A Research Paper on Improving the Performance
The authors’ argue that agrarian reform is required for increasing productivity in agricultural, strengthening agribusiness, efficient utilization of natural resources, and improved code of induct for the organizations involved in the business processes. Agricultural products need financing as well as proper marketing strategies and better value chain needs to be created. Bangladesh can sustain long run macroeconomic stabilization by reducing deficit between demand and supply and achieving economic progress, and reducing unemployment and mass poverty the rough proper development and implementation Of agro-business strategies.
The growth of this business may also help improve the balance of trade position of the country. Key. Fords: Agribusiness, Bangladesh, Natural resources, Global warming, Economic Development JELL Classifications: NON, 013, IQ 7, QUO 1. 0 Introduction Bangladesh is basically an agriculture based country and a large proportion of the population formally and informally depends on this sector. Besides official unemployment, disguised unemployment creates real problem for the country. Under the global village, food is becoming scarce and prospects of agribusiness are increasing gradually.
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Agribusiness can be defined as the business activities related to the agricultural product which will add value, create synergy in the production process, import-export of agricultural reduces and redistribution of the product starting from the wholesaler to retailers and ultimately consumers can be able to get the products. As such strategic management of agribusiness is required So that core competencies can be created and proper supply chain management along with vertical and horizontal coordination is being required.
Agribusiness includes seed production and product processing, drying payday, dairy, fish farming, poultry, vegetables, follicular, fruits ,jute, livestock, tea, gingers, potatoes, oilseeds, pulses, sugarcane etc. Is to legally transferred to the customers. According to Berliner and Wolverine (1991) the term agribusiness is important to visualize following three sectors: the agricultural input sector, the production sector and the processing- manufacturing sectors are interrelated part of a system in which the success of each part depends heavily on the proper functioning of the other two.
However, Kohl’s and Lull (2002) comment that markets join together the various component of the food industry, the farm supply sector, the farm sector, the food marketing system, and national economies. The input supply and farm markets are often referred to as agribusiness. Customer need based products for the agricultural sector is being required to produce. This agribusiness can reduce deficit in balance of trade position and can contribute in national income and in turn economic development can be occurred. Agribusiness may have brighter future in Bangladesh if the country can avail the opportunity and overcome the shortcomings.
Natural resources especially in the agriculture sector may be properly handled. Global warming and ecological imbalances created need for agribusiness more vital business. Orr (1993) opined that past gains in agricultural productivity have contributed significantly to the problem of global warming. Actually Bangladesh has also been facing global warming problem which may cause danger in agribusiness. Salinity problems, coastal areas problems, flood problems, water – logged, river erosion, river basin surface runoff, drought etc. Are creating problems for production of agricultural products as a whole.
This has been accompanied by high growth rate of population. As such proper techniques, innovations, adaptability, mechanization, and policy framework and implementation of the policies are required for agribusiness management of Bangladesh. By definition business must have three core elements: legal entity, social obligations and profit maximizing. As such in the twenty first century business especially agribusiness has been growing in importance. According to Yuan’s (2009), industrial style agriculture is practiced in United states has been very effective in raising crop yields. But in the long run it is not sustainable.
Actually Yuan’s Comments for social business is in built in the traditional system otherwise if business which doesn’t fulfill aforesaid three core elements they can never remain in the business process from the context of 2 he social welfare of the human being. However, profit should not be super normal one rather it should be normal profit. When the firm earns normal profit then it will create distinct competencies and long run sustainability. Raman (2004) argued that poultry inputs like chick, feed and medicine markets are oligopolies in nature, in which prices are determined individually considering probable reaction of others.
Agribusiness requires and market entrepreneurship effort through combining different attributes of productivity, experimentation, innovation, risk-taking, efficiency, effectiveness and synergy. Diversification of the agribusiness process into agricultural product segmentation is required. Due to Global warming situation, importance of agribusiness has been raised after the end of the first decade of twenty-first century. Bangladesh is currently trying to cope with the global warming situation but it won’t be feasible without global and regional cooperation. 2. 0 Literature Review Diana et al. 1989) find that climate affects technology development and diffusion; conversely, technology development and diffusion affects the impacts of climate on productivity in India. Technology development and effusion, as well as climate, also affect net revenue in agriculture in India. Khan and Hosing (1989) argue that due to high pressure of population and limited opportunities for non-agricultural occupations, land is cultivated in very small business. Shads and Sings (1989) opine that agricultural prices, unlike manufactured goods prices, fluctuate more volatility as the agriculture sector is highly influenced by the vagaries of nature.
Mistakes and Policeman (1994) find that only with the dramatic rates of growth in agriculture combined with excellent infrastructural facilities have an increased in employment and was ,a decrease in seasonality and a diversification into rural nonagricultural employment resulted. Erickson et al. (2002) comment that the successful agribusiness manager must understand what the firm did (or did not) that led to bottom line, and the successful manager uses this understanding to improve the bottom line in the future.
Bolder (2002) depicts that Bangladesh faced various interdependent distortions and constraints which originate from the economic, political and social structure and concomitant choice Of policies. Islam and Sacker (2003) mind that in Bangladesh livestock sector composed of cow-buffalo and goat sheep registered very slow growth rate while the poultry sector made of fowl and duck grew an appreciable rate though this is still inadequate to meet their demand.
Drummond and Goodwin (2004) depict that in the contemporary agricultural system of the United States ,most of these functions are performed by extremely sophisticated business firms that specialize in performing certain functions or in the marketing specific products. These specialized firms have become known as collectively as agribusiness. The study of the management, marketing, financing, and marketing decisions of agribusinesses is a specialized branch of agricultural economics that deals with the economics Of Gaslight’s corporate sector. 3 Raman et al. 2004) argue that the factors which help increase production of Boor rice are extension service, human labor, seed, fertilizer , age and experience Area and bullock power have positive effect on the Us output. Similarly, extension service, area and bullock power have positive effect on the Man output. Dobson and Quaked (2005) observe that when the value of he services provided by middlemen is not readily apparent to others in a supply chain, the middlemen is invariably criticized, and distributors in Bangladesh shrimp business receive the same criticism leveled at middlemen in other industries around the world.
Jungian (2005) opined that a proper management Of different functions Of agricultural marketing will give incentive to presents to get better price during off seasons. Aimed (2008) proposed that for saving the cultivable land the county would have to be habituated to community living. He also advised that at this moment, if it is to possible to construct multi-storied building in rural areas we can opt for making two storey mud-built houses by applying indigenous technologies, which in turn will save a good extent of lands.
According to Seams (2008) crop productivity of land is low, as new technologies are not widely spread specially in non-rice crops. To thrive in the competitive business environment, the plan should be properly done so that competitive advantage and economies of scale in producing those agricultural products should get priority. Speculative motive in the agriculture sector still works. As such farmers sometimes deprived from getting their due share for their valuable contribution towards production.
Mellon (2008) commented that when food prices decline that tends to reduce the real price of labor and thereby increases employment and conversely when food prices rise. Thus, the poor benefit from lower food prices either directly in their cost of living or indirectly through increased employment and conversely they lose from rising food prices. All and Input (2009) suggested that create awareness among the producers and the consumers about organic farming by improving the level and quality f information through materials ranging from simple field training, media programs, leaflets, cell phone up to web sites and comprehensive campaigns.
Changer (2009) observed that the existing poor marketing supports and lack of adequate cold storage facilities have long been depriving the growers of perishable products like vegetables and fruits. Legman and Majored (2011) argued that Bangladesh is seriously vulnerable to climate -induced hazard although there are so many controversies about the scale of climate change impact. 3. 0 Study Objectives and Methodology
The study has been undertaken with following objectives: to assess current situation of agribusiness in Bangladesh; 4 ii) to evaluate what sort of strategies are required to sustain in agribusiness of the country; ii) to provide some policy implications for proper strategic management to develop agro-business. The study is done mainly on the basis of secondary sources. The study is explanatory nature. Exact sources will be mentioned. 3. 1 Present Situation Bangladesh possesses deficit balance in global business in the context of the global arena. In the twenty-first century, there is a wide scope to mitigate efficient in the global business.
Although Bangladesh is still an undeveloped country, the primitive characteristics of Olds do not exist here. But the country is still lagging behind to take any sort of appropriate measures for the agriculture Sector, which should be complementary with WTFO. Bangladesh Economic Review-2008 described that the overall contribution of the broad agriculture sector at constant price is projected at 20. 87 percent of GAP in 2007-08. Mm 2007,the government granted TX. 2. 54 core to help the flood affected small and marginal farmers to recover the losses due to seedless Boor rice,TX. 106. 6 core for 2 times flood and TX. 36. 28 core to regain the sever damages of Side and government also granted TX. 22. 68 core for agricultural rehabilitation (Source: BBS, 2009). Below we shall see Agriculture’s share of GAP in comparison to International standard in Figure 1. Figure 1: Agriculture’s share of GAP in comparison to International standard Source: World Development Indicators, World Bank, Washington DC, ASSAI, www. Workloads. Org Now we shall show below in Figure 2 share of rural and urban population in Bangladesh. 5 Figure 2: Rural and urban population in Bangladesh
Source: World Development Indicators, World Bank, Washington DC, USA Green revolution was initiated during the sixties to maximize the benefit of agricultural output. After independence, BAD (Bangladesh Agricultural Development Corporation) worked hard to develop agricultural sector. But it became crippled to mitigate personal gain of the policy makers during eighties in the name of prevarication. Now we have emphasis on private and public partnership. Optimum scale of plants has already been produced. Decreasing returns to scale is prevailing in the agriculture sector of
Bangladesh. Land, canal and labor is essential for production of agricultural product. Without raising the production, supply cannot be raised and demand cannot be fulfilled. As such in the latter part of the first decade of the twenty-first century agriculture related business will not rise at a faster rate. Sector wise share of GAP in Bangladesh has been shown below in Figure 3. Figure 3: Sector Share of GAP: Bangladesh 6 Debt and Zamia (2007) argued that during the last 35 years, agricultural production in Bangladesh has substantially increased.
Production of crops, vivisect and fisheries has increased significantly. Rice production has increased from 9. 90 million metric tones in 1972/73 to 26. 53 million metric tones in 2005/06. Crop GAP has increased from TX 19. 76 billion (US 2714. 69 million) in 1972/73 to TX 622. 324 billion (SIS$ 9277. 34 million) in 2005/06. Production of potato, maize, fruits, vegetables and other crops has also increased. However, production Of wheat and sugarcane has decreased. Area under jute has declined though production increased slightly due to increased yield.
Poultry’ production has increased from 76. 88 million birds in 972/73 to 232. 99 million birds in 2005/06. Meat production is more than five times than that in 1972/73. On the other hand, milk production is about five times while fish production is about 2. 9 times of the production in 1972/73. Shrimp production has increased to 110 million tones in 2004/05. Thus, agricultural production system in Bangladesh has been transformed from a us abstinence oriented system to a commercially driven production system which is very much responsive to prices, policies and trade liberalizing.
Below in Figure 4, we have shown share employment in different sectors of Bangladesh. Figure 4:Sector Share of Employment: Bangladesh Notes: GASBAG: Agricultural Employment as share (%) of total employment in Bangladesh; MESSED: Manufacturing Employment as share (%) of total employment in Bangladesh; Service sector Employment as share (%) of total employment in Bangladesh; 7 Aquaculture is still a small sub sector accounting for only 5% of GAP.
Much of the potential of the sub sector remains unfulfilled. The water area under aquaculture can be increased two to three-fold with some initiative from the government and a workable lease policy of government keas waters. The lied rate of aquaculture, which is one of the lowest in the world, could be increased several fold through appropriate actions and policies of both the government agencies and the private stakeholders. Development partners can play a supporting role.
With an enabling policy environment, the share of fishery in GAP could easily rise to more than 10%. Employment could also increase two or three-fold. Debt (2008) suggests that Bangladesh agriculture has potential for further diversification. However, in order to materialize this project, Bangladesh must invest in road infrastructure, strength SSP implicate facilities, improve poor-harvest technology, expand storage facilities for vegetable and fruits and negotiate further trade liberalizing at the global level.
According to Board of Investment (accessed on 24 October, 201 0) over 90 varieties of vegetables are grown in Bangladesh, yet for such a fertile land, there are huge gaps in local resources and industrialization of the country’s agricultural capacity. This presents many opportunities for investors seeking to export agricultural products, or to meet the rapidly growing local demand. Here are just some of the investment opportunities: Cold storage acclivities to serve all stages of the supply chain, and especially for fresh produce for export. Fresh produce production for local and export markets ; Production of fertilizers and cultivation of seeds; CEO-friendly jute production, with the support of several jute industry technology development institutes; Shrimp farming; Hall foods; Milk and dairy products; High value added foods for export, including herbs, spices, nuts and pulses (Sources: http:// www. Bio. Gob. Bad/about-Bangladesh/costs-of-doing-business/overview-of- costs-taxation/8). According to Bangladesh Agribusiness Report SQ 2009, the
Bangladesh agribusiness service provides proprietary medium term price forecasts for key commodities, including corn, wheat, rice, sugar, cocoa, coffee, soy and milk; in addition to newly-researched competitive intelligence on leading agribusiness producers, traders and suppliers; in-depth analysis of latest industry developments; and essential industry context Bangladesh agribusiness service (source: http://’. Nor;u. Recommendations. Com/reports/1 080797) GHz and Sure (2008) argued that the demand for food in Bangladesh and around the world is changing rapidly.
Driven by economic growth, rising incomes, and arbitration, demand is shifting away from traditional staples toward high-value food commodities. High value agricultural commodities include fruits, vegetables, spices, fish, and livestock products, many of them processed before reaching the market. In Bangladesh, additional demand for these commodities is projected to be worth about $8 billion by 2020 (in 2005 prices). However a gloomy report on food deficit in Bangladesh has been published in The Daily Star on 16th October 2010. N the report, Palm (16th October, 201 0) described that a rising population amid declining agricultural and has put the country’s future food security at risk, especially when salinity in the coastal belt, and droughts and depleting underground water level in the north have become constant realities. According to a projection of the Bangladesh Bureau of Statistics (BBS), the country’s population will be 16. 69 core by 2020, while unofficial estimates suggest that the current population is already approaching 16 core.
The National Population Council of 8 Bangladesh says the number will reach 17 core by 2020. Bangladesh had to import nearly 20 lack tones of food grains in the last fiscal year on top of round 3 core tones of rice and wheat produced domestically, while Abs’s projected food security requirement was for 2. 49 core tones. At the second Bay of Bengal Initiative for Multi-Sector Technical and Economic Cooperation (BOMBSITE) summit in New Delhi, which held during mid November 2008, the chief advisor of Bangladesh proposed for a food bank.
In the context Of the recent global food crisis that has created a sense Of food insecurity among the peoples in the developing as well as low-income countries, regional cooperation for food security has emerged out as an important issue. For this matter, the proposals for setting up of a BOMBSITE poverty alleviation centre in Bangladesh and a food security reserve among BOMBSITE members should merit attention. The idea behind such proposals is good.
But unless the same are endorsed by all the member-countries of this regional cooperation body with a strong commitment to operationally the same at the earliest, no meaningful results in the desired direction are likely to come. Reduction of the subsidies on fertilizer and also consent to private trade in fertilizer, small irrigation equipment and seed sectors etc were done during efferent phases of the economy. Structural adjustments started with the liberalizing processes and openness of the economy through diverse agricultural input delivery systems from public sector to the private sector.
Social enterprise business system tried to develop. But it creates disparity between have and have-notes. As private disbursement system of agricultural inputs works as a monopolistic nature so it creates small and marginal farmers On an awkward situation. Bangladesh is now exporting vegetables and other sorts of crops in the European markets, Middle East, and Asian countries. This process opens new avenues to private sector investment in the areas of agricultural production of high value of crops and production of seeds.