Increasing trend of farm mechanisation

A group of researchers from the Dhaka office of the Washington-based International Food Policy Research Institute (IFPRI) - Akhter Ahmed, Latiful Haque, Aminul Islam, Farha Sufian, and Salauddin Tauseef - analysed agricultural performance of Bangladesh based on a panel data set derived from Bangladesh Integrated Household Survey (BIHS) for 2011 and 2015. A number of unique features of data collection made the initiative different from conventional research works in agriculture, e.g., anthropometry measurements of all household members, plot-level agricultural production, individual food intake of all members of a family, women's empowerment in agricultural activities, etc.  A few findings of the research and observations of the researchers are briefly discussed below.

 Agricultural and rice production growth rates have slowed down from an average of about 5.0 per cent per year during FY 2007-11 to a little over 2.0 per cent per year in FY 2012-16. This distinct, albeit deep, dive owes largely to a fall in rice production growth rate from about 5.0 per cent per year to less than 1.0 per cent during the same comparable of time. But, remember that rice still holds the lead in overall agricultural growth; rice production more than tripled since liberation, but the progress has pitifully paled. By and large, the trend apparently rings a disheartening bell in the wake of agricultural growth being 2 to 3 times more poverty reducing than growth in non-agricultural sector.

Using highly sophisticated econometric model, the researchers argue that a 1.0 per cent increase in real (inflation-adjusted) rice price leads to 1.5 per cent increase in total rice yield - apparently adducible to the increased use of modern inputs. This possibly points to the role of rice prices in boosting production through increasing farmers' incentives to grow rice. It should be pointed out here that, national average real price of coarse rice fell by more than 50 per cent in past 35 years with a comforting peaks in 2008 and 2009. Another important observation is that there exists a negative relationship between farm size and productivity thus reinforcing findings from other studies. The authors observed disincentives in agrarian structure in terms of tenurial terms and modes; high degree of inequality in distribution of operated land. A very mindboggling observation is that  despite the Bangladesh Rice Research Institute (BRRI) developing 100+ varieties, the adoption rate remained low; most popular varieties are BRRI dhan 28 accounting for about half of boro land and BRRI dhan 29 claiming about one-fifths of the land. Average time to reach adoption peak is estimated to be 19 years whereas HarvestPlus achieved rapid adoption of its high zinc rice variety in only three years.

Only about one-tenths of farmers receive loan from Krishi Bank and the access is positively related to farm size - about 15 per cent for large against 7.0 per cent for marginal and small farms. The data pertaining to agricultural credit from Kishi Bank show two things: (a)  government loan reaches at feeble rate in rural areas and (b)  Krishi Bank credit is accessed more by the richer ones. Perhaps it needs no analysis   that, in the absence of cheap credit from government agencies, a large number of farmers - mostly marginal and small - depend on non-institutional credit sources with usury interest rates and also on NGOs with 27 per cent of interest rate. Finally, as data reveal, only 12 per cent of all farms received agricultural extension service during the last 12 months of the said survey: only 6 in 100 marginal farms and 14 in 100 small farms reported receiving extension compared to 25 in 100 of large farms. Thus be it credit or extension, solvent farms continue to rule credit and extension facilities available in rural Bangladesh.

In terms of total cropped areas, the share of rice has decreased marginally and non-rice food has increased during the last three years or so. Emerging crops are maize, pulses, oilseeds and wheat but crop diversity as such seems to be missing yet although Simpson diversification index shows little upward movement.  Regionally, Barisal seems to be doing the best in terms of diversification followed by Dhaka and Rangpur. It is interesting to note that adverse ecological zones appear to be performing better in terms of crop diversification as they face little challenge from modern varieties that tend to take away land of these non-rice crops. The gross margin of selected crops per hectare, falling in comparable periods, seems to be very high for brinjal followed by onion and the least for rice. However, the fluctuations is noticeably larger for non-rice than rice crops, possibly indicating wide fluctuations in yield, narrow marketing, storage and incentive  facilities. And obviously, the inverse relationship between farm size and productivity is reflected through higher gross margin for marginal and small farms compared to medium and larger ones.

The researchers observed some other interesting developments. Real agricultural wages have increased sharply in the recent past commanding about 13 kg rice in 2016 compared to a little over 5 kg in 2005. Rural labour market has grown tight, calling for calling for increasing farm mechanisation.  The government should also take into due cognizance the share of share croppers and devise incentive schemes for them by changing tenurial conditions. Finally, rice cultivation should be intensified with major attention on agricultural research and development. The challenges of non-rice crops, demand for which will increase as the country attains middle-income status need to be assessed and followed by policy interventions.

The readers should, however, be reminded that the observations outlined relate to the 2012- 2015 period, the years of relatively stable socio-economic and political situation. The upcoming years could witness woes of different kinds ranging from climate change to change in political power. Good policies always work and should continue to work irrespective of shocks - man-made or nature-induced.

The writer is a former Professor of Economics at Jahangirnagar University. [email protected]