunity for Bangladesh's agro- and
food-processing sector to diversify its markets. This sector can also profit from preferential access
to 52 foreign markets as well as the significant demand for locally produced food among
Bangladeshi communities living abroad.
Figure: Bangladeshi Export of Agro/Processed food products
Competitive cost of production:
Bangladesh has one of the lowest costs of production in the world because to a young,
hardworking, and competitive labor force as well as a robust incentive program from the
government that includes income tax exemptions and export subsidies. Utilizing Bangladesh's
cost-competitiveness will be essential for increasing the export potential of domestically
processed food goods.
7. Abundant access to agricultural resources:
Bangladesh is able to produce a wide range of crops thanks to its abundant farmers and fertile
soil, including rice, sugarcane, jackfruit (the second-largest producer in the world), mango
(9th), guava (8th), and vegetables like potato (6th), eggplant, and tomato, as well as fisheries
and livestock (12th-largest cattle inventory in the world).
Importance of Agro-Based Industry
The importance of agro-based industries cannot be described in words. All agro-based industry
branches are crucial for the following reasons:
Aid in raising industrial output.
Giving tribal populations and landless agricultural laborers from rural and
underdeveloped areas jobs.
By diversifying the economy and reducing reliance on agriculture, rural economies can
grow and remain stable.
Guarantee the reduction of poverty by offering reliable sources of income and support.
Generate the crucially important foreign exchange for the nation.
Raise rural residents' quality of life.
Contribute to reduce the excessive disparities in wealth and income distribution.
Are simple to establish
Encourage balanced development of industry and agriculture, and
Assist in preventing the waste of agricultural items that are perishable.
Growth Drivers
30 agro-ecological zones present in the area create favorable geo-climatic conditions for
the growth of a variety of agricultural products.
Access to affordable, skilled, and competitive human resources on a global scale
The Ministry of Industries intends to introduce the Agro-Food Processing Industry
Promotion Policy 2021 with the following goals:
Over the following five years, bring in FDI of USD 5 billion for the industry.
Establish specific industrial parks for the processing of agro-foods.
Offer enticing incentives and subsidies.
8. Problems Faced by Agro-Based Industries in Bangladesh
Agro-based enterprises in Bangladesh have similar challenges to other sectors of the economy,
which appear to be impeding their growth. Among these limitations and issues are:
Small Landholdings:
Due to the difficulty in achieving economies of scale due to small landholdings, farmers are
compelled to rely on subsistence farming.
Seasonal nature:
Farmers only have a very little window of time to enjoy the fruits of their labor. Climate change
has recently had an impact on weather patterns, which has had a negative impact on agricultural
production.
Perishable nature of agricultural products:
They require extensive infrastructure in the form of cold storage and excellent transportation
connectivity. India experiences problems with both forward and backward links.
Variability:
The amount and quality of raw resources might vary in agro-based companies. Variations in
weather and soil conditions have a negative impact on the quantity of raw resources. Because
of a lack of standardization, the quality decreases. These elements put additional pressure on
production, scheduling, and quality control activities in agro-based companies.
Lack of knowledge:
Lack of knowledge about opportunities, technologies, and production methods as well as a
lack of awareness are significant barriers.
Competition:
India and other nations in the region that offer comparable benefits in terms of affordable labor
rates and fertile soil are beginning to put pressure on Bangladesh.
Discussion
Numerous restrictions known as technical trade barriers exist in the international trading of food.
To safeguard customers, each nation has its own set of laws and regulations governing food safety.
Food containing filth, rotted, decomposed, or other dangerous substance; toxic compounds such
as pesticide, insecticide, melamine, or lead; and veterinary and agricultural medications are the
most frequently cited justifications for using regulatory tools to reject imported food.
9. But the World Trade Organization (WTO) seeks to ensure that laws are solely intended to protect
consumers and not serve as non-tariff barriers (NTB). To address the issue of NTB, two
agreements have been added to the list of WTO agreements. They are the updated Agreement on
Technical Barriers to Trade and the Agreement on Sanitary and Phytosanitary Measures (SPS)
(TBT). Geographic Indications (GIs) may also be important in some circumstances. Bangladesh
must so pay close attention to food safety rules and standards in order to encourage exports of agro
processed food products. In this regard, it is crucial that domestic institutions do their part in
ensuring food safety.
While Bangladesh may choose to go its own way, all food safety measures contained in the
country's adopted food safety regulations must be in accordance with the internationally
recognized food safety standards. Additionally, the process of putting those regulations into effect
must be seen as transparent.
Reference:
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%203.5%20per%20cent.
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