Why is farm mechanization in Bangladesh not gaining momentum?

The government often boasts of allocating Tk3,020 crore in subsidies for a five-year farm mechanization program, but the reality is only a little over Tk200 crore has been channeled in the first year of the program’s rollout.   

When the government initiated the subsidy program in July last year, it aimed to help farmers in Bangladesh buy over 50,000 agricultural elements by 2025. An Agriculture Ministry statistic shows farmers could buy only 2,300 machines in the first year of the five-year subsidy program.  

If the subsidy program continues at its current pace, it will take farmers in Bangladesh 22 years to purchase the targeted 52,000 farm machines.  

What has the government done?

With the aim of swiftly mechanizing the country’s farming sector, the government decided in mid-2020 that it would provide farmers up to 50% subsidies (70% in case of the Haor region) on purchasing prices of machinery such as combined harvesters, reapers, transplanters, etc. The idea is that if a farmer has to buy a machine at Tk100, the government will bear Tk50 from its five-year subsidy fund of Tk3,020 crore.  

Thinking of future needs, the government also created 284 posts for farm engineers across the country, as their services may come in handy when farmers require troubleshooting for their machines.

What is the predicament? 

Asked why the subsidy program is not gaining as much momentum as expected, Agriculture Minister Dr Muhammed Abdur Razzaque pointed at the farmers’ inability to bear their share of the cost as the machines are too expensive.

Even if the government provides a farmer Tk15 lakh as a 50% subsidy for a Tk30 lakh combined harvester, it is difficult for the farmer to come up with the remaining Tk15 lakh.  

“Banks need to finance farm mechanization. We are now trying to encourage commercial banks to help farmers buy agricultural machinery by providing them with loans,” said the minister, who is trying to promote machinery in Bangladesh’s agriculture to make the sector more efficient and cost-effective. 

Officials at the Ministry of Agriculture told Dhaka Tribune, they will increase the subsidy allocation to Tk680 crore in FY 2021-22 (the 2nd year of the five-year program), so that more farmers can buy machinery.

However, market sources fear a larger allocation would not make much difference unless banks start financing farm mechanization.

Bidowra Tahmin Khan, who is a team leader of supporting market systems and social inclusion for the USAID-funded Feed the Future Bangladesh Rice and Diversified Crops Activity, said banks can provide farmers loans for buying farm machinery and the same machines can be used as collateral.

“The problem in Bangladesh is that these farm machines are registered under importers’ names and not under the end-user’s (in this case the farmers) name,” explained Bidowra, who has years of experience in working with market system development and gender mainstreaming for rural marginalized farmers. 

She suggested a simple policy tweak in the form of mandatory registration of farm machines under buyers’ names to remove the barrier to banks providing loans with the machines as collateral. 

Current status of farm mechanization 

Starting from 1950-51, irrigation was the first operation that was mechanized in the farming sector in then East Pakistan. For threshing rice, Japanese pedal threshers and weeders were introduced on a limited scale. 

Tillage was the next operation that was mechanized. Tractors and power tillers were introduced from the 1970s. 

At present, nearly 100% of land preparation (tillage) is mechanized in Bangladesh, while over 60% of land is irrigated and farm implements are used in nearly half of weeding jobs. Sprayers are used for pesticides in almost all cases. 

However, Bangladesh’s farm sector falls behind when it comes to mechanizing the process of seed transplantation and crop harvesting. A huge part of crop planting and harvesting is still being done manually, and the government is trying to promote more use of combined harvesters and transplanters.   

Of the 2,300 farm implements farmers procured in the past year under the government’s subsidy program, 1,762 were combined harvesters, 379 reapers, and 34 rice transplanters.