BANGLADESH INSTITUTE OF INTERNATIONAL AND STRATEGIC STUDIES

AGRICULTURAL TRADE LIBERALIZATION IN BANGLADESH: AN OVERVIEW OF ITS IMPACT

Author: M. Emdadul Haq Sultan Mohammed Zakaria

DOI Link: https://www.doi.org/10.56888/BIISSj2008v29n3a1

ABSTRACT

Historically, the agricultural sector has been highly protected both in developed and developing economies. However, since the 1980s with the re-emergence of the neoclassical orthodoxy as the new’ development paradigm, many developing countries adopted market reform and trade liberalization programs. The aims of these programmes were to reduce government control in both agricultural input and output market, lowering tariffs and non-tariff barriers (NTBs) and allowing market forces to work in agriculture. These programmes often came as a part of Structural Adjustment Policy (SAP) with the conditionalities attached by the international donor agencies, such as, the World Bank and the IMF. Like many other developing countries, Bangladesh maintained very tough restrictive measures in the agriculture sector in comparison with other sectors. It started liberalization reform under the SAP programme in the early 1980s. During this period, Bangladesh eased quite a large number of restrictive measures imposed on agriculture in terms of liberalization. However, the result or outcome did not reflect much of ripping the benefits of the liberalization programme. For example, the yield per hectare remains lower in Bangladesh than in other Asian countries with comparable environment even after the implementation of market reform and trade liberalization nearly two decades ago. Yet, in 2001, average paddy production per hectare was 6062 kg in China, 4515 kg in Indonesia, 3129 kg in Malaysia, 2856 kg in the Philippines and 0811 kg in India and 2792 kg in Bangladesh (FAO 2001). The logical question arises then whether market reform and trade liberalization indeed stimulated production environment and production efficiency in agriculture. Till now, approximately 77 per cent of the population lives in rural areas, and about 63 per cent of the labour force is employed in agriculture, forestry and fisheries (Rahman & Deb 2005). And agriculture remains the single largest contributor to the GDP (21. 11 per cent) (BBS 2007).