POBNEWS24, Dhaka, June 15, 2026 : A gradual shift towards smarter public spending in agriculture can build a more productive and resilient agrifood system, protect farmers and create jobs, according to a new World Bank report.
The report, Repurposing Agricultural Public Spending for Quality Growth and Jobs in Bangladesh’s Agrifood System, finds that Bangladesh places high priority to agriculture, allocating about 10% of total public spending to the sector. Yet, agricultural growth has slowed, productivity gains have weakened, and diversification into higher-value products has lagged, even as consumer demand shifts toward fruits, vegetables, protein-rich foods, and processed foods.
A large share of spending goes to subsidies and rice-related support, while areas critical for improving farm productivity and incomes—such as research, advisory services, irrigation, market access, and climate resilience—remain underfunded.
Fertilizer subsidies remain the largest form of agricultural support, accounting for about 80% of the Ministry of Agriculture’s budget. These subsidies helped farmers maintain production and price stability. However, as the subsidy is linked to the amount of fertilizer purchased, farmers with more land receive a larger share of the benefits. The top 20% of landholders receive about half of all fertilizer subsidy benefits, while the bottom 40% receive only about 15%.
Fertilizer use also remains highly imbalanced, with only about 5% of farmers applying a balanced mix of nutrients within recommended ranges. Correcting this imbalance could substantially raise yields, making it a major opportunity to improve productivity.
“Agriculture is central to Bangladesh’s development, job creation, and poverty reduction. But climate risks, shifting consumption patterns, tighter fiscal space, and rising price and supply disruptions of fertilizers due to the Middle East conflict 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 modernizing 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.”
Public spending is also heavily skewed toward rice production, which discourages diversification. Rice occupies around 72% of cultivated land and receives about 80% of subsidy benefits, even though high-value subsectors such as livestock, fisheries, and vegetables, and agro-processing offer stronger opportunities for income growth and employment.
The report recommends sequenced reforms. In the near term, it calls for expanding soil testing, strengthening farmer advisory services, and rolling out the Farmer’s Card and e-voucher allowing agricultural spending to reach poorer and climate-vulnerable areas. Over time, better delivery can free up resources for investments that raise productivity, support higher-value agriculture, and benefit poor farmers.
Modernizing fertilizer subsidy design and delivery offers a significant opportunity to save foreign exchange, increase agricultural productivity, improve soil health, and ensure that support reaches the farmers who need it most,” said Mansur Ahmed, Senior Economist at the World Bank and co-author of the report.
