Académique Documents
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Culture Documents
25February-1 March2012
Bangkok and Phuket, Thailand
Presentation Outline
I . Country Profile
II. Background/Introduction
III. Issues and Challenges
IV- Objectives of the Government of Bangladesh
V. Some Initiatives and Success Stories of Bangladesh in
Agriculture/Rural development
VI. Food Security Status of Bangladesh
VII. Initiative taken by Bangladesh Bank in Agriculture & Rural
Financing & Development
VIII. Conclusion
2
Country Profile
Area : 144000 Sq.Km
Population : 150 Million
Male : Female : 71.2 Million : 71.0 Million
Birth Rate : 1.34%
Population density : 964/ sq. Km.
Villages (rural) : 87,319
Rural profession :Agriculture (70%)
Scheduled Banks : 47
Non-Bank Financial Institutions : 30
Microcredit Institutes : 553
Cooperative Agencies : 57,000
3
Background/Introduction
o Agriculture is one of the prime sectors of Bangladeshs economy.
o About 80 percent of the total population lives in rural areas, with 70
percent of them employed in agriculture.
o Agriculture contributes about 20 percent to the country's GDP, about
15 percent of which is contributed by the crop sector alone.
o Food security, employment creation and poverty alleviation are closely
related with the development of agriculture.
o The government has set a target of 8% GDP growth within 2015.
Besides, there is another issue on achievement of self-sufficiency in
food production within 2013.
o In Bangladesh, it is possible to reduce rural poverty and raise the living
standard of common people by establishing agriculture as a profitable
sector. 4
Issues and Challenges
o Rapid increase of population and shrinkage of agricultural Land .
o Agriculture is dependent on the impulse of nature and is risky.
o Widespread poverty among the population engaged in agriculture.
o Inadequacy of appropriate technology considering farmers' socio-
economic conditions.
o Decreasing yields of different crops due to slow expansion of modern
technology as well as unplanned use of soil and water.
o Uncertainty of fair price of agricultural commodities due to
underdeveloped marketing system.
o Absence of efficient as well as effective farmers' organization at the grass
root level.
o Inadequate use of improved seeds, fertilizers, irrigation and other inputs.
o Very weak backward-forward linkage in agriculture.
o Climate change and variation
Objectives of the Government of Bangladesh
oTo make the nation self-sufficient in food through increasing
production of all crops.
oEnsure a profitable and sustainable agricultural production
system and increase the purchasing power of the farmers.
oPreserve and Develop land productivity.
oReduce excessive dependence on any single crop to minimize
the risk.
oIncrease production and supplies of more nutritious food
crops and thereby ensuring food security and improving
nutritional status.
oTake up programmes for the introduction, utilization and
extension of bio-technology.
oProduce and supply of agricultural commodities as required
by the industrial sector. 6
Objectives (Contd..)
o Take appropriate steps to develop an efficient irrigation
system and encourage farmers in providing supplementary
irrigation during drought with a view to increasing cropping
intensity and yield.
o Establish agriculture as a diversified and sustainable income
generating sector through strengthening of 'Farming System'
based agricultural production and agro-forestry programmes.
o Take effective steps to ensure input supplies to the farmers at
fair prices in a competitive market and remove difficulties at
the farmers' level.
o Create opportunities for establishing agro-processing and
agro-based industries, and
o Develop contingency management system to combat natural
disasters. 7
Some Initiatives and Success Stories
of Bangladesh in
Agriculture/Rural Development
8
Women's Participation in Agriculture
Women are engaged in Agriculture related activities like:
post harvest operations, seed preservation, nursery business,
jute stripping, vegetable cultivation, homestead gardening,
floriculture, production of horticultural seeds,
establishment and management of cottage industries based on locally
produced agricultural commodities etc.
Extensive training programmes are conducted and capital supports are
provided to encourage women's interest and improve their skill in such
activities.
9
Invention of Genome Sequence of Jute
Jute was called the Golden Fiber of Bangladesh as Bangladesh
was the largest jute production country of the world.
Recently, genome sequencing of jute has been discovered by
Bangladeshi scientists.
This invention is treated as the prime success of Agricultural
sector of Bangladesh.
10
Cash Assistance for the Jute Cultivator
Government has taken a massive programme for the
development of the quality of Jute.
An amount of Taka 200 per head was assisted among 1.54
million farmers through their bank account.
Besides 15396 pieces ribner are distributed among a group
of 100 farmers (one pieces for each group).
The cost incurred for this program was about 337.9 million
taka.
11
Introduction of Agricultural Card & Assistance
of Diesel for irrigation through this Card
There are about 13.8 million Agricultural Cards are
distributed among the farmers family.
Through these cards about 7220 million taka are
distributed as assistance for purchasing Diesel for
irrigation.
12
Modernization of Agriculture
A project for about 1500 million taka is in the pipeline for
modernization and mechanization of Agriculture.
The farmers will get 25% subsidy to purchase modern agricultural
machineries.
Purchasing of about 64,140 machines will be subsidized under this
project.
13
Rehabilitation programme for the farmers
There are about 0.39 million flood affected farmers
has got assistance through distribution of free fertilizers
and Boro seed for cultivation of Boro rice.
About 484.90 million taka is subsidized by the
government for this purpose.
14
Subsidy in Agricultural Sector
15
Accustom farmers with agricultural technology
16
Addressing the Adverse Effects of Climate Change
17
Food Security Status of Bangladesh
The major cereal crops are rice and wheat although main focus is on rice
production.
79.4 percent of the total cultivable land area under rice crop.
Almost 90% population depend on rice.
Rice contributes to over 63% of the caloric intake for urban consumers
and over 71% for the rural population.
The agriculture sector has grown at 3.2 percent annually during 1991-
2009.
Growth rate of agriculture sector during FY 2009-10 & 2010-11 were
5.2 & 5.1 .
This trend resulted Bangladesh as the self sufficient country in
production of food grain from the year 2010.
18
Food Security Status of Bangladesh(Contd)
19
Initiatives taken by
Bangladesh Bank
in
Agriculture & Rural
Financing & Development
20
Background of Formulation of ACP
21
Background.. (contd.)
22
Major Area Covered in ACP
Crop
Fisheries
Livestock
Agri-Equipments
Irrigation Equipments
Grain storage and marketing
Poverty Alleviation &
Employment generating activities
Others
23
Salient Feature of Annual Agricultural &
Rural credit policy Of Bangladesh Bank
Priority will be given to the major three sectors such as Crop, Fisheries,
livestock.
Credit shall be disbursed in an area approach method i.e. comparative
advantages of producing crops in different regions.
Ensure timely availability of agricultural credit for the small and
marginal farmers including share-croppers.
Less developed and neglected areas (i.e. char, haor, coastal belts etc.)
shall be given priority.
Credit facilities shall be allowed at a concessional interest rate (4%) for
cultivation of import substitute products such as pulse, oil seeds, spices
and maize.
Other than Agricultural credit different self-employment/income
generating activities are encouraged in order to stimulate the rural
economy.
24
Salient Feature of Annual Agricultural &
Rural credit policy Of Bangladesh Bank
Women borrowers shall be given priority for disbursing agricultural &
rural credit.
To ensure transparency, emphasis is given on disbursement of
agriculture credit publicly(open credit disbursement) at union level.
High Value Crops shall be given priority in extending credit facility.
Contract Farming: Banks are advised to provide loan to the agro-
commodities producing farmers engaged in contract farming as well as
the entrepreneur to ensure fair prices of agri product.
Crop Diversification:
Nutritious food such as potato, pulse, oil seeds, maize etc. are given priorities to
others.
Banks and Financial Institutions are advised to disburse loan for cultivating and to
popularize the various ways of consumption of them.
25
Salient Feature of Annual Agricultural &
Rural credit policy Of Bangladesh Bank
Revolving Crop Credit Limit System: To ensure continuous credit flow
revolving crop credit limit system i.e. three year auto renewal of
agricultural-loan has been introduced.
Climate Change Effect:
Banks are advised to make flexible of the schedule of credit disbursement
and recovery to adapt the adverse effects of climate change.
Banks are asked to facilitate credit to cultivate salt tolerating crops in salty
areas, water tolerating crops in flood affected areas, drought tolerating
crops in drought areas.
Fish culture in cage: Banks are advised to disburse loan in fish culture in
cage i.e. culture fish in a controlled environment to produce commercially
viable fish.
26
Salient Feature of Annual Agricultural &
Rural credit policy Of Bangladesh Bank
Distribution of loan to coastal aquaculture:
Banks are advised to disburse loan for cultivation of Mud crab, Lates
calcarifer, Gray mullet etc. in the potential coastal area of Bangladesh which
are limited to shrimp cultivation.
A significant amount of foreign currency could be earned through export of
this fish variety.
Credit Disbursement through 10 Tk. Farmers Account
For Financial Inclusions instructions are given to the Banks to open a
farmers account by taking 10 Tk. initial deposit.
To develop savings habit among the farmers and to attract un-tapped rural
savings, banks are instructed to allow higher rate of interest to these
accounts.
Farmers are encouraged to channel their foreign remittances through these
accounts.
Banks also instructed to allow credit up to 90% of their total deposit at a
lower rate against the deposit on this account. 27
Salient Feature of Annual Agricultural &
Rural credit policy Of Bangladesh Bank
Besides the core agricultural sector, following sectors are encouraged by
Bangladesh Bank:
Salt cultivators at 4% concessional rate of interest.
Tissue culture
Jute cultivation
Betel leaf cultivation
Apiculture
Mushroom cultivation
Palm oil
Cotton cultivation
Weavers loom industry
Silk industry
28
28
Salient Feature of Annual Agricultural &
Rural credit policy Of Bangladesh Bank
Credit for Green Banking activities:
29
Effective use of Bank-MFI partnership
30
Low Interest Rate in Agricultural & rural
Financing
31
Achievement & Success of Bangladesh Bank
Disbursements of agricultural credit rises from Taka 92.84 to
131.37 billion respectively from FY09 to FY12.
A specialized department exercises oversight on hassle free credit
disbursement and other customer interest protection issues.
Mobile phone based financial service delivery processes.
Facilitate cost effective agricultural credit delivery and recovery to
and from farmers in remote areas.
More than 9.5 million accounts of farmers have been opened by
the State-owned Banks with an initial deposit of Tk. 10/- only
(<20 cents).
32
Target Achievement Trend in last 5 years
138.00
14000 131.32
126.17 121.84
115.12
12000 111.17
93.79 92.84
Amount in billion Taka
10000 .8580
83.09
8000
6000
4000
2000
0
FY2011-12 FY2010-11 FY2009-10 FY2008-09 FY2007-08
Target Achievment
33
Sector-wise Agricultural and Rural Credit
Disbursement in FY 2011-12
(Tk. 131.32 billion)
32.99 (25.12%)
53.50 (40.74%)
Crops
Irrig. Equip
Agri Equip
Livestock
16.09(12.25%)
Fisheries
Grain Storage
Poverty
alleviation
0.7(.54%) Others
2.75(2.09%)
2.59(1.97%)
10.26 (7.81%)
12.44 (9.47%)
34
Banks Disbursement of Agri-loan in FY 2011-2012
35
Green Banking Activities in
Agriculture and Rural finance
36
Green Banking Activities in Agriculture and Rural finance
37
Integrated Cow Rearing and 14
13.32
Bio-Gas Plant
10
As of December2012, an 8
amount of Tk.133.20 million 6
5.02
is re-financed in 820nos of
4
Integrated cow rearing and 0.19
2
Bio-gas plant.
0
plants:
No. of Beneficiaries: 980 families
No. of cows in the project: 3550
No. of Chicken in the project: 14150
Volume of Bio Digester: 4089 cubic meter
Milk production per day: 25560 litre
Production of Bio-gas per day: 1635 cubic
meter
Organic Manure per day: 21300 kg
38
Green Banking Activities in Agriculture and Rural finance
Effluent Treatment
Plant(ETP):
As of December 2012, an amount of
Tk. 90.40 million disbursed for
establishing 8 ETP which reduces
environmental pollutions.
39
Solar Assembling Plant
As of Decemebr 2012, an
amount of Tk. 248.80 million
disbursed for establishing Solar
PV module assembling plant.
Bio fertilizer
As of Decemebr2012, an amount
of tk. 0.4 million has been
disbursed through banks in Bio-
fertilizer sector under a refinance
program.
40
Vermiposting : composting the earthworms
41
Special Refinance Scheme for providing
finance to the share-croppers
42
Disbursement to the Sharecroppers through Banks
No. of Sharecroppers in lac
6
5.01
All scheduled banks are advised 5 4.27
to disbursed agri-credit towards 4 3.74
sharecroppers on individual or 3
group basis.
2
Agricultural Credit towards 1
sharecroppers has been increased
0
(in no. of farmers and amount) 2009-10 2010-11 2011-12
0
2009-10 2010-11 2011-12
44
Credit Disbursement at concessional Interest
Rate (4%) for Salt production in coastal areas
45
Special Credit towards women
46
Credit towards tribal farmers in Hill Tracts Areas
47
Special Credit program in supporting of
Agricultural and rural development
48
Agricultural assistance through CSR(Corporate
Social Responsibility) Program
CSR actions aim at mitigate the diverse environmental impacts of the
activities of the business and at reducing inequalities and alleviating
deprivation and poverty in the communities across the country.
Bangladesh Bank (BB) issued a detailed directive titled "Mainstreaming
Corporate Social Responsibility (CSR) in banks and financial institutions
in Bangladesh.
From the year 2009, 2010, 2011 & 2012 all banks disbursed an amount
of Taka 550 million , 2330 million, 2190 million and 3046.69 million
respectively in CSR program
Banks are advised to distribute free crops seed like oil pump, strawberry,
baul kool, appel kool etc. to the farmers.
Some banks are disbursing interest free agricultural credit towards share
croppers landless farmers in cyclone affected areas.
49
ADB fund for improving brick kiln efficiency
50
Monitoring of agricultural credit
To ensure timely and hassle-free disbursement of agricultural Credit
to real farmers BB has set up three-tier monitoring system. Such as:
51
Flow Chart of 3-Tier Monitoring System
Divisional/Regional Level
Branch Level
53
Monitoring by Branch offices of BB
54
Monitoring by Head offices of BB:
Off-Site Supervision
On site supervision:
Visit bank branches and their borrowers on sample basis.
Coordinate with BB branch office monitoring cell of BB branch offices.
Monitoring through District Agricultural Credit Committee.
Meeting with senior Officials of participating banks.
55
Success in agri & rural-credit will be awarded by:
giving permission of new branches
opening foreign exchange dealership license,
Liquidity support and
banks rating (CAMELS Rating).
57
58