Potential Investment sector in Agribusiness after Covid-19 Pandemic in Bangladesh

Potential Investment sector in Agribusiness after Covid-19 Pandemic in Bangladesh
Potential Investment sector in Agribusiness after Covid-19 Pandemic in Bangladesh

Potential Investment sector in Agribusiness after Covid-19 Pandemic in Bangladesh 

What is Agribusiness?

Agribusiness is doing business with agricultural products.  Agribusiness is a term that bridges Agriculture and Business. Potential Investment sector in Agribusiness after Covid-19 Pandemic in Bangladesh are discussed below:  Agribusiness includes all business entities that buy from or sell to farmers. The transaction can include a product, a commodity, or a service and involves products such as feed, crop, fertilizer facilities, electricity, machinery, etc. Agricultural goods, such as food and fiber, etc. Facilitative services, such as loans, marketing of insurance, storage, manufacturing, transport, packaging, distribution, etc. 

Basic Introduction of  Bangladesh 

With a total area of 1,47,570 square kilometers and a coastline of 710 (check) kilometers, Bangladesh is the world’s largest river delta and one of the most fertile areas. With a population of 160.8 million people (as of July 2016), it is one of the world’s most heavily populated countries. Bangladesh is ethnically homogeneous to a large extent. Bangla is spoken by over 98 percent of the population. English is also commonly spoken. The country is covered in a labyrinth of interconnecting channels and rich waterways formed by a network of rivers and canals.

Agribusiness in Bangladesh 

Canned juices, fruits, vegetables, dairy, and poultry thrive in this industry. The country has a large supply of raw materials for the agribusiness industry, as well as a tropical climate that allows for year-round growing, plenty of freshwaters (the country is interspersed with rivers), and available land with fertile soil. The government and non-governmental organizations (NGOs) run regular training programs to cultivate qualified manpower in the industry, and there is a wide variety of biodiversity for different crops. Agricultural commodities contribute more value to the economy than non-agricultural commodities.

Investment Possibilities

  • Cold storage facilities serving the supply chain, especially fresh produce for export, are among the many investment opportunities.
  • Creation of fresh produce for local and international markets.
  • Fertilizer manufacturing and seed production.
  • Jute technology creation institutes promote environmentally-friendly jute processing.
  • Shrimp raising, halal foods, and milk and dairy products are only a few examples.
  • Herbs, spices, nuts, and pulses are examples of high-value-added foods for export.

Potential Investment sector in Agribusiness in Bangladesh

Areas of Investment

  • Seed, fertilizer, pesticides, irrigation, and farm machinery are examples of agri-input sectors.
  • Infrastructure for post-harvest
  • Processing of foods such as qualifying oil, corn, sugarcane, potato, fruits and vegetables, and spices 

Exceptional Incentives 

  • It is permissible to have 100 percent foreign equity (Except for defense, nuclear energy, currency and forest plantations)
  • Tax breaks for 5-7 years, depending on place and industry.
  • Cash incentives: agro-processing sector receives a 20% special rebate on energy use.
  • Access to the European Union without tariffs
  • Cash incentives and export subsidies ranging from 5% to 20% are available for a variety of export goods.
  • In agriculture, the aim is to disburse USD 2 billion in loans.
  • Entrepreneurs Equipment Fund is permitted to invest in the agro-sector.
  • Agriculture provides a living for more than 47.5 percent of the population.

Prospects for the Industry

Bangladesh possesses the required characteristics for prosperous agri-based industries, including rich alluvial soil, a year-round frost-free climate, ample water, and a large supply of cheap labor. Increased production of vegetables, spices, and tropical fruits in Bangladesh could provide raw materials to local agribusinesses for both domestic and export markets. Agribusiness efficiency has improved dramatically as a result of progressive farming practices, improved marketing methods, and modern processing facilities.

Incentives for the industry

The government promotes agricultural growth by taking steps to boost crop sector productivity and non-crop agriculture production. It accomplishes this by increasing credit and making inputs and new technology more available. The following support mechanisms are in place to promote investment in Bangladesh’s agribusiness industries:

  • Special loan facilities are available to start an agribusiness through the Equity Entrepreneurship Fund for the growth of the agribusiness industry.
  • Tax breaks are available to the agribusiness industry.
  • Any investment in this field would be eligible for the same tax amnesty as other investments.
  • Imposition of supplementary duty on mango, orange, grape, apples, dates, and other fruits and vegetables to encourage the use of high-quality, lower-cost local resources.
  • In different subsectors, cash rewards to exporters range from 15% to 20%.

Bangladesh’s Competitiveness in Exports

Despite being a developing economy, Bangladesh has a track record of export competitiveness. Here’s a quick rundown of the truth. Bangladesh achieved annual export value growth of 19.6% from 2003 to 2017, demonstrating its export competitiveness. Despite not wanting to be complacent and keeping in mind the tough global trade conditions in 2008-2010, these favorable trade differentials are likely to remain with Bangladesh for a long time. Hope above Potential Investment sector in Agribusiness after Covid-19 Pendamic in Bangladesh will attract potential investors. 

Please read:

What is Agribusiness? – Agribusiness Education and Research International

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Information Reference: www.bida.gov.bd

 

 

Md. Masudul Hassan
CEO & Editor in Chief of this Portal. Md. Masudul Hassan is an Assistant Professor and Coordinator of a Reputed University in Bangladesh. Professional member of International Food and Agribusiness Management Association ( IFAMA ). He Performed Numerous Research Regarding Agribusiness.