Bangladesh's poorest farmers are receiving only a small share of agricultural support despite the government allocating nearly 80 per cent of its agriculture budget to fertiliser subsidies, according to a new World Bank report.
The study, titled "Repurposing Agricultural Public Spending for Quality Growth and Jobs in Bangladesh's Agrifood System," found that between FY2019 and FY2023, the government channelled an annual average of Tk 321 billion into food and agriculture, equivalent to 10.1 per cent of total public expenditure and 1.1 per cent of GDP. Despite this substantial spending, the sector continues to experience slow growth, modest productivity gains, and limited diversification into higher-value crops and products.
The distribution of subsidies is equally troubling. The wealthiest 20 per cent of landowners receive roughly half of all fertiliser subsidies, while the bottom 40 per cent of farmers collect only about 15 per cent. Heavy spending on subsidies and rice-related support continues to crowd out investment in research, irrigation, market access, and climate resilience, the report says.
Inefficient fertiliser use further compounds the problem. Only around 5 per cent of farmers apply a balanced mix of nutrients within recommended levels, resulting in what the report describes as a "highly imbalanced" pattern of fertiliser application.
Nearly two-thirds of farmers are over-applying phosphorus while 90 per cent are using less sulphur than required. Correcting that imbalance, the report argues, could significantly improve yields, with Boro rice output potentially rising by 33 per cent, Aman rice by 65 per cent, and potato yields by as much as 87 per cent.
The spending structure also fails to reflect where agricultural value is actually generated. Despite livestock, fisheries, and horticulture jointly contributing three-quarters of agricultural GDP, these sub-sectors receive less than 20 per cent of total agricultural spending. Rice alone accounts for 73 per cent of allocations, a disparity that the report says is hindering diversification.
"Agriculture is central to Bangladesh's development, job creation, and poverty reduction. But climate risks, shifting consumption patterns, tighter fiscal space, and rising fertiliser price and supply disruptions linked to conflicts in West Asia are exposing gaps in policies and spending," said Jean Pesme, World Bank Division Director for Bangladesh and Bhutan.
"The good news is there is a clear path forward. By modernising support delivery and gradually rebalancing agriculture spending toward high-return investments, Bangladesh can build a more resilient and productive agri-food system that delivers more and better-paid jobs," he added.
The report calls for phased reforms across three timeframes. In the short term, it recommends expanded soil testing, the rollout of Farmer Cards and e-vouchers to better reach poor and climate-vulnerable farmers, and stronger advisory services.
Over the medium term, it calls for reorienting funds towards research, extension services, and market infrastructure. In the long run, the bank envisions a full transition away from universal price subsidies towards targeted, farmer-linked support.
Agriculture Minister Amin-ur Rashid Yasin said the findings would help guide efforts to restructure public spending and promote quality growth and employment across the agri-food sector.
