According to the Food and Agriculture Organization of the United Nations (FAO), 25-30 percent of agricultural and food products are lost annually in the country due to lack of conservation and management. According to the Bangladesh Institute of Development Studies, the total loss of lost products is 5 thousand crores. If we add the calculation in the last 50 years, this loss figure is possible two to two and a half lakh crores. Which is a maximum of 4.46 percent of the current GDP. This huge amount is not added to the core economy of the country.
Research has shown that the development of agriculture and agro-processing industry is blocked by several obstacles. Among them, gas and electricity are not available for setting up new industries. Uncertainty of availability and supply of raw materials in most places. In addition, innovation, research, quality improvement and control, establishment of laboratories, storage and packaging systems are not strongly developed. Although many products are produced at the local level, processing industries are not prioritized. There is a lack of skilled manpower with product productivity and technical knowledge and adoption of innovative technologies.
Also observed are lack of storage facilities, limited access to business information and marketing facilities, high operational costs and lack of business-friendly tariff facilities. As a result, the value add to the product in the processing industry is decreasing due to lack of dependence on modern technology. Despite the demand, the export market is not growing.
If these obstacles are not removed, there is a risk of missing the target of 5 billion dollars of investment in this sector by 2028.
An analysis of the documents of the Ministry of Industry has shown that an additional four and a half lakh crore rupees can be added to the GDP by 2028 through agriculture and agro-processing industries if the existing constraints are removed. The contribution of this industry in the current GDP is stuck at 96 thousand crore rupees.
A related official of the Ministry of Agriculture said that 25-30 percent of mangoes are wasted annually during transportation, storage, marketing and production, 45 percent of wood and 30 percent of vegetables. Although the demand for export is more than 100,000 metric tons, it is currently not possible to export more than 3,000 metric tons of mangoes. If the processing industry is developed in the right place, this wastage would be reduced and exports would be increased.
According to the findings, the neighboring countries India, Vietnam, Thailand, Indonesia have advanced a lot in agriculture and agro-processing industry. In Kerala, India, pineapple variety ‘Mauritius’ is recognized as a GI product by the state government. Many small processing factories have been established around this pineapple. Initially, about 15 types of value added food products are being made from pineapple. Among them are fresh cut pineapple, dried pineapple, pineapple jam, jelly, juice, soft candy, pineapple chunk, pulp etc. Apart from this, Kerala virgin coconut oil, coconut powder and various showpieces made from coconut by-products attract the attention of tourists. These have a lot of economic value. There are also various kinds of chips made from bananas sold in quality street shops. Similarly, in Ho Chi Minh City, Vietnam, sidewalk shops sell fresh cuts of various fruits in beautifully wrapped wrappers. Which is quite tempting.
When the matter was drawn to the attention of the Minister of Agriculture on April 28 in his office. Md. Abdus Shaheed (now former) told Jugantar, no big processing industry has been developed in the country so far. Pineapple and mangoes are produced in abundance but cannot be processed. He feels that research is needed to set up agro-food processing industries. Provision should be made for this.
On July 7, various places in Rajshahi were visited to know the condition of agriculture and agro-processing industry. According to the Rajshahi Chamber of Commerce and Industries, tomatoes are sold locally for Tk 400 to 500 crore and fruits for Tk 1561 crore. In the current season, the target of mango production on 19 thousand 602 hectares of land has been set at 2 lakh 60 thousand 165 tons. Last year, about one hundred crores worth of mangoes were sold.
Masudur Rahman, president of Rajshahi Chamber of Commerce and Industries, said that local farmers will benefit from the development of mango processing industry, as well as employment in the region.
Talked with farmer Feroz Ahmed of Naohati village of Paba police station in Rajshahi. He is producing mangoes in few orchards in 2024 but selling them at low prices. Not getting any kind of export facility. Regarding the processing industry, he said that even though there is a company for making juice from mangoes, it is being made with low quality mangoes called ‘guti’ and not using good quality mangoes. According to him, many of the products produced are wasted due to lack of proper storage and transportation.
The Food and Agriculture Organization (FAO) of the United Nations (FAO) in Bangladesh visited the garden of Kandabona village in Chapainawabganj last June and said that mango is a value chain (value added) product. To avail this benefit, the farmer has to follow ‘Good Agricultural Practices (GAP)’ at the production stage. Then the opportunity to export to different countries will increase.
During a visit to the same place, Singapore’s Dhaka-based charge of affairs Sheila Pillai said, Indian mangoes are going to Singapore at a higher price. Why not Bangladesh if good quality mangoes are available at affordable prices. Since Singapore does not produce mangoes, Bangladesh can take this opportunity.
According to Bangladesh Investment Development Authority (BIDA) and FBCCI’s report on the prospects of the ‘Agriculture and Processed Food Products’ sector, the global market in 2022 was USD 1.333 million. According to that, the country’s domestic market (domestic demand and export) was 4.8 billion dollars. Besides, Vietnam and India are leading in this regard. There is an opportunity to increase the export of Bangladesh if it is possible to overcome the obstacles.
According to research, scientists of Bangladesh Agricultural Research Institute (Bari) have been able to produce about 20 types of value added food products from kathal. It is sold in some super shops. The demand is also quite noticeable. Besides, many value added food products are being made from fish, meat, milk and eggs. But it is limited.
According to experts, infrastructure capacity building and policy support are needed for full development of this sector. In addition, research and development is needed for building new entrepreneurs, expanding domestic and foreign markets and increasing exports, product-based production in each district, establishing and coordinating the connection between farmers and producers, and modern packaging systems for processing.
Bangladesh Agricultural Research Institute Chief Scientific Officer Dr. Jamal Uddin told Jugantar that the private sector should come forward to invest in agriculture and food processing industry. This will increase the value addition of our products, expand the export market and people will also add processed products to their diet. He also said that currently 95 percent of production-oriented projects are. And only 5 percent projects are focused on agriculture and food processing. But farmers know about production. Now there is a need to increase the number of processing projects.
As a result of the increase in people’s purchasing power and changes in eating habits, the domestic demand for processed agricultural products is also increasing gradually. At present, about 682 million tons of processed agricultural products are being produced in the country and these foods are being exported to 140 countries. The export amount is about 17 million tons. There are 600 food processing industries in the country. Among them, 300 industries are exporting. Employment has been created for 7 lakh people. The domestic value of processed food in Bangladesh was $5.2 billion in 2018, which is expected to reach $7.3 billion in the current year, according to experts.
When asked, ‘Bangladesh Agro Processing Association (BAPA) President Md. Abul Hashem told Yugantar that electricity and gas connection is not available if there is a potential sector. These two are major obstacles for the new industry. Besides, the existing processing industries are facing power shortage for 7-8 hours every day. Also dollar crunch in LC and high cost of raw material sugar in this industry are major obstacles. This is hurting the export earnings of this industry. Although the products of this industry are exported to 250 countries, the government has reduced the incentive from 20 percent to 10 percent. It is not able to survive with competing countries. As a result, the plan to increase the export income of this industry from one billion US dollars to three billion dollars by 2027 is under threat.
Declaration of Policy:
According to sources, the Ministry of Industry formulated the ‘Agriculture Food Processing Industry Development Policy-2023’ with the goal of investing 5 billion US dollars or 58,500 crore rupees and creating 100,000 new jobs by 2028. The policy was gazetted on November 11 last year. Under that policy, duty on import of capital components and income tax waiver on dividends of existing projects, cash incentives up to three years after commercial production and flexible banking system were announced for setting up agro-food processing industries. Besides, the corporate income tax on automation investment will be 100% exempt if the domestic connection value reaches at least 30 percent of the total automation connection value.
In order to protect this industry, an opportunity will be given to impose higher tariffs on the import of agricultural and food processing products from abroad and adjust VAT on the import of certain raw materials. A maximum of 50 percent of the project cost or low interest capital assistance up to Tk 50 crore will be provided for setting up new industries. Apart from this, 100 percent VAT exemption for 5 years for setting up micro and small industries, 75 percent VAT exemption for 7 years for medium industries and 50 percent VAT exemption for large industries. In addition, capital adjustment of up to 100 percent of investment of medium and large industries will be provided.
Professor of Agricultural Business and Marketing Department of Bangladesh Agricultural University. Mohammad Jahangir Alam told Jugantar that there is a lack of laboratories and good varieties of agricultural products for necessary testing of agricultural and food processing products. Besides, there are complications in obtaining phytosanitary certificates and poor packaging.
He also said that emphasis should be placed on implementation of Good Agricultural Practices (GAP) and Good Manufacturing Practices (GMP) to increase export of processed agricultural products. In order to maintain the quality of the products, the system of product identification (traceability) needs to be improved in the country. Government and private institutions should work together to develop the export of agricultural products.