Agro-preneurship and enhancing farm income
In Bangladesh, employment generation is the prime agenda for sustainable development for huge educated jobless. This is highlighted in policy discussions or research findings.
Value-addition in agriculture through post-harvest processing is considered a critical element which requires a fresh look in the agricultural technology system. Although the growth rate in the country is considered favourable in spite of the impact of the coronavirus pandemic and other global phenomena, sluggish employment needs to be addressed.
It is often said that entrepreneurs need to be created in the country. A number of such entrepreneurs have already emerged in the field of rural areas, especially in the supply of inputs, financial transactions, feed, poultry farms, dairy farms, nurseries, floriculture, mushroom cultivation, fish drying, and fattening of cattle. However, it is still very small compared to the overall market demand of the country.
Agricultural start-ups are becoming very popular in different countries, including Bangladesh. These start-ups are working on connecting producers and consumers, solving problems in the production process, providing financial assistance to farmers, capacity-building through training and market creation.
Bangladesh Bank has set up a fund of Tk 500 crore to create startups and entrepreneurs. In this, a maximum loan of Tk 1 crore has been arranged for entrepreneurs. It is learned that 1 per cent of the financial institutional income is supposed to be used to stimulate such innovative ideas in these sectors on easy terms. Small entrepreneurs can benefit by utilising these initiatives.
The Access to Information (A2I) Programme of the government promotes IT-based solutions, including supporting innovative ideas. It helped agri-professionals develop digital solutions to reach farm growers. It has been supporting innovative ideas into action, including agriculture through an innovative fund.
Like other countries in Asia, Bangladesh has achieved commendable success in diversified fields of agriculture, including aquaculture. Exotic fruits are being grown as high-value products with the involvement of young investors.
It is known that high-yielding and nutrition-rich crops or livestock products will continue to contribute to food security in South and Southeast Asia. Basically, this development has been or is being made possible by utilising high-yielding seeds, natural resources, and an improved fertilizer irrigation system. But growers engaged in small-scale farming do not get a fair price.
Considering the opportunity of infrastructure and connectivity, more particularly the newly built Padma bridge, product processing may offer an expansion of the market within the country and beyond.
SME is a big employment generation and economic sector in the country.
There have been 23,600 small-scale enterprises, including agriculture-based ones. The major constraints faced by the small or cottage industries are finance and lack of access to bank financing.
Conventional research extension methods for the application of seed fertilizer-based technology have been working well in different countries. Apart from production, it is possible to add value to agricultural produce and there is an opportunity to engage the educated youth in remunerative activities.
However, the institutional structure has yet to be developed in the country or in the region for the expansion of agricultural processing technology. As a result, these innovative technologies do not reach entrepreneurs in most cases and cannot contribute to the agro-processing industry in the country. Moreover, the application of each processing technology requires a different institutional approach with a skill mix of agro-industrial set-up.
Several countries in Asia such as India, Indonesia, and Thailand, have introduced agribusiness incubation centres or accelerators at universities. These centres provide technology-based business capacity and support. Since agribusiness largely depends on geographical location, consumer demand, financial institutional arrangement and social structures, entrepreneurs must work together with the incubation labs before investing in technology to transform it into a successful business.
There have been a lesser success in the development of agro-processed products and equipment, meaning that there is still a lack of technology suitable for the business of processing fruits, vegetables, pulses, spices, milk and fish for SMEs. As a result, Bangladesh imports these products. However, as a result of urbanisation, there is a potential for processed products considering the diversified food demand.
Although various types of flowers, vegetables and fruits are grown in the country as high-value crops, very little of the production volume is processed. On the other hand, these products are not available throughout the year. Only 70 per cent of the conventional or major fruits are available in the market during the three to four months of summer.
About 25-50 per cent of the production is either wasted or spoiled as post-harvest loss due to a lack of processing. The market depends on imported fruits for the rest of the time of the year.
There is a number of under-utilised fruits that are rich in nutrition but mostly ignored. It is said that only 2 per cent of the gross domestic product (GDP) comes from agricultural processing. Bangladesh's large private food industry relies on foreign machinery and domestic raw materials and is exploiting this potential to some extent.
A number of agricultural and food-related public agencies in the country are conducting research to develop value-added products. Bangladesh Agricultural Research Institute, Bangladesh Jute Research Institute, Bangladesh Council for Science and Industrial Research, Bangladesh Sugarcrop Research Institute and universities are some of them. It is learnt that private industries have a memorandum of understanding with these public research bodies in getting product formulation. These research organisations need to create closer links with small entrepreneurs on a partnership basis.
Food quality is considered a major concern in the food industry. In addition to fresh vegetables and fruits, two types of food items -- ready-to-cook and ready-to-eat -- are being sold in chain shops or big stores.
Ready-to-eat food products are more sensitive to public health that require compliance with strong regulations for marketing. If micro, small and medium entrepreneurs can market these products, the youth can be engaged in productive work.
Research institutes are waiting to find their space in the mainstream market with their products, including jelly, syrup, packaged products of green and ripened fruits, jute products, fish balls, noodles, by-products of agro commodities like shrimp, fruits, mushrooms, drying, preservation and equipment, and agro-tourism.
Small-scale seed production of high-value crops and hybrid seeds may become a successful rural enterprise.
Seed, fertilizer-based technologies available today and those in the pipeline in Bangladesh and elsewhere will remain solutions to addressing food security. For sustainable development of the farming system, it will require higher income for the farmers. However, higher-income through value-addition remains unattended and this is highly context-specific in a specific location.
Reshaping the whole agricultural technology system will be required to support those unattended areas to augment farm income and improve livelihood.
Training should be provided to entrepreneurs in marketing products through the Department of Youth and Women and NGOs. Product quality, labelling, packaging, branding and market management can be included in the training.
The Center for Sustainable Agricultural Mechanisation under the UNESCAP may be persuaded for exchanging best practices of post-harvest management among the member countries for enhancing agro-processing.
Research institutes and universities engaged in food processing must work with business potential in mind in the technology innovation process. The institutional capacity of the institutes must be strengthened to promote agro-business with a skill mix of technology and market promotion.
Financial institutions have an important responsibility to sponsor successful innovations. Entrepreneurs can be assisted by start-ups for potentially emerging products.
The innovation fund under the A2I programme may be harnessed for the promotion of innovative ideas.
The author is former executive chairman of the Bangladesh Agricultural Research Council.
Wais Kabir(Jul. 8, 2022).Agro-preneurship and enhancing farm income.The Daily Star. https://www.thedailystar.net/business/economy/news/agro-preneurship-and-enhancing-farm-income-3066721