Bangladesh: How agro-based industries fare against the pre-pandemic level

Published 19 Feb,2021 via The Financial Express - Despite its healthy state in the early phase of the Covid-pandemic, the agriculture sector of Bangladesh was confronted with multiple challenges as the pandemic started to tighten its grip on the economy over the subsequent period. This had adverse implications for an early recovery of the sector, although the level and range of impacts varied across agricultural products and agro-based industries. This article examines the state of recovery of agriculture and agro-based industries by analysing performance of related indicators including distribution of agricultural and non-farm credit and production and export of agricultural products.

Following the 'purchasing managers' index', a composite index has been estimated to assess the level of recovery of agriculture and agro-based industries. Necessary data as regards selected agro-based entrepreneurs weres collected through limited perception survey. The index was employed to evaluate the pre-and-post Covid economic health status of agriculture and agro-based industries of Bangladesh. The index value was calculated by putting weighted proportions of respondents responding, up, same, and lower. The resulting index values are, therefore bounded between zero and 100. Data on agriculture production, export and credit during FY19, FY20 and several months of FY21 have been compiled to compare the performance of agriculture and agro-based activities during pre-Covid and Covid period with a view to appreciate the level of recovery.

PERFORMANCE OF AGRICULTURE AND AGRO-BASED INDUSTRIAL OUTPUTS: Agriculture sector of Bangladesh was impacted by the Covid pandemic during the second half of FY20 and first half of FY21. Available official data mainly provide information on agriculture production for the second half of FY20. According to the data, the agriculture production, especially that of rice and wheat during FY20 was higher compared to the previous year. However, the production of rice, particularly aus and aman rice during FY21 was adversely affected due to the consecutive floods which affected about one-third of the districts in the country. Approximately 2.57 million hectares of paddy fields were inundated which affected about 1.27 million farmers in 37 districts. An early estimate indicates that aman rice, which accounts for 36 per cent of total rice produced in the country, was 1.0 million metric ton less than the targeted amount. As a result, domestic stock of rice through public food procurement was significantly less at the end of December, 2020 (7.63 lac m ton as on January 14 , 2021 which was 15.70 lakh m ton as on January 16, 2020 - about 51.4 per cent less compared to the year before). Similarly, production of jute was adversely affected due to flood and production was 6.2 per cent less compared to that in the previous year. Domestic market prices of rice and jute posted a significant rise because of low production and delay in import (particularly rice). Food inflation although declining but still higher than the pre-Covid period (January-February, 2020).