Increase budget for agro product processing, storage to boost exports: Experts

Highlights:

• Bangladesh ranks among world's top 10 producers of 22 agri products
• Govt gives a 10% cash incentive on the export of agro products
• Improving agro-processing can reduce post-harvest losses
• Post-harvest losses stand at 40–45%

To strengthen agricultural export performance, experts have called for increased budget allocation for processing and preservation, recommended duty and tax exemptions on imported agro-processing equipment, and stressed the need for subsidies to ensure food security.

"We must improve agro-processing to reduce post-harvest losses, which currently range from 40–45% due to weak market systems and inadequate processing and preservation," said Professor Mijanur Rahman of Manarat International University during his keynote presentation at a seminar held at the Bangladesh Agricultural Research Council in Dhaka today.

Professor Rahman said that farmers are the direct beneficiaries of the agro-processing industry.

The seminar titled "Agriculture Budget 2025–26: Outline for Sustainable Growth," organised by the Bangladesh Agricultural Economists Association, was attended by Anisuzzaman Chowdhury, special assistant to Chief Adviser Muhammad Yunus, as the chief guest.

At the seminar, a recommendation was made to allocate Tk40,692 crore for the agriculture sector in the upcoming budget. In the last budget (FY2024–25), Tk 38,259 crore was allocated to the agriculture, food, and fisheries sectors, which was 5.9% of the total budget.

Professor Rahman said that the government should support the development of area-specific processing zones for items such as fried fish, dried vegetables, fruit juice, and dairy products.

Citing Vietnam, Professor Rahman noted that the country provides a 20% subsidy for agro-processing, which has helped it increase agricultural exports nearly 2.5 times over the past decade.

To further boost exports, he proposed a 15% cash incentive on processed agricultural products and emphasised the need to strengthen preservation capacity. "Thailand earned $2.8 billion from agricultural exports in 2023, with 60% of that coming from processed products," he added.

The government of Bangladesh currently offers a 10% cash incentive on the export of agricultural and processed agro-products. This was previously 20%.

The keynote also highlighted that Bangladesh ranks among the world's top 10 producers of 22 agricultural commodities. It is second in jute production, third in rice and vegetable production, and seventh in potato and mango production. At present, fruits and vegetables are being exported to more than 70 countries, with earnings from agricultural exports surpassing $1 billion.

Professor Rahman proposed the adoption of public–private partnership models to build modern cold storage facilities at district and sub-district levels, implement product tracking systems from farmers to markets, and introduce blast freezing facilities to reduce the spoilage of perishable seasonal crops like tomatoes, onions, mangoes, and lychees.

The presentation also recommended an allocation in the upcoming budget for the development of the poultry sector. It proposed reducing duties and VAT on imported poultry feed ingredients such as maize, soybean meal, premix, and vitamins.

While India levies a 5% GST (Goods and Services Tax) on poultry feed inputs, Bangladesh imposes up to 15% VAT. In 2024, feed prices in Bangladesh rose by as much as 30%, significantly increasing production costs.

To preserve the agricultural base, Professor Rahman urged the government to act more strictly in conserving wetlands. "Bangladesh must implement conservation laws designating wetlands as reservoirs, as the country is losing 1.2% of its wetlands annually due to encroachment and pollution," he said.

Md Ahsanuzzaman Lintu, president of the Bangladesh Agricultural Economists Association (BAEA), remarked that farmers' sons no longer wish to pursue agriculture, making mechanisation essential. "During harvest seasons, we face a shortage of labour," he noted.

He criticised the banking sector, saying, "Thousands of crores have been looted from banks, yet farmers still struggle to access credit." He stressed the need for easier loan facilities for farmers, including provisions for post-harvest credit. "Due to a lack of funds, many farmers are forced to sell their produce quickly at lower prices," he said.

Special assistant to Chief Adviser Anisuzzaman Chowdhury commented that Bangladesh needs to gradually move away from subsidies and invest more in research and development. He stated that agriculture will play a crucial role in the transition of Least Developed Countries (LDCs). 

"No country can become developed without agricultural progress. We must understand the condition of marginal farmers and work for their betterment," he said, emphasising the importance of fair wages for agricultural labourers.

He concluded by underlining the need for modernisation to stabilise food prices and ensure food security. "We must keep our eyes on this sector, as agriculture is the backbone of our national economy," he said.