Photo : Messenger
There is huge potential to export agricultural and agro-processed products to the world market by utilizing the opportunity of low cost of domestic raw materials and labor. If this opportunity can be properly utilized, the agricultural and agro-processed products sector can be a major source of the country's economy, just like the apparel sector.
Through the export of these products, on the one hand, foreign exchange will come to the country, on the other hand, the smile on the farmers faces will also be seen, and new employment will be created for millions of people. But due to several reasons, even after 53 years of independence, the export income is still below 1 billion dollars. There are several challenges to overcome this path.
The Secretary of the Ministry of Agriculture Dr. Mohammad Emdad Ullah Mian is acknowledging the matter. He told The Daily Messenger that there are two types of world market - one is the market of expatriate Bangladeshis. Another is the foreign market. A country-wise survey of the Ministry is underway to find out the consumer needs of these two markets. The results of the research will first be translformed into policy. Then necessary action will be taken.
Giving the good news that foreigners want to import mango, jackfruit and pineapple from Bangladesh, he said, we have also shown our products to entrepreneurs and ambassadors of several countries including Japan, China, and they also liked them. Hopefully, these products can be processed and exported quickly.
However, steps are being taken to avoid import of essential products including rice, lentils, onion, garlic and ginger. On the one hand, domestic farmers will get more prices for their products. On the other hand, foreign currency will be earned by exporting goods.
According to Export Promotion Bureau (EPB) data, one of the top five export sectors of the country is agriculture and processed food products. For the first time in the financial year 2020-21, the sector crossed the milestone of one billion dollars in export earnings. That year, the export income of this sector was 102 crore, 80 lakh US dollars. In the next year i.e. 2021-22 fiscal year, the export income in this sector was 116 crore 22 lakh US dollars. However, exports fell by 27 percent to 83 crore US dollars in the fiscal year 2022-23. Earlier, in 2018-19 fiscal year, Bangladesh earned 70 crore and 70 lakh US dollars by exporting processed food and various related products. In the fiscal year 2019-20, the income is 90 crore and 90 lakh dollars.
Khondokar Golam Moazzem, Senior Research Director of Center for Policy Dialogue (CPD), a private research institute, told The Daily Messenger that, in fact, Bangladesh has yet to enter the global market. Because fragrant rice, spices, snacks are sold outside Bangladesh only to expatriates.
But they are not being sold in Europe, America, Australia and even Asian countries. Because foreigners do not accept unhygienic food. They want to know whether organic fertilizers have been used on the land during the production of these products? Or whether any kind of fertilizer has been used? They buy these products only if everything is risk-free and safe.
He said, take the initiative to export fruits, vegetables, rice and pulses by fulfilling the conditions they have. It will expand the agricultural sector of the country day by day. New employment will also be created. That is, the contribution of the agricultural sector to the economy will increase.
Just like the industrial sector, Bangladeshi agricultural and processed products are being displayed in various supershops in Europe, Middle East and even in Africa, he said, citing this as a good example, we should make brands of our products and present them in meetings, seminars and exhibitions in different countries.
Producers and exporters say that processed food from Bangladesh is being exported to 145 countries of the world. After Asia, Middle East-Africa, Bangladeshi food products are now also going to Europe. Its range will be bigger in future. Apart from Europe, processed food products are being exported to USA, Canada and Australia. Demand for products in these countries is increasing tremendously. In such a situation, this sector is promising as a new export sector of the country. However, there are also some challenges.
BANGLADESH AGRO-PROCESSORS ASSOCIATION (BAPA), the organization of factory owners, says that there are five reasons that have hindered the export of domestic products to the world market. The first of these is the export of fragrant rice is currently not in action. As a result, agro-processing is also canceling purchase orders for other products. This order is moving to neighboring countries.
The second reason is the provision of cash assistance-incentives against the export of contract manufacturing products. Due to non-availability of cash assistance against the export of products produced through contract manufacturing, the hurdles in the export market are increasing day by day.
The third reason is that the rate of cash assistance-incentive should be maintained as before or the source tax should be abolished. As against the export of agro-processing sector, the rate of cash assistance has been reduced from 20 per cent to 15 per cent, which is reducing the export.
10 percent source tax is deducted on cash assistance, which needs to be canceled or treated as AIT. 1 percent tax is deducted on every export bill, which needs to be reduced in order to increase exports.
The fourth reason is the unusual increase in the price of raw materials for agro-industrial products. Surviving in a competitive market has become a challenge in the pricing of export products due to the unusual increase in the cost of raw materials in the production of agro-processing products. Our export markets are shrinking as the prices of raw materials in our neighboring countries are much lower than ours. For example: Sugar
The fifth reason is to determine the certification authority for export of halal products. In keeping with the global economy, it is very important to be aware of the specific rules and regulations in the export of halal market products.
Position of World Market and Bangladesh:
According to World Bank statistics, the agricultural export market is worth four trillion dollars. According to Verified Market Research, the global processed food market was worth 143.51 billion US dollars in 2020. This market will be USD 235.67 billion by 2028 at an annual growth rate of 6.6 percent. Processed foods include beverages, dairy, meat and poultry, bakery, snacks, confectionery products.
The United States is the largest buyer of these products. European countries occupy about 40 percent of this market. The export of agricultural products of the Netherlands, which is Smaller in size than Bangladesh, is more than 100 billion dollars. Those related to the sector say that if Bangladesh wants to go this far, it should proceed with proper planning.
Within Southeast Asia, Thailand is a leader in the agro-processing industry. Food processing industry is the third largest sector in the country. 23 percent of the country's total GDP comes from this sector. Thailand earns USD 36 billion annually by exporting agro-processed products.
Only 1 percent of Bangladesh's agricultural produce is processed. On the other hand, 5 percent of Vietnam, 38 percent in China, 31 percent in
Philippines, 70 percent in America, 81 percent in Thailand and 84 percent in Malaysia are processed.
According to the Bangladesh Bureau of Statistics, the contribution of the agriculture sector to the GDP in the fiscal year 2023-24 was 11.02 percent, which was 11.30 in the previous year. 45.4 percent of the total manpower is engaged in agriculture. But this sector is not able to contribute to the export at that rate.
According to BAPA, the agricultural sector contributes 12 percent to the GDP of Bangladesh and the processed food sector contributes 1.7 percent. According to the Food and Agriculture Organization of the United Nations, 30 percent of the total produce in Bangladesh is wasted every year due to lack of processing and storage. It is possible to prevent this wastage if infrastructural development is done at all stages of production.
Pran-RFL Group companies alone account for 60 percent of the 1 billion exports. The potential for export of agro-processed products as food products is very high. Kamruzzaman Kamal, marketing director of PRAN-AFL Group, said that the population of our country is more than 17 crores.
There the total population of the world is more than 7 billion. Hence, purchasing power is high. We have many advantages in favor of business like cheap labor, easy availability of raw materials, cheap land, good working environment etc. If we can use them to bring quality products to the market at affordable prices, then we will be able to grab a large share of exports in the global market.
Already, big companies and brands of different countries are importing products from here. SQUARE Food & Beverage Ltd is among the top ten exporters. The company's Senior Brand Manager, S.M. Riashat Tanvir said Square currently exports $13 million. Our target is 15 to 20 million dollars. We want to double exports quickly. For this, we have planned to export new products. The company is contributing 15 to 156 percent of exports.
He said, to increase exports to the world market, the government should introduce closed radiation. More radiation is required to certify the product.
Bombay Sweets & Co Ltd exports 40 percent of the total exports of snacks. The company's General Manager (International Business and Corporate Affairs) Khurshid Ahmad Farhad told the Daily Messenger. Apart from snacks, we have also brought spices (turmeric, chili coriander and cumin) to the market.
We are selling at affordable prices while keeping the nutritional quality intact. We are researching the products of different countries with the aim of creating new markets. Government should provide all facilities including policy support. Only then will it be possible to increase the export income quickly. Bangladesh Agricultural University Professor Dr. Shakila Salam said that most of our products are not produced organically, it is a big problem. As a result we cannot export much despite the demand, many problems remain here. In case of mango export, the product quality of neighboring countries is better than ours. Government should take steps to increase the quality of products.
Professor of Agri Business and Marketing Department of Shere Bangla Agricultural University. Md. Rashedul Hasan said, Bangladesh agricultural agro processing industry has come a long way due to lack of quality of agricultural or processed products in the international market. But we lag behind our competitor countries like Vietnam, Thailand, India. To avoid this, lab testing has to undergo drastic changes to maintain product quality. At the same time, in addition to increasing the 'Made in Bangladesh' campaign in the outside world, the officials of the embassies abroad should work to promote the business of local products.
Messenger/Disha
