Role of private sector in agricultural market dynamics

Bangladesh's agricultural sector has experienced significant transformations over the past few decades in which the public sector played a crucial role. The Green Revolution attained the primary goal of food security. Significant commodities that have succeeded are rice, wheat, potato, jute, fruits, pulses, and oilseeds. International collaboration paved the way for the success of technology and knowledge servicesduring the last two or three decades.

Public sector policy directives have been closely supporting private sector participation in the development initiatives. National Agricultural Policy 2018 stated public-private sector cooperation in research, extension, and marketing for enhancement. The same is reflected in other relevant policies. Reflecting this, many policy-making bodies have involved relevant private representatives in policy-making in agricultural research.

The emergence of the private sector has changed the agricultural production landscape, playing an increasingly important role in the seed industry, particularly in the vast varieties of hybrid vegetables, maize, and rice. This shift has enhanced crop yield and ensured food security for the nation's growing population. The public research and extension system is dependent on inbred seed. Inbred rice proved its worth, occupying 80 per cent of the land, and farm-saved seed is a major crop supply.The phenomenal growth of irrigation in 1988, with the private sector engagement in groundwater irrigation and the withdrawal of the public sector in shallow tubewell, triggered the success of boro rice.

According to the 2012 report Private-Sector Agricultural Research and Innovation in Bangladesh: Overview, Impact, and Policy Options by Harun-Ar-Rashid, Mohafez Ali, and David Gisselquist, there were 51 private companies in total, including two foreign ones. Among these input companies, 13 were involved in seeds, 2 in fertilisers, 6 in pesticides, 4 in machinery, and the remaining in livestock/fisheries.In 2008, the combined number of professional research staff (researchers, research technicians, and administrators) totaled 1,101 individuals, including 19 with PhDs, 74 with MScs, and 242 with BScs. These numbers include women with MScs and 25 with BScs. (Source: Private-Sector Agricultural Research and Innovation in Bangladesh Overview, Impact, and Policy Options Harun-Ar-Rashid, Mohafez Ali, and David Gisselquist June 2012)

Annual turnover in the seed industry of the country was USD 0.85 billion in 2021.  BADC, private companies, NGOs, and seed dealers are major stakeholders. The Seed ACT 2018 allows the private sector to release a notified crop variety. It enables the private sector to release a notified crop variety. Quality seed makes up 52 per cent of the total seed supply. (Source: Development and Growth of Seed Industry in Bangladesh, Bangladesh Seed Congress 2023, 11-13 February 2023, BICC, Agargaon, Dhaka)

Historically, Bangladesh's seed supply was predominantly managed by public sector entities such as the Bangladesh Agricultural Development Corporation (BADC), the Department of Agricultural Extension (DAE), and the National Agricultural Research System (NARS) Institutes. These organizations are responsible for developing, multiplying, and distributing seeds to farmers nationwide. However, challenges such as capacity and skill, limited resources, and the inability to meet the rising demand for high-quality seeds necessitated the involvement of the private sector.

The liberalisation of the seed market in the late 1990s marked a turning point. It allowed hybrid technology in the country, and private companies took advantage to import, produce, and market seeds. This policy shift catalysed the growth of the private seed sector, leading to increased competition, innovation, and the availability of diverse seed varieties tailored to the needs of Bangladeshi farmers.

The private sector has made remarkable strides in Bangladesh's hybrid seed market. According to recent data, private companies supply approximately 95.68 per cent of hybrid rice seeds, 99.28 per cent of hybrid maize seeds, and 99 per cent of hybrid vegetable seeds. This overwhelming contribution underscores the private sector's capacity to meet the growing demand for high-yielding crop varieties.

Hybrid vegetables and maize occupy the majority of crop land, and several corporations are involved in the business with an organised dealer network. The seed development of hybrids is highly technical and requires skill and land for growing seeds. It is heard that hybrid seed is imported as it is cheaper than locally produced in some crops. Private companies have invested substantially in R&D to develop hybrid varieties that cater to Bangladesh's specific agroclimatic conditions. This focus has led to introducing seeds that are not only high-yielding but also resistant to prevalent pests and diseases.

Agriculture has been a private-led enterprise, where the private sector dominates farmers, service providers, and market operators. However, the public sector plays a regulatory role in research and extension services. The public sector is also involved in marketing rice and wheat, which are staple food items in import and distribution, including the public distribution system to vulnerable groups of society.

Besides seed, the private sector is becoming increasingly active in machinery, pest management, organic fertiliser, and other agrochemicals. A vast network of dealers nationwide is operated with skill and market mechanisms. Dealers at the farmers' doorsteps provide advisory services as well.

Local manufacturers of machines, notably less capital-intensive, are dominated by the private sector. These are threshers, winnowers, potato diggers, sprayers, pumps for irrigation, power tillers, seeders etc. Bangladesh gained skill in producing spare parts, which are exported to neighbouring countries. Bigger capital-intensive machines like combine harvesters are imported mainly by companies, which the owner uses through custom hiring arrangements. This could create good local service providers, thus creating local employment. An attempt is being made to manufacture large machines, though these require regular mechanical services.

There are several agro processors in Bangladesh, such as Pran, Akij, Square, Ahmed, ACI, BD Foods, and Bombay Sweets, with Pran being the largest. According to Bangladesh Agro Processors Association (BAPA), there are around 250 processors; however, the list is not exhaustive as many processors are not members of the association.

There are over 53,000 broiler farms in Bangladesh. Laying hens produce about 1.25 trillion eggs out of a total of 1.5 trillion eggs produced, 80.65 per cent  of all eggs commercially produced in the country. From 2019 to 2020, the poultry population (broiler and layer) totaled 356.318 million birds, producing 173.6 billion eggs and 7.674 million metric tons of meat.

The poultry and aquaculture industry is growing, and the private sector plays a major role. Shrimp farming is recognised as the third-ranked industry worldwide. Poultry, dairy, and fisheries feed manufacturing is gaining momentum using local maize production.

Leveraging extensive dealer and retailer networks, private companies ensure timely and widespread distribution of seeds, making them readily accessible to farmers even in remote areas. Many private entities conduct training sessions and workshops to educate farmers on hybrid seeds' benefits and cultivation practices, facilitating better adoption rates and crop management.

While ensuring the quality and authenticity of seeds and other inputs remains a concern, instances of counterfeit or substandard seeds can erode farmer trust and impact yields. Public concern is about unsafe local food items like poultry, fruits, and vegetables grown by using unregulated chemicals and antibioticsused in animals. Besides, rice milling with polishing and misbranding seems to erode trust in the market. Skilled manpower in the regulatory agencies and logistic support should be in place to bring the market into order.

Awareness building through training may be made compulsory for marketing, and timely doses of chemicals may bring better results. The ministry of agriculture established a campaign in good agricultural practice (GAP), which may result in better products. Global "one health approaches" mainstreaming will require coordination of line ministries and departments to regulate private operators engaged in the food system.

Enhanced collaboration between public research institutions and private companies can lead to the development of superior seed varieties, combining academic rigor with market insights.Training programmes for farmers on the benefits of hybrid and inbred seeds and their cultivation practices can facilitate better adoption and agricultural outcomes.

Continued government support in the form of favourable policies, subsidies, and infrastructure development is essential to sustain the growth of the seed sector.The private sector's significant contribution to Bangladesh's hybrid seed industry has been a game-changer, increasing agricultural productivity and food security. However, a balanced approach that leverages the strengths of both private and public sectors is crucial for sustainable growth.

Susmita Das, Ph.D. Principal Documentation Officer, Bangladesh Agricultural

Research Council (BARC)

susmitabarc@gmail.com