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Poverty Alleviation Through Agriculture and Rural Development in Bangladesh

Mahabub Hossain
BRAC University, Bangladesh

Abstract/ Executive Summary:

The improvement in the livelihood of the resource-poor households and thereby poverty reduction could be better achieved through faster growth in non-crop agriculture than for the crop sector, because the latter is much more land-intensive than the former, and the land is so scarce and unequally distributed. Non-crop agriculture generates substantially higher value-added in post-production (processing, storage and marketing) activities that can create opportunities for higher productive employment for the land poor households. The exploitation of this potential will however require support from the public sector for developing rural infrastructure in the field of transport, power and communications, investment in secondary and technical education, as well as providing access to finance to the resource-poor households. The movement of labor from low-productive agriculture to high-productive non-farm activities is a positive trend for poverty reduction, and should not be an issue of concern. Farmers have started responding to the phenomenon by adopting mechanization. The government could facilitate the process by providing access to credit for financing mechanization and setting up small scale agro-processing enterprises, and removing policy distortions against small-scale trading and business enterprises. Also, children from low-income households must be provided greater access to quality secondary education, to facilitate their occupational mobility and to improve the distribution of income from the rural non-farm sector.

Keywords: Poverty Alleviation, Agriculture, Rural Development, Bangladesh

Location: In Bangladesh

Start Date: 00-00-1990

End Date: 00-12-2001

Program Area: Socio-economic and Policy

Commodity: Livelihood, Employment

Objectives:

To determine the Poverty Alleviation Through Agriculture and Rural Development in Bangladesh

Methodology:

Agriculture and rural development: Agriculture performed relatively well in the 1990s. The growth of agricultural incomes is estimated at 3.5% per year during 1990-2001 compared to 2.6% during 1974-90. The acceleration of agricultural growth has contributed substantially to the improved performance of the overall economy. The national income grew at 5.3 percent in the 1990s compared to 4.1 percent during the previous two decades. The acceleration in the growth of agricultural incomes was mainly on account of noncrop agricultural sectors, particularly from livestock and fisheries. These sub-sectors experienced a substantial increase in physical output, as well as favorable prices compared to the crop sector. The fisheries income grew by 7.8% per year in the 1990s, compared to 2.3% during the previous two decades. The income from livestock activities picked up in the 1980s and continued to grow at a robust rate of 7.3% in the 1990s. Only the forestry sub-sector grew at a moderate rate of 3.8% per year. Thus, agriculture has become much more diversified than it was at the time of independence (Mandal 2000; Ahmed and Chowdhury 2000). The share of livestock, fisheries and forestry in agricultural incomes was only 20 percent during 1973-74; by 2000-2001 they contributed nearly 44 percent to agricultural incomes. However, the crop sector is still dominated by the production of rice. Although the area under rice increased marginally from 9.8 to 10.6 million ha, rice production (in paddy units) increased from 16 million tons before independence to 38 million tons in 2000-01. It implies a rate of growth 2.6% per year, much faster than the growth of the population. Development and diffusion of high-yielding rice varieties supported by the development of minor irrigation through shallow tube wells and power pumps was the main driving force behind this growth (Hossain 1988; Hossain et al. 1994). More than half of the land is now irrigated, and over 65 percent of the rice area has been brought under the cultivation of the high yielding modern rice varieties. Poverty reduction: An accurate assessment of the trend in reduction of income poverty is difficult, in spite of a large number of studies conducted for Bangladesh on the subject (Muqtada, 1986; Hossain and Sen 1992; Ravallion and Sen 1996; Sen 2003). The household expenditure surveys (HES) conducted by the Bangladesh Bureau of statistics that report the incidence of poverty and income inequality through the periodic generation of household-level data changed over time the method of data collection and the measurement of the poverty line. Thus, while making a judgment about poverty trend one needs to be cautious about the interpretation of the information. Major challenges and opportunities: The major obstacle to poverty reduction in Bangladesh is its over-population in relation to natural resources. A rising population puts pressure on the limited land resources for producing food, and limits the capacity of the household and the nation to accumulate physical capital, due to the diversion of resources for maintaining a large proportion of young and unproductive population. Because of inadequate investment in education and health care, the human capital content of the population remains poor. Instead of becoming a resource, the illiterate and unskilled population becomes a burden for the nation. The lack of physical capital and skills constrains the development of the industry and services sector and limits the generation of productive employment for the rising labor force. Unemployment and underemployment breed social ills like violence and terrorism that in turn hinders development.

Source of Information: Poverty Alleviation in Bangladesh, CPD Occasional Paper Series 39, August 2004

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

The improvement in the livelihood of the resource-poor households and thereby poverty reduction could be better achieved through faster growth in non-crop agriculture than for the crop sector, because the latter is much more land intensive than the former, and the land is so scarce and unequally distributed. The non-crop agriculture generates substantially higher value added in post-production (processing, storage and marketing) activities that can create opportunities for higher productive employment for the landpoor households. Exploitation of this potential will however require support from the public sector for developing rural infrastructure in the field of transport, power and communications, investment in secondary and technical education, as well as providing access to finance to the resource-poor households. The movement of labor from low-productive agriculture to high-productive non-farm activities is a positive trend for poverty reduction, and should not be an issue of concern. Farmers have started responding to the phenomenon by adopting mechanization. The government could facilitate the process by providing access to credit for financing mechanization and setting up small scale agro-processing enterprises, and removing policy distortions against small scale trading and business enterprises. Also, children from low-income households must be provided greater access to quality secondary education, to facilitate their occupational mobility and to improve the distribution of income from the rural non-farm sector.

Knowledge Management: Journal