Bangladesh’s economic structure remains deeply agriculture-dependent. At the center of this structure lies rice production, which is not only the foundation of food security but also the main driving force of the rural economy. Nearly 55 to 60 percent of total rice production comes from the Boro season, which is entirely dependent on irrigation and energy-based technology. As a result, the relationship between agriculture and energy here is direct and highly sensitive. Even minor volatility in the global energy market immediately affects agricultural production costs and capacity, turning this issue from a purely economic matter into a question of national security.
In the current global context, geopolitical tensions centered in the Middle East"particularly uncertainty around strategic waterways such as the Strait of Hormuz"are directly influencing the international oil market. Nearly 20 percent of the world’s crude oil passes through this strait, making it a highly sensitive corridor for global energy security. Any disruption or escalation in this region quickly pushes oil prices upward, creating immediate pressure on import-dependent economies like Bangladesh.
Bangladesh’s energy dependency further intensifies this impact. Around 80 to 90 percent of the country’s total energy demand is met through imports. In particular, diesel, which is critically important for agriculture, is entirely dependent on foreign markets. Annually, Bangladesh imports approximately 5 to 6 million tons of refined petroleum products, a significant portion of which is used in agriculture, transport, and the power sector. Of this, around 900,000 to 1 million tons of diesel is used in the agricultural sector alone, reaching its peak demand during the Boro season.
If the global oil price increases by 10 dollars per barrel, the country’s annual energy import cost may rise by approximately 1.5 to 2 billion dollars. This additional burden puts pressure on foreign exchange reserves and causes depreciation of the exchange rate. As a result, both domestic energy prices and agricultural production costs increase simultaneously. Thus, fluctuations in global energy politics directly shape Bangladesh’s agricultural cost structure.
However, the crisis is not solely global; internal structural weaknesses also play a major role. Since Boro cultivation is fully irrigation-dependent, the demand for diesel is extremely high during this season. On average, 120 to 150 liters of diesel are required per hectare of land. With nearly 4.8 to 5 million hectares under Boro cultivation, around 800,000 to 900,000 tons of diesel are used during the season. Even a slight disruption in this vast demand-supply chain can significantly affect total production.
On the other hand, weaknesses in supply management and inefficiencies in market regulation often create crises greater than actual shortages. In different regions, diesel is reportedly sold at 15 to 80 taka per liter above the regulated price, significantly increasing farmers’ production costs. While the normal irrigation cost per bigha should be around 3,500 to 4,000 taka, during crisis periods it rises above 5,000 taka. This is further worsened by hoarding and manipulation by intermediaries, creating artificial shortages in the market.
This dual pressure"real supply constraints and artificial market volatility"makes agricultural production increasingly risky. In many cases, irrigation pumps are forced to shut down due to lack of fuel, directly affecting crop growth and yield.
Against this backdrop, the economic structure of Boro rice production has become highly complex and costly. More than 55 percent of total rice production"around 21 to 22 million tons"comes from the Boro season. However, the energy-dependent cost behind this production is extremely high. With 120 to 150 liters of diesel required per hectare, annual irrigation costs alone reach approximately 75,000 to 90,000 crore taka (assuming an average price of 120 taka per liter). This constitutes a major share of agricultural expenditure.
If international oil prices rise by 15 to 20 percent, agricultural production costs may increase by another 10,000 to 15,000 crore taka. Including fertilizer, labor, and mechanization costs, the production cost per kilogram of Boro rice has reached 24 to 28 taka, whereas five years ago it was 16 to 18 taka. This indicates a 35 to 40 percent increase in production cost.
This cost escalation directly affects farmers’ profitability. In many cases, production cost and market price are becoming almost equal, reducing farmers’ profit margin to 5 to 10 percent, and in some cases even causing losses. This is a worrying sign for the long-term stability of the agricultural sector.
Production disruption due to energy shortages is another major concern. If irrigation is interrupted, soil moisture cannot be properly maintained, hindering crop growth. This risk is particularly high in northern and haor regions where large-scale irrigation-dependent farming is practiced. Studies suggest that even a 5 to 7 percent disruption in irrigation can lead to a loss of 8 to 12 lakh tons of rice, worth approximately 25,000 to 30,000 crore taka.
Dependence on mechanization has made agriculture even more energy-sensitive. Harvesters and threshers require diesel to operate. If fuel shortages prevent their operation, harvesting is delayed, increasing the risk of crop loss due to rainfall or storms. On average, 5 to 7 percent of crops are lost annually due to delayed harvesting, which can rise to 10 percent during crisis periods.
International comparisons show that Vietnam and Thailand rely less on energy-intensive agricultural systems. There, the cost of producing one kilogram of rice remains between 15 and 18 taka, whereas in Bangladesh it ranges between 24 and 28 taka. This difference reflects gaps in technology, irrigation management, and energy efficiency.
The impact of energy crises is not limited to agriculture; it also affects fertilizer production systems. Since urea fertilizer production depends on natural gas, gas shortages or energy instability often force fertilizer factories to partially or fully shut down. This leads to increased reliance on imported fertilizers at higher prices. Between 2023 and 2025, fertilizer prices increased by 25 to 35 percent, further raising agricultural costs.
This entire situation is creating significant pressure on food security. If Boro production decreases by 10 to 15 percent, a rice shortage of about 3 million tons may emerge in the market, valued at approximately 80,000 to 90,000 crore taka. If global food and energy crises coincide, filling this gap becomes even more difficult.
Bangladesh’s food security rests on three pillars"production, supply, and purchasing power. Any disruption in any of these pillars creates instability in the entire food system. In the current context, energy crises are directly reducing agricultural production and indirectly increasing inflation, making it one of the most serious threats to food security.
Nearly 55 to 60 percent of total rice production comes from the Boro season, amounting to more than 20 million tons. If energy constraints reduce production by just 10 percent, a rice shortage of 20 to 22 lakh tons may emerge, valued at around 60,000 to 75,000 crore taka.
This supply shock directly affects inflation. According to the Bangladesh Bureau of Statistics (BBS), a 1 percent increase in food prices can raise overall inflation by 0.4 to 0.6 percent. Therefore, a contraction in Boro production and supply could increase total inflation by 2 to 3 percent.
The impact is most severe on low and lower-middle-income populations. In urban areas, where food expenditure is higher, a 10 to 15 percent increase in rice prices can reduce real purchasing power by up to 20 percent. This forces poor households to reduce food intake, increasing risks of malnutrition, child development issues, and human capital loss.
Over the last five years, production costs of Boro rice have increased by 35 to 40 percent, while market prices have not risen proportionately. As a result, farmers’ real income has declined by 15 to 20 percent, increasing dependence on agricultural loans at an annual growth rate of 12 to 15 percent.Many farmers are now trapped in debt cycles due to high-interest borrowing for Boro cultivation, while some marginal farmers are exiting agriculture altogether. This is also reducing agricultural labor demand.
According to the Bangladesh Institute of Development Studies (BIDS), an 8 to 10 percent decline in agricultural labor demand may put 20 to 30 million people in partial employment risk. This accelerates rural-to-urban migration, increasing pressure on urban economies.
Bangladesh’s food security is now facing a multidimensional and interconnected crisis involving energy dependency, agricultural structure, and global market volatility. Currently, 70 to 80 percent of irrigation depends on diesel, making the production system highly vulnerable.
To reduce this dependency, a gradual shift toward solar-powered irrigation systems is essential. International experience shows that India and Vietnam have reduced irrigation costs by 30 to 40 percent using solar pumps. If Bangladesh shifts even 20"25 percent of its irrigation to solar energy, it could save 15,000 to 20,000 crore taka annually in diesel costs.
Strengthening transparency and monitoring in energy and agricultural input markets is also crucial, as artificial shortages often create greater instability than real supply gaps. Digital subsidy systems should be introduced so that diesel and fertilizer subsidies directly reach farmers’ accounts.
Food storage systems also need strengthening. Internationally, a 3 to 6-month food reserve is considered safe. Expanding this capacity in Bangladesh would help stabilize markets during global crises.Agricultural modernization is equally essential. Smart irrigation, drip irrigation, and energy-efficient machinery can reduce production costs by 20 to 30 percent. Additionally, introducing crop insurance would protect farmers from climate and market risks.
In conclusion, Bangladesh’s food security is no longer merely an agricultural or energy issue; it has become a national strategic concern where energy security and food security are deeply interconnected. Global energy uncertainty, domestic market inefficiencies, and energy-dependent agricultural structures are jointly increasing production costs and placing the food system at risk. However, through proper policy, technological modernization, and energy diversification, these risks can be managed.
The author is an Economist, Researcher and Columnist
