World Bank Document

nfrTn^,rr TL T'rT. ly' TYkIll T. " T A .fT ~tT I V -l A ~ TT ~rfl~frnlTm D'CUIVIEnNI OFIINTILNERNATi1'IONAL BANK, rFOi R R,CONST'1u1CIuiON AIND or,vtLVrMhEr I INTERNATIONAL DEVELOPMENT ASSOCIATION

Public Disclosure Authorized Not For Public Use PS-13 t VO~~~~L. 5

Report No. P3-13

LAND AND WATER RESOURCES SECTOR STUDY Public Disclosure Authorized

BANGLADESH

(in nine volumes)

VOLUME IV

CROPS, LIVESTOCK AND FISHERIES

CONTAINING:

FORWARD Public Disclosure Authorized

Technical Report No. 7 - Rice Technical Report No. 8 - Jute Technical Report No. 9 - Sugar Technical Report No. 10 - Tea Technical Report No. 11 - Fisheries Technical Report No. 12 - Livestock

December 1. 1972 Public Disclosure Authorized

Asia Projects Department

inis report was prepared for officiai use only by the Bank Group. it may not oe pubiishea, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report.

Note

"!The Land and Water Resources Sector Study - Bangladesh" dated December 1, 1972 was prepared between May 1971 and the summer of 1972 under the general supervision of the Bank, by staff members of the Bank, and FAO, with substantial help from consultants. The UNDI' and the Bank shared the cost of the consulting services. The study is made available on the understand- ing that it does not necessarily represent the official position of the Government of Bangladesh or of the Bank.

The study is based mostly on data collected prior to March 1971. Although some of the infonmation contained in the study is out of date, the essence of it is valid and it should be useful to the Government of Bangladesh and to other countries, agencies, and institutions interested in the development of Bangladesh.

BANGLADESH - SECTOR STUDY

VOLUME IV - CROPS, LIVESTOCK AND FISHERIES

FOREWORD

i. This Volume is made up of six technical reports dealing with rice, jute, sugar, tea, fisheries and livestock. These products together account for the greak bulk of the farm income of Bangladesh. In particular, rice is of overwhelming importance as a subsistence cron and iute as an earner of export ineome. Though closely interrelated and interdependent at the farm level, these crops have been subiect to verv different technical and marketing influences. As far as can be foreseen, rice will set the pace of development in the agricultural seetor and determine the nutri-tional standards of the bulk of the population. Recent developments in the technology of rice nroduction. and in narticular the availability of high-vielding varieties, are therefore of crucial importance to the country. The extent to whi c thehehnefi ts of this new tet-hnnl nmv tcan he realized in the particular circumstances of Bangladesh is, in fact, a dominant theme running through the en+Are Sec+or Stdy

ii= P?-nPropnosal Are made hernerin for a r_ce development strategy adapted to the existing structure of farm holdings, and recognizing instit…l+Anna…1imi+.…+Anns ThA …immediate ob…e…-+ivP is a rapid dis- semination of high-yielding varieties throughout favorably located ar'eas fol o=.reri hyr a ".ore -int.ensive deelopment+in~ "areas of cne ntr'1ation" - as institution-building proceeds.

iii. No dramatic breakthrough has been achieved in production technology for crops ^wn4+ho +hoIn oA4na T- short. and, e A , improve ments in production would have to be achieved by all-round improvements 4,n ,,nnn44 aaa YeVa 44 sloudAA 1,bepossi4b1- to -cneve S-.._4-4,,44 yielA .LS,pLOLLA4....OO 4. LA L O*4JLL' U JO )JJ44tAJO L tUS.OO CIO fLA&4 J..OLAA increases for the other important crops, through research. With this wnve,proposals ar ,ae Ifor thue reorganizatino hJueRsac Institute and expanded sugar research. A rationalization of sugar t - ^^nee;rarv 4'n^414+46an nl na a,.,,,. ono.A o,A a-,aA4 + _a_o P_ ha innovation, modernization and electrification of tea factories. These 4 acn+io-ns aren -nn+ln.naeende b a ca o t-ha dtrorav;.g p -siin-4-- otha industries concerned. iv. Livestock and fisheries might be conveniently considered together as alter.- ,ative sources ofP pro"en.4 Of% 4-U- 4-wo, te fishe.-es 0 -A5)4. 9).5 -U.LV 0 O9JU4.UO W1.L F UVJ.ILe V1± 1)550 1)1V, 9)15 L..0110± L05 industry -- though very neglected to date -- undoubtedly has most potential 1 A5L'- 4.0 JVVLV015 A LJ.L5J.LW .LV4y LS V LJJIL.UFM LA. I!j.~Lr I) '.4.VV.LVJJ1Ik0ii1U OkLA111WO A100 LL ,1 inland fisheries sector are identified. The recommendations made con- 'livestoc-1 insemLinatiLLVonce...ig oL andIAJ pLtbL.LreLnfaltesfPocusL on research. a..dA th-e9)l %V0J9411taldeve'loprment L, of ar-tific- ia insemination and poultry breeding facilities.

Re.strictAd

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

INTERNATIONAL DEVELOPMENT ASSOCIATION

BANGLADESH

LAND AND WATER RESOURCES SECTOR STUDY

VOLUME IV

CROPS, LIVESTOCK AND FISHERIES

TECHNICAL REPORT NO. 7

RICE

Decem.ber 1, 1079

Asia Projects Department

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TABLE OF CuNwT-±M

Page No.

SuITMII ANVJ CONCJLuSIONSS ...... **.. 1

Io i-NlxODUCTION soooeoo*o*.ooooooooaoo**oooooooe***.oooooooo

!I. RECENT PnruuTRN NCE AN.-D CU.KENT.. STAr ...... 12......

II. GRO-Wlr PDTENTIAL oo...o..oo1oosoooS ...... 80

The High-Yielding Rice Varieties ...... 8 Cropping Pattern Changes and Intensification Potential 10 Yield Increase ...... 11 Climate Limitations ...... * 14 Cultivation Limitations 15 Farmers' Acceptance of New Technology ...... 16

IV, RICE DEVELOPMENT STRATEGY ...... o000**...... 16

General Objectives .o.o...... 0 16 Choice of "Areas of Concentration" ...... -...... 17 The Package Approach . . 19

TABLES

1. Summary of Acreage Production of Rice and Yield Per Acre 2. Paddy Yield Assumption 3. Suggested Fertilizer Doses for Various Paddy Yield Levels 4. Areas Suitable for Improving Rice Yields with Inputs Only 5. Rice Production 1969/70 and Estimated Production Resulting from the Minimum Package and Concentration Area Programs

1/ This report was prepared by G. Stern, G. de Brichambaut (FAO/IBRD) and Professor N. Efferson (Louisiana State University)

BANGLADESH - SIECTOR STUDY

VOLUME IV - CROPS, LIVESTOCK AND FISHERIES

TECHNICAL REPORT NO. 7

RICE

Summary and Conclusions

i. Cereals constitute the main portion of the national diet in Bangladesh and 93% of the cereal consumption is rice. A crucial test of agricultural policy in the years ahead will be to meet the staple food requirements of a population growing at over 3% a year.

ii. The suggested strategy for increasing rice production calls fo2 the ranid distribution of new rice variety seeds throughout the country by a minimum package program, and an intensive follow up program concentrated in areas with the greatest rice nroduction potential. Tmnroved seed bulking arrangements are a prerequisite to the strategy which also reauires the sunnort of expanding research. education and training. Rice production is projected to increase from 11.4 million tons in 1969/70 (the assumed 1973/7h level) to 18.5 million tons by 1983/8h.

iii. TIn 1969/70 rice was planted on about 25.5 million acres. Since little more land is available for expansion of cultivation, increases in yields mnst be generated by more intensive cropping and improved farmin8 practices. A program to intensify cropping may entail wide distribution of an inputs nackage to farmers incluiiin high-vieldin-g varieties (NYv) of rice seeds, fertilizer, and pesticides coupled with small-scale irrigation efforts where surfaGe water or gronund water is available.

iva The first high yield i ng variety--L-R-8-- t;h1 nnly for Boro (the irrigated winter crop), was introduced in 1966. The variety was dramaticallv mcessqfNl and has spread over 700000 acrPs. Tts furtheAr spread has been limited by the expansion rate of irrigation. IR-20 first introdtced in 1970 for T. Aman (the rainfed summer crop), has already spread to 500,000 acres. Suitable varieties (IR-176 and IR-272) have beein scessf11 ested f the Aus or sprning crop And another variety (IR-J22) is undergoing tests for areas flooded up to 5 ft deep. These varieties would allew a sigPnificant prndietinn i-ncreas nn 18 millirn (ut nf 25 5 million acres of rice crop by use of seeds and inputs alone. Highest yield Improvem.ents per acre wrvlsti a11 be obtained froe%m HYV Boro. The suggested minimum package program would cover all areas of the country where there is rice improvement poten+tiala. The sugges+ted intensive program.., which wod include about 3 million acres irrigation expansion, would concentrate on 11 m4il;In aces _40r .,. -An d-i- 4th 10 yrar period from 1v07-vv - ii - v. Numerous other varieties are in the research nipeline. including several close to release for cultivation, which would give further improvements in grain qualitv and vield through better pest and disease resistance and better ecological adaptability. Furthermore, new varieties may onen un areas for HYV now under low potential varieties because of drought, flooding or salinity. vi. The suggested program for intensive rice production visualizes implementatjion at thana level. Consideration should be viven to, including agricultural extension, training of farmers, distribution of inputs and implPments, strengthAning of eooperat.ives; Rtsrage facilities; and immnroved communication and transportation within each Thana program. The need for nadeqate +twraidmAnnewor And expansnin eof training andtinpiut.q qprv'e-erq might be the main implementation constraint. Consequently, adequate training programs may req ire s+rrng support at +he national level. Shor+age of farm draft power for land preparation, could become a serious constraint toA __tensive~ r_c ,il +.-ivTaton untless +ac.4.led energep+ially~ diiHnc, +-he ten year period by animal improvement, implement design and mechanization tw als. B:aNCTaT- DESFT- SGrnp SmTTw

VOULTVLTME IV - GROPS, T.TITP'1Y'nP ANM T;TSTWVFRTTP.I

TECUITGCAL REwPORBT N,O, 7

RIEPI

I. INTRODUCTION

1.1' .LUi diet- of,a-.,_ P BanidLD 4 hisen+ially oyn cereals. Rice averaged about 93% and wheat about 7% of the total cereal C-- I+4{0i 1oAr/A-rOAO /7.^. -q 4+-- 07^, -A II A-.4- +h^ __~ ^nm WV^JU IAMJ VJ..SfA XL* A/ VV-i'' " V OU J. WAu J... Sf L' 'tJ/ I 6 i',, I .. 6 vfl* ' ''EA ten years. This reflects an increased reliance on wheat imports which

*ILJ11g..3 1-veLIZ bkro-ughtU.u L'J AiLI about-~Li,U v som'eiZ per,-,LanertJJ.I vLLI %I.AcL.6char,g 4nLLL LLLUdea-4- I&.L t3stesV~QUVO towardLown-J IA~0 wheat in urban areas.

1.02 Bangladesh's foodgrain production has lagged behind population grow.Cl :_'-A _4S4-^ 1_.. n4f _- n5.AA_;- -.4- _r ,uc - 6J. '.LW AIJ1 IJAAV A 7V -J' s B ..LLILLM.L.. I .L%.V IJI jAUL V.LVSL 'LA__t- AJ IL.6'.vAVUOI LLA- r. ' JM4 from an average of about 9.7 million tons during 1960/61-1964/65 to an average oU. alloutt 1L0.I 7 MI lIU.1J.-LonJ tIAJIW Uonsd.gIr, 19765/66-19/7LJ70, Ca IIIr.er -0 annual expansion rate. This compares with an annual population growth of.L 32 c 'U lleat. output has L1U±CU ±sUj.rp ., anaver.11 Ct rat Lage o .17 a year, yet it still constitutes only a minute share of the total cereal s Lpp±J.-

1.03,U.1 Bangladesn nas oecome increasingly dependent on ioodu ziMporELs as a direct result of its sluggish output performance. Foodgrain imports grew from an average Of 775,000 tons a year during the first halI oI the decade to 1,131,000 tons during the second half (about a 9% annual increase) and amounted to 1.5 miilion tons in i96oy/7U. Tne value oI imports was respectively $32 million, $54 million and $94 million. Much of the imported grain has been procured on concessionary terms under U.S. PL 480.

1.04 No other crop can replace rice at this stage; rice is and will be grown boy all farmers on most of their land, in large part for subsistence, for several reasons:

(a) Over 85% of the arable land becomes flooded or waterlogged during tne rainy season and is consequently SUITaDle only for rice or jute production.

(b) Bangladesh farmers are skilled paddy growers and paddy production is their preferred farming activity.

(d) Rice technology is more advanced than that of other crops. At the same time, with the continued shortage of rice, the price has remained firm. The combination of these two factors gives farmers higher returns from paddy than from other crops grown on a large scale. - 2 -

With."U%.JUL.LAL1 -th- 4-o,V4AU 111WOJU i,p-tar.tLilIjJJ.L UC4114 U seto%,UUAJ WJ.L 4of,V*LLUe U%I.SJX&W4lI, i..A. U. Cr -- -cro.vtL~I.L4- -- A,-ceLJlAo will continue to play a dominant role. Thus, the future of Bangladesh is t-o a large exter.t tied Jn with th;e -fo.-4tur.es ofP t,.e ricecop

L c u'.i A .L . 5 _- _LAIM - ..' _--_ L.DA-4 _ U- J--U,L1-P __- J - Is _L_ 2_I. - * .v.L1 jV LLU .;JUjcL; aP,uWu UL ±JIIJL-UVVU Oe;t::U;, ±e±-±±|zV, pesticides and mechanization, as well as the land and water resources,

are described in UoQher- 1-t:ePo1`U. 111IOL, -s Fe re-UvWb the VarluUcu situation, the possibility to intensify the cropping pattern and the yields wlhch can be expected from the -various types of crops using the high-yielding varieties.

II. REfENT PERFORMAnCE AN) C'UREENT1 STATIUS

2.01 Rice is grown on a total area of 25.6 million acres (1969/70) annually in Bangiadesh. Paddy production for 1969/70 is estimated at 17.8 million tons. Seasonal areas, yields and production for rice for the 10-year period 19ou_-yu are snown in Tabie I and the same inxormation for paddy for 1969/701/ is summarized below:

Crop Area Yield (paddy)} Production (Paddy) (million (percentage (long (md/ac (million (percentage acres ) of total) tons/ac) equivalent) tons per of total) annum) Rice Boro 2.2 8.5 1.3 35.6 t-' 2.9 1b.1 Aus 8.5 33.2 0.5 14.3 4.5 25.1 B. Aman 5.2 20.2 o.6 17.1 3.3 18.4 T. Aman 9.7 38.1 0.7 20.1 7.1 40.4

All Rice 25.6 100.0 0.7 18.6 17.8 100.0

2.02 The rice yields are among the lowest in the world reflecting only relatively modest progress in the introduction of modern farming techniques to date. Only limited areas benefit from substantial application of modern technology since Boro rice is the only available rice crop geared to an improved variety (IR-8) and which is responsive to fertilizers and other better practices. There were no comparable improvements for Aus and Aman crops until the introduction of IR-20. for the Aman season only, in 1970.

1/ Bureau of Agricultural Statistics (1970) 2/ Compound average HYV and traditional varieties. Examination of yield statistics indicates that there may be an error in HYV statistics and "Bank" estimates for the average Boro yield are 29 md/ac or about 1.1 long tons/acre. This would reduce Boro production figures to 2.3 million tons and total production figures to 17.2 million tons. - 3 -

2.03 Hydrologic conditions, in particular the annual rainfall and drainage patterns, chiefly determine the cropping patterns and cultivating practices of Bangladesh. Three separate cropping seasons have emerged over time and four different rice crops have developed. each adapted to particular seasonal and hydrologic conditions and each accompanied by a distinct farming technolozy as shown below:

ADproximate Paddy Paddy Area Yield (million acres) m_d_sac)

Aus - early rainy season March/April - July/August 8 14

Aman - main rainy season Broadcast Aman March/Mav - Nov/flA)-( 17 Transplanted Aman JuLyoAug - NovDec -1020

Boro - dry season Nov/Jan - April/Myaj 2 36 Aman varieties are photoperiod-sensitive and panicle initiation is stimulated by decreasing day length in October. Boro and Aus varieties are not photoperiod-sensitive.

2.04 Some 8 million acres of Aus rice are grown annually on lands not flooded beyond 1-3 feet by the end of July, which still enables harvesting. At planting time the moisture conditions are more uncertain than during the transplant Aman season since they depend on the unpre- dictable, irregular precipitation pattern of the early part of the rainy season. Plowing of land begins with the first showers and is followed by seed broadcasting with limited moisture. Although warm weather prevails during the growing season, the yield potential is adversely affected by cloudiness, by heavv weed growth and by pest and disease incidence. Harvesting takes place during the rainy season, when conditions are at their most difficult both for field work and for drving the crop. Due to such uncertain production conditions, Aus rice has evolved to a quickly maturing, low input crop with vields lower than the other rice crops.

2.05 To date, only traditional rice varieties have been cultivated during the Aus season. However, she ulew va.L.u%-_e- TP 979 nd, to a lRaSer extent, Chandina - are now ready for release and a significant increase in yields can be expe ted in areas where they canr be introdWced. To shortfen the growing period of Aus varieties is one of the main research objectives. By shortening the growing period, the crop could be sow. somewhat later, to escape uncertain rainfall conditions without delaying the succeeding T Aman 4-4 1-ivitA prepartioAn crop* With a possible shortage of farm draf t power, t4..elyIAj pr--tion- for the T Aman crop after the Aus harvest may become a constraint to increased T Aman yields. Consequently, shortening the growing period of the AuS crop would leave more time for land preparation. Since pest and disease incidence is probably highest during the Aus season, exceptlonal pest and disea1e resistance is necessary for improved Aus varieties. Finally, because of cloudiness during most of the Aus season (on average onrly four hoUs brIght sunshine a day), the variety must be able to photosynthesize effectively in conditions of low sunlight intensity. - 4 -

2.06 Transplanted Aus - planted in February-March and harvested in June-July, is essentially a late Boro crop, at present only grown on about 40,000 acres, mainly in the Northwest. It is normally grown on land which is not flooded early (medium highland or highland) where soils may be somewhat more permeable than in lowland areas. The advantages of T Aus over Boro are: lower water requirements (since the rainy season will have started at the time of peak water requirements) and the possibility of growing a winter crop such as oilseeds between T Aman and T Aus. On the other hand, pest and disease incidence is higher, ripening weather cloudy and harvesting during heavy rains more difficult and expensive. In general, T Aus yields are expected to be at least 10% lower than Boro yields.

2.07 Aman rice is grown on about 15 million acres. About 5-6 million acres are broadcast while 9-10 million acres are transplanted. Aman rice is grown during the Deak of the monsoon season. The type of Dlanting and technology are determined essentially by the depth of flooding. Broadcast Aman is grown in areas too deeply flooded for transplanted rice varieties, i.e. at flood depths of 5-15 feet or more, which cover about 5 million acres annuallv. Tn deenlv flooded areas. floating Aman rice varieties are seeded in March-May and harvested in November/December. These varieties ran elongate with slowly m sing floodwater and stems can reach a leneth of 20-25 feet. In some years, floating rice is damaged by rapidly rising floodwater or river currents. Because of inherently low yields, the long growing season and risks of damage, Broadcast Aman is a low input crop. Fertilizers or nesticides are rarely applied. It also Dresents the most difficult problem for genetic improvement. However, one variety, IR-442, has some caparity to elongate wi th rising water and is currently under trial for medium flooded areas.

2.08 A portion of the areas devoted to Broadcast Aus or Aman is cult+ivatredr asz a mi-nxe crop- o)f' both vaq+e. eds of the shnrt. season Aus variety are broadcast with a long season photoperiod-sensitive Aman va- 4+.r in Mr _ch-Maiy. Thoe short+. seasoznn par+. of' the r-pn is ha rirveste'.d in the water before the deep water floods cover and the remaining long season crop after t-he flood recedes, Mi;xed Auls/40.an is grown in mneriiu flnof1de (3-5 feet) areas where flood depths do not, as a rule, exceed 3 feet at Aus har'west t,v.e ,v, J,,1,r TVhe practice of g ng both Aus and _man together is a form of double cropping. The yield of the two crops is higher than eit_her B Aus-or B Aman g_raely iand, in addi--on, iS a form of insurance against the failure of either of the crops. IR-442 and some of the longr sf r mme A,sA , '+ s , An + ' n + nracon+ prove suitable for replacing local low yielding varieties in future. In t 1,.e MIea n tim e , Mraxed Aus/ma r e ce--i ve~s lltt1-e_ f ert_ -iizer1 o r p e StI;cid e . 2.09 Transplanted Aman is grown on some 10 million acres in areas with shallow flood depths ranging from less than 1 foot up to 3 feet. It provides the bulk of rice in the country. Improved traditional varieties have been available for some time. Because the response of local varieties to fertilizers and improved practices has been limited, the rate of fertilizer application has remained low and only about 10% of the T Aman area has received any fertilizers. The early part of the T Aman season is marked by cloudy weather which gives place to increasingly sunny weather. The harvest in November/December takes place under near perfect harvest weather conditions and,consequently, grain quality is excellent. Because of the sunny weather during the second half of the T Aman growing period crop yield potential is high, but under field conditions this is counter- acted to some degree by fairly heavy pest and disease incidence. T Aman to date is mostly rain-fed. Supplementary irrigation takes place only in the Ganges-Kobadak Irrigation Scheme and in small parts of Northwest Bangla- desh. Rainf'all analysis (see Technical Report No. 23) shows that east o the Brahmaputra there is adequate rain in most years for high yields, but west of the Brahmaputra rainfall tails off earlier. Consequently. in parts of Rajshahi, Jessore and Kushtia Districts only one high yielding rice crcp may be possible under rainfed conditions in most years. In these circumstances, the crop might be a late planted Aus rather than T Aman and one of the high yielding fix period Aus varieties might be more suitable than photoperiod-sensitive varieties. In general, T Aman under rain-fed conditions is a reliable crop though both minor drainage and irrigation would help ensure high yields in all years.

2.10 The fact that T Aman varieties (locally known by the suffix "------sail") are photoperiod-sensitive gives considerable flexibility to planting dates, but improved varieties appear to have an optimal transplanting period during the second half of July or early August. A number of circumstances might cause a delay in transplanting da-e, especially under rainfed conditions or where drainage is inadequately regulated. Late commence- ment of rains means a late Aus crop which in turn usually means delayed Aman transplanting. Field water depth can also determine the time of transplanting. Transplanting cannot take place where- there is more than 6 inches of water on the field. Consequently in some years,transplanting may be delayed. Seedlings would become overmature and this would depress yields. Planting photoperiod-sensitive varieties late may not allow them enoughvege- tative . development before grain initiation, for highest. yields. By contrast, planting fixed period varieties late (some of the IRRI varieties under trial are only weakly photoperiod-sentitive ) maturing of the crop miy carry over into dry weather or into periods of cold night time temperatures. Cold weather can inhibit panicle formation or inhibit pollination.

2.11 Up to 1970, introduction of high-yielding varieties during the Aman season had not been successful. However; during 1970jtrials using TR-20 indicated Aman production could be increased considerably under shallow water nonditions. This variety, introduceAd on 180,000 arprqe is helirved to be suitable for some 5 to 6 million acres of land flooded only at 1 foot denth after the And nf J.l,v. fO+.h varieties sensit;ve to photo-period are being tested and some of them are expected to be released during the next 3 to 5 years. The prospects of rapid development are, therefor . excellent for the main Aman season. 2.12 Boro rice is cultivated traditionally in undrained depressions holding various depths of water after the rainy season, in areas adjacent to them, or along waterways where irrigation can be practiced by traditional methods. Circumstances do not permit other than the most limited use of fertilizer on traditional Boro rice, since these varieties are not receptive to fertilizers and the water stands in the fields for much of the growing season and cannot be drained away. Better varieties and fertilizers have been introduced in limited areas irrigated by traditional methods.

2.13 The development effort of recent years has been largely focussed on bringing more land under irrigation to grow Boro rice. Much of the emphasis has been on irrigation by low-lift pumps, and lately also by tubewells, and on WAPDA's efforts to develop large-scale flood protection and irrigation projects. The efforts of more than a decade have brought only 650,000 acres under irrigation, about 500,000 under IR-8, which yields decisively better than traditional varieties. Any further expansion in Boro rice cultivation depends exclusively upon the rate of future increase in irrigated area.

2.14 Rice yield potential is highest during the Boro season. Though days are short and temperatures low, the weather is clear and sunny throughout most of the growing period. Pests and diseases are almost absent until mid-Mfiarch. Traditional varieties are not too sensitive to low temperatlres, but IR-8, the improved variety now commonly grown during this season, is cold sensitive. Sown in early December, it takes 170 days to mature. The newly and successfully tested variety Chandina is less sensitive to low temperatures, and consequently the growing season is 20 days shorter than IR-8. IR-272, primarily selected for Aus, also shows promise for Boro and there are other promising varieties in the research pipeline. Shortening the growing period of HYV Boro varieties is important so that crops avoid pests, diseases and hailstorms common during April-May in some areas or to avoid early flooding in others.

2.15 Considerable resources were applied to the production of rice during the 1965-1970 period. In 1967, the Government initiated a major effort in the form of an official "Program for Attainment in Self-Sufficiency in Food Production in East Pakistan by 1969/70." This program emphasized expanding the land area under irrigation during the Rabi or Boro rice season and expanding the planting of new high-yielding varieties. The program included supplying subsidized fertilizers and pesticides. It also included an expansion in the establishment of low-lift pumps and tubewells. While the program failed in its goal of self-sufficiency, it did result in a substantial increase in the production of Boro rice (from 830,000 tons in 1966/67 to 1.8 million tons in 1969/70) and of wheat (60,000 tons to 100,000 tons in the same period). On the other hand, there was only a slight increase in the production of the Aus season crop, mostly due to acreage expansion, and no noticeable increase in the transplanted and broadcast Aman cron. which renresents more than two-thirds of the total rice planted during the year. - 7 -

2.16 The success of the Boro is attributed larzelv to the adaDt- ability of the new improved IR-8 variety for early season production and to it.-, rvAnnsivpentesq t+ ferti1izers and plant protection :measures. The lack of suitable improved varieties for unirrigated Aus and for the main Aman ropnn wasc cnnsiaerd S +thompn.r roAqnn fnr thQ lal nof response of these important crops to the intensified efforts. During this per4od, climatic conditions were less favorable than average an several natural disasters, especially the cyclone of 1970, had a major infMuenna n. v4als and served +o greatly offset the efforts of the program.

2.17 During the monsoon of 1970, a major step was taken to increase r_cer~wtiprdu+Avio+-hr +.+}ihe ninOf' +he Acclre1qate Plce Pr- duction Program. This program involved the importation of 1,800 tons of the r.ew TLT .4^e varie+vy, TR=20 (IR=53° E-= froJ7A.m.''the .LLJP -- enough to seed about 180,000 acres and, in addition, the local production of tvhe TV--er 1969/70 was- f to plant On20,000 acres.* A special organization was established on a crash basis to promote the uti4li-z ti^vn of a ^^m lete 4vwms package, thea ,,re wnr personnenl was appointed, and a training program of agricultural personnel and farmers wavns mudert-Oa1en. Fertilzer and-- pest--4- c -onrlcher,icas Were .,ade av3il31b-le. WLu, U.L.Lu~.L~~1J £ .L JL.LSJ. 0 GLQM.L i u vLAJLU.r IJ1 cherdcl .0 fl. 1 e* LVLuL-.L.uJ~ The package was available to farmers on credit which could be repaid with grain after harvest. A pre,,Li. of. Tks "mund was pro-ised to farr.ers a s an incentive for the new variety. The new seeds were concentrated in

Ud.Lst.L-.Uct 0se.LetUUeVL or.L t uObasiLs of.L cLCIIUapjabLiL.Li.y andLU thle avaO.ViJ..L0.LL.L± 14y oJf. agricultural services; only areas not flooded to depths more than 1 foot

D0 m' 1- D .. _ 1 f _ -A 2. TheI Prnprugrcur wa e-va.Lua tleU ULLiunLIg vl,e w.Lainv 1i.7 / (ancuu livhe results were judged satisfactory IR-20 was grown on about 170,000 acres and average yields of fields pianted during the right periods with fertilizer exceeded 35 maunds per acre. Flooding was not a constraint although the floods of 1970 were more severe (about a 10-year flood) than normal. MnTe results have confirmed that a major contribution to rice production during the next decade is possible witn t1he increased use of tHfV varieties in tihe Aman season.

2.19 Inputs consumption has increased markedly during the last few years. Between 1965 and 1970 fertilizer consumption nas increased by 23% a year from 1965 andhas now reached 275,000 tons of fertilizbr (Urea, TSP and Muriate of K)0 Also, pesticides used in 1y9u are estimated to have covered 800,000 acres0 Chemical inputs have been in greater demand at farm level in recent years, largely as a result of introducing high-yieldiing rice varieties. - 8 -

Il. GRO-vM'L POTENlT-LAL

3.01 The potential for expanding rice production appears good although very little new land can be brought under cultivation, and a substantial increase in production can only come from an intensification on areas already cultivated. New high-yielding varieties are avaiiabie for non-flooded monsoon rice and irrigated rice; additional varieties suited for the Aus season and for flooded areas are expected to be released over the next five years. Response of HYV to inputs has been ascertained; rate of fertilizer application can be suggested for local and high-yielding varieties; pesticides and pest control measures for the main growing season are available; rapidly developing irrigation will permit substantial expansion of the Boro crop area and stabilization of Aman yields.

The High-Yielding Rice Varieties

3.02 The major successful high-yielding rice varieties introduced under a cooperative research program between the Intermational Rice Research Institute (IRRI) of Los Banos and the Bangladesh Rice Research Institute (BRRI) - from 1967 to 1971 are as follows:

(a) IR-8. This first major release from IRRI was first tested in Bangladesh in 1965/66 for all three seasons, Aus, Aman and Boro. Initial results indicated an average yield of 2.5 tons of paddy per acre as compared with less than 1 ton per acre for the local varieties planted in the Boro season. The variety showed little adaptability for the Aman and Aus seasons. One thousand five hundred tons of IR-8 seed was imported from the Philippines for the 1967/68 winter season and a promotion program was developed with IRRI training Bangladesh staff on IR-8 cultivation, who in turn trained farmers and promoted the variety. IR-8 requires more irrigation water and a'longer growing season than the traditional Boro types. If planted early - in October and November - it is heavily infested with tungro-virus, bacterial leaf blight, and is subJect to cold damage. Althouah clearly higher yields are obtained with IR-8 than with local varieties its imoact has been modest since Boro acreage. which benefits from supplementary irrigation, constitutes only a small part of the rice production in Bangladesh. However, IRRI experimental work in the Philippines and its cultivation in the main rice areas of the world have shown that this variety has a very high yield potential and responds well to inputs. Yields above 5 tonsAnnetare are generallv obtained on large experimental plots, going up to 9 tons with high fertilization and nest rontrol dizring the idrv season- ThR varie +tv iS ImnS-ir continuous selection and new strains selected mostly for disease and npest. resPistnce are being tested in the Philippines and in BRRIo - 9 -

(b) IR-20- bred i;n the Philinppines and released in 1969, reflects efforts to combine improved plant type with other desirable tfraits (grain qnialiHT.y insect and disease resistance!. Tt matures in 120 to 135 days and is thus substantially better adiustAd 1-t^ the ra;inv seasnn than traditional ATnan varieties (150 days or more). It is a short-straw variety with high tillering rcanarcitv weaklvrnhntnnPeri_d-qensitive and adantive to the monsoon season. It has a production potential abovp 5 t^ns or more, it is resistant to bacterial leaf blight and tungro virus and is partly resistant to leaf streak and ster. borers. It perfor.ed vew,T well in large-scale trals in 1969 and was imported in large quantities in the 1970 Aman SeaA lon.M DFurhe _SeQ ctioDn+;Mow inT^ pr;,.s_ sAho-d 9 ;mAr=Jrn. pest and disease resistance further and lead to more uniform "ipening.

(c) =was TThI ~an has under= IP.=532=l=l76_-~~~~~~~~~~~~~~~~~~~~, (Chandina) identified by gone three years' testing in Bangladesh. It is primarily a a1 nmo + .rn v4 A-+rr -rP- T D-PRPno +hemr -A IT- ,+-A A-Q * itF1IlIJLL J V -V. V. UJ iV -V _L16-... V'JW 4. i. &L%-V £. c' aJ. UW4'- Sui crop though it may find some use in Broadcast Aus areas not subJ-ec-lLA' 4-~AS J.L~.JLW-Ploo44- JiJ.J.LLa . ItsTg.LU .Ov ~ a short4LW.iJ U strawOV.LCVV) VO.±.LSUVy--reuy , O.VVLi.L-- , -ra-*iaJL 85 cm. compared with 100 cm. for IR-8. It is more cold +A-J la n TOR-8 mat wes 20-30 days earier -1era-i4t4-LiJ~ . L± U Ull~I _.L L %J and%AL±J consequentuly ±iJLL. U. Yi VyL.uUl~_o c _'JJL "C6.J 0 Z 4..LJ'. J It also has more pest and disease resistance and better grain

quaLiLdQy andU ILd1 VUh±J-ieLt U I-I'J URLUt::- fLiLU condi"` tions . In L, U - duction of the variety on a field scale was interrupted by the U.disurbancesU ofL 1971. CaLd it Ls Ue'lie-ved' u,ct uonly- small quantiti-,es of seed are available for bulking.

(d) IR-272-4-1-2 - was first tested in Aus 1968 and has been intensively tested since. Tnis variety is moderately tall, averaging 118 cm. has good tungro virus resistance, medium leaf blight resistance and good grain quality. It has outyielded IR-8 during the Boro season two years running but shows particular promise for replacing local Broadcast Aus varieties. In years of high tungro virus incidence, it has outyielded local Aus varieties two to four times. Thne variety is at the seed bulking stage, ready for large-scale introduction.

3.03 A promising variety at an earlier stage of testing is IR-42 which has the unusual ability to elongate as the iloods rise and to cont:inue growth, if necessary, in up to 5 feet of water, while remaining short if only a minimum amount of water is available. It is adapted to the Aman season. Its high-yield potential and adaptability to varying water levels was first identified in 1970, but the degree of resistance to the major plant diseases has not as yet been fully evaluated. 3.04 So far, more than 7,000 IRRI rice selections have been introduced andu screenedUL fCor J bee tLhL'ree cr-op seasons U- nJlU±. MoJre *4.1an ,'J iocal varieties and selections have also been screened. In addition, about 200 crosses Lhave btete. raLdCU, ]lardgel.y bet-Ween.L IP. selections dal te besta local varieties. This massive selection and breeding work in Bangladesh, in

allUUJ i Ull IU WUI'. L LUd K I dLU., .l_kLa LLU jvXm.t UtU UV p.lUUtlU CL k oV:1V1LLU)UD flow of improved rice varieties suitable to each of the ecological conditions J-1 be CUwiUIy. Some prUgres-b ZisUCLlg IImaeU i.LI die UevepjI1I-U Uo. deep-water J at BRRI, in Thailand, and in the Philippines. This is also true of salt- tolerant varieties. In the next 5-1u years, pur±povedu varieDie alreacuy in tests at BERI are therefore likely to be available with improved characteristics, including yield, grain quality, pest and disease resistance and special ecological adaptions to broaden the range of high yielding varieties in the field or ooDsibljr even to replace some oi tne LRUZI varieties now recommended.

Cropping Pattern Changes and Intensification Potential

3.05 As underlined in several other sections of the Study, the cropping choice of -aie4ties, 4y of c 4 4tvto4 al-e ,ydb patteM.s, ~~~~~~~ ~ 4-4er,S4.Lv UCJ4J. U> JL cu_.ULLL Vda± . 1ULI'lL1y Uu(zLIzte-u mined by climate and hydrology: the seasonal pattern of monsoon rainfall and flooding followed by dy conditions dui--n the 5-6 mlonths! dry season. Present cropping intensity is estimated at more than 1501% on the paddy grow- lwl-s T_ several districts ofP 4the cowX-s- 4-wo cneu-v ^-aol- -5 ---- ~ .A.~ ~ ..L ~V.O-- "J UL U ~~ L UILC_ %VW IJ uINI UVIEJeu;L;LL 4jj.Ve : .L'. JJ1- fed crops per year are grown on the same piece of land (double cropping).

T h ese include the A,,-/A -- area- 4-1- Athe-- /PI-4 crop ar-ea we-e- -- n- crop is grown on residual moisture following the monsoon rice. In the best wat red AA S _4;\ I T-4_|- -- A 4____ M_- __*4N _! Wr.-.''.. I sCZ t1lC Ull LUI UaIt lat3 U, -L. U -L CV il jJO 3±U.Le to develop a triple cropping with a quick growing Rabi crop followed by an early AUs rice crop and an AinCn rice crop. Dy contrLast, only une crop may be possible in the driest part of the country and in flooded areas such as the Sylhet an.d Central R-regions. There was a notable increase n1 Aus rice and Rabi crop acreage in recent years reflecting an increased pressure on the land but this potenilal for contlnuous intensification is now severely limited.

3.06 In many cases irrigation alone allows the replacementi of a low potentiial Broadcast Aus or Aman crop by Boro or T Aus, but does not increase the croppirg intensity. In present B Aus/T Aman areas the introduction of Boro or T Aus would replace B Aus because there would not be enough time for it before the T Aman crop. In flooded area; the Boro crop would not allow B Aman to be sown in time to escape destruction by flooding, as B Aman needs to be 6-8 weeks old before it can elongate with rising water levels. However, in large parts of the 'i^est of the country, where late Aus or transplanted Aman is the only crop grown in the year, either because heavy clay soils cannot be plowed in time for early planting or because the rainy season is too short to allow more than one rice crop a year, irrigation would intensify cropping by allowing two HYV rice crops a year, Boro/T Aus and T Aman. ahile the main benefits would come from Boro or T Aus, irrigation would help to ensure constant high yields for T Aman, particularly in years when rains end early. Generally a Boro (or T Aus)/T Anan rotation with only minor drainage is associated with tubewell irrigation on highland or medium highland soils. However in the Barisal/ Patuakhali area large areas are suitable for the same rotation with irrigation from low lift pumps. 3.07 Relatively minor local gravity drainage may help to ensure the Broadcast Aus harvest by preventing local flooaing atter hea-vy ran or it could help to ensure timely transplanting of T Aman by regulating the depth of water at transplanting time. in some areas of medium floodinr-g (3-5 feet) this type of drainage could change the cropping pattern from the low yield potential mixed Aus/Aman to HDv broadcast Aus foliowed oy HYV T Aman. Flood protection and drainage would have a similar effect allowing a change from low yield potential Broadcast Aman to Broadcast Aus followed by T Aman. This type of protection and drainage however usually requires major engineering works, including embankments, siuices and sometimes pumping stations and is therefore now generally combined with irrigation as in the Dacca-Narayanganj-Demra Scheme or in the Chandpur Scheme which is under construction. The effect of a combination of flood control, drainage and irrigation is to change the cropping pattern from one low potential crop of deep water rice to two high yield potential rice crops, Boro and T Aman. However, this type of scheme has a long gestation period estimated at about 15 years, and can therefore make little impact on rice production in the next 10 years.

Yield Increase

3.08 The malor opportimities for increasing rice produt-ttinon in the 1970's include the development and expansion in the planting of new varieties, the use of increasing volumAR of fertilizepr on +thes f varieties, the continued development of improved water-control facilities, including lowlift niimpn tihwe11 and minnr drainnae development, continued improvement in pest control programs, and irilDroved cultural practices. These inlivi9amj fa-tors arep i-n'rtpe-npenrn in +.t+ +lhe new v-rieJiJs are affected by the degree of pest control; the cultural practices used also affect the productivity of theInew varieties and +1th e gree of resnpoan from fertilizer applications. Improved crop husbandry practices, including ferti iJi .on, pest o ntrol nf3 iri gtnJ car.n be e-prcte to nearly double average yields. The feasibility of doubling average paddy yields on large was de-nnnRt'ratad in wt Pa.Yi stq Korea, and axeas v P- 14-Ltne-, number of other countries in the Far East. In Bangladesh, the IR-20 program 'h> shown +hatanhatnaverage increaose of 15~ marnds per acre c-n be rhtained from Transplanted Aman rice.

3.09 For the projection of production, farm budgets and input require- m__anr nmhay- nf xri=lr aa+nmn+t hoaqA +nhc mFlc - rtThnmm nla+4yms+oa +nlrn in+n account the following factors: (a) ecological conditions; (b) type of rice grown; (c) avaialability of irrigation; (d)potential of production an.d proposed level of inputs considered. A series of yield projections used for aa+im2t,Vf- rliictior is skho.m ir rrle 0 3.10 Where the use of HYV is possible an input package was always included as there is no evidence that i-1Yv, without proper fertilization. and pest control, would give better results than local improved varieties. The corresponding yields proposed take into account the need to use lower average yields than those obtained in the supervised farmer's field as the size of the area to be improved is considerably iarger. A minimum period of adaption for the farmer was also specified. Estimates of the fertilizer inputs at various yield levels are indicated in Table 3 and described in more detail in Volume V. Crop responses are as yet in- sufficiently known to consider these estimates as accurate. hney will have to be kept under continuous review on the basis of new evidence. Volume V also describes suggestions for improved plant protection measures and rice seed production and distribution.

3.11 It should be recognized that the great possibilities for yield increases stem from the introduction of HYV that are both disease-resistant and fertilizer-responsive and that the yield increase cannot be repeated year after year. It usually occurs only once every 30 to 50 years. Thus, after the initial increase in yields from the introduction of new varieties to most of the land area planted to rice, further yield improvement from additional new varieties will be slower. The rice-breeding program after this initial impact is likely to contribute more in terms of quality improvement, disease resistance, seasonal improvements, such as a shorter growing season, adaptability to specific soil and water conditions and replacement varieties for those that suddenly become susceptible to new strains of plant diseases. Nevertheless, a combination of these factors together with some rise in overall yield potential plus the increasing skill of farmers (enabling them to achieve yield levels closer to those of experiments) should bring about a steadily rising yield per acre, as indicated in Table 2.

3.12 Based on land capability, flood levels and duration described in Volume II, an estimate has been made of the rice acreage which would be suitable for improved varieties or where significant yield improvement of traditional varieties may be possible with inputs only. The result on Table 4 shows that yields could be improved on about 18 million acres which would be suitable for the varieties described in paras 3.02-3.04 either already tested or undergoing testing in Bangladesh and some improvements would be possible for about 2 million acres local varieties. Again, based on land capabilities, an estimate has been made of the total rice production potential of the country, first with maximum possible development of improved varieties only, then with improved varieties and irrigation, and finally with improved varieties, irrigation, drainage and flood control. In each case, production has been estimated at rising yield levels over ten- year intervals between 1983 and 2003. The result is shown in the table below. The estimate has been based on available land resources and does not take into account implementation constraints, water availability, engineering or economic feasibility -- all factors which could change over time. - 13 -

±LLUfl rnunutpjjUjT1j -'UTPIAL (millions of tons Clean Rice)

1983 2993 2003 17uqr v Yield Yield Yield Production Levels Levels Levels Inputs only 11.4i/ 16 19 22

inputs 26 32 38

Irrigation,4 Drain- A0 na i-tVn.. age ;-tna-nd - 35 42 51

3.13 The following are assumptions and judgments which apply to the table:

(a) Production possible with improved varieties and inputs only assumes 1969/70 levels of_rrigation and a total paddy area of about 23 million acreV/ out of which 18 million acres would be improved varieties.

(b) Production possible with irrigation assumes about 15 million acres of irrigation, and an increase in the paddy area to 28 million acres of which 25 million acres would be improved varieties. While, at present, water sources for only about 10 million acres irrigation have been identified, it is likely that further studies will show that available water supplies would permit 15-16 million acres to be irrigated. (For a full discussion of the water resources of Bangladesh, see 'Technical Reports 20, 21 and 22.)

(c) Assumptions for the combin3d flood control irrigation and drainage case include flood control and drainage for about 6.5 million acres. The paddy area in this case would rise to 3h million acr#s of which 33 million acres would be under improved varieties, and 18 million acres would be irrigated. However, on present evidence, flood control, drainage and irrigation combiled may only be technically feasible for 3.5 million acres.

1/ Inc:ludes production from about 700,000 acres irrigation and 500,000 acres IRBI varieties. 0/ fOlntnr+u mixed Asm/Aman as one crop rather than two crops as in past Government records 0 - 114 -

3.1)4 Various assnmptions of nonulation growth ner canita income growth and per capita grain consumption are discussed in Volumes I and III and on the basis of these assurmptions a range of future grain requirements were estimated as follows:

1983 - 16 million tons - 18 million tons 1993 - 22 " ' - U' 2003 - 28 -_ 39 ti

The divergence between lowest population and income growth and highest growth figsres is considerable and actual req1ui-rmPnts may be about half way between the two extremes. Comparison of the food grain requirement figures with the predicted physical production potential shows that the contribution of improved varieties alone is limited and must be supported by irrigation developmentr, nd cobrnned irrigation flood protection nnd drainage development would become necessary in the second development decade.

Climate Limitations

3.15 Although the climate is generallY favorable to tropical field crops, it imposes severe limitations during both the dry and the monsoon season. The two months of the cool period starting at the end of December do not favor transplantation and early development of paddy and transplantation of Boro should take place, either before or after this. The dry season which lasts from 6 to 7 months is the most important limiting factor for agriculture intensification: Rabi croP can be grown without irrigation if it has a short period of growth and is planted early using monsoon residual moisture. Paddy cannot produce during the dry months exceDt where either irrigation is available or receding water leaves enough moisture in the soil.

3.16 During the monsoon, the main limitation comes from unreliabilitv of rains particularly at the outset of the season, the humidity which favors multiplication of pests and the cloudiness which imnoses a limitation On the yields. Drought occurrence is particularly severe in the western part of the countrv and imDoses a limit to cron intensifinatinn nthpr nlimAtin factors can adversely influence agriculture development in specific areas. This is the case of the cyclones in the south and the fl2sh fl1onds in most of the central and eastern parts of the country, especially in the Svlhet Rasin.

3.17 With respec.tf fo eaeh r-ic growing season, the main .oblemI already described in Chapter II may be summarized as follows:

Boro rice. Requires good water control; early monsoon rain might

4 AU 3 r +, v.r ~v A~ +- A- -- P '.t~~ *~~LWL.LA.AL5~~ ~.JL* UJ ±±.U& flY VJ.. 5

flood risks in many areas; high occurrence of pests; harvested during monsoon lead-ing to hiJEgh grain- hm A4 +-, - A-4 -4 z processing-r. problems leading to low farm prices. Transplinted Aman. Adapted to area of shallow water only; risk of missing optimum planting date when Aus is late or fields flooded; risk of drought at end of the growing season; average occurrence of pests.

Broadcast Aman. Difficult to fertilize and protect from pests kaeriai spraying); may be destroyed by rapidly rising floodwater or t)y river currents. No high-yielding variety in pipeline.

Cultivation Limitations

3.18 Where intensification of a cropping pattern is possible the fanler has to face a major constraint: the scarcity of draft power to prepare the land for planting. The main problem occurs at Aus and Jute planting time and between the Aus or the Jute crop and the Transplanted Aman crop. To prepare the land for transplanting Aman during the month of July, the Aus crop or the Jute crop should be harvested at the end of June or the beginning of July. This means that using the present varieties the Aus/Jute crop should have been planted sometime during the first half of March. There would, therefore, be two critical periods related to soil preparationsfor the seed bed preparation which should take place during the first showers and the puddling/ plowing in July for the Transplanted Aman crop. Consequently, a careful assessment may be necessary of the impact of Aus on the Aman crop yields and on the timing of farm operations. In July there might be a significant shortage of :Labor in Aus/Aman areas where harvest, transplant and threshing of the Aus crop takes place at the same time as land preparation and nursejry establishmen-t for the Aman crop. With the available varieties a substantial increase of -the Aus crop area is very unlikely. A Boro/Aman rotation does not face the same problem, with at least 4-6 weeks between crops available for land preparation.

3.19 A Rabi crop, if planted on residual moisture in November or December, might, in certain areas,be harvested before April and leave room for late ALuS. Again, timely land preparation may raise difficult problems. Cropping intensification depends, therefore, on three possibilities: (i) increased draft- power availability; (ii) improving farm implements to cut down the number and time of operations necessary for land preparation; or, (iii) shorter duration varieties. To increase draft-power, either the animals should be improved or mechanization should be introduced. Improving animal draft-power is a long- term exercise involving improved feeding and breeding. Recent experience with mechanization was unsuccessful due to a lack of training in the use and repair of equipment at the operation level, insufficient supporting facilities, the large number of small and fragmented holdings (the problems raised bv mechanization aspects are covered in Technical Report No. 16). Thus, the use of shorter season varieties for Boro and Aus combined with imnroved water control appears as the most promising avenue for intensification of land use. - 16 -

Farmers' Acceptance of New Technology

3.20 The spread of new technology is likely to be hindered by the small size of the farim and the consequent poverty of farmers. The 1961 Census of Agriculture estimated that the 22.5 million acres of agricultural land were farmed by 6.5 million farmers, making 3.5 acres the average farm size. However, about half the farms are smaller than 2.0 acres and, in addition, consist of six or more scattered fragments. Most of these farmers are chroni- cally in debt to private money lenders and may not be able to raise the money necessary for the inputs required for the modern technology. Even if many farmers are able to find the cash or raise further credit, they may have to be very sure of the result before accepting the risk of investing in purchased inputs when one bad year could mean the loss of their land. The good performance of ISRI-8 and IRRI-20 has attracted widespread interest by farmers, but it may need a complete package of demonstration, advice, credit, timely availability of inputs, efficient marketing arrangements and a reliable water supply to translate interest into widespread acceptance. The build-up of all the necessary supporting services may act as a constraint to development rate. It has, therefore, been assumed that about 20% of the cultivable land may be operated by farmers who would not be able or willing to accept modern farming methods.

IV. RICE DEVELOPMENT STRATEGY

Ceneral1 Objectives

4.01 The availability of high-yielding varieties for transplanted Aman and Boro paddy offers tremendous possibilities for increased rice production.and the imminent release of new varieties for the Aus season presents additional opportunities for increased production. However, these varieties are not adapted evervwhere in the country and their potential can only be realized under favorable ecological conditions. Also these varieties have to receive other innuts such as fertilizer; nestisides and irrigation to replace local varieties.

4.02 The opportunities provided by available HYV need to be exploited as quickly as nposibhie. AFile progress is possible onna broad front, it would be wasteful to exercise no selection in terms of the level of effort choseqn in specific locationsn The strate proposedn for rice developm.ent involves three complementary actions:

(a) a minim~un package program to spread niew seeds to all suitable areas;

(b) an intensive program to concentrate efforts and investments in areas where maximum increase in production can be obtained, where the production potential is high and the risk of natural catastrophe is low; - 17 -

Cc) proarams to lay the foundations for further growth through expansion of research, education and training and improvement of the transnort. storage, nrocessing infrastructure.

4.03 In the short term the minimum package program would allow inter- eqte-d fqrmpres in all 'areasto hbnefiit from the new seeds U.nwAvAr- RinC'A there are only modest back up services the degree of farmer acceptance

mTv nn+. fyld Ing- rThiq nrnarwm wonill ri iqA P-riqti.n .qtnff +.n nnnriiitn. Arhm- onstrations, and training programs along the lines pioneered by the 1970 AcceAleated .Ace Prodclition Progray.A wnitch succ eipti in innt-r'oducinngTIR-20 seed to 180,000 acres. The minimum package program would be expected to introduce new varieties--or to Pencourage the spreadof impnroved variePtie-- where they have already been introduced. The program would also be a prep- arat-ion for int-ensive followu p iin. selectead anrea-s.

4. ol* ro" +the mA11y. i.+., the beast uise o-fi4"v%iu n,r be r1dor^Ion- centrating their use in favorable areas. Any other approach may spread 4 scnarce managean n- -A fi4"-ca resources too "inyn Fr- 4.1- long=te., ..S1U ± A CLF, - --....a.L -A,L.a.5Oa.A .&. UJtU~jt Uw~ ulLuj-~.Jy * tLw. %URIC _.%LU* -u uv.j it is intended to extend progressively the approach suggested by developin; adNait-ional wate- contro pro-4c whic would perm-t intensificauion. O.~A..L J1..L WCY. .Y~LIJ.U.JLJ.UJ~1. O UI1.L.J.1A WCJ L11"4. U V L..LJ.. L %CZ U4..jLV Wiith increasing yields of rice and more adequate water control, the cropping -at-trnoa-P P IL-.gl.Aadesh1ar,ay Ibeaorm.e sorewha rore diL,-I- 4P4aA to4r-.ee P.,fu.- 4..,u - paL)1~J.,4.C~1u ~±11 U. III.J U~AJ1I~ O'JIIC nIa U111U4.L C, %" V Vl QI .L.L. J, 4 A LIU) C U U IL UUJ. IC, requirements for a higher-quality diet. On the well-drained soils which do

r.otIRAU IL'.LIJ.%,-Io Wwater, vUC., -sLLL co-uldJU..LIl 1IkCU.L.114er- 4-- --.-nrae-A dcto of '-.i4-I, tRVL pleFJL ULV&I.U L~1 LL 1 ALJ.U and high-vitamin vegetables or perennials such as tree crops or sugarcane. S,-,lal_&LLy inJ the dr,y saonCDL, theO producUtio_n of a .-.-- me of.gh_al> vegetable and high-protein crops may increase on the lighter soils.

Choice of "Areas of Concentration"

4.05 The recognition, delineation and description of Land Development Units supplemented with detailed hydrological and socio-economic information (see Volume II) provide a rational physical basis for selecting the areas where maximum increase can be expected and HYV are likely to succeed. (See Volume II, summary maps). An additional criterion to be considered when selecting the area of intervention is the accessibility of the area so that fertilizer and pesticides can be provided, surplus rice marketed, and fields and villages accessible to the extension agents. While highest priority is suggested for areas with the greatest production potential, social and political conditions may also have to be considered in practice.

4.06 Using the criteria mentioned above and the information available on possible irrigation development, a number of areas have been identified covering parts of 219 Thanas and are suggested to be suitable as areas of concentration for development during a 10-year perspective. The main priority areas selected are the following: - l0 -

(a) the rainfed areas predominantly suitable for HYV Aus and Aman where those two crops are either grown in succession or independently; these areas cover approximately 3 million acres mostly in the Northwest and Central (Mymensingh) Region, including about 80 Thanas; they also include areas in the Comilla District and in the Barisal District (about 10 Thanas in each);

(b) the rainfed rice areas suitable for high-yielding varieties of transplanted Aman (IR-20) without flood risk; they cover about 2 million acres mostly in Rangpur and Dinajpur Districts and part of the Barisal area;

(c) the areas which can be irrigated by low-lift pumps and tubewells suitable for HYV Boro rice and transplanted Aman HYV without major drainage work--part of these areas are located in the region already identified under (a) and (b), particularly in the Barisal/Patuakhali area and in the Northwest; thirty Thanas in the Barisal and Patuakhali areas are suitable for additional low-lift pump development and areas north of Jessore in the Southwest Region, the greater part of the Northwest Region and the North of Eastern Region are suitable for tubewell irrigation. It is considered that irrigation development of about 2 million acres would be possible in these areas over an 8-10 year period,

(d) the Boro growing areas presently equipped with low-lift and deep well pumps covering some 700,000 acres where a slight increase in irrigated area and productivity can take place;

(e) areas suitable for lo.; lift pump irrigation where HYV Boro can replace Broadcast Aman -- partly in the Kushtia-Faridpur Districts of the Southwest Region, partly in Comilla-Noakhali Districts and Sylhet District of the Eastern Rezion.

4.07 Assuming that during the next 10 years, only 80% of the area mentioned above can be improved under rainfall conditions and 100% under irrigation, the area suggested for improvement in concentration areas would cover:

Million Acres

Transplanted Aman HYV 4.6 Broadcast Aus HYV 3.0 Boro/Transplanted Aus (additional HYV) 3.0 Boro (improved HYV) 0.7 Boro (traditional with inDuts) 1.0 _ 19 _

The Package Approach

L.O8 The size of the initial development program for rice has been identified taking into account the need to use a package program in the concentration areas and the main constraints in skilled manpower and managerial capacity during this initial period. It should be recognized that one weak link in the chain of production and marketing might spoil the whole program and that distribution of improved seeds of HYV can have adverse effects if not Dart of a development Drogram. The nackage approach considered in this report has been centered on the Thana though its limits do not coincide necessarily with those of the Land Develonment Units. Up to now, most field activities, training, storage and input distribution are done at Thana level where the various ministries and directorates have representatives. It was, therefore, assumed that unless a major change in the administrativA st-nitures is implemented- the Thana would be the most convenient development unit.

4.09 The package approach at Thana level assumes that a number of antions are bAinv oarriad out at thA national level - scmh as agricultural research, education and training, procurement and transport of inputs and sunpluses. Hoflwever, it is at Thnna level that a coordination of action is essential to reach the production objectives and this, during an initial period, needs substantial technical anti financial a f r?,^m the Government and efficient farmer training programs.

4.10 For the time4 being,4 agricultural extension and rural education aM' yw.r,bab,lw tjronI, nl"L v +Vim "".,a^,+4 ,ws -krs ovA d-1-,air nnnv.,vI 1% 4mv%"awrraA pra TJweak l.n it1tiJ chain and te be i o V. dramatically in a few months or even a few years. A major limitation is 4 ilna of prop-r assistar.c a eorg nd -zatio4 an of +.1e Ma.le.The a.4 co..po= aa.. -. FAI tJjfl. - O.. V-M%. O.*- '.4 . WAJ..CV..~. .D**' *a..I .0 *.*' i,.LM C'*fl& nents of a package program at the Thana level can be indicated briefly as 4 4 foll 1 .:a ( a) nfl. ,n 1+. .,l a-u+ ant, n orieanted4 atowards a n..icu.1u4r.e Aan'1al a, ment in close contact with farmer groups; (b) farmer training following +he -odel of Co,.4l1a and .,-..-a-a,- . /(z)- 4 a.- in ofP 4i,ns+ ar.d 4i.w1 ments, including sprayers, improved plows, etc; (d) establishment of 1 4 4 4 t.,-aining a.,ad cooperative mac4 e4- (t)N aa-lability a soage 4ac41 +4-. for inputs and paddy; (f) improved communication and transportation; (g) availabil:ity of credit.

1 .1 1 Car.mir.g,- cut all i r.etro+mer.t necefsay 'fto+ anhi',-=ea the productios r. obJectives in 219 Thanas in a 6-8 year period for infrastructures and an 4 4 1 4 4 - ---- ;4AA Pa - nv-+4-A P;n; + -as Aa,1A bA a PA.m-4AmIAln +.SI, R10_vJ'S . F04. - - - .5. .5, v.1-a . 4 L C 5-. s'. /0 *'U S LA LS 5/aDaJ U considering that so many Thana centers and village structures need rebuilding. '7,0 The.1he properPu'1J. trainin-gL. "A2.ILJA1, LJJor retrainingL A0.L.AA' LU..of C'.Au~sor,. I ,.'JJ 4torVW 1 U,UMVA,00 Ann.J J il.L.LU VAA cer C .4QiLAL the concentrated areas, in addition to the regular staff replacement in the restI- of'tbe country, wo reqaire effort- P---, 4the -- Ad,,.iristration. C ...A VLA4 L A1IUJIL YJU.L"A% "'d .0.L.J 0ulA.L.a ma-or 0.L AJ..Wl.LA14 U.15111 15.0K MAUjIA.L1.LU U.LV.Ij. Credit needs, much greater than at present, are roughly estimated to build up -o a level oP MI1-5. -I . a., per ,Th,M.a per year for- -- 4 inputs-4t at4 full development. - 20 -

4.12 The combined effect of the minimum, package and concentration area program is estimated to increase rice production from a level of 11.4 million tons in 1969/70, to 14.4 million tons by 1978/'t9 and to 18.0 million tons by 1983/84. A more detailed breakdown of these production figures is given in Table 5. This shows a rise in the overall yield level from about 12 to 18.5 mds rice per acre due to improved varieties inputs and irrigation. The acreage under rice increases mainly because of the areas in the proposed concentration areas where irrigation would allow -two rice crops per year where one is now grown. At the same time the acreage under Broadcast Aus and Broadcast Aman is likely to decrease as irrigation allows replacement of Broadcast crops by Boro or Transplanted Aus. BMIGLADESH - SECTOR STUDY

SUMMARY OF ACREAGE PRODUCTION OF RICE AND YfIELD PER ACRE 1960-71

AcreagB million acres) Production (million tons) Yield (mauund/acre) 'Season Aus Amnan BlDrO Total Aus Aman Boro Total Aus Aman Eloro AverEe :1-959/60 5.9 L4.3 .9 21.1 2.09 5.99 .40 8.48 9.6 11.4 11.8 10,.9 :1960/61 6.3 14.6 1.0 21.9 2.50 6.57 .45 9.52 10.8 12.3 12.1 11.8 :1961/62 5.9 14.1 1.0 21.0 2.33 6.65 .49 9.47 10.8 12.9 ].3.1 12,.3

1962/63 6.2 14.2 1.1 21.5 2.20 6.05 .48 8.73 9.7 11.6 11.3 11,.1 1L963/64 6.6 14.6 1.1 22.3 2.66 7.29 .51 10.46 11.0 13.6 13.0 12.8

19614/65 6.6 15.1 1.1 22.8 2.50 7.26 .57 10.33 10.2 1.3.1 ]L4.9 12.3 1965/66 7.3 14.7 1.1 23.1 2.92 6.80 .62 10,,34 1.0.9 1]2.6 1L4.9 12.2 '1966/67 7.0 1401 1.4 2205; 2.67 5.592 .83 9.42 10.5 11.5 16.3 11.5

1.967/68 8.2 114.7 1.5 24.14 3.07 6.81 1.11 10.199 1J0.2 12.8 :19.8 12.2 1968/69 7.7 14.4 2.0 24.1 2.68 6.88 1.60 11.16 9.5 13.0 21.8 12.6 :23.6 12.8 1969/70 80 5 14.9 2.2 25.t, 2.96 6.95 1.590 11.482 9.5 12.7 1970/71 7.9 114.2 2.4 24.r; 2.86 5 .91 2.2 10-.97 9.8 11.3 25.0 12.2 TABLE 2

BANGLADESH - SECTOR STUDY

PADDY YIELD ASSUIAPTIONS

(Maunds Per Acre)

1983 1993 2003 Inputs Package Inputs Package Inputs Package dith With With With With With Base Irri- -Drai-- Irri- -Drai- Irri- Drai- Crop Year Alone gation nage Alone gation nage Alone gation nage

Local Aus 16 18 20 22 21 24 26 25 29 31

B. Aman 15 17 20 22 20 24 26 24 29 31

Local T. Aman 23 28 32 33 33 38 39 39 45 46

Aus/Aman 21 23 24 25 27 29 30 32 35 36

Boro 25 30 30 30 36 36 36 43 43 43

IRRI Boro 40 45 50 50 54 60 60 65 72 72

B IRRI Aus -- 25 29 32 30 35 38 36 42 45

T IRRI Aus -- -- 45 48 -- 54 57 -- 65 68

IRRI Aus/B

Aman - 27 32 35 32 38 42 38 45 50

T IRRI Aman -- 36 40 42 43 48 50 52 57 60 TABLE 3

BANGL*ADESH - SECTOR S1UDY

S-u-v*ESTED FERTLIZER DOSES FOR -VARI1OUS

PADDY YIELD LEVELS

Yield Urea v Phosphates-/ Potash - Tota.L crop (m/acre) (lbs per acre)

Rice 20 60 30 -- 9( 25 120 60 45 225' 30 140 70 55 265; 35 170 85 65 310 40 200 100 75 375C 45 230 115 85 430 5° 260 130 95 48' 55 290 145 105 54C) 60 320 160 115 59';

65 350 175 125 65C0 70 380 190 135 705:

75 410 205 145 76C1

1/ 46% N 2/ Triple superphosphate 46% P 3I Muriate of' po+ash 60% K02 TABLE 4

BANGLADESH - SECTOR STUDY

AREAS SUITABLE FOR IMPROVING RICE YIELDS

WITH INPUTS ONLY

Improvable Actual With Inputs and 1969/70 Minor Drainage Crop Area Only

(Million Acres)

Boro/Transplanted Aus

a. Traditional Varieties 511 1.0 b. HYV Varieties o.6- 0.8

Sub-total 2.1 1.5

Broadcast Aus

a. Traditional Varieties 6.0 1.0 b. HYV Varieties: Chandina. IR-272. IR-bI2 5.0

Sub-total 6.0 6.0

Transplanted Aman

a. Traditional Varieties 9.3 b. IRRI Varieties

i. IR-20 0.2 6.02/ ii. IR-20, Chandina 2' ' IR-272, IR-442 and 1.7-/ " Varieties in the Research Pipeline iii. IR-LL2 and similar 2/ 4/ varieties 1.8

Sub-total 9.5 9.5

Broadcast Aman 2.5 -

Mixed Aus/Aman

a. Traditional Varieties 2.5 b.Tm-" inrA T 4+4c_OC

rP(OrrA DTOT A11A 00 A o0

1/ Irrigation already installed.

Suitable for those parts of the Western areas of Bangaldesh, where the rainy season is short and only are reliable ricC crop can be grown. 4/ For T Aman areas with flood depths of 1-3 ft. BANG]ADESH - SECTOR STUDY

RICEI PRODUCTION 1969/70 AND ESTIMATED PRODUCTION RESULT:[NG FRLOM

THE: MINIMUM PACKAGE AND CONCENTRATION AREA PROGRAMS

1969/70 1978/79 198384 Area Y'ield Production Area Yield ?roduction Area 'Yield Production (00' Mds/Acre 000' 000' Mds/Acre 00(' 000' Mds/Acrie 000' Crop Acres Clean Rice Tons A.cres Clean Rice Tons Acres Clean Rice Tons

Aus __~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~2 .a. Broadcaist Local 8421 9.4 2907 6177 9.4 2131 3025 / 9.4 1045 lb. Broadcast HYV - - 1/ - 1897 14.0 975 4175 - 15.8 2438 c. Transplant EHYV 42 23.7 ' 37 250 28.9 266 600 29.6 650

Total Aus 8463 9.4 2944 8324 11,0 3372 7800 14.4 4133

Aman

a. Broadcast '5152 11.4 2165 4986 11.4 2089 4030 11,4 1686 'b. TransphLant Local 9657 13.4 1/ 9748 5005 13.4 2500 2897 13.4 1427 c. Transp:Lant IYV not Irrigated 25 23.2 - 21 4000 20.8 306'1 5004-/ 21.6 3970 d. Transplant EYV Irrigated _ 5 23.2 ]L 4 845 25.1 780 2125 26.7 2086

Total Aman 14839 12.7 6938 14836 15.4 8430 14052 17.7 9169

Boro

a. LDcal 1604 16.7 1/ 982 1604 17.9 1054 1496 19.7 1083 iEV 580 26.7 568 1292 31.5 1497 3125 31.6 3631

Total Boro 2184 19.3 1550 2896 24.0 2551 4621 27.8 4714

TOTAL RICE 25486 12.2 11432 26056 15.0 1435:3 26473 18.5 18016 = - == - ==--- =- =- _=

1/ Adjusted figures as off'ical statistics were considered to be too high. 2/ It is predicted that thLe jute acreage may increased by 300,000 acres at the expense cf Broadcast Aus and consequently the Broadcast Aus Area has been rediuced by 3Cl0,000 Acres. 3/ Includes 3 milliorn acres in the concentration areas yielding 16.7 mds rice per acre and 1,2 million acres in minimum paclkage program yielding 14 mds rice per acre 4/ Includes 2.4 million acres in the concentration areas yielding 24 mds rice per acre and 2.6 million acres in the minimum package program yielding 20 mds rice per acre.

Restricted

NTETI,TAmTAO,T,T RA41V. FOR ;wnYqT'RlPTTm'TON ANn nPiTiTlPMTNP.M

TMMT1TRPT\TAmr(lT,TTAT WMT,P-OTPv,TWW AqqO(ITATTON

VOLUME IV

CROPS, LIVESTOCK AND FISHETIES

TECHNICAL REPORT NO. 8

JUTE

Llacemb6r 1, 1972

Asia Projects Department

BANGLADESH - SECTOR STUDY

VOLUME IV - CROPS, LIVESTOCK AND FISHERIES

TECHNICAL REPORT NO. 8 -JUTF,/

TABLE OF CONTENTS

QJUI'Vr±Uk±tj .LI.IJ Li L.L1 Li.LIUQ LVJ±L)

T IrND0^TTTRODUTIONT 1

TT MAJC'rP VT^r)(1 THE rPU1V .TnPTf MA PWTP 3

A. (Ionsum,ption of Jte4- Goods 3 B. Jute Manufacturers 4 r'i 4.r ouLruc-.Li o..LL±±o .Ld JUU.L. te 1. D. Trade 5 LI'D EProspectls6 F. Trade Outlook 8 III. PAST JUTE POLICY 9

IV. FIBER PRODUCTION 11

A. Past Performance 11 B. Potential for Increase of Ou-put 13 C. Jute Development Program 14

V. JUTE MARKETING AND PROCESSING 17

A. Jute Marketing 17 B.ranuuacturing Sector 21

vI. PRICE JNu.CEhdI±v'b; FOUt Jul,r23

A. Competitiveness witn Rice for Land Use 23 B. Effective Foreign Exchange Rate 24 C. Rationalization of the Mill Sector 28

1/ Tnis report was prepared by Y. Nakahara and G. Stern. BANGLADESH - SECTOR STUDY

VOLU1TE IV - CROPS, LIVESTOCK AND FISHERIES

TECHNICAL REPORT NO. 8 - JUTE

TABLE OF CONTENTS

(Continued)

APPENDIX 1 - The Price Responsiveness of Jute Producers in Bangladesh

TABLES

1. TWorld Production of the Chief Natural Fibers 2. Importance of India, Bangladesh and Thailand in World Jute Economy 3. Estimated World Consumntilon of Raw Jute and Allied Fibers 4. FAO Projection of Jute Consumption By End Uses 5,rWorld ProdMtA on of Raw Jutei and Allei d Fibers 6. Exports of Raw Jute and Allied Fibers from the Ch-ef Producing Countries 7. Relative Share in World Exports of Jute Manufacture 8. World Exports of Jute Manufactures 9. Exnort of Jute Goods from Bangladesh and India 10. FAO Projection of Jute in 1980 (in terms of fiber) 11. Raw JTiit Prnciir.tlon in Rangladesh lla Raw Jute Production and Disposal 1969 Onward 12 Relatiuv Shari in l.Tnrlc Prnoiiuction of Raw TJite anci Alliri iMhbrs 13. Supply and Distribution of Jute Manufactures in Bangladesh and Pakistan 13a JTiieG-. Cl-ndso Posiqi tl on 14. Bangladesh: Production and Exports of Jute Manuf'actures By Type 15 Ne Fap+rm In-ome fr'om Jutei- Gult-- ivIation 16. Net Farm Income From Rice Cultivation 17. Jute Prices to Farmers from Spread of Marketn CGosts 18. Jute Prices to Farmers Fr'om Manufacturing Costs BANGIIDESH - SECTOR STuvY

VOLUUIVE IV - CROPS, LIvESTOC. AJUv FI.SbRIES

TECumiLCuL ±ziORu INO. 8 - JuxE

SUMnARY AND CONCLUSIONS i. :Bangladesh's past strategy toward the jute sector has been re:La- tively successful in expanding the jute manufacturing industry and in enabling exports of a larger portion of the jute crop in the form of jute goods. As a result, Bangladesh had gained a strong position in the wor:Ld market for jute goods. However, given the recent disruptions in jute production and marketing and the rapid inroads made by synthetics, a fundamentaL change in jute policies has become necessary. Bangladesh should regain and strengthen its position as the major source of high quality jute. To meet the growing market for carpet backing requires high quality jute, in large volumes. Considering the rather limited world market for jute, high quality jute is essential to Bangladesh if it is to retain a large share of the world market. ii. More emphasis on research is necessary. To increase productivity, identification of high yielding species could be decisive. Experiments of culture practices and optimal inputs requirements are necessary for different local conditions. Finally, to maintain and possibly increase jute consumption, new efforts to develop end products and. to develop better ways of producing the same end product, will have to be made. Existing research facilities, available staff, land equipment and funds are inadequate to meet the challenge. The existing Jute Research Institute needs to be built up to play as productive a role as the Rice Research Institute. This will entail an increased budget (to employ high caliber researchers, if necessary from abroad) and the purchasing of adequate materials and modern equipment. Jute researchers would also benefit from increased contact and coordination with research in other countries, notably India. iii. An adequate farmgate price for jute is considered a key element for persuading farmers to participate in the intensive jute production program. Analysis carried out for the report indicates that prior to war disturbances a minimum price of Tks 36 per maund appeared to be necessary for jute to be competitive with high yielding varieties of rice with a farmgate price of Tks 24 per maund. That is.a jute/paddy price ratio of about 1.50 was required. At that price level, jute fiber is considered to be competitive with other fibers and with synthetics on world market at a foreign exchange level of Tks 7.50 per U.S. dollar and manufactured jute goods at Tks 9.52 per U.S. dollar. iv. Bangladesh Government has just announced a Tks 45.oo per maund farmgate minimum price for the next season. In addition the new relationship with India is a new and major factor. In the aftermath of the war. - ii -

aL ne~wa e s4ituatiorn 4U.C has'LA.,± emergedA±L wiuh.4W.4-U11 uthe - domesticA ---U~ 4 4- ..,-- -rice price £d eciu-LJ- -1446U C minimum of Tks 46 per maund on a country average basis corresponding to a IXmtis)U 30 per- m U.IU d.ftJr,CLUtLa- P.L±Ue ±U.Lf Jorupudy, Whier-eLa jLute eJxpr-t pi, i have also increased considerably. In the light of these new price 5ww~AI 4_ _A _ ml_I . r_____H____.____SLr_ Levels, Ui e ILLUIIuJl. LCL.LUt: P-ILUt Us £±x L4:) PtL WUSLU dlULULLLUIU Uy Bangladesh Government would appear to maintain the needed relationship to the far-gate price of paddy. H'owever, the highelnces in pi-ice on, the jute export demand side may not last beyond one season and the minimum farmgate price r-ecently aUlllouul.ex d sho-uld also be exain-ed in the light of the price relationships prevailing on the other side of the bor-der in India. The two competitive jute economies axe likely to undertake more adjustments toward a new long ran equilibrium among them- selves regionally as well as with respeuc tO substitutes, particularly synthetics, on the world market. That is, with the new minimum farmgate price announced for tne next season, the jute industry continues to be confronted with its basic problems of remaining competitive on the medium to long run. v. J intenitve jutue ProdLu.;U lV p.ruoa CLLsLrj .LiLkelj to au Utai anX output of 8 million bales by the mid-1970's instead of the ambitious target of 9.2 milllon bales previously projected, due to a n-umber of difficult conditions confronting jute production. Even achieving this 'targe'U will not±Ube easy. Speuia effortsEL.L W-I-.Ll ue neeAdelU Uto Ustrerg Uth.Len the extension system and diffuse the improved farming practices. Timely Uist ri-LUutlon ofL in-puts dtSnd crteLdit1 is al1so essentlual to 'le suAcess of the program. vi. Jute marketing systems in Bangladesh have long been a target for criticism. Marketing is allegedly too expensive. It invol-ves too many intermediaries and consequently farmers receive less than the statutory minimum- price. On the other nand, effective alie±inatives are difli- cult to conceive and even more difficult to implement. The problem is complex because the crop must be collected from tnousands oI smail farmers throughout the country. Measures taken to date -- direct purchase by government-controlled agencies~-have had little or no impact. Public sector purchasing agents have not been able to provide adequate coverage throughout the country and have not been able to cut private trading margins to any significant extent. Marketing policy may therefore deserve early and comprehensive study. TF-he method of calculating the statutory minimum price and various suggestions for improving marketing, mainly aimed at ensuring a better farmgate price, may need to be examined. Previously advanced suggestions include an increased role for public sector purchasing, organization of farmers into groups or cooperatives which could grade and kutcha bale jute and provide storage as necessary, establishment of a public warehousing corporation to enable farmer groups to store fiber and the provision of commodity credit for stored jute, to allow sales throughout the year to eliminate depressed prices now common immediately after harvest. - iii - vii. Continued expansion of jute manufacturing should be weighed against the economic benefits of increased fiber exports. Further rapid expansion of sacking and hessian manufacture may lead to cutthroat competition and to prices close to the cost of raw materials (this has already happened with sacking). Consequently, a rational approach to the export mix of the jute industry is necessary to increase employment as well as foreign exchange earnings. Rationalization of jute manufacture to increase competitiveness may need urgent consideration. In the past, manufacturers have enjoyed special protection from the bonus voucher system. Average processing costs need to come down substantially to allow a higher farmgate price to raw jute and at the same time remain competitive in the face of falling world market prices. Consequently, measures to improve management, use of machinery as well as increasing labor productivity need to be considered. viii. To be able to export the increased production of raw jute and jute goods, Bangladesh may need to stabilize the world jute market if possible in cooperation with India and other producing countries. For- eign manufacturers will not continue to use jute in preference to synthetic substitutes as their raw material unless they are convinced that such stabilization of jute prices and supplies can be relied upon. It would be most difficult and expensive for Bangladesh to establish buffer stocks in consuming countries without the support of other producing and consuming countries. Thus, a continued effort for international cooperation is reauired to bring forth a practical solution.

BANGLA])ESH - SECTOR STUDY

VOLUME IV - CROPS, LIVESTOCK AND FISHERIES

TECHNI CAL REPORT NO. 8 - JUTE

I. INTRODUCTION

1.01 Jute is often referred to as the golden fiber or as the main- stay of Bangladesh. It is the second most important crop after rice and is the major cash crop. It creates substantial income and employment in agriculture, manufacture, trade, transport, banking and other services which hand:Le jute for manufacture and export. Moreover, jute is the largest foreign exchange earner, accounting for as much as 90% of the total value of merchandise exports from Bangladesh in 1968/69.

1.02 In terms of volume of production, jute is the second most important natural fiber in the world, after cotton. It grows best in humid climates and loamy alluvial soils. Jute cultivation is highly labor-intensive (about twice as labor demanding as aus paddy under present farming methods) due to the number of tasks performed by hand such as: freauent weeding and thinning: the numerous operations involved in extracting the fiber from the inner bark of the jute plant; and the operations necessarv to -pre-pare the fiber for the market (i.e. retting or soaking, stripping, washing and drying).

1.03 .Jute is used in the form of yarn or cloth. It is the most widely used pack-agingn materisl for ba-aina siAnd balinLr of Aporicultural commodities and raw materials such as grains, cotton and wool. In addi-- tion to this o1dest sndi most important use. it has been used for many decades in the manufacture of woven carpets as face and backing yarns, linoleum, 4 4 4 ,,,n-; ~4-Ur-,,yo1-.nr +n 1 vla.vI A~,- .,,~ 'o1-I . O,n-,A'.. 4. A-4 .LLtJ. All. uu webbing , t-ailors ga-l--, -- feltsb, cor'-U*eJ ec o' several uses developed in recent years, the most important is the manufacture of cloth-bncki,-,t-ted C& ts T.hi-ch has bee. in -easing at a rapid z--e since the early fifties in most developed countries.

1.04 T.hough generally inferior in quality, a number of jute-like or allidrl fibhrs nn.in beh as a more or less quitnhblt substitnte for iutei in most of its end uses. The most important of these is kenaf (Hibiscus Cannabinus and shbdariffa), also called mesta or meshts in Pakistan and India or Siam jute, due to its large-scale production in Thailand. Kenaaf is grown -n high ground as it cannot .it+ha1n.2vA .Tn+.'l irvfJ-nrr T- growsa in Africa and Latin Akmerica as well as in Asia.

1.05 Since the growing season of jute coincides with that of summer ,adidr (m nly aus padV ar. to so ex+ent amar. ad, jute rrora_l-r competes for the same land with rice, the staple food of the jute growing aresa. 0aS3 A-+e (a-ra-,rn o f +orue a m3o rn, anoencn grown, cannot withstand waterlogging and is grown only on shallow areas, Therefore, col nches, aor tigh groudns lalnsosuitrale for pas.ous Therefore, competition for the use of dry land is direct and serious. -2-

On J.LL4th-eUIL~ otheUllt-±.L LIEdL.U.hd, whitWiLLUq-4apL jJLbJute t ~U(u J.LU!1IU.LLA.Z UC6Ji:LL-Ldt_L±J'aris) , theU11t: othr-speieVUibI.L: which can withstand waterlogging in the later stage of growth, can be gro-uwi on Ueep-fLUooudeud arLeas gener-al'ly not1 su_itcable fLor aus paudLdy.*LLLUs competition for the use of such flooded areas is less serious than in Ithe c;as;e of Togs;s jute.

1.06 Woven jute goods are generally classified into standard and specialty goods. Standard goods consist of sacking, a coarse, loosely woven fabric made of inferior jute and jute cutting (the damaged butt end of the long jute fiber) or a mixture with kenaf , and hessian or burllap (a more expensive, lighter fabric of a finer textuure made of superior quality jute). The most important specialty product is carpet backing -- a type of hessian of a greater width. Other specialty goods include canvas, cotton bagging, webbing and laminated fabrics. These three broad categories of products -- sacking, hessian and carpet backing -- are generally manufactured on special looms of differing widths and construction.

1.07 A salient feature of the jute market is the recent more or less static world demand for jute with a sharp decline in the share of developed countries, especially as a material for sacking. The major cause of the decline is the recent increasing use of substitutes which has been encouraged by short supplies and high prices of jute. In particular, competition from synthetic products, mainly polyolefin, constitutes the major threat to the future of world jute market.

1.08 A salient feature of the world jute economy is the very high degree of concentration of production, manufacture and exports in three developing countries, namely, Bangladesh, India and Thailand (Table 2). Bangladesh and India each produce about 35%o of the world production of jute and jute-like fibers while Thailand produces about 10%o. Of world exports of jute goods, Bangladesh accounts for 40-45% and India for 50-55%. In raw fiber, Bangladesh exports about two thirds of the total volume in jute and Thailand ships most of the remainder in kenaf. (Exportable surplus of producing countries is roughly 50-55% in manufactures and about 45-50% in raw fiber.)

1.09 Bangladesh has a comparative advantage in both jute production and manufacture. The natural conditions are particularly favorable to the growth of jute plants which produce fiber of high quality. Cheap and plentiful labor meets the large requirements of production, marketing and manufacture. The superior quality of fiber is well- suited for manufacture of specialty goods and for export. II. MAJOR TRENDS IN THE WORLD MARKET

A. Consumption of Jute Goods

2.01 World consumption of jute goods reached 2 million tons in the pre-war period and thereafter showed little progress until the early fifties. In spite of the earlier trends of substitution for jute, consumption during the decade of 1954.-56 to 1964-66 has grown at a rate of 4.2% per annium, which compares favorably with the growth of many primary commodities,, such as other natural textile raw materials, over the same period. From the mid-sixties, however, consumption has tended to stabilize around 3.5 million tons per year, due to the increased competition from sutbstitutes for jute (Table 3).

2.02 Availability and prices have been the major problems for jute manufacturers in developed countries. In the short run, there have been considerable and frequent fluctuations in supplies and prices of raw jute! and jute cloth. A constant threat exists that short-term supplies will be inadequate as a result of crop failures, political disturbances, labor strikes, and other causes. To guard against such eventualities, substantial stocks of raw jute or jute cloth have had to be maintained in importing countries. This raises the price of jute goods. In addition, temporary stoppage in. the supply of jute or imbalance between supply and demand has led to violent price fluctuations. In the longer run, foreign users are worried about the upward trend of jute prices and are concerned about; the ability of jute-producing countries to supply sufficient quantity to meet the world demand at viable prices. particularlv for the fast-growing carpet backing industry. All of these short-term and long- term conditions led foreign users to welcome the development of domestic substitutes which would be free from these drawbacks. The high prices of lute goods in develoned countries also made the develonment of such substitutes economically feasible.

2.03 Jute now faces a most serious threat from polyolefin (inclu- Rive of low-densitv nolvethelene -- Ruit,b7le only for bvR. hio-h-densitv polyethelene and polypropylene), a new synthetic substitute developed in the mid-sixties. whic-h can he extruded in tapes and woven in the same wav as jute into sacking and carpet backing. Although there are still technical disadvant aes (such s less dimen-sio-nal stability sensitivity to high temperatures during the dyeing process, a lighter, less substantial fPel nn pnnorpr honding wi+.h latex i e.rY thp gre_n+.atr +.enqile strength, uniform quality, stable and gradually falling prices, short ply-n-nl line, bet-it.er -nrnoidot devTelAopment-.n mina-ndrl superior -v +ome-'Taer ser-vicea are the attractive characteristics of the new material. Stability, reliablityj nrl rean&r n-mnilwb'i1i+tr areiwi-nfr"y -new%users for +.he sy-t thetic substitutes.

2.04 The greatest use of jute is concentrated in the realm of packag- ijn anrd floor coverinr. Sacks and bags, which account for over three quarters of the world consumption of jute (Table 4), compete with similar 4 4 n,tA-ic wiMA a aP ---- a, ni- 4-ar n a,; Syrrrv.I-na 4 at .n twa1. en..,I w, +1mny-as -,r products madeo i s. pae, colto ar.d 0JuShe+Uics, as well sVI. wit L Osub stitute techniques such as bulk handling, direct retail packaging and -14-

contanerization. l,^latever products are to be pac ed+, te decslv factor in the choice between jute and its competitor for this end use lsthelr relative prcs A ppaErt>, u±itherapid decrease in demand of sacking in developed countries and Latin America has been offset to a certain extent by increase in other coulLtries with a larger marketable agricultural output, mainly in India and the People's Ref=pub_lic ofL Chinia.

2.05 Carpet backing, although secondary in quntitative iportace to packaging, is a crucial area for jute consumption in the future. It

acco-arunts EOr- abo-utl. 1170 of ite -VULUC 0o W.U-lU UoUunipu±P on of j-ute a ata higher share of its value. Production of tufted carpets is increasing rapdUly for tne res±aentiLal, cUonLract, naoaUO-uuduour anu bransport markets and it has the greatest potential for growth in developed countries. Because woven carpets are more than twice as expensive as tufted carpets, the importance of woven carpets is rapidly declining. The present share of the carpet market is only 5% for woven carpets and 95% for tufted carpets in quantity or the share is 12% and 88% in value, respectively. Tnus, the prospects of jute depend mainly on the total size of the market for tufted carpets and the share which can be retained by jute.

2.06 Continued advancement in technology has made polyolefin products a closer substitute for jute and prices are already competitive with jute goods. The strong competition is most clearly demonstrated in the carpet backing market in the United States. Five years ago, jute had a near monopoly in the primary backing market. As prices of synthetic backing became fully competitive with those of jute backing, jute lost one third of the market by the end of December 1970, at a time when the supply of jute backing was plentiful. During the same period, the use of jute declined from 80% to 63% in the secondary backing market, which was considered to be more favorable to jute than the primary backing market.

B. Jute Manufacturers

2.07 The most important post-war development has been the shift in the world jute textile industry from developed countries to developing countries. More and more jute mills in developed countries are closing or diversifying to synthetic substitutes. The European jute industry is typical of the situation. Raw jute prices and labor costs are rising. At the same time, the jute industry faces increasing competition from lower cost goods exported from the jute-growing countries as well as the competition from synthetic substitutes. In contrast to this declining trend in developed countries, the increase in developing countries can be credited entirely to the establishment of an export-oriented jute industry in Bangladesh beginning in the mid-fifties. The number of looms in Bangladesh increased from nil to 22,000 by 1969/70.

C. Production of Raw Jute

2.08 The pattern of jute production changed significantly over the post-war period, especially after Partition. Until Partition, undivided India was practically the world's sole producer of jute. After Partition, India expanded jute production to become self-sufficient in supplying its own jute mills, which remained in India, while three fourths of the best jute-growing area went to Pakistan. India was able to raise jute output to the level of Bangladesh, but about 30% of its output was in meshta due! to limitations on suitable land for jute. On the other hand, what was then East Pakistan stagnated in jute production. Therefore, Thailand supplied the main increase in world demand in kenaf produced for export. As a result, jute-like fibers, mainly kenaf, increased from practically nil in the pre-war period to about 30% of the world output of jute and jute- like fibers combined (including the production in the People's Republic of China and other countries for domestic consumption only). The total output of jute and jute-like fibers was about 3.6 million tons in 1969/70 (Table 5).

D. Trade

2.09 Export of raw jute and jute-like fibers stagnated and remained at a level of one million tons in most of the period since 1950 (Table 6). Raw jute was in short supply when world demand for jute had been increasing from the early fifties and the first half of the sixties. The main cause of the short supplv was the steadv decline of raw lute exDorted from Bangladesh, the major exporter. The post-Partition trend towards exporting a larzer pronortion in the form of iute z-oods. combined with a more or less sluggish jute output, cut down the exportable volume. This decline was mostly offset by the nhenomenal increase in kenaf exports from Thailand. But the basic shortage of raw fiber in the world market remained unsolved qnd eventu-llv enrcoxqragea the development of various substitutes for jute.

2.10 Exports of jute goods have been mainly from the Indian sub- continent, accounting for -rniouhly 90%o of the to+.ntal wiorlrl mArVet. The combined exports of the countries in the sub-continent reached one million tons in 1959 nnd have fluctuaed sinGe th-^n b.e+ween 1;0-1.9 million tons (Tables 7 and 8). Of the major products, exports of sacking fell from 500,000 tons in 1957 to 300,000 tons in 1969 w.hile thaose of hessinn gds have remained static for the past 15 years at around 500,000 tons per year. E mports of canpet bncking, which .as first man-ufactured in 1Q9A in India, reached 250,000 tons in 1969, with an average yearly increase of 20% from 1965 to l96q9 Thrf- the share between the countries in +hei area has greatl;y changed. Though it entered the export market only in mid-fifties, Bangla- desh experiencedaconsiderable growth, mostly at the expense of Inia. In 1969, its share reached 46% of the combined exports of jute goods (+&h,l O'a) 2.11 ITe+ ational action to- promote trade so far has fPocused primar-ily L~~~~~~~~~4V W Lu L W_Wu U~ G7_A LCL, U VL%9 U L0V UVJVVU;UX.uS"U L_L.LLDLV .YPL L on the problem of price stabilization, namely, reduction of year-to-year effects of violent price fluctuations, but having failed to agree on a

J. CJLJ.dLs UU VL_L_dzaUJAJ±J. CL6. WL=Cn UV11 LLLUq1 CAJ.LU %JibLOUJLL.L46, 1AU,VLU.LUAL~0 Liii. Ui.d URU.; in 1965 under the auspices of FAO's Study Group on Jute, Kenaf and Allied

F LUbe.Lr, a 1UtLIWL±W forU etbi ,LU±±.I1IIUW ari JJincLVl p.LceU re" fLor each season -- a range to be respected by both sides, with no formal commitmen-ts. The experience under this so-called informal agreement has not been con- sistent. The agreement probably contributed to price stability in periods when year-to-year changes in supply and demand were relatively small and the disequilibrium between supply and demand was not excessive. But in some years, agreement could not be reached with parties who could not maintain the recommended price range. Over the past two years, proposals for establishing internationally financed or supervised, national or international stabilization reserves were advanced to improve the effec- tiveness of the price arrangement and to alleviate the burden it places on India and Bangladesh, the major exporters. However, no concrete proposals have so far been put forward.

E. Prospects

2.12 The technical development of synthetic substitutes has advanced to the point where quality differences between jute and synthetics are insufficient to sustain a high price for jute over synthetics without an excessive loss of sales. For jute to be competitive with substitutes and to retain a promising share of the market in the future, jute producing countries will have to lower prices of raw jute and jute cloth to a level competitive with those of synthetics and to stabilize supplies together with prices. The legitimate fears of jute manufacturers in developed countries should be removed by ensuring a sufficient supply at reasonable prices.

2.13 Bangladesh and India, the major producing countries, may therefore need to consider a strategy of increasing yields, reducing production costs and lowering prices as their weapons in combatting substitutes. While output targets have been set at ambitious levels in both countries, actual programs and resources devoted to reach the stated goals have been inadequate in both areas. Bangldesh had planned to raise output from 7.17 million bales in 1969/70 to 9.1 million bales by 1974/75, or by about 27%, and India has been considerLng an expansion of more than X0%0 in jute and meshta output from the 1967-69 level by the mid-seventies. Thailand is also olanning to increase output of kenaf. All in all, the expansion olans of producing countries are contemplated at around 30%.

2.14 FAO has made a preliminary report on the position of jute in world markets in 1980 (Table 10). It assimd that synthetics will continue their recent trends in reducing prices and will fall by some 25% byv 1980. (i{i from qhoiit. 18 or 1Qol. on.rrP.lnt.1v to A1hniut1 1-; or 1)iol, nor 1h. for general purpose polypropylene in the United States)L/. For consumption +'he hiih projpection aiintp utill rpmnin fuillv compntiti-vrP UTJith synthetics while the low projection assumes it will become uncompetitive. For production, the decisive factor is the lon-term jute production programs of Bangladesh and India. The high projection assumes a complete success in increasing jute output as ple

actually paid by textile manufacturers) so that the further price UecLLLICe fLorecasu f or tuhle 0J WoLU onliy Ue orLbnlhe UordeL of 1U. - 7 -

2.15 According to the low projection, world consumption would be 2.75 million toins, a decrease at an annual rate of 2.5% in 19u0 from 3.5 million tons in 1970. The high projection would be 4.25 million tons, an increase at an annual rate of 1.85%o. On the other hand, the low projection of world output would increase from 3.7 million tons in 1970 to 4.1 million tons in 1980 with a growth rate of 1% per amnum. The high projection would be 5.0 million tons with a growth rate of 1o per annum. In these projections, the only balance is between the high projection for consumption (4.25 million tons) and the low projection for production (4.1 million tons). In other combinations, a large surplus of production would accu-- mulate and adjustment for over-production would become the most serious problem. At the same time, to avoid rapid inroads by synthetics into the jute market, sufficient supplies of raw jute are needed as soon as possible, because once a market is lost to synthetics, it cannot be recovered.

2.16 The salient feature of the projections for jute consumption is the decrease in demand in developed countries both in share of world consumption and in absolute volume, in contrast to increases in developing countries. In developed countries, demands for sacks and bags are assumed to decline sharply to between 370,000 tons (50% of 1970) and 150,000 torLs (20% of 1970). In developing countries, demands for sacks and bags are assumed to increase for marketing of agricultural commodities (Table 4). Ihe share of jute in the overall carpet backing market is assumed to decline to 60% according to the high projection or to deteriorate to a low 25% according to the low projection (70% in 1970).

2.17 rThe levels of jute production, consumption and price at which equilibriun will be reached cannot be determined precisely, since the jute market is currently in the midst of radical changes, many of them difficult to measure or project. Jute spinners and carpet manufacturers are increasingly worried by the uncertainty of supplies and price of Bangladesh juite. As of April 1972, the European fiber market had had no supplies for several months. Only a few shipments of fiber had left Chalna and jute export policies and procedures remained unclear. Because of lack of supplies, the raw jute price has soared to £230 a ton -- well over twice the price competitive with synthetics. If supplies remain scarce and the price h:igh for too long, there might be a dramatic switch to synthetics within a few months. Since a change to synthetics appears to be irreversible, future jute demand may be drastically affected by the time it will take to res-tore normal supplies to the world market. Taking the optimistic view that India and :Bangladesh will be able to regain the confidence of the trade quickly, but considering the static trend of world consumption since 1965, jute consumption may continue to be static or to increase only at a verv slow rate while jute production may increase at a moderate rate, in spi-be of the efforts of jute-producing countries to achieve ambitious targets. On these assumptions, it is predicted that the future jute market may change from shortaze to oversupply in the face of declining or stable demand for jute. Thus, it may not be sufficient for jute to be competitive simply on enual tprmR with svntheticR. Growth of iute consumDtion mav need to be induced not only in present product lines, but by developing significan-t new end uses. Otherwise, the oversupply of jute may result in a dis- astrou price faLL, detrlaUUMt UCIL uu Gilthe conorY - Cfll JUUte-proUUcULir countries.

2.18 The Bank has forecast that world raw jute prices may have to decline by as m-uch as 15-25% from recen't levels if the jute narket is to grow by any significant amount in the mid-seventies. This decline is based on an increase of jute output of 8-15%. In terms of the principal quotations used as a price indicator in the trade, namely, Bangladesh t"White Dv', per long ton f.o.b. Chittagong-Chalna, the decline would imply a price level in the neighborhood of £90 (£86.25-097.80) in the mid-seventies (in 1969 sterling terms) compared to £115 in the 1969/70 season (June-July). In spite of this forecast, there is a more pessi- mistic prediction. An earlier study of September 1968 on "Impact of Synthetics on Jute and Allied Fibers" by FAO projected jute price to be as low as £60 c.i.f. Europe in 1975.

F. Trade Outlook

2.19 With the qualifications already described about the uncertain- ties of the future trade outlook, the tentatively projected increase in jute consumption is partly based on a larger demand for sacks and bags in the jute-producing countries, mainly in India and the People's Republic of China and, to some extent, in other developing countries which grow jute-like fibers and are becoming self-sufficient in domestic consumption of sacks and bags. Therefore, the trade outlook may be more dependent on exports of carpet backing and other specialty goods to developed countries. According to its high projection, FAO has predicted that exports of jute goods would be stabilized at around 2 million tons, which has been the present size of world trade in recent years. According to the low projection, exports may drop down to about 1 million tons, only half of the present volume, if jute becomes uncompetitive with synthetics. According to either projection, Bangladesh and India, both of which rely heavily on exports of jute for foreign exchange earnings, may need to induce a larger jute market. - 9 -

III. PAST JUTE POLICY

3.01 The dominant objective of jute policy in Bangladesh over the na-. t 2' v¢.Prq ha- hppn t..^ huiii, lin +hli iit.P mAn,if .(-tirino iin8i-trv. Following 'Partition, Bangladesh was left with a large portion of the P-ntire jute crop Wi+.h fpw marketing fnailities nnA no mill. +hi reginn had to be dependent on a then unfriendly India for most of the offtake nnd t+.hus quickly introdued a set of vingo-rus policiesl t enter +the mar*- ket for finished jute goods, as it had done with cotton textiles. TihPrAl Gredit fac-ilitie d l^n.w iTrmnv+ oonnQ fnr equipment, generous export incentives and tax holidays, together with export taxes on raw materinl, ennaled jute mills to earn large profits while pursuing aggressive price competition against less generously protected Indian manu- factu,rers, their main competitors in +hen *.nnrld Tl+. lThesae inentive have been successful. The industry steadily and rapidly increased its share of e-nort+ of junte goods =r.d its -caci+-,y A emplonntnn 4n +thnd4svr.r grew continuously.

3.02 For various reasons, authorities chose to provide a large par-t 1, 4 ofPIA the-1- 1Vft,~-¶t4--eti-e for'lLA4fIfi -dustri31 investment, nflI-m,,4 4-Sf the1, nI Porm'#- Wfl.P of 1lo=cs .fj~l wi-4,V cultural raw materials, not only in jute manufacturing but also in othe:r textile .dA,ustries and~ afgric 'at-urallpyrocessirng sectors. Fxmowr jutve, tis policy was implemented by export taxes on raw fiber and, later, by exclu-

sionO0VLJ. L5.4..dAof raw fiberJ.UoV.L ±.L.JVULfro t.&PV5.LU IL..LJincntve ;L.±LU4.LVz; CzjJJ.P._L%-Uapledtpoesegos.-xor UVJ 6 u Historically, such commercial policy evolved as part of a common pattern u. WCLL U.J. Xu.;LJautWmen v LUo exvuchiaL r ate U..OU.LJL.LvLJ.L LUXU UIL LuXJ O cUW,1 - Ui. V e and discriminatory devaluation, import controls, and the like. At the same tme, --.-. -n-a-- -age o- -tsn.ear ,noponn position a an exporter of raw jute by overt or implicit taxation to improve its external ter-mis of trade, lncrease gUverzn.meUnt Ue-veL-ULte, and to gi-ve the domestic manufacturing industry a competitive advantage over Indian and other ju'Ue ma1nLUac+u e.ers. Par+v Uof +is"L dJlsUrJmJIina+LvUn beUween eXp.UUS Uof raW jute and jute goods can be explained, moreover, as an attempt to overcome the pr-otectUion afforded to EuropeUa and other jute LanufactuLers by highLeraU barriers to imports of processed than unprocessed fiber.

3.03 An unintended long-run consequence of promoting the manufacturing ind-ustr-y thr-o-ugh discrimirLnatUojL adUst rUaw materiLal export, howe-ver, has been the stagnation of raw jute production. The manufacturing sector has gro-w-n rapidly, but cultivatlon has haXrdly increased at all. Consequently, fiber prices have drifted upwards in the face of growing world demand, and other countries have rapidly increased acreages under jute and jute- like fibers. As a result of these short-sighted policies, the Bangladesh share in tne total jute output has fallen dramatically. Experience and statistical investigations have consistently shown that a considerable supply elasticity in raw jute production exists because of the substitution between jute and rice cultivation on much of the jute acreage. Since the ratio between prices of rice and jute in Bangladesh has ri senl over the years to its present level of roughly twice the world price ratio, a good deal of jute cultivation has undoubtedly been discouraged, while in other countries which have provided more generous incentives to jute, cultivation of jute and jute-like fibers has expanded. - 10 -

3.04 Over the long term, this combination of policies has made the Bangladesh jute sector extremely vulnerable. The upward drift in fiber prices has forced a similar upward trend in the prices of jute goods. Since jute goods are minor intermediates with long supply lines and little intrinsic or habitual appeal, price increases have opened their markets to substitution of jute by paper, bulk handling, and now polyethylene and polypropylene. Since only a small portion of this upward drift in Drice has been passed back to jute cultivators and instead has been intercepted through ever higher implicit export taxes on raw jiute. cultivation has been made vulnerTable to encroachment by more productive land uses -- notably, improved cultivation of higher-yielding rice varieties. - 11 -

IV. FIBER PRODUCTION

A. Past Performance

4.01 In Bangladesh, jute has been grown since ancient times for its fiber from which rope, paper, and even cloth were made for local use. Only towards the middle of the l9th century did jute become an important commercial crop. Raw jute was shipped to the United Kingdom and later also manufactured by jute mills located around Calcutta. After Partition, Pakistan enjoyed a world monopoly in exporting raw jute for many years. But the jute-growing acreage was regulated by the government which was afraid of swamping the world market and thus de-nressinga jute -nrices. Strict restriction was observed on acreage until 1960 when jute farmers were allowed to grow whatever acreege they denired.

4.02 Tn snite of the increased demand for juote in the world m-rk'Ve the government gave no encouragement to jute production. A serious weak- pnnlinipp ness~~ ~~nf ~~nnst. ~ ~ S iljute -_t_ _ t_ was-r_____ neglige-nce _in _ pmrsu-ing_ pnlicies_- -- - for-- _mni-n _ taining the region's share in the export of raw jute and jute-like fibers. A=riclztural plicies cnno-ncentrate reors lmotn exluivl on pro- -~-----~----.-if-….---.-. - es i--e -- - - moting self-sufficiency in food, especially rice production. Industrial policies- put emp-sis on ex.p-w_g the j_t m--- actr-, _dzu__.y by providing relatively low-priced jute. Scarcely any attention was given +r Tmrv?YvrT omnF+. tnf' -V.ln(liieA+i~Tri'(T r%-v ivir--no ~a~n-f' *rvvf'n i ~-n +ir-.r 4n P~,vwn-mnc to improvementv o easof The policies pursued until recently had overlooked the fact that one acre of ijut producd +the forerv.- en >-e-.. -r,.e,l n-t 0o- f +23aAa- tional varieties of rice.

4.03 LoDw yielding traditional jute farming practices have long pre- --3'led n- BladeshA -k. T.e effect of .ceae------Aa -partly-- '--bee -4 m_ - -1 - - x ~ 4 .A. ~' '..' A. L~A~uQQL . ~ Q U 1 LJUU.L JL.L LA.UJ. offset by falling yields (probably due to a decrease of high potential lanrd andAn icrease in marg-al l-ad for jute production). Table 11 shows a decline in acreage and rise in yields up to 1960 followed by revers -W1of -ULhe tbrend. However, th-Llet-wo peeriods - not-- 4- be -oelher comparable because of a change of estimating crop acreage and yields introduced betwe,u~uYvuu-I.L 1962 ld194l. -ar. -4eld data- -w, have been f hr "". I J.7%Jc- cuLuJ LJL,7L 4 . .0L0A------CLu. J.Lq=..U. U.MUCL LuO,J IW.VV iulJ±L - JUiULA-ui.-1 distorted by under-reporting related to past acreage control regulations.

Towtal p "uCG'TiLo d.a Ul Gare more 0accurate. TL.Lhey s.how CZ0 Utotal gro4.h.L'.101 of over 20 years, from 5.5 million bales (average annual production 1950-55) 4. ie -54 r A{.__- ___m .^ _z__1 %UVVJ aILLJULV1 VCLJ04.;0 I,V=1 %0g CILcJLdJ. jLPJ±-U_UUUL LU L. I V bt e-e U U1lJ±d I II. Over the 20--year period, the share of Bangladesh in world production of jute and jute-lke fibers dropped from,, 49o35 bucauste of increased producion mainly in india and Thailand (Table 12). Information recently received from theZ ±4U1 ,Ju t Board (seeTable -i1a) shows thedecline oI jute production to 4.2 million bales due to the disturbances during 1971 and a forecast 4. - - .0 - . - . 4. lnY7n /17-,1L - ~ . thU,aLt, fU.Lr Ule c-u.*en±t1972/73 e atSUL, pLu.LJuLLtUorUX WULL'LU L)be Vto,UU1d diLWUL't to the high 1969/70 level. The table also draws attention to the high level of unregistered exports of jute fiber to India during the last seas on estimated a-t about 2 million bales. 4.04 Competition between jute and rice for the same land induces annual chxges -i jute gro,w-ig acreage end promotes 'jute outputintbly / The growing season of jute overlaps with that of rice, mainly the aus crop. AS ani ear'li-er- crop udepending1 Von pret-monsoonUV1 ra2aLJ:l,L whi-Lte jLute is traditionally planted in February or March on lower lands and harvested "I LJulle-A-utU. vYleIL IaU.-vUUV, UU.J.XLy,lUt it-U be.LUtfo lUlUWeU Uy U transi- planted aman crop. It is an alternative to local broadcast aus and also to local broadcast am.Wan in a-eas s-ubject to flooding . In1 somu U.rdeas, an early jute crop is competitive with boro paddy planted in November in low areas when floods recede and ha-vested in April. Tossa jute is less resistant to flooding and planted on higher grounds. It is planted in April/Ia,y (but caumot be planted earlier as it then braniches profusely with severe reduction in fiber yield) and is harvested in August/September. On these higher grounds, Tossa jute competes mainly with iucal broadcast aus crop or local broadcast aus and aman. Because of the late growing season, it can be competitive with transplanted aman, especially tne !RR! varieties, transplanted in July/August.

4.05 Because of the early flooding, there are areas unsuitable for cultivation of either broadcast aus or transplanted aman paddy but suitable for white jute. Such areas can be classified as relatively specialized for jute cultivation or at least less suitable for rice than other drier areas. Nevertheless, areas within irrigation projects may shift from jute to rice cultivation because a better return can be obtained ,mder controlled water conditions, from cultivation of high-yielding rice varieties.

4.06 Trends of relative prices and yields are less favorable to jute than rice. In the internal market, the price of rice is rising faster than that of jute due to the large shortage of foodstuffs. Also, yields of rice are increasing with the introduction of IRPI and other high- yielding rice varieties. Unless jute productivity is greatly improved, marginal lands may come under rice production. On the other hand, in certain areas where fargrate prices of aus paddy after harvest during monsoon rains are unduly low because of the shortage of drying and storage facilities, jute is likely to remain in cultivation until marketing of aus paddy is improved.

4.07 In Bangladesh, white jute, the major species of jute is generally grown on about two thirds of the jute acreage. Tossa jute takes up the remaining one third of the acreage. In addition to jute, a small acreage of meshta is grown on the marginal highlands (producing about 200,000 bales). The fiber from Tossa jute is generally golden in color and is fine in quality compared with the greyish-white rather coarser fiber from white jute. The quality of fiber, however, is also affected by the type of soil, weather conditions, flood height and the water used for and the care exercised over retting.

4.08 Jute growing areas in Bangladesh are grouped into three traditional regions, namely, Jat, Northern and District. The Jat area includes the Mymensingh district, the most highly concentrated area for jute

1/ An attempt at measu2ing the supply elasticity of jute in terms of acreage and output adjustments made by producers in response to changes in the jute/rice price ratio is given in Appendix I for the nine major jute producing districts. - 13 - cultivation, together with the Dacca and Comilla districts. This area produces jute of highest yields and best quality. The Northern area includes the Rangpur, Dinajpur, Rajshahia and Bogra districts. Though the average yield is the lowest of the three areas, this area is well- suited for imultiplication of jute seed. The District area includes all of the remaining districts.

B. Potential for Increased Output

4.09 Using modern farming technology, the Jute Mills Association has been trying out a new system of farming to improve both yields and quality by intensive cultivation. Through numerous farm trials, under ordinary farming con(ditions, the new system has been proved capable of yielding up to 32 maunds per acre, more than double that of the present average yield of 14 maunds. In the absence of more fundamental technological break- throughs, this system appears as the only practical solution in raising the productivity of jute.

4.10 The major measures taken in improving yields and quality are: (a) timely sowing; (b) line sowing; (c) improved seeds; (d) fertilizers and (e) plant protection. A short description of the above measures is in order:

(a) Timely sowing is essential for white jute. For optimum yields,, seeds which are normally planted from the end of February to the end of April should be sown within ± 5 days of March 31. Also. sowing- of seeds duringr this period enables an early harvest of jute so that transplanted aman paddy can be planted as the following cron. Tossa lute is not so sensitive to time of sowing and is usually sown during April and May (see para L..12 below).

(b) Line sowing- with the aid of seed drills imnroves both yields anid quality of fiber and reduces seed and labor costs. Growth o1 lute rlnte is. better .nd more even because of a wider space between plants. Line sowing reduces labor for weeding, thinning and other onerations. Also less seed is renuired (less than half of the quantity necessary for broadcasting).

(c) Improved seeds yield higher quality fiber and respond better to fertiI iers.-The varieties recommended are n 15J 4'or white lute and 04 for Tossa jute. (Both of these seeds were developed before World War TTiibut improved selection- of +hese varieties was: achieved subsequently.)

(d) Proper application of fertilizers raises jute yield substan- tiallt. But the vsl.t+ Aaea on varriou conditio±Jnscm sunc'h type of fertilizer and soil, water conditions, and timing and sHcrnnr nf thea doses nnnl ed. - 14 -

(e) Plant protection is important to attain high yield since jute is subject to diseases and pests such as seedling blight, stem rot, color rot, and jute semi-looper. Though the damage caused may become large, proper plant protection measures, with already known chemicals and pesticides, can control or prevent these diseases and pests.

4.11 Using the results obtained from farm trials, the Jute Mills Association has apportioned the following percentage of the total incre- ment to each of the above measures:

per cent

Timely sowing 15 Line sowing 25 Use of improved seeds 20 Application of fertilizers 25 Plant protection measure 1 Total 100 per cent

4.12 There is no doubt that irrigation would assure optimum jute yields under the improved farming practices. First of all, timely sowing can be followed without depending on the vagaries of rainfall. Secondly, crop losses from drought can be avoided. Thirdly, areas with a short supply of retting water would benefit from getting suificient water suitable for retting and thus produce a better quality fiber. However, a serious study of the impact of irrigation water on jute cultivation (particularly its relation to time of seeding) has not yet been undertaken in Bangladesh. Such a study should be made to quantify the effect of irrigation as one of the new inputs for intensive jute cultivation and help frame suitable irrigation policies.

C. Jute Development Program

4.13 Jute production could be increased either by expanding the acreage under cultivation or by increasing the productivity per unit area. Since no new inputs and extension services are required, the former method is the quickest and cheapest way of increasing production in the short run, but in the longer term may have to be supplemented by the latter method to lower production costs and compete with rice production. Thus, for the first time, the government initiated a pilot program for intensive jute production in 1969/70, based on the new farming technology developed by the Jute Mills Association. The pilot program encouraged the use of fertilizers for jute, which were still unknown to many jute farmers, and also demonstrated the better performance of the improved seeds in comparison with desi seeds. The area covered was 358,000 acres and the average yields exceeded the targets for the project area.

4.14 In the draft Fourth Five-Year Plan (1970/71 to 1974/75) the government had proposed a program to expand jute output from 7.17 million to 9.16 million bales during the plan. The basic feature of the program was the package approach which had been adopted for rice. Jute development proposals - 15 -

suggested in the progrnm outlined in VoluTme T of this Qtu1a-c ceppt +.he basic principles of concentrating scarce resources into the main jute pro- duicing areas. These areas, part of the proposed concentration areas for rice and jute production would total about 1.5 million acres, spread over 170 thanas ni 10 districts. Tt is suggested +that n 096 f +'t.the +I lc production would be the main duty, but jute production would be part of the task of agricuvltural suwpport services including extension, coo"or- tives, inputs distribution and irrigation services. In the remaining 74 thanas jut productioe isn proposed as the prniay objective of the ri- culture services. Proposals for the 74 thanas include an increase of extension sta-ff by 900 agric- 4 t.1-1al g-ad,,vtes and diploma holder,. It i also suggested that farmers be encouraged to form Comilla type coopera- ti,r ec t-_^ r+MA ;7,4- Tn,o rfv+-nl f- - - -no- -re - J A-c .- ; .cl rRk-l,a m-sr Ve - - -_ - - a - _ _ Clh1w_ L UL i 1 v e ^CVvFwooL-mbVVAAs -@- - - rtozw require a staff of 1,000 cooperative workers. While production rose to 7.7 ------onJ bale 17/Iur I 1 prob~ably bDec_aus_e of fa-70rable weather conditions, it dropped back to just over 6 million bales during 1970/71. Consequentl1y,. 4the daftP4 Fve_-Ya PD1&-- 4targets appear44 optmiti th4nd ~~L~~~~J . 111 U.4.O.L U X ~LV V u a 4. V.L rVVU.J4J Q~(njJ .L~ovL'. O.l,LU ull~ following revised production estimates are suggested:

Base Year Year Year 10 pr-oduc T P,-oduc I Produc JYield -tion Yield -tion Yieldj -tion

Md/!00 000)uu ! 000 MdsVVU 1V10.!0 s/ 0uu0 AcreslAcrelBales Acres Acre Bales Acres Bales Conlcen't,-atuiOn. areas H _ 800 18 2,960 1,5001 20 16,165 Uther areas 24 14.1 I,170 L,790I4.1L4 1 5,210U _L ,3 1*5 3 D595

TotLa-l 2,469 14.il- 7,i70 2990½.1-3 18,170 2,800li6.o8 19,760

4.15 The country-wide program of increasing jute production by 2570, over 10 years, partly by a modest increase in acreage and mainly by raising, yields is judged to be feasible despite expected competition from hign yielding rice varieties. The major concern is the difficulty of diffusing the improved farming practices to millions of small farmers. Success depends on whether the new technology can be applied on a sufficiently large scale and in a well enough integrated fashion to raise output To the target levels. The farmgate price for jute (see Section VI) may play a decisive role in helping technological diffusion and, hence, in determining the future levels of jute production.

4.16 Line sowing is not likely to spread easily since jute seeds have to be sown during an optimum period of about 10 days, whicn depends on the pre-monsoon rainfall. It requires seed drills and more labor than broadcasting or even more labor intensive methods of line sowing by hand. Seed drills are not available in sufficient quantities and would require financing as they are relatively expensive for farmers. To encourage universalline sowing, provision of seed drills by ADC at Thana Workshops for hire to farmers at nominal rates warrants consideration. Farmers with only small jute acreages may need to be taught simple hand method of line sowing. - 16 -

4.17 Improved seeds are still scarce and of poor quality. Suner- vision of registered growers is not effective and testing of the multi- nlied seeds is inadenuate to ensure better germination. higher fiber yields, and greater resistance to diseases. Unless seeds of uniform hig-oh niinalitv c,.nn- dishtrihute in miffinient niuintitv. fqrmev.- will not use the improved seeds. At present, seed multiplication is carried olt hv the Rangladesh Agricultural Pevelopment Corpnratiovn qnrl the Bangladesh Jute Committee. Though the responsibilities of seed multi- pliation are being shifted from the Corporation to the Committee, it is contemplated that a separate organization under management provided hy the junte trade~sThou1ld ultirately ta~ke~ over~. ths resonib-il -.ities oni a full-time basis rather than allowing seed multiplication to remain as subsidiar,, ope-rations o_f thne present two rn aiatos Sues inof, registered growers, certification of multiplied seeds, marketing of the certified seeds, a-d other mnprovements oru,l ,3 u assure a suffc4ient supply of high quality seeds to jute farmers. A jute seed production sc.eme identified by Fl0/ T4PT staffU,s otliAne . Vo .Tlum V Z n Report No. 13. Since improved seeds is the basis of improved jute t;_echnol1ogyr,u 1±.LJLJJ, imlmntto.. m~.Lc1I U. J. uJ±of-A l the-lU± schemt~1~V may 11-41.05.OVuhav_ C 1-SJ..LUJpriority.1- ;4 )..,I A rlhe mlost urgent- prolDleml Jn 3fert-il-izer arpplication is to determine the optimum amount of plant nutrients required by soil types and otherlocal condit_ ions bcuieteefcof -1-4r fro flood_ing Experiments have to be carried out on a country-wide scale. Also, t-m elIy Adist-ibut-ion ofP fer tili---zzers is ir-p-- -t4 4

U.. In A.4- p n LAJ4All U C . U..LJ.LLJC.. 4--_ _.ll -. Ut4 j - 4ADu - ' D _ U L ASe 14.-.1<7 A1 U J1LLC011 UD 0La p41 .SGJA L% LIUIIU.IAUb DUCL Ld45 1 Ui .1 01 vU U V-LWUC UJ-U±1 Service. Considering the vast requirements for rice and jute produc- LiIo, tLihC LVLUC £ez nliJi Ui Lot U1LZ Lk UL' UttC Ut sLIeasonLl,J. hleav-y -Luoadsi -rL-L insecticides, pesticides and spraying implements. W\hile strengthening the tLice is ULrg.LtlU, itU maiy Ub' J)4-0.b. UprUl m a.o Le d2ar-e,t111tlU fo farmers, under the guidance of the Service, to be responsible for their O-w-n sprUay±Ln^. P-eopVoals lo£r fJ.ULLU- plant protection iiiO±l u441U jLute are.1 outlined in Volume V Technical Report No. 15.

4.20 Because of the difficult conditions, the targets to increase output through higher yields may become difficult to realize. Success in spreading the new technology quickly in the early stages is important. However, the production -- suggested production targets 8.2 million bales by year 5 (1978/79) and 9.8 million bales by year 10 (1983/84) -- should be feasible. These targets compare with a forecast production of between 7.74 and 8.25 million bales in the mid-1970's (a forecast made before the disruption of the industry in 1970) made by the Bank and an FAG 1980 production forecast of 7.84-10.08 million bales by 1980 (also not taking the years of disruption into account). - 17 -

V. JUTE MARKETING AND PROCESSING

A. jute Marketing

5.01 A complicated system of middlemen has developed to transport and market the jute crop, since fiber production is spread over a broad area and a vast number of small farms. The production and income of individual farmers are too small and the distance to the market is too far to warrant an average Jute farmer transporting his crop to market for sale. Only those close enough to a market or to agents of local mills or balers can make direct sales. Thus, about 80% of the crop is sold to middlemen (Paikers, Farias or Beparis) at the farmers' premises, the first link in the marketing chain. The importance of these itinerant dealers in the primary market, transport and communication system can be measured by the fact that over 61,000 were licensed for the trade during the 1970-71 season. This system enables every farmer to sell his jute, however large or small the quantity. However, it is widely believed that the system is inefficient, leaves small farmers with little bargaining power and hence denies them a fair price. Consequently, Government has established three official purchasing agencies. However, these agencies can neither provide the widespread cover afforded by private traders nor can they match the price paid by private traders, because of high overheads and lack of expertise. Consequently, existing marketing arrangements may require a careful and comprehensive study befora changes are attempted. As pointed out below, improved storage, transportation and marketing intelligence, rather than increased Government marketing functions, are probably the keys to more efficient jute marketing in Bangla- desh.

5.02 Traditionally, farmers dispose of their crop at the earliest opportunity to repay the local money lenders, still the major source of finance at the farmers' level, who charge high interest rates for short-te:rm loans. In addition, farmers do not have storage facilities to hold the crop until a later period when market prices generally rise from the bottan after harvest. It is possible to store jute in their dwellings for a short period, but jute may compete with paddy stored for home consumption. As a result, over 75% of the total production is sold during the first six months after harvest. At this stage, the fiber is marketed in bundles of loose unassorted jute weighing approximately 20 seers (roughly 41 lbs). The bundle is not weighed and its value is determined on its external appearance and by species. (Tossa jute usually commands a higher price than white jute while mesta is of a lower value).

5.03 The itinerant middlemen and small portion of farmers sell their jute at a primary (or hat) market, a tv-oical open-air market, normally held once a week in the bigger villages where all kinds of products are traded. Paikers and Farias transport the jute they have purchased on small boats during the season when much of the area is flooded or small waterways are still deep enough for their shallow draft boats. BeDaris often own large country boats. Depending upon the district and the time of season, trans-port - 18 - facilities within the primary market are mainly by small boats, bullock cartsj pnack- an imans ovr hnad loads -- all lwhi -relativ1-elyr cheap metho At this stage, there are virtually no storage facilities and no processing or assorti-,g is'-doney . TV '- vn-rso are mos+1y the I aarge-scalno nd Beparis and the agents of local mills and balers.

5.04 Most of the jute of the primary markets arrives at the secondary markets, bigger assembly centers where transaction.s tae place more fre= quently throughout the week, and the bulk of the jute is brought down the riveear. byof epaiconry bas >e buyers are balers \,ka-ha, and pucca), shippers, their agents and agents of local mills, who make purchioases thrOurllh brok'ers . At 4the y ma-econda , I-ose j is assorteA by over 2,000 licensed kutchas balers for the first time into identifiable

Stadnl'-d.U, fLLUWI dU0 L.LLU orLIUCLL.LUO,U.L LasIU.d CU LU.Otu WwLUInWd Uuiie intL.eri.al111 market largely by local mills and for inter-baler transactions. (These cor-responjdLu ro-oughley Lto ejJor-u U anLd[UL wIIW.L lthe except I UII LUl "Ith latter, the root end has been cut from the fiber.) The fiber is pressed by abo-ut l,000 licensed kutcha pesses (which are -usually hanuld operated or of a primitive type) into low density bales of 4 maunds weighing about 320 lbs per bale. ThliS facilitates easy handling, st±-±, trLaI-poStin-g-, and identification. Kutcha bales are never exported.

5.05 At this stage or at the terminal markets, loose jute purchased from Beparis and brokers, asd ktutcha bales j-ute f-r-om k-utcha balers are assorted by 301 licensed pucca balers into pucca or cut grades ready for export overseas. Tne cut hard root end oi the fiber is baled anl. solU separately as "cuttings", a commodity for which there is a substantial demand by the felting industry of botn Europe and the United States. Tne assorted fiber is power pressed by 68 licensed pucca presses into rope bound high-density bales of 5 maunds weighing approximately 400 lbs per bale. 5.06 Grading of fiber is of utmost importance both within the internal market and export market. In assessing the qualities of fiber, assorters take into account such factors as length, strength, color, luster, weight, softness, uniformity, proportion of cuttings, hard centered fiber, harsh crop-ends, bark, stick, specks, knots, runners and other faults. The characteristics of the fiber will vary considerably according to the districts or areas where the fiber was grown and the species of jute, Tossa or white, which can only be determined by the experienced eyes of the assorters. Buyers, particularly overseas buyers of Tossa jute, will often specify the districts they prefer.

5.07 Two terminal markets have been designated by the Jute Board, namely, Narayanganj and Daulatpur. The majority of exporters operate from these pucca baling centers located in the two markets. Kutcha baled jute is either transported, by country boat, road, rail, the balers or mill's own barges or one of the inland transport craft.

5.08 Local mills have direct access to loose jute from suppliers at the secondary market price level or to baled jute from kutcha and pucca balers. Loose jute accounts for about 25% of mill requirements while 50% is bought in katcha bales and the balance of 25% in pucca bales. - 19 -

5.09 At the beginning of each season, the Government announces its statutory minimum internal prices of new jute. The announcement is usually made in early July and is too late to have anyr effect upon production. The minimum price system in rupees per maund for the 1968/69 to 1970/71 seasons are shown in the following table.

i Farmer T.Lve1l X, Market Level. Primary Markets Secondary Markets Terminal Markets?!

SPeaon 68/69 69/70 70,/71 6R/69 69/70 70/71 68/Q (6QI/70 7C0/71 Daulatpur Northern Area 26.0 27.0 31.0 27.0 28.0r9.c 32.0 _ 33.5 District Area 27.0 28.0 32.0 28.0 29.0 33.0

Jat Area 26.0 26.0 32.0 29.0 29.0 33.0 - 30.0 Th.0

5.10 The minimum price serves more as a euide to farrmate nrice levels than as a statutory minimum price. It is difficult to establish prices received bv farmers since no receints which would show weight, grade and price are issued. Farmers complain that they do not receive the minimum -nrice. Accordinr to a Governmant survev the farmgate -nriceis venerallv Rs 3 - Rs 4 (and in some cases 20%-25%) below the minimwm price. As already pointed out; nublic marketing agencies have not been able to match prices paid by private traders and this suggests that Government, in fixing the minimUm nrice, has not taken adequtacl-cnulnt. of marketingm Go-ztM A nharwe in terminal market price affects the farmgate price more than the statutory minimnTm price. Whan in 1970,/71 GovernmAnt nllowed a Mt bonus rate for jute fiber the rise in price was passed on, in large measure, to the farmer. This e Iampleunderlines the ne frrif frtherun study of the present rute marketing and pricing system.

5.11 One suggestion for improved farmgate prices which may deserve s1;udy i - t -rfarmwrnq to sell Aften AR-qao1ing the fibher-A - Th-i rnul ti T-qii-ire cooperation among a number of growers to enable a larger quantity of fibers to be han ejl and assor+-edat or. t *en If ei,q.mas a bvilf for. +hia purpose and kcutcha presses are -ithin reasonable reach, a cooperative might well produce "Iff1+Lha baled Jt+e at an econo^cal cost. The baled f ber "at d be readily idientifiable, and require less storage space and could be held iivntil the cooperative decides to sel1. If males are spread or the se-or internal marlcet prices might be more stable and might secure a higher average 4 price to inw4 idunJA fPa w,.aa for. +Ihe %i+t ,vp mrke-+ aA .t,roh +he c tive.

5.12 - Another suggestion4 to improve the position of farmers1 wich4 may Wav-ray a+ r 4 a tov% f, 4 nv.A whi4 chI .,s A4 -1 - them 4o h d 41.- nt StU..J -- 1.n S - - .. A._ *aL.- 1 AA. fDL W~ &SLUL LA *lO crop and sell later at higher prices. At present, farmers are forced to 1 - +6- pr4ce-- usur40oua sellUW. hi~ LL C.c-op- J~ ~ WkWt the LiSA-ww U Om UJJM to-W%.USAa.~% ----&%kJdJ loan.GAv borrowed'11 UL SiLon @ S.L

1/ Additional transport expenses for higher level markets. 2/ Mills located at terminal markets are treated as secondary markets. - 20 - terms from moneylenders. The term of production loans provided by cooperatives could be extended and changed into commodity loans. This deferment of the final repayment date may allow farmers to sell their jute at a better price. If the jute crop could be deposited at a designated godown, financing of commodity loans by cooperatives might become much easier and at the same time safer.

5.13 In either case, the lack of adequate storage facilities may be one of the major obstacles for the cooperatives for marketing and financing. To meet this problem, the Warehousing Corporation was formed with the objective of building godowns throughout the country. The idea behind the Warehousing Project was that storage facilities might reduce the selling pressures exerted upon farmers who could deposit their unassorted fiber in the godowns and receive 80%o of the minimum price as a cash advance. The time of delivery from the godown (generally the time for sale) has to be determined at the time of deposit. Whether this scheme would be profitable to farmers after payment of godown rent and other handling, insurance and finance charges are problems requiring further study. The operation of godowns should be adjusted to the best advantage of farmers. If assortment and baling into kutcha bales became practicable, such an operation might allow more space for storage and might enable farmers to gain advantages from grading and weighing, especially for high quality fibers.

5.14 The role of public marketing agencies also requires study. Originally there were two, the Central Government-controlled Jute Trading Corporation and the provincial government-controlled Jute Marketing Cor- poration, which bought loose jute from farmers or traders, kutcha bales from kutcha balers as well as pucca bales. Because of limited effective- ness of the two public sector organizations as jute buyers, the Jute Board itself started direct jute purchases from farmers in 1970/71. The difficulties of providing adequate coverage at low cost have already been described, but if some of these difficulties could be overcome an efficient public sector buying agency may offer healthy competition to private traders. However, public agencies may not be capable of servicing the needs of individual farmers and, consequently, an effective public sector marketing system miaht have to be matched. by the organization of farmer groups or cooperatives.

5.15 In external marketing, the Jute Board controls export prices through the expcort nrice check vsytem. The Roard requires registration of all prices of raw jute for export with the State Bank. If the regi- Rtered price is below the nrice fiyera unaer the check syvtem (which is closely correlated with the minimum price), export of such jute was dis- annnrved in the npat. The annnrent riguiditv in prices was- however; overcome by sellers trading at above or below the fixed price, differences in price being adjusted in accounts held overseas. The check system has not functioned to achieve price stabilization and reflects only the >pric wh>ch i+ ;o lirnaAn-r- z or-N-n>QiiTnP7- Wirll -nmr fnr f>r-r;hn taking into account the laws of supply and demand. In fact, the prices under the export price check have remained stable for a period of years. - 21 -

4 4 5 -I A l1'hem+ publick 4 nr a-rn-zed ar ne recogr a b'eKmrs a.d exporters cf high repute and importance. During the 1969/70 season, they ea,rort+ed about 900,0+0V001b00 aessor ahout2+ 6A'6,.of +tetot+al fibw-er eax,+s,o,rt- a large increase from 9.36% in 1966/67 season. The share of the eight largest sco 'ln+atears, .onthe cont- hI decreased fro abvout 56%to about 37% during the same period. Therefore, export is competitive and actual prices are not fixed by a fa. frs

'D. U_-factuin Qe4 4._or 2

5. 1d 7 .. k JI.9'A,+ £0.. U.kWW~& WJLMU-A,-+io 4ha.LO LAWNI;.s- JJC6LLr,.0.LC6~%5.5.D-1-rlae .5rceve 75$I,)@_IA ofI.J.. the41,UJLLV J%LUO4-ute growing area which had no jute mill to convert the abundant raw jute to textile. mhe total crop had -to be shipped to feed the jute mulls in India and other countries. The immediate step taken was to increase the baling f aci.itie to prepdare r-aw Jutue Losr ex-pol-r. at t1h san,e It.iUULM, thLe UCEW.lL measure adopted looked forward to establishing a jute manufacturing industry. £sLlJJJinLg a highU p.L.rLU.I.J1..Y Jin th1±We oaLiOon..±I 0of 1-C0Urces, tIh JUte McULU.L Ww-± turing industry has made impressive progress since the first mill started production in Decemtber 1951. it has become the leadi ng industry in B gladesh, non the second largest jute manufacturer in the world. after India. At J -- - -- ~ - - present, dLostVOU one half of the domestic crop is processed and more than 80% of the manufactures are exported. The total output reached 0.6 mil:Lion tonsJ.~ in 196z/.70I. . l± .Le 13..). J ±Ue L--UU'er- o. 'oors Jin ------a 3 b 2.',000 in comparison with about 75,000 in India at the end of June 1969. But the number of more profitable broau loom installed for carpet backing was about 900 (in addition, 600 ordered and 1,500 sanctioned but not yet ordered at; June 1969) while India had 7,000. Figures recently supplied by the Bangla- desh Jute Board ( Table 13a) show the effect of the disturbances on the jute industry. From peak production of.62 miiiaon tons, manufacture declined to only 0.15 million tons during the 1971/72 season (up to February 1972) wiJth exports dec.lning irom aLmost 0.6 million tons (counting sales to Pakistan) to about 0.L3-0.lh million tons. The table also shows the forecast by the Board that production would return to 1969/70 levels in the coming season. This will require an enormous effort to repair damage to buildings and installations, replace damaged or looted machinery, repLace management, cad restore the morale and discipline of the work force. Manufacturing levels presuppose adequate fiber proauction as set out in TaDle lla.

5.18 ruring the expansion, production mix has been given little attention to meet; the changing conditions of world demand. Overinvestment occurred in sacking, the cheapest product line, and resulted in a cut-throat competition with India. At one stage, the price of sacking came close to that of raw jute and portion of Bangladesh jute manufacturing capacity had to be shut down to recover the market price for sacking. At the same time, India began tD shift to manufacture of carpet backing to recover the loss in export of sacking. Bangladesh did not enter the carpet backing market until 1962, even though this is a most profitable and growin market. The volume of carpet backing export from Bangladesh is still smalI tsee table'07 - 22 -

5.19 Given the low (and sometimes negative) value added in sacking and hessian, pursuit of an across-the-board industrial expansion policy could be costly to Bangladesh. With the establishment of friendly relations between Bangladesh and India a larger fiber market is available to Bangladesh and the tradeoffs between fiber export and expanded industrial development-- in the immediate future in any case--require careful study. In the longer term, there may be a case for expanded production of jute goods for the carpet backing trade. In addition, in the longer term the effect of increased internal consumption of jute manufactures in India on the world market is worth considering. It is also important to exert the utmost efforts in modernizing facilities and in raising efficiencies of mill operations. To effecLthis an action program may be worth considering under which each jute mill should prepare an improvement plan to lower its processing costs industrywide and possibly raise its turnover. It may become necessary to concentrate production in the more efficient mills and suspend production in mills which cannot be improved. VI. PRICE INCENTIVES FOR JUTE

6.0l Prices of si+thetiG8 myn declinte frt-her b_t not as shnrnpl as they did in the last five to six years. Economies of scale appear to have been laraglv PYn1ni taei n1rvetv and e-nmn+ttA nn has already reae-hed a StU!3 where the industry is making very low profits (the Japanese industry has actuallyr Jincurr a loss).aa) -T^tra asligh+t fur+ther dc nema; +alrm pIaceg in the future. Because of the close substitutability between jute and sy.tQWr-t+het.;rn^er+ -t produc, price-"io m^-amovements m="+ a of< th-e--+h- t+wT^ poc---woA..-+ are_a -cloP^O= related.a_ Therefore, prices of jute goods must fall at least equally to those of

cooperates with India, cannot force foreign buyers to accept high prices since,a4 "^n. withwir +1 +t. 1ia e adver.tnAf+rTn+ of,-.faih+4+v+ substitutes, de-dA -"~nA is4 a no"^ longer inelastic.,1 ,+4, The protected mill sector in Europe processes raw jute imported free of duty and there is little chance of decreasing the tariff rate for impor+ts of jute goods immediately though the UK over a period of time and Japan, ' No?rwa arnd EEC cour.tiies somewha-+v!4+ rapid-y mAay rer.ove tarlf from jute goods in line with the UNCTAD sponsored generalized system of pre- 4 ferer.ces. In n"ry case, prof +aits of m-il1th+e sector ar al d l A 4i is difficult to cut down production costs. Moreover, the mill sector mist

co.,.etemWO w+vhVfl -+1.thet,UV&I U4.4 prouct wihnthh-VALUUJ.i VIjO %U%JU±11atr-ro4-e Ii±J .1. r.,£ IIJt nignu ~JSS S'.44'.UWQ U.LJ~U V,~ LLL~ 6 OLA'&O materials. Therefore, the burden of price reduction must fall on raw jute price-s since theL.q mil Usector is narL-b-le to cabsorb" akdX -tior.al costs.1 * UJ~ ±11t kJ±U ±~II IJJ.~±LU.LI% LI141 WU.LJUL6Id I±. -L 0L-4t4 II WIkI

6.02 ~ 11 prber1..I of pricing "hen -wo-id le lo work- oul a syste,,. which1 can fix raw jute prices to satisfy requirements of both markets, the external and ir.t ernal. For the te^er1ALcL .M1-Aket, thei JLute prceLus' becr.eiir with that of synthetics, namely, a price level favorable Br exports of raw

jut4e and JIutLe goodUs. For 'thi' e Interni1 m LarketI JUUe priceU IILLUst beV high1 enough, in relation to rice prices, to keep jute competitive with rice ove)r XL I e u s e t. 1 S_ _

A f L .L ...... 4.. f.- .. .a T-...l/ a. C np~±etitiveness with nuce ±U.Ufor 'u -/

6.03 In selecting wnether to plant rice or jute, farmers generally respond to price incentives unless exogenous factors interfere. Whenever a nigh price for jute is paid in a certain season, more jute is grown in the following season. Since increase in productivity is insufficient to make jute competitive with rice, a higher price for raw jute is required for promoting an intensive jute production program. The economics of jute and rice cultivation are compared under a number of assumptionsas snown in Tables 15 and 16 with the farmgate paddy price at Tks 22 per maund the aveirage price for a numder of seasons prior to 1970. In unirrigated areas, jute under traditional production methods will be competitive with local broadcast aus aLnd broacdcast aman at the price of Tks 27 per maund, equal to the Govern- ment minimum price level of Tks 26 and Tks 28 in 1968 69 and 1969 70. To compete with transplanted aLman or mixed aus and aman, the price of jute has to be raised to Tks 34 per maund. Under improved farming practices, jute! at Tks 27 is superior to broadcast aman and about equally profitable as

1/ See footnote on page 12. broadcast IRRI aus. The price of jute may have to be raised. to Tks 36 per maund to b with transplanted IRRT aus. ' n ia - jute may need to be priced, at Tks 35 per maund. to compete with transplanted TRRI -- Tn either,- case a_ hihe pr-.ce- for_ jute r-4 be n s-,ri inputs are subsidized at the present rate of 50% for fertilizer and seeds

A~~~~ 4- c s4-3- -4 - n d - 4 :-X-sse__.s_P 4 _-. . - anlUs l0O'JV,/ fo pe U. _LU;U0u;% v, 0 L; U> *I_L,t: ;; vJ tAui: a% C16CX,<; CURLUwLL v. w1ssHU0J. than jute. The price of jute may need to be raised to Tks 36 per maund ,nder -imroved. farnlgL practices in unrrigated areas and to Tris 38 per maund. in irrigated. areas. In summary, the raw jute price to farmers may need. to be raised to at least Tics 6Uper iuiaund to relmlain comlLpetitive with rice in unirrigated. areas under the intensive jute production program -with inLput subsidies, when the far-ngate paddy price is in the r-ange of Tks 22-24 per maund..

6.oh At present (April 1972) jute prices are going through an unset- tled. phase but this may be temporary. The prolonged urirest and. war in 1971 caused. a serious food shortage and the minimum grain price rose to Tks 46 a maund rice in YMarch 1972, equal to a farrmgate price of about Tks 30 per maund. paddy. The Bangladesh Government, determined. to restore jute production to at least 1969/70 level announced a raw jute price of Tks 45 per maund. for the 1972/73 season. This price is in line with the jute/paddy price ratio of 1.5 shown to be necessary to maintain a high level of jute production by the calculations made in Tables 15 and 16 and implied. by the anailysis (see Appendix 1). A new situation also arises from the regular trade which has developed with India recently, because both paddy and. jute prices were reported to be higher in India than in Bangladesh in the past. Because of inadequate supplies, the World M1arket price has soared. to i5230 a ton. This high price level will allow payment of new raw jute price, but once jute supplies are restored, the World Miarket may fall to half the present level. However, the raw jute price will continue to need adjustment to internal grain prices and to the price relationship prevailing in the India/Bangladesh border areas. Tne two competing jute economies may mutually adjust prices towards a regional equilibrium which takes account of competition on the World M1arket with jute from substitutes. One factor, which may shift the balance of the jute/paddy price ratio towards jute are reports that the Bangladesh Government may consider reducing or eliminating subsidies on fertilizers or pesticides-, to prevent these inputs from flowing to India where they are not subsidized.. Removal of subsidies would favor jute which uses less fertilizer and pesticides than rice. Section B, which follows and which examines the relationship of the farmgate price of jute to the W4orld Market price, needs to be read with the foregoing comments in mind. B. Effective Foreign Ecchange Rate 6.05 To raise the price of raw jute to a level competitive with rice in the internal market and. at the same time remain competitive with syn- tihetics in the external market, would require appropriate foreign exchange ad.justments for raw jute and manufactured. jute goods exports. Until recently, the export of raw jute was discouraged. by the bonus voucher system. Under this voucher scheme, a variable percentage of the f.o.b. value of exported. commodities was given to exporters in the form of a bonus voucher which then could be sold in the open market for as much as - 25 -

180% of its face value. For a long time, raw jute together with raw cotton and other primary commodities, was excluded from the benefits of the voucher system while jute goods attracted a 30%o rate. In 1970/71, raw jute exports received 10O% for the first time while jute goods exports received 35%, a 5% increase to cover a part of the increased costEs for raw jute.

6.06 As the basis for calculating jute price payable to farmers, export prices of raw jute in the mid-seventies are predicted at three levels, namaely, £90, £81.75 and £60 per ton.

(a) £90 is about 20% decline from 1970/71 price levels of £115 in accordance with the Bank's forecast for major agricultural oommodities.

(b) £81.75 is a 25% decline from £109, the indicative price for -the 1970/71 season (recommended by FAO's Consultative Committee for Jute, Kenaf and Allied Fibers). In comparison with the £90 level above, this is a conservative projection which assumes competition from synthetics to be more serious.

(c) £60 is a projection made by an FAO study on "Impact of Synthetics on Jute and Allied Fibers" prepared in September 1968. This price level is taken as the low projection, but is considered to be too low. (£60 is used here as the f.o.b. Chittagong price, though the study has given it as c.f. Europe price.)

6.07 Prices of raw jute payable to farmers have been calculated, alt different effective foreign exchange rates. from the spread of marketingr costs (Table 17). The survey on spread of costs was conducted in 1961. Since the subseouent degree of chanze is not known the figures renresen1 the best available information. As already indicated, marketing and handling- costs require study. Calculation has been made at three effec-- tive rates.

Effective foreign Payable prices to farmers& exchaMce rates (Tks/9) (Tks/md) For Raw For Jute Export price Export price Export price iute zoods of f Q0 of .81.7c of f.60

Case A L-76 5.0 20.8 182 11.2

Case B 6.52 7.50 31.5 27.9 18.5

CAse C 8.28 9.52 )1 2 36 5 25-4

I/ The recently imposed export tax on raw jute mnght reduce the farmgate price by about Tks 5 per maund. - 26 -

6.08 The following comments are called for:

(a) Tn rase A. iute is not comDetitive with rice in all cases. The export price has to be as high as E150 to be able to nay Tks 36. the minimum nrice comnetitive with that of rice.

(b) Tn rase B. the navable iute price rises to Tks 31.5 per maund, 12.5% less than the minimum level to Tks 36. This means that the tradi tional ilute arowinv areas which ean nroduce more than 23 maunds per acre will become competitive with rice. (Tt also shows in theo-ry fhn+t at +.'he Yrnnt pr-icre' of' 1t15 as much as Tks 41.5 per maund could be paid if all takas auvilable at fhp Pffeptiv+ep erhange rate of Ths 7=5 per dnl- lar were spent entirely for purchase of raw jute by the mill

(n) TIn nnzao C, +.he npricea r hlp +t- fnr.mecrs bheorme- 9 36.5 which is about the minimum price level of Tks 36, at the export prie of' LA1 7. TIf + ex-pnrt+ nprize is stabilize 41.2 at the1 level of b90, jute price would4 be Tks per maund, 1 n.mlee- forutefor Aii+n +a-- beI,.nh ^ino+A+-Tro tr _hrce+1'h" -o=+iivno, evena~rno4 i 4-rr,ri gated areas. In this case, the effective exchange rate could be lowered to TI.s 7.52 per dollar for raw jute (equivalent to Tks 8.65 per dollar for jute goods) and still allow pay-

(d) Tn al'l three cases, -he export prie, of. T 60 is justtoo low and cannot be adjusted to be competitive in both internal and ext-ernal ,,ar'kets si.,mply by cl-,ngnrg v.he effective ex= change rates. If the level of E60 has to be maintained in e ftre, a rt,c r c -4- . _ i,lrs 4Ae1- WG l 1LUAVIA. V Ca L"LL.k %A%.ULUIL * bA_'F ' %AA VL V_U|L V1-VOvO | O Wz only solution, mainly by developing new jute species of dram-aically high Yields.

6.09 Galculations in Table 18 show the change in raw jute price and in foreign exchan-ge earnings of raw jute used in manufacture witn a 12-1/2% and 25% drop in world market value of jute goods. Assumptions used in the calculations are that manufacturing costs estimated at half the price of jute goods in 1969/70 would remain constant and that manufacturers profit margins would also remain constant. The following are explanatory notes for the three cases presented in Table 18:

(a) Case A shows the 1969/70 position and a range of raw jute prices which may have been paid to farmers in that season. A Government survey reported Rs 34 per maund jute as the average price received by farmers. This seems high especially for the mass of small farmers, who have to sell just after harvest when the jute price is at its lowest. The lowest price in the range is Rs 3 lower than the average Government guaranteed price of Rs 27 per maund (also shown). Many farmers and investigators claim that, on average, farmers - 27 -

receLve RLs _- Le UILCII UVVtS.L-1M gu1=11 1LU-an,ua prices. 1Ji.e range is presented because the actual price received by farm-s..ers co-uld not be ascertainred for- lack of data. Some investigators claim that manufacturers could have afforded to pa-y everi. ruore tUhaldI rSw .34 pPCer LmaundUb I-u0 dgaiLn1 UadLa is lacking to substantiate those claims.

(b) Case B shows that when the jute goods price drops by 12.5% the raw jute price to farmers can be increased by 22% by allowing an exchange rate of Rs 8.28 per dollar for raw jute. (Since it takes 1.15 units of raw jute for each unit of manufactured jute, the table shows the exchange rate at ixks 8.28 X I . 1 5 = Tx s 9.52 per dollar.) At this exchange rate, the foreign exchange value of raw jute in finished goods declines by 25%. However, by raising the exchange rate for jute goods to Tks 9.52 per dollar, thus compensating for the rise in raw jute price, the industry could, without impairing profit margins, probably pay more than Tks 36 per maund raw jute and consequently prevent a switch of jute land to rice. The two top raw jute prices to farmers in Case B, Tks 414. and Tks 36.5, (Table 18) are similar to those of Case C in para 6.07 above for world market jute prices of 190 and E81.75 per ton--25% reductions of price levels from B120 and B115 respectively.

(c) Case C, a reduction of jute goods price by 25%, would lead to a 10% reduction in the farmgate raw jute price even allowing an exchange rate of Tks 8.28 per dollar for raw jute. The foreign exchange value of raw jute used in manufacture would decline by about 50%--down to B60 per ton discussed in para 6.07 or lower. It is unlikely that at that level of decline the industry could offer a raw jute price high enough to prevernt the loss of some jute production to rice, without a reduction in the manufacturers' profit margin.

6.10 Tn CnnnliiAOnn an effective fnreign erchnngA rat,e nf Tks 8-28 per dollar for exports of raw jute (equivalent to Tks 9.52 per dollar for expnorts of ifute goods) emerges from these i'1enilatitnns. These ra+es would allow payment of an adequate farmgate price for jute while allowing iii+.P an^dq t.n ha ov-nn-r+.Ad nt. nriAR ^nnAt.n+-Ai trP Tn t-h c-,rnthPM+. , I rAnrt i n case the export price of raw jute drops to B81.75, Tks 36 per maund could be paid to fnrmers. Though +his price level is hignher +han +he mi iT4nmi price of Rs 34 for unirrigated areas, an additional strong incentive might be needed +o increase 4u+e ou+put as soon as possible +o ret-ain +he 4u+e market from the encroaching synthetics. With improved farming practices, ju+e would be compe+i+ive wth rice under irrigated conditions if +.he yrieald could reach the high levels of farm trials (in some cases exceeding 30 - 28 -

C. Rationalization of the Mill Sector

6.11 The mill sector may have to improve its performance drastically to remaini competitive with syntiLe: ULcs andu to t-y and gain a larger shiare of the limited and slowly growing world export market. Efforts to improve might be particularly important if the manulacturing sector were to lose the privilege of purchasing raw jute at a lower price than exporters or overseas manufacturers, as proposed in preceding sections. In tne past, because of the higher foreign exchange bonus, manufacturers could outbid fiber exporters and still maintain a low raw jute price. without prefer- ential bonus, manufacturers and fiber exporters would have to compete for fiber supplies on an equal basis--both at a nigner raw jute price levei than in the past. Consequently, local manufacturers would lose the raw material price advantage they held over overseas manufacturers and would therefore have to increase efficiency to remain competitive. Measures wnich may have to be considered by local manufacturers to cut costs include smaller profit margins, increased productivity and concentration of production in low cost mills. TABLE 1

BANGTADESH - SECT;lcR STUZY

WORLD PRODUCTIOTf OF THiE CHIEF NATURAL FIBERS

(000 irAetric tons)

1962/63- 1966/67- 196h/65 Percentage 1968/69 Percentage Average Average

Cotton 10,911 62.9 10,853 61.6

Jute and Allied Fibers- 3.121 18.0 3.380 19.2

Wool2/ 189 8.6 1567 8.9 Vep3 .,j42 6.6 10R99- 6.2

F].' .6/ 65R 35 3,9

Totanl '17,353ICan,o 17,A-60-"oo.

C-i lA.'.luUdL.L Ulle So Uj Union.

21 1 s.b 2,X -- .fI an'

2' 3xciL.Luding Pvouu' biUll 01 51 i hernp in ±iainlanu China.

A/ 19C02-64 Average.

el -%f% to-Z0 - 2! 1766-6o average.

6/ xccuuringf Mainland China.

Source: CEC,, Industrial Fibers, various issues. BANGLADESH - SECTOR STIJDY

IMPORTANCE OF INDIA, BhNGLADESH AND THAILAND) IN WORLI) JUtTE ECONOMYL/ 7-CIOO mnetric ~nsto

1 963-1 96', Average _ 1966-1968 Average A:Llied Allied Jute Fibers Total Percentage Jute Fibers Total Percentaae

World Prodluction 2,384 971 3,3i55 100.0 2,33h4 1,093 3, 427 100.0 (71 .1) (2'8 .9) (100.0) (68 .1) (31 .9) (1(00.0 )

India 1,002 283 1,285 38.3 883 221 1 32.2 (78.0)) (22.0) (100.0) (E80.0)l (20.0) (10(0.0)

BangLadesh2/ 1,116 1,116 33.3 1,i10 1 ,14( 33.3 (100.0) (100.0) (1C)0.0) - (1(0.0 :)

Thai:Land 7 2'35 302 9.0 11 422 433 12.6 (2.3) (97.7) (100.0) (2.6), (97-4) (10(.0)

Others 259 393 6,52 1 9.4 300 450 750 21 .9 (39.7) (60.3) (100.0) (1o0.o) (60.0) (10().0)

Raw Fiber Manilfacltures, Total Percentage Raw Fiber Manufactures Total Percente

Producing Country Ecports 1,009 1,206 2,215 100.0 1,061 1,107 2,168 100.0 (46.0) (54,O) (100.0) (L[8.9), (51 .1) (10().0)

India 26 959 985 445. 24 71 7 7411 34.2 (2.6) (97.4) (100.0) (3.2) (96.-) (10(.0)

Bangladesh 763 247 1 ,01 0 45.6 668 390 1 ,058 48 .8 (75.5) (24.5) (100.0) (63.1) (36.9) (10(.0)

Thai:Land 202 - 2'02 9.1 360 - 36() 16.6 (100.0) - (100.0) (1CO.O) - (10().0)

Others 18 - 18 o.8 9 - 9 0.4 (1 00.0) - (100.0) (1CO0.) - (10(.0)

Ratio of ]Exports to Production 66.0 63.3

1/ Production data relate to crop year (July-June), and exports data to calendar year. 7/ Production data include small quantities of' mesta.

Source: Annex Tables 3, 11, 19. BANGLADESH *- SECTOR STU]DY

ESTIMATED DWORLD COINSUJU'TION OF RAW JT'E AND AILIED FITERS

(COO metric tons)

Western Eurooe Est t"iated Uni ted CGr. ;tirc,ntaJ. liorld July - Junel India Bangladesh Kingdcm W., Europe Total Other Consum,ption

1950/51 953 55 396/1 L24 1, 8:L9 1951/52 1',125 72 697T 5L,6 2, 2:12 1952/53 963 .90 wui2 734 2, 2.3 4 1953/5i4 9hh1 127 504 5114 2,089 19514/55 ]L,114:L 1,145 5M6 351 2,1143 1955/16 1,25:1 1,82 538 59, 2,5)25 1956/57 1L,18.3 2!56 52 7 124 2.,3L0 1957/53 'L,221 206 536 2,50 1958/59 :L, 211.4 251 50D3 628 2, 59'6 1959/60 I.,25.2 309 137 336 h73 772 2,806 196o/61 1,, 161: 3109 1141 32L L62 673 2,6(5 1561/62 1,2'07 3IJ9 117 27'1 3L3 1,,031 2,?75 1-962/63 IL,37( 363 130 3832 512 753 2,22"3 1963/'C'4 1, 443 38_ 135 310 9154 372 1961i/6 5 1,502 3l64 131 36 17 1498 9,0 3,3:L4 1965/66 1,1415 508 131 38:L 512 1,191 3,626 1966/67 1L,33.3 1S9 123 3519 1,235 3 577 1967/o8 ]L,319 563 1 142L. 1,C i,5 3,"55 1963/69' 1L,089 581 111i433 550 777 2,997

1/ The data relate to calendar year.

Spurce: CECO, Industria.l Fibera, various issues; CF.C, Wool Intelli, ee and Fibers Su2p1ment; F.O, Trends in World Demand for Jute iianufaclures. TABLE, 4

BANGIADESH - SECTOR STUDY

FhO PiJ-5tTz'TIO^T 01' JUTE' (.C;.j.-,T,RI"TIONI BYi F:TD USES

(t000 tonls)

i196-c 19701' L _ 1980

Sack.s, Bags 'an dev~oo':o5n~ s 100|7 7 150 Other- Pa cL:ag-in 'Cen-ltrI4 cIi-nnif, I Ma.?terials Cex-uritr ies | 770. 84:105 840 Dvl-,)j-t, f'oumtriesl, 1 15 1 ,l?1?595 1,2(DO

S ulb -to ta -L 2 co(76.i.°7Js05 72*6o)2 ,J(830

Carpet f3 acllcin7 I LXn.',, B3aa i | 75, i138 i198 50

V9-J _:w'::uSt:; IJ =, | 4vJ LLA -)J.L4 .TcGre;>Cal l,e-t 1 105 87 88 4l

-Slb-to taS | 220 (6.35) | 37v0 (1o0e) 600 (14.3-') 250) (93.f)

Othei. Uses D-eoe'';ut-.s ;', 2"O ! 255 6

Io ,zl,tr e _ 50) | 0 00oo J:evel.c,tir.gCoXll.'riesl ]:L5 | 140. 1 20510

S )b -total -355 (10.3'9j 450 (12.8,, 55G (13.1,%j 200 (7.4, )

Total Dlevel.oped '

2/ Developed countries only. MANC.ADFSH -SF(:l'lt STUnY

WORLD PRODUICTION OF RAIl JlrTE AND ALLIEZD ?TBUif

(thouaand nmtric tons)

Crcp Wcrld t USSR a-e. MzLinlatd China Drveloing Cotuntries FIANGt.AaFSi. IndiL 2/ Thail:ard eahers Ten T_Jriotal Jul e TtF.cr IiDtal Jute Uthe r Total J-u te l6Ui-eF .Jte-o ;tal Jute Mesl.a T'ot a Jute K7na To. a] -Jute Cr-IT

lSS. /_ I 1,S_ 7 1,752 95 IO 35 65 1,7L7 1,717 30 1,090 595 595 16/ 7 2 5 5' 30, 25 1. -:/- 2,365 2, 69 200 270 125 145 2,095 2,040 55 1,148 849 8l9 L/ 23 3 20 75; -Ci :2,0'4 2,Z67 t.L7 330 155 175 2,284 2,112 172 1,238 957 833 12 214 l 13 75 LC 'S l;.o^./4 1,375 1.323 252 160 70 90 1,415 1,253 162 655 679 561 .:L8 16 2 6'i 35 j, l--_c -. 1, 74r0 1.6739 301 170 70 100 1,620 1,419 201 81,6 694 531 163 20 2 8 70 I, 30 _S-6X-; 2 Jo5 1,012 6,3 261 82 1Y9 2,084 1,630 254 1,017 973 762 2.11 11 1 10 83 SC' 33 ;;- / j7,LUi 1,°25 536 292 65 207 2,169 1,840 329 1,002 1,01,7 778 2659 19 2 17 10:L 59 L' 1.:z7/%S 2,'::6 2,18 536 335 100 235 2,121 1,818 303 1,036 961 724 237 24 6 18 1'V) 52 4- 2,756 2,1'96 602 356 IC:, 252 2, 1tJ.2 2,092 350 1,0!'1 1,208 938 270 33 3 30 11G Lo 5- ''5"Clio 2,-3J 2,010 570 371 109 262 2,209 1,901 308 1,010 1,021 818 2()3 54 4 50 121, 69 55 V :-2'C1 '2t>53 1,061,7C9 365 10'6 259 2,288 1,838 1650 1,0023 929 726 205 187 6 181 2149 85 64 1 :!'' ' 6 2.637 959 31I6 98 268 3.250 2,539 711 1,267 1,,f62 1,215 308 351 S/ 12 339 170 1IC 64 2,9 2,1123 7,6 360 99 261 2,529 2,024 505 935 1,289 983 306 1611 7 213 166;4 99 65 1- " /i! ,. 3,2z.U 2,360 F(06 410 116 294 2,856t 2,2644 6210 1,000 1,,54 1,116 338 219 7 212 181 121. 69 3,,_3 2,535 978 L50 130 320 3,063 2A,05 658 1,291 1,372 1,086 2136 309 6 303 191 6122 69 3 >27 2:255 1,02-9 510 150 360 2,777 2.1C8 669 1,157 1,029 805 224 377 7 170 22!4- 139 75 < c_7 ;!6?7 2,397 1.-co 5CO 2>15 355 3,197 2,252 945 1,110 1,232 962 270 600 5; 5;5 255 1.5: 9' 1. 0 * , 0 2;&76 1,'72 562 16S 374 3,308 2,510 798 1,243 1,367 1,138 2;29 507 10 l97 191 12S 72 1 /Fc 2. 733 1,926 807 549 1?3 376 2,184 1,753 431 1,068 714 550C 1646 193 9 1.84 2C9 126, 83 1965/79 7/ 3, 51 563 3,018 1,260 1,224 320 2116

21 uiz."-,2e for r.ost countries.

2/ COffcial; cro.) estinates wV-ich differ from, trade estimates based on imp)rts, exports, consumptiorn end changes in stocks.

I/ VAMGI.AAnFSH Is also reported to prcdu=e 30-6.0 thousand tons of mesta a year, i Included in the jute fl :re!u.

A corLdng to trade sources, this figuwe was overstated ani production was in the order of 130-11,0 thousand tons (FAO).

C` '.',:h Br.iz41 9_, Nep;,l 37, Teiwan 15, Burna 12 and Cong;o (Kirshasa) 7.

7/ Frcn a differ!E-t s; FeSAC, Ccnr7.di0 Feview and Outioo!s. O

Scu-ce: r.dis frcm I,'A r u:sl Su;-- 2 r=y of jrte ;:r:d GCn'i.y St2istics; Pakistan from PJNIA, Monthly Sxrurary of Jute Goods Statistics Thailand from Thailard 11nistry of Ag'ic t-flxe, Aen-i.z:;'tura2 S-,ti: tcs o;:' v-tndnl from FA0, .Pont-wnr Trends in the Producticn of Jute, crvf anfd AliUod Fibers" (CCP/Juto/664/3, July 31, 1r64) arn LII, St--:st.c-l Y>=:'?:^'>, 19^6.* _: fibuc…s for 957 68, -4 _S:68=694.- .-.. r Goer-...... T'. , -; ood *n.d"'ri*cult-urc, '^nt, rirctor**tc of jute Dn:clop '; -.: e:__ - - F

BANGLADESH - SECTOR STUDY

EXPORTS OF RAW JUTE AND ALLIED FIBERS

FROM THE CHIEF PRODUCING COUNTRIES

(1,000 metric tons)

Calendar Bangladesh India Thailand Others Total Year l/ -/ 2/

1950 933 7 1 15 956 1951 1,053 7 2 17 1,079 1952 840 - 2 23 865 1953 980 - 3 12 995 1954 904 - 3 3 910 1955 981 - 3 10 994 1956 859 - 6 10 875 1957 735 1 15 9 810 1958 906 - 28 10 94, 1959 809 34 37 9 889 1960 758 3 62 13 836 1961 605 1 144 12 762 1962 7h1 7 238 10 996 )963 739 19 126 13 897 1 _c 791 1G 161 5 1.Och 1965 7_5 26 317 25 1,126 1966659 27 1X73 1.172 1967 680 26 317 6 1,029 1968 665 19 290 9 983R 1969 831 8 256 9 l,loh

1/ Jute only. in addition, Bangladesh is reported to have exported fO-30 thousand tons of0 rMsta in recent years.

2 / iostly kenaf.

3/ Nepal, Congo (Kinshasa), Burna and Brazil. It exclude3 small quantities exported by Mainland China.

Source: FAO, Trade Yearbooks; Bank of Thailand, 1t:2nthl.y Rec20r3; Central Statistical Office of Pakistan, 2bnthlv Statistical Bullet-in. TABLE

BANGLADESH - SECTOR STUDY

RELATIVE; SHAAPE TI 1TWORLD EXPORTS OF JUTE MANUFACTURES

Dev>eloped Deve1 Opir)g India Bangladesh Countries CocWtri.e3

i onEfr I 7 n A,RR1P 1951 135 8M,5 868. 030 1952d,% n ff)II. 14.9n 85.5r-U 'I Ai 85*lr 0 A 1953 14.0 86.o 86.0 0.0 -179v4I r3r1 .1.4-,,IelQ .4u 0- 1e6eo 8.6 I 1@I A 1955 12.0 83.0 82.9 5.1 t ^~,z -%-I> 5,00 ,. Qn -7 n _l~Y,)U 114 . -) oUU.( U.L f ft.u 1957 10.3 82.7 82.9 6.8 -- I /0 .,,~~~~~~10 0 1 9 >1, 11.410, 0.0 79. co 0.0 1959 9.7 90.3 73.9 16.4 190 5 058.O.5 73.2 16.3. 1961 10.0 90.0 70.3 19.7 1962 9.4 tO.G71.5 i9.1i 1963 9.5 90.5 71.8 18.7 196i 8.2 9jL 75.2 16.6 1965 8.9 9h.*1 70.3 20.8 1966 9.5 590.5 60.7 29.8 1967 8.4 91._6 61.7 29.9 1968 9.1 90.9 54.5 36.14

Source: Table 19 of Statistical Annex. TABLE 8

BANGLADESH I - SECTOR STUDY

WIORLD EXPORTS OF JUTE MANUFACTURES

(thousand metric tons)

Calendar Developed Developing Year Vbrid Countries Countries Ini a Bangladesh

1950 784 92 692 692 1 95 J- -).L 899on~V.7.7 ..121LLJ. 1778flu 7flu 78 1952 868 129 739 739 1953 869 122 (41 7'-7 - 1954 972 121 851 8b1 10 I955 1,057 127 930 876 `4 1956 1,065 120 945 870 75 1957 1,046 1o8 938 867 71 1958 975 111 864 778 86 1959 1,163 113 1,050 860 190 1960 1,158 122 1,036 8h8 188 1961 1,023 102 921 719 202 1962 1,200 113 1,087 858 229 1963 1,239 118 1,121 890 231 1964 1,392 114 1J278 1,047 231 1965 1,337 119 1,218 9h0 278 1966 1,198 114 1,08)4 727 357 1967 1,223 103 1,120 755 365 1968 1,226 111 1,115 668 W47

Note: This table excludes, as far as possible, trade in used sacks.

Source: CEC, Industrial Fibers, various issues. TABLE: 9

BANGIauAkS - SECTOR ST1lUDY

EXPOKRT OF JUrE C1OOiD FROM BANGLADESH AND INDIA ('000 tons)

______-Sackin<, ______Hessian SwIn of Bangladesh Share of Swu Of Bangladesh Share of and India Bangladesh Bangladesh and India Bangladesh BanRladesh

1957 490.1 60.4 13 428.8 29.7 7 1958 424.3 78.5 19 436.3 36.9 9 1959 490.3 135.7 28 481.2 5o.7 11 1960 436.7 123.8 2Q 453.3 61.9 14 1961 423.9 140.2 33 419.3 61.4 15 1962 456.7 6L6.5 36 523.1 65.7 13 1963 40.1 157.5 40 535.2 71.4 14 19601 392. 1q7.6 ho 55[*6 66.8 12 1Y65 h64.6 181.1 39 527.6 79.5 15 196A 4,07.9 234.6 58 h68.7 95.9 21 196'7 hB.h 232.9 57 185.3 103.0 22 1968 336.3 2h127 72 152 32193.h 1969 296.4 2h842 84 hh6.9 195.2 42

__Cjiet Baclding Total SC.rn, aof' BangladVe s0ha S are fan of 9....i UL aro and Incti- Bangladesh Bangladesh and India Bangladesh Ban1ladesh

0 a a a ar. V~~~~~~~~~~.

19D7,) 8O.x - O . 7 4 L.V 1958 19.2 - 0 922.0 115.8 13 317,930.1 - O 1,02.4 8L8U.4 18 1960 35.3 - 0 1,001.1 190.7 19 n n-e - In / al-e% 'm ^r%t a^ 1L96U1. 4J.O6 - V 7L|.I LOV4.972 1962 57.7 - 0 1,107.5 233.1 21 n " ~ 00 , n no 0 an a 19G3 oo.3v - 0 1,0I8.8 234. 21 1964 107.8 1.2 1 1,165.4 234.2 20 1965 106.5 6.5 6 1,211.6 282.4 23 1966 1J4.7 13.2 10 1,107.9 361.8 33 1967 161.0 19.4 13 1,139.2 370.7 33 1.968 20ih.8 25.0 13 1,125.4 h54.0 hi 1969 208.5 29.2 12 l,O04.8 484.9 46

Sources: DC 1 & S - Calcutta Bangladesh Jute Mills Association TABLE 10

BANGLADESH - SECTOR STUDY

FAO PROJECTION OF JUTE IN 1980 (in terms of fiber)

~~~~~~~~~~~~~~------(000 -txns)

______e 1970- , ______Lja o w lIain (Bangladesh 1,150 1,300 1,800 1,4.00 (I.ndia 1,170 1,250 1,680 1,400 Total Pro,icers (thailand 510 35 450 33 IQSub-total 2,830 | 2,900 | 3,870 3,130 Production Other Frodu-ers 670 800 1,130 I 970

I______I wTotal 3,5C00 3,700 5,000 i ,100

(Bangladesh. India 1 Prodh.cers (TbIa-larid. 650 700 1,05C0 820 Total (Others I 670 1 800 1,130! 970 1

Sub-total I 1,320 1,500 1 2,180 1,790

I l (DevelcDed l,.LO I 1,360 I 1,225 h65 I TiiaorUers (Cer;txal I I I P_-nr:n.e.: i q330 1 '320 426 I(I (eveioI,i.l-Th | lO 370 ; 42 | 3051

S ub-total | 2,180 2,0•0 | 2,070 | 960

Total | 3,500 3,550 4,250 2,750

Ic~,,,,,.iI,c . 0I I I I~,21I

I-__ _ - _ _ _ "

(Bangladesh 1,005 1,170 1,5S0 1,21[0 f~~~~~~~~~~~~~~~ Ezpo (Ir -I.i I CrvswhJJ 1 6n 1,500a On j Q,6' ILYT01- LiIWLA

!.^(ThailandJ| | 37•) 280 35• 0 250

Total 2,180 2,G050 | 2,820 2,310

!'xporlt 0 2,050 2,070 960

_ _ _ _ 130 0__ __-U'Plus 0 I 0 ''t 750 )-n

1/.According to a prclirl na-ry survcy, total producticn and total oornsurption are given as 3.2• and 3.)13 m;illion tons.

2/ Should be exportablc b'.t no breakddcx, avai1L!Tle. TABLE 11

T ABYllnt AD' -HSECHT OR n-MU I

RiAW JUTE PUDiUCTIONT IN BANGL,ADE;SH

Area Production Yield per acre ('000 acres) (i000 bales) (bales)

1947/48 2,059 6,843 3.3 1948/49 1,877 5,479 2.9 1949750 1,561 3,333 2.1 Three Year's Average 1,832 5,218 2.8 1950/51 1,711 6,007 3.5 1951/52 1,779 6,331 3.6 1952/53 1,907 6,823 3.6 1953/5l4 965 3,610 3.7 1954/55 1,243 4,665 3.8 Five Year's Average 1,521 5,487 3.6 1955/56 1.634 6,500 4.o 1956/57 1,230 5,514 4.5 1957/58 1,563 6,200 4.0 1958/59 1.528 6,ooo 3.9 1959/60 1,375 5,554 4.o Five Year's Average 1,466 5,95 4.1 960o/61i1.518 5.625 3.7 1961/62 2,061 6,969 3.4 1962/63 1; 723 6,300 3.7 1963/64 1,700 5,875 3.5 1964/65 1;660 5;328 3.2 Five Year's Average 1,732 6,019 3.5 1965/66 2,198 6,693 3.0 1966/67 2,165 6j30 1967/68 2,400 6,850 2.9 1968/69 2,170 5,754 2.7 1969/70 2,465 7,171 2.9 Li,ve Ye ar'Is t,verag 2,280 6,54 .

Source: Yearbook of Agricultural Statistics, Ministry of Agriculture and Works, Government of PaKistan, Jute Board. 'TAB-LE ila

BANGLADESH - SECTOR STUDY

RAW JUTE PRODUCTION AND DISPOSAL 1969 ONWARD'/ (thousands of bales)

1969/,70 1970/71 1971/72 1972/73

1. Carryover from previous season

(a) Mills 598 531 919 500 (b) Shippers 231 89 500 138 (c) Jute Board - 261 309 - (d) Dealers _ - 150 - (e) Growers - - 269 -

829 881 2,147 638

2. Production 7,391 6,801 4,200 6,500

3. Available with Trade 8,220 7,682 6,247 7,138

4. Disposals

(a) Mills' consumption 3,618 2,739 900 3,200 (b) Growers' consumption 213 200 - 200 (c) Mills' likely carryover 531 919 670 500

5. Lost or Unaccounted - 398 200 -

6. Exports 3,508 2,198 2,9062/ 3,000

7. Carryover with Trade, etc. 350 1,228 1,344 238

(+946 with growers)

1/ Including Mesta 2/ Including about 2 million bales of unregistered export to India.

Source: Bangladesh Jute Board TABLE 12

BANGLADESH - SECTOOR STUDY RELATIVE SHARE IN WORLD PRODUCTION OF RAW JUTE AND ALLIED FII3ERS

(percentage)

USSR & Mainland Developing 1Tndi China Countries *

1950/51 5.4 94.6 59.0 32.2 1951/52 11.4 88.6 48.5 35.9 1952/53 12.6 87.4 47.4 36.6 1953/54 10.2 89.8 41.6 43.1 195L/55 9.5 90.5 4±7.3 38.13 1955/56 11.9 88.1 43.0 41.]1 1Q56/57 11.9 88.1 Lo.7 42.'; 1957/58 13.6 86.1 42.2 39.:L l958/59 12e? 87.3 39.6 h13.2 1959/60 114.4 85.6 39.1 39.6 1960,/61 138 86.2 38.6 3.0 1961/62 9.6 90.4 35.2 40.-7 1962/63 12.5 87.5 32.-4 441. 1963/64 12.6 87.±4 30.6 44.5 196hO)65 12.8 87.2 33-9 39_! 1965/66 15.5 84.5 35.2 31.:3

1967/68 14.1 85.9 32.3 35.5 1968,X6 20.1 7009 3901 26. 1969/70 15.7 84.3 35.2 34.,

Sou--ce: jD.Le) of Sjtais4tical Annex TABLE 1i3

BANGLADESH - SECTOR STUDY

SUPPLY AND DISTRIBUTION OF JUTE MANUFACTURES IN BANGLADESH AND PAKISTAN (thousand rmetric tons)

Su DlY Distribution July - June Stock 1/ Piodtuction Total Exporus Consumption 'rotal

1955/56 l1.o 132.3 1L6.3 65.3 41.0 127.3 1956/q7 18.h 16.9 106.3 82.0 58.1 1lLG.l 1957/58 114.7 160.4 175 1 10'.3 57.9 163.2 1958/59 _ 8 206.7 ____ 139A5 56= 1O<7 1959/50 31.4 260.o4 29. 8 20-.0 51.6 251.6 194n/641 28.22.9 281.1 ] L,8 8 18.o 2514. 1961/62 23.8 275.4 299.2 219.2 57.8 277.0

1942/53 3<.5 302.° 333.5 222.3 56~~ ~ ~~.5.-258.8 1963/14 L8.3 336.2 38L.5 2514.7 69.9 32b.6

-lz2 .; l;/to~'"; 4 7.J L 7 Uv). ) Iir; r* J 6 7 .8 2 7 5.o 1965/66 71.8 14i5.9 1487.7 321.6 72.3 393.9 - mS) Xy'V'D/iJL)L., V t -. ff UlLILU.C - e- tJ(1./,i on-L c:,. Uy.CD.UUA{ Lie, J-l- - e 1967/6S 73.7 520.8 5914.5 U29.? 79.3 508.5 9$8:to9 0`2.-7 ~ 525"J.8rol 509.) L'9..3 7o.) 537.o 1969/70 64.4 596.9 661.3 50tt.3 91.4 595.7

l/ There are small discrepancies between the stock figures as published and the difference between supply and distribution.

Source: PJMI, Mlonthly Sun-ary of Jute Goods Statistics, various issues. TABLE 13a

RANGLADESH

JUTE GOODS POSITION (tons)

1969-70 1970-71 1971-72 19'72-73 (up toFeb' 72) -

1. Carryover from previous season 57,603 74,488 68,107 65,ooo 2. Production 620,866 469,762 153,680 642,000

3. Availabil:ity 678,469 544,250 221,787 707,000 4. Disposal (a) Internal 83,002 79,132 26,000 0,000 (b) Overseas 521,703 385,028 114,o000 60),0ooo

5. Carryover stock 74,488 68,107 81,787 67,000 (Physical) (physical)

Source: Bangladesh Jute Board. TABLE 1 4

BANG,LIWESH - SECTOR STUD-

TBA NGDE:TVnflc.r? . rtrOmRT JnDry S OF D1jiJ.l JL)LJri; r1.tUiJUuu-1- UIN 4U JtAZUAItO Uv JUTE MANUFACTURES BY TYFE (thousand metric tons)

July - June Hessian Sacking Others 1/ Total

Production 1955/56 30.7 96.0 5.6 132.3 1956/57 36.3 107.0 3.6 llt.9 1957/58 boA1. i.3 5.7?6o.h 1958/59 52.6 lh3.0 11.1 206.7 I 959/60o 67 -1 181.8 11.5 260A1 1960/1 68.3 172.8 11.8 252.9 1961/62 73.8A89. 12.3 275 5 1962/63 85.9 207.1 9.9 302.9 1-I3/W 0 . 9 99C 7 19 1. 36.3 196ht/65 82.b 196.3 15.1 293.8

1966/67 111.8 267.9 30.4 ldo.1 'I oK,7 14Q -Ii.Ln ' - 4 n N iOf) 9 9 ,7 u / ou -LIC4c 7.rV*v 7 *Jv, 'Jv. 1968/69 191.8 289.9 h5.1 526.8 19/-20 IV 23. 302.,in)~~~~~~,Vc ,-1 564r', 1. rC-~. 9

Ex.erts 2/

1955/56 211.6 61.7 0.1 86.h 1956/57 26.6 55.3 0.1 82.0 1957/58 33.0 71.9 O.h 105.3 1958/59 Lt5.o 92.8 1.7 139.5 1959/60 60.1 13h.5 5.3 199.9 1960/61 62.8 137.7 5.14 205.9 1961/62 66.5 1t8.8 4t.0 219.3 1962/63 72.A 107.5 2.3 222.2 1963/6h 80.1 170.9 3.8 25h.8 196h/65 7h.8 11.2 9.2 225.2 1955/66 92.8 211.7 17.0 321.5 1966/67 91.8 236.3 24.1 352.2 1967/68 132.1 26h.5 32.6 129.2 1968/69 167.1 256.1 36.2 159.14 1969/70 221.8 236.9 L5.6 50L.3

1/ From 1962/63 the data include carpet backing material which

constitut- by far the most JiLport*at .J- 4n this fctegor. 5 LI i*1i V.LJ.UJ~c LA- t .1.1 wUb Vtj.- O ouMlr deispaUntchle for exSort ovferseas.

Sour-ce: MIA,X, Me'ontUl'y Sururna-.Y of Juze od Statistics:5 various1 issZues3. TABLI, 15

BANGLADESH - SECTORZ STUDY--

NET FARM INCOME FROM JUTE CULTIVATION

Unirrigated Areas

Traditional Areas Improved Areas

Tks 27/md Tks 34/md Tks 27/md Tks 34/md

A. Average Yields (acre/mds) 15 15 20 20

B. Gross Revenue (acre/Tks) 405 510 540 680

C. Production Costs (acre/Tks) 213 213 293 293

D. Net Revenue (acre/ Tks) 192 217 247 38i7

E. Net Revenue Wdith Subsidies (acre/ Tks) 201 306 283 42:3

Improved Areas - With Irrigation

No Flood Control With Flood Control

Tks. 27/md Tks 35/md Tks27/md Tks35/md

A. Average Yields (acre/mds) 24 24 26 26 B. Gross Revenue (acreAIks) 648 84o 702 910 C. Production Costs (acre/ Tks) 350 350 392 392 D. Net Revenue (acre/ Tks) 298 490 310 518 E. Net Revenue With Subsidies (acreAtks) 352 544 384 589

Notes: 1L Excludes income from sale of -iiiitp -tieX 2. Production costs are taken from the sector model. ('See Technical Paper No. 4) 3. Fert.Alizers and seeds are not. susidizd.A 4. Average wage rate per day is Tkis1 0 75. 5.E' Hire of b'lock pair per dayTis 2.50. 6. E gives the net revenue with subsidies for inputs (50% for fertilizers and seeds and 100% for pesticides). TABLE 16 BANGLADESH - SECTOR STUDY

hET FA^nM NCOMEn rOM RICE£ . CTL7LVA LUON

Traditional Areas M-ixed Aus Toval A-as B . -Amn T A_ -- n -P_- T 1 Bra

A. Average Yield (acre/mds) 1/ .16 15 23 21 25 B. Gross Revenue - (acre,A2o) 352 330 506 4 62 550 C. Production Costs (acre/ Tks) 158 158 211 172 304 D. Net Revenue (acre/'TkS) 194 172 295 290 246 E. Net Revenue with Subsidies (acre/Iks) 204 182 317 300 284

Improved Areas - Without Irrigation Mixed IRRI B. IRRI Aus B. Aman T. IPRI Aus Aus & Aman

A.ae.ge t.iel A (acre/mds) 1/ 25 17 36 27 B. Gross Revenue - (acre/ Tks) 550 374 792 594 C. Production Costs (a-/q-) 299 206 II 303 D. Net Pevenue (acr-/ TkS ) 751 168 381 291 F. Net Revenue with Subsidies (acreATks) 330 203 471 327

Irrigat4d Areas - 'r.'ithIrrigation & Without Flood Control B. !RR! TInnI.!RI T. RiU Ued IRn Aus Aus Aman Aus & Aman IRRI Boro

A. Average Yield (acre/mds) 1/ 29 45 40 32 50 Be Gross Revenuee - (acre,'Tkcs) 638 990 880 704 1,100 C. Production Costs (Acrefi'ks) 361 598 468 378 564 D. Net Revenue (anr-A/nvn/ - 2??77 412 326 E. Net. Reven d with Subsidies (acre! TIks) 380 615 543 413 683

Imnroved Areas - With Irrigation & Fl-ood Control B. IRRI T. IRRI T. IRRI Mixed IRRI Aus Aus Aman Aus & Aman IRRI Boro

A. Average Yield (acre/mds) ,/ 32 48 42 35 50 B. Gross Revenue - (acre/! lS) 704 1,056 904 770 1,100 C. (acre,rTks) 441 541 496 367 564 D. Net Revenud (acre/Tiks) 263 515 428 403 536 E. Net Revenue with nissSdies(ar/LeR~ ~ ~ ~~17? C95947 AAI

Niotes: 1/1. Paddy 1 md ' Ties 22. 2. Production coss are en rod the sector model. 3. Fertilizers and seeds are not subsidized. 4. Average wage rate per day Tkcs I.7-. 5. Hire of bullock pair per uay 28 2.50 6. E gives the net rovenue with subsfd es Mor fnputs (50% for fertilizers and seeds and 100% for pesticides). TABLE 17

BANGLADESH - SECTOR STUDY

dulE' M-CES TO FARIdU7S r20M SPREAD OF MARKFYL-NG w STS 1

f.o.b. Price in £ (ton) 2/ 120 115 10 90 86.25 81.75 60

f.o.b. Price in Tics (torv) for Pucca Bale -

(Tf¢fDr'+A ve FoeiExchange Pa+A3) a. Tks 4-76/$ 1,360 1,305 1,235 1,020 977 926 680 b. Tks 6.52/$ 1,862 1,785 1,691 1,397 1,338 1,269 931 c. Tka 8.28/$ 2,365 2,266 2,148 1,774 1,700 1,611 1,182 f.o.b. Price in Tks (md) 4/ / for Pucca Bale -

(Fffective Foreign Exchange Rate) a. Tks 4.76/$ 50.0 47.9 45.4 37.5 35.9 34.0 25.0 b. Tks 6.52/$ 68.4 65.6 62.1 51.3 49.2 46.6 34.2 c. Tcs 8.28/$ 86.9 83.2 78.9 65.2 62.4 59.2 43.4

Paya--ble Price t-o Farmers el 6/ inTks (md) for Loose Jute Z

(Effective Forei Exchange Rate) a. Tcs 4.T76/3 30.5 28.0 26.9 20.8 19.6 18.2 11.2 b. T-ks 6.52/j 43.6 41.5 38.8 31.5 29.8 27.9 18.3 c. Tks 8.28/$ 57.8 55.0 51.7 41.2 39.0 36.5 25.4

1/ Spread of cost taken from "Marketing of Jute in East Pakistan" prepared by the Dacca University Socio-Economic Research Board and published in 1961. 2/ Decline in price (%).

120 £ 5L.L. L£L107 £ 90 25 22 17 86.25 28 25 21 81.75 32 29 25 60 50 48 45 3/ Effective foreign exchange rate equivalent to Tks5.5, Tks7.5 andTks 9.52 for jute goods as 1.15 unit of raw jute to manufacture 1 unit of jute goods. I/1 ten - 27.22 m.ds §/ Loose jute price to farmers - f.o.b. price x 5 x 72.17% a. 5 = 6.5 6.5 mds of loose jute are required for 5 mds pucca bale. Though usually 7 mds are required, price of 2 mds. of cuttings is not included in thi.s case. b. 72).17%C Acta'ypretg adwfr,r fe eu. l lee^e'trsrqie for marketing. As most of the expenditures do not change,Tks 8-9 have been deducted instead of multiol-Lino this noresntace for other nr; r.P r•l nillla n.; 6/ Price payable to farmers does -not taile accounit of the effect of export tax or fibre. At Tks 30 per bale long jute and Tks 15 per bale cuttings the tax would reduce the farmgate price by about TIKcs per mamd raw fiber. TABLE 18

BANGLADESH - SECTOR STUDY

JUTE PRICES TO FARMERS FROM MANUFACTURING COSTS

(Manufacturers Profit Margin Remaining Constant)

1969/70 Price Decline Price Decline Situation- Goods of 12.5% Goods of 25% (Case A) (Case B) (Case C) f.o.b. Price of Jute Goods ($) $ 100 87.5 75.5

Exchange Rate for Jute Goods

a. Present Rs/$ 7.5 b. Alternative Rs/$ - 9.52 9.52

Taka Price of Jute Goods

a. Present Exchange Rate 750 - b. Alternative Rate - 833 714 P/ Taka Processing Costs:- 375 375 375

Maximum Raw Material Price which3 / Local Industry could bid (Tks)- 375 458 339 (100%) (122%) (90%)

Range of Raw Jute Price to FarmersZ' . (Tks/md) 345 41.5 30.6 306/ 36.6 27.6 27- 32.9 24.3 24 29.3 21.6 Foreign Exchange Value of Jute Used in Finished Goods $ a. Raw Jute at Rs 5.5/$ 68 - - b. Raw Jute at Rs 9.52/$ - 48.1 35.6 (100%) (72%) (52%)

1/ 30% bonus voucher only for jute goods. 2/ Half of the price of jute aoods (in Case A). Remains the same irrespective of iute goods price. 3/ Comparision is made on the basis of 1 unit of jute goods equal 1.15 units of raw lute jute, Rs 375 -4 Rs 326, Rs 5.5 -* Rs 4.76 and Rs 9.52 -. Rs 8.28 (by dividing by 1.15). 4/ The actual raw jute price paid to farmers in 1969/70 is not known as no receipts were issued or purchasing records kept by primary buyers. There is evidence see 4/ and 5/ and para 6.09 (a) that the 1969/70 nrice was in the range of Rs 24-3)4 per mauind. Gnntant handling costs between farmgate and jute mill have been assumed. / Average producers raw Jute price in 1968,/69 from Econ.omnic^ rvey off angladesh, Planning Department.

/ Av-I % 4ofUL,e m pca ueh .e r er 4n 1C4LL/AOA and 1*CA.. P APPENDIX 1 Page 1

THE PRICE RESPONSIVENESS OF JUTE PRODUCERS

IN BANGLADESH

1. The first attempt to measure the supply elasticity of jute in terms of acreage adjustments made by producers in response to changes in the relative price of jute was made by R.M. Stern (1962)2./ It covered only a short period 1949/50-1959/60 following Partition and did not include a sufficient number of years to permit any generalization about the magnitude of the response of jute producers to changes in the relative price of jute. The elasticities obtained by R.M. Stern ranged from 0.57 to 0.70 and his simpLe correlation coefficients range from 0.51 to 0.56 (with 10 degrees of freedom).

2. In connection with this Technical Report, jute acreage and jute p.-oduc+ion price responses------were 4 4 1*1- esSi- o - dist-4_t,14 a-si4 for the nine major producing districts in Bangladesh using a sample of 17 Je of daita coverin,5 the period (1 or0,A/i51=1A94,7) Th.e realainsh-ips1 considered are of the form: for acreage yt = a + b * x y y 1 for production zt = az +b * Xt-1 where Yt is the district acreage under jute

Zt is the district production of jute

Xt is the regional jute/rice price ratio relevent to the district, lagged one year

3. The variables are expressed in logarithms. Hence the parameter estimate of b is equal to the elasticity of acreage grown to jute with respect to the relative price of jute and b. is equal to the elasticity of total production of jute with respect to the relative price of jute.

4. Results are given in Table 1 for the Jute acreage price response and in Table 2 for the jute production price response. Estimates for both -woul'd appear to be reasonably cosistent. A pattern would appear to emerge from these calculations:

(a) Both jute acreage and jute production price elasticities I; l eAaation to Ariw woU1d App_ eAr ;4- 'A__ about 0.7 to 0.8 on the coastal districts, Barisal and K^hulna. That -is an 1 Jince"asegn +1iothe Sic price4m7-^ ratio would appear to be associated with a 0.70 to 0.80% increase in jute acreage as well as in jute produetion in these districts.

1/ This analysis was prepared by B. Oury. 2/ Stern, 1ebei M., "The Price Responsiveness of Primary Producers". Review of Economics and Statistics, Vol. XLIV, pp. 202-207, 1962. APPENDIX 1 Page 2

(b) Moving away from the coast, Comilla and Jessore would have an 0.h to 0.5 elasticity, or about. That is a 1% increase in the jute/rice price ratio would appear to be associated with a 0.hO to 0.50 increase in jute acreage and in jute production in these districts.

(c) Dacca district would have elasticities of 0.4, or about. That is a 1 increase in the iute/rice price ratio would appear to be associated with a o.4o% increase in lute acreage and in lute nroduction in the Dacca district.

(d) Moving further North, Mymensingh and Bogra would have these elasticities also around 0 4; or about. That is a 1% increase in the jute/rice price ratio would appear to be associated with a O.40% incresqe in jute acreagoe and in jute production in these districts.

(e) Not fitting this pattern would be Rangpur fulrther north and Raishahi also in Northern Area h- west of Bogra. Estimates would appear to be around 0.5, or anbout fnr Ranganpr and o=6 (acreage) and 0n5 (production, or about for Rajshahi.

5. Close inspection of Tables 1 and 2 reveals that for each district analyrzed the jute acreage price response would, greally, apper to be equal or greater than the jute production price response. This would appear be negligible (b) that in those districts where jute acreage price elasti- appear to move on marginal lands following a significant increase in the following a significant drop in the jute/rice price ratio the previous year.

6. In Jessore and Rajshahi there would appear to be other major sub- t 4 o4-4 +~,4- no nv ,', -_ 1-h _rn s1 n ,n-.__I ro,.~nn Tv, 1hn+I,na iuv for'.AV'.LJ.1 Jui U, I.-I rice aIor.e, %/AktLJ sgc. Icse-ly acreage and production responses, it's for Jessore that the equations are thze lleast sir.ifican-. T.7%.ere m t-h+e so.e-- e+laMao tis fO the one hand, variations in the jute/rice price ratio lagged one year WL aLOp.pear lo explain m.1CL20% V U(3 eLUJ t4o4,VUV P.anr), and moe often from 31% to 38%, of year to year changes in jute acreage. On the other hianLA, variati± sii. z th1e Juta/JL&e/rLLUe. ratioU.U lLage ony.Ja WoUJ.LL ajppea.L UV explain from 25% (Dacca) to 45% (Rangpur) and more often from 27% to 33% ofI yyear UV V.L LlI1.L1rUO iLL1 Uch.ad U.LLlic J LLU pJroutioLLn (UJsOreL bneVJ,.L1A, pteLdL/ . BANGLADESH -- SECTOR STUDY

JUTE ACREAGE RESPONSES TO JUTE/RICE PRICE RATIO LAGGED ONE YEAR FOR 9 DISTRICTS 71 950,/51-- 19ZW7M; 1 7 Years )

Vt is natural log of Jute Acreage; xt_l is natural log of Regional Jute/Rice Price Ratio of Previous Year

Acreaee Price Elasticity In R_Ze@ioin District4Ju&t10rIs_(io logl Relation to Rice Ft

Jat Area Dacca Yt = 11.98600 + 0.44045 xt-1 0.44 0.334 (3) (2 .742 )**

]"ensingh Yt = 12.,88317 + o.40567 xt-1 0.41 0.314 (2.618 )**

Comilla Yt 11.92367 + 0.52823 :t-l 0.53 0.219 (2.478 )*~*

District Area Jessore Yt = 11.082,'0 + o.57620 xt-, 0.57 0.208 (h) (1.984)****

10iulna yt 9.8092 + .88854 t-1 0.88 0.333 (2.733)**

Barisal 10,.24068 + 0.71916 :xt_l 0.72 0.379 (3.028 )*

Northern Area Rangpur Yt 12.26596 + o 50914 xt-1 0.51 0.440

It '~~Bograi yt 11 .023,31 + 0.39299:xt_ 0.39 0.384 (3.060)*

It Rajshahi Yt 11 .269,O5 + 0.61321 :tt_ 0.61 0.421 (3.30L4)*

N.;B. Thie figures in parenthesis are the t-values indicating the levels of significance of the coefficient t|I estima.tes. A * indicates coefficient estimates significant at least at the 1% level; **, at the 2% level, *N. at the 3% level; *44 signUificL at the 10 'evel CD Both variables in the equation are expreassed in logarithms. Hence, the parameter estimates of xt 1 (the price variable) is equal b definition to the elasticity of jute- acreage changes with respect to the relative price of jute in relation to rice.

,Source: Raw Data from Planning Deipartment, Dacca. BANGLADESH - SECTOR STUDY

JUTE 'PRODUCTION RESPONISE TO JUTE/RICE PRICE' RAI'IO LAGGED ONE YEAR FOR 9 DISTRICTS (iq57- 19667;71T7Year-sT

Zt iLs natural log of Jute Production; xt_1 is natural log of FRegional Jute,/Rice Price Ratio of Previous Year.

Production Price Elasticity In Regicon District Eiations (log - loL Relation to Rice

Jat Area Dacca St = 13.27661 + 0.3,9665 xt-.. 0.40 .255 (3) (2.267)***

'I Ityumensirigh Zt = 1l4.20706 2.4106330 xt-'l 0.42 0.295' (2 .5134) *~*

It Comilla zt = 13.21,946 + 0.43640 xt-i 0.44 0.287 (2.1648 )***

District Area Jessore Zt = 12.311161 + O5526 2-xt-1 0.55 C).192 (4) (1 .886)**** KhuLna zt = 10.96905 + 0.86598 xti 0.86 0.283 (2.-435 )*B

of Bar-Lsal zt 11 .39722 + 0.67393 x+_1 0.67 0).272 (2.-69)**

Northern Area Rangpur Zt = 13.511152 + 0.562703 xt_1 0-53 o.458 (5) (3-5667)*

Bogra Zt = 1'2.19953 + 0.38006 xt-.l 0.38 0.321 (2.668)**

H Rajshah.L zt = 12.40013 -+0.49801 xt_l 0.50 C).327' (2.70 )**O

N.B. The f'igures in parenthesis are the t-values indicating the levels of significance of the coefficient cr Pd estimriates. A* irniicates coefficient estimates significant at least at the 1% level; **, at the 2,% I 0 level; *X*, at the 5% level; **3k*, at the 10% :Leve]L. Both variables in the equatiorLs are expressed iLn logarithms. Hence, the parameter estimates of x1 ('the price variable) is eqjual by definition to the elasticity of jute production changes with respect to the relative price of jute in relation to riLce. Source: Raw Data from P'lanrnLng Department, Dacca. RESTRICTED

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

INTERNATIONAL DEVELOPMENT ASSOCIATION

BANGLAADESH

LAND AND WATER RESOURCES SECTOR STUDY

VOLUME IV

CROPS, LIVESTOCK AND FISHERIES

TECHNICAL REPORT NO. 9

SUGAR

December 1, 1972

As-jia Pronect.s Department

BANGLADESH - SECTOR STUDY

VOLUME IV - CROPS, LIVESTOCK AND FISHERIES

TECHNICAL REPORT NO. 9

SUGARP/

SUr-IARY ANLD CONCLuIO'Ib i - iii

I. TNTm.ODuCTION ...... t

!I, RECIEWT T-HENDS ...... 3

!II. THE GtUK IN`DUS1'KrY ...... 3 ,

1V. W-HITE SUL-IAK INDIUb'RY ...... ,

V. S UGATRANE PROD-LrCTION METHODS AND PROBLEMb ...... *....

VI. RESEARCH 20

T4: -4't V

-4. Pr1Au.&WCVtion of1 Cen.ifgl Ln CNon=centr"--g Sugar i1n Bangladesh and Pakistan, 1961-62 to 1965-66, and ~UL.IU>l-y ±74f.-67 to 1970- ± 2. Area, Total Production, and Yield per Acre of Sugar Cane, Dangladesh anUkCLdL L L.Lt, JIuunaly ±J962-6U3 199 -7U70 3. Total. Production of Sugar Cane in Bangladesh and Use for Seed, Froduudr a,.JU VilewdLng, PeC.L.LnedL Sugar, a.l thILe J74L.ufacLtiLre Vo. GUL-, Annually, 1962-63 to 1969-70 14* CjLOL00mLd l4.Oful lieReun i.L the.AaUfact-,rLWIV Of Refined Sugar and. Gur from a Ton of Sugar Cane and of the Chemical Content

of "[C±.LLJ SuarC And UULr 5. Centrifugal Sugar Mills in Bangladesh,, 1947-1970, by Location,

24-hour. VaLpact, tdUQt; SeaVsouLal 0C6JCdJUj 6. Sugar Cane Ground for White Sugar, Sugar Produced, and Recovery Raz., runXualLy, 1959-60 t,o 1968-69, Bangladesh 7. Production Cost in an Average BIDG Sugar Mill 8. VxLta.L= P*ces of UG. tdLL of. 1=.L_U1rU OCLL, ~LArUal. VCrages, l960-61 to 1969-70, Dacca, Bangladesh 7 7. A Couipa'Lson00 Jt-LL.L Lof .k the1,ILV 1UVL,V11±.LJ.oeta .LAItOULUt7noeRcifdb 1L1V%;V.VtU LIJ OU.6..L-4a-Cn 0CL4V Farmers in Manufacturing Gur as Compared with Selling the HarveseduTT_ _ Sugars__ Caneg___ twv_ a_ witlesT_ Sugar_ __ Mill\Az vnn 10. Monthly Average Wholesale Prices of Gur (Cane) in Dang'lade-shc' 11. Trends in Sugar Recovered per Ton of Sugar Cane Crushed in All 0._ £ir .3 1.IL..1 .k "J.f91 - .- Y... ~1. flreA C,I R1.J.1IreUed FVILL± OLLgWhlSugar Ll 11 OtLgladesh, 4tfUlUUd±yI ±950-51 to 1969-70 12. Changes Ln ReUoverable Sugar in Sugar Cane According to the Period of Time Between Harvest and Milling, Louisiana, 1954-1956 13. Average Milling Results from the Operation; of Eight Tefined Sugar Cane Mills in Bangladesh, 1962-63 and 1963-64 Season

1/ This report was prepared by Mr. G. Stern on the basis of a report by Professor Efferson (Consultant). Table of Contents (Contd.) - -

14. Causes of Lost Time and Proportion of Total Crushing Time Lost, 11 Cooperative Sugar Cane Mills, Louisiana, 1968 to 1970 15. Proportionate Sugar Recovery per Ton of Sugar Cane Crushed for Various Individual Sugar Cane Mills in Bangladesh, 1962-63 and 1963-64 Seasons 16. Response of Sugar Cane to Varying Rates of Fertilizers in Bangladesh RPA1T.1T.AT)RT-T qPr.nT-? qMTnV

WATTMT, T* =!PfPM T 17TY'Cn r AT(DTfFUV.TPT-Tq

TECHTICG AT PEPORT NTO 9

SS:TTr UGA ATQ

SUMMARY AND CONCLUSIONS

i. T.n :If'7f% puced--- around tons of p-lan, t"on J.. L LA.. 7f%J, JJCJJLL G..LC DLL PfrJL AW%A %A .J LIA J.AL'Inn LLLJ J'%J%Li UIJAD L4. PJ.L_. U~ WLiS white sugar and 180,000 tons of gur. This provided a per capita supply amounting~U1LJUSAL.LL1 to- :3 'I&J. pounds J S'J of 1.71p.lanJtatLUion .LJA O. 4.IJI -IL4.hI ^ sugarv~U0.L~.'A and6C-- 6L.Li poJ---- U"ofV.UA d -A -Li gr.The-1 0 MU.1 L government-fixed wholesale price for white sugar using the international or more reali.Stic exchange rate for the rupee a %oAntedto about $10 per hundredweight, while the free-market price for gur was around $6. The fixLed W1LUUSdLJt ->-iUc Wasb abuLLJt UWthe U,JJUU LVle wor-ld UoUIPVLite.LV pric for white sugar and the gur price was much higher than the price for gur or its equIvalent in most countries of th'e world. The gover-nLment-l controlled fixed price for whitesugar as compared with the open-market uncontrolled price for g-r pre-va''ing in the 1961-1970 period res-ulted in an economic situation unfavorable to the expansion of the plantation WhL±e sugar L Ubusbry, ii. The very low per capita availabil8ity of sugar InI Bangladesh, the slow expansion in sugar production and the need to conserve foreign exchange earnings, all suggest the neeu Ior improvemeltw In lth :sugar Lnusrtry. However, the severe dry season followed by a wet-flooded rainy season does not provide ideal conditions for sugar cane production. On the other hand,, the soils in some areas are reasonably adapted to high yields of sugar cane. Furthermore, climatic factors are less severe than in some other countries where the sugar cane industry is a viable profit-making enterprise. Thus, under proper agronomic and management conditions, a high- yield reasonably profitable sugar cane industry should be possible. By contrast, the izmmdiate potentiai for sugar beets in Bangladesh is not good. iii. In the 1960-1970 period considerable emphasis was placed on dev eloping a modern plantation centr3Iugal white sugar industry. Ne-w rela-' tively efficient mills have been constructed and the production capacity of the region has been increased to around i80,000 tons of plantation white sugar annually. However, because of various factors these mills have been operating at only slightly more than 50% of capacity and at relatively high costs that are not bringing a satisfactory return to the capital invested. Tne causes for this situation are complex DUt include the intensive competition with the gur industry, the very poor quality of the sugar cane delivered to the mills, inefficiencies in the milling process caused partly by the high proportion of idle time, the inflexible fixed-price system applied to all parts of the plantation wnite sugar industry, and a very inefficient farm production system. - ii - iv. The gmur industry i9 an inefficient extractor of the available sugar from sugar cane, with only about 75% of potentially recoverable sugar being recovered and 2q% lost in the bagasse and the primitive Drocessing system. The total yield of saleable product per ton ground, however, is about the sanme since the molasses content. non-sugar solids; and some impurities remain in the finished product along with about 10% moisture. Towever- the value of this nrnduct is less than centrifuPa_ sugar since it is more perishable and low in quality. Also, the molasses by-products, 1sinallv makino, np abont lq9 of the total value of nroducts of the centrifugal milling process, are completely lost in the gur manufacturing approach. v. The gur induistry, however, is an efficr'iAnt utilizr of' otherwise idle low-cost rural labor and the investment costs and needs for imported Amienta. are low. T+. 40i lelry -or cor.tir.u +-o be an importa+. rural industry in Bangladesh until employment opportunities are greatly expanded snA +wos7r_+0+^ntore1;+;oc roc+.la ;_wrA. gTih-to +'ha hkZC+ oto and trnpott-" facIltis vastly z _ _roved Thv;usy , '. .. vv. _ vv appears to be to coordinate it with the plantation white sugar industry an.d to imrove it so that it can provide more low-cost sugar to rural people. This might best be done by de-controlling the plantation white s sugar industJr to provide a fleaxiblve price for ug,ar cane paidAy m-ills and a flexible price for plantation white sugar determined by competitive forCe in +the roen maketa+ Thishc flerible prai sysrt+m mIgh+ se7rv to stabilize supplies of centrifugal sugar mills and let the long-time futurl-e of 00-be deter-mined by consumers. In addition, the gr i ndustry may need an effective applied research program and a progressive extension seran,-c,ao asssi.st f4 rlaeras 4tn intensifiedaeffaort-s t+o improve proa d=,- tion, processing and marketing. vi. Transport problems probably constitute the most important reason for the very poor cane qualy+w delivered to sugar rllls. Co.se quently, concentration of cane production close to sugar mills, con- 4 struction of an adequa+e roaa network, b+-a -+-an n.f4a+ -n anA cooudA4- tion of harvesting and the provision of an efficient cane transport 0 . -uality ser-ice020. LJV..L.0m.ay J LUGmat-erially 40± L0 .y LJ iupr-.ULPJJ. it 2 'SG.LI0cane S.Jt4.L..LUJ delivered.L.L S0'4 tofctresUU ±0'. A...LC. 14.h 410 fixed price to farmers based on cane weight is also an important reason for "low car.e q,UtO'Li4Vy andd a change4 41 20 4to pa,ment0 14201 on - qu-l44- basis 4. 54. 1jU..LLJ.UI 20150U 04'.4 0 E 155 H yu& U' LJJ .t0..L ~ ULsJuc ir-L.i.i feasible, would encourage farmers to deliver better quality cane. vii. While substantial progress has been made in the construction of potentlally efficient sugar mills, very little has been done at the sugar cane production level. Yields per acre of sugar cane harvested are reported to be only about ore half of equivalent yields In other areas wit.h the same climate, soil, and water conditions. The reported yields appear to ue rather liberal estimaues as individual yield reports anu general observations in the field lead to the conclusion that the official data may overstate production. The low yields anu low sugar production per ton of cane processed has been due to planting cane on soils liable to flooding, limited i-rrigation facilities, iack of adapted varieties, inefficient cultural practices, especially the use of diseased planting materials, fertilizer shortages, restricted and high-cost credit, and poor control of pests and diseases. - iii - viii. Strengthened research may be one of the programs necessary for rapid improvement of the industry. Consideration should be given to great:Ly expand and equip the oane research service. The research effort may benefit from overseas technical assistance over an initial 5-10 year period. To be effective, the research effort may need to be closely linked to a dynamic extension effort to demonstrate new varieties and new cultivation methods to farmers. Experience with rice has shown that Bangladesh smallholders adopt new farming technology rapidly if the new technology demon- strates marked yield improvements. ix. Some of the mills may have to be relocated to areas where possibilities exist for higher-quality sugar cane. Rather than following the 1960-1970 practice of building the mill and then trying to stimulate sugar cane production around it, the mill could be located where sugar cane is already produced. Recent information from the Soil Survey identified soils most suitable for cane production. This could be used as a guide for factory relocation. In addition. it may be Dreferable that mills have access to enough land (e.g. by long-time leases or arrangements with local cooperatives) so that about one third of the total seasonal capacity could be produced by the mill. This practice, common in most sugar areas of the world, would permit the mill to utilize its own sugar cane production to fill in between deliveries from farmers and thus maintain maximum canacitv during the season. It would also nermit the mill to demonstrate good production methods and the use of improved varieties and to serve as the distributor of imnroved varieties to the growers.

BANGLADESE - SECTOR STUDY

VOLUME IV - CROPS, LIVPESTOCK AND FISPERIMS TECHNICAL REPORT NO. 9

SUGAR

I. INTODuCTION

1.01 Trhe subcontinent was the original home of sugar cane and the production of sugar in this region has been an important farm enterprise in the area for centuries. The establishment of the Sugar Cane Breeding Institute at Coimbatore, India, in 1912, was one of the pioneer programs in the world leading to the development of the modern sugar industry. rhe breeding of the "CO" varieties at Coimbatore was a major foundation stone in the initial development of high-yielding, disease-resistant sugar cane varieties. These varieties have been used throughout the world as specific production varieties or as basic components of improved breeding programs leading to new types. The United States sugar cane industry, for instance, was built on "CO-290", a high-sucrose early-maturing type and this and other CO varieties are still widely used in United States sugar cane breeding programsi. The Coimbatore sugar cane research program and the improved varieties resulting from this effort have been important in many other sugar regions, including other sugar regions of Asia, such as Taiwan and Thailand, much of the tropical sugar cane regions of Central and South America, and in Australia and South Africa.

1.02 The sugar cane industry first developed on the sub-continent as a small cottage-industry producing non-centrifugal brown or yellow sugar, consumed mostly where produced. Beginning about 1925, a small centrifugal or refined-sugar industry gradually developed. At Partition, in 1947, the subcontinent had about 150 modern vacuum-pan sugar factories and was producing about 1 million tons of white refined sugar in addition to aroLmd 3 million tons of non-centrifugal sugars, mostly "Gur". This amounted to a per capita consumption of about 7 pounds per person annually of refined sugar and 11h pounds per person of non-refined brown sugars.

1.03 At the time of Partition, sugar cane was extensively grown in both Bangladlesh and West Pakistan. The climatic conditions of the two areas are wridely different, with low rainfall and extensively-developed irrigation systems and relatively low temperatures in West Pakistan and ., heavy rainy season followed by an equally dry season, high temperatures., and little clevelopment of irrigation facilities in Bangladesh. In both wings, the conditions were not ideal for the production of maximum yields of sugar cane, but the crop could be grown and demand existed for sugar. Al- though sugar cane was produced in both wings, the volume was not sufficient to meet all domestic needs and in the 1948-52 period, annual imports of from 100,00() to 200,000 tons were needed, mostly for West Pakistan.

1.04 In 1947 there were five modern sugar mills in Bangladesh and three similar mills in West Pakistan. In the 1948-1952 period. these mills produced a total of about 35,000 tons of white sugar annually. About 25,000 tons of this volume were produced in Bangladesh and iO,OnO tnns in West Pakistan. In addition, both countries produced araond 500,000 tons of "'des-"! non-centr-i7_gal suagars (g I-ur-, nd--AdsaE other .,- -4--,- Avuebro-" sugars) which supplied most of the domestic consumption for the population iLl1 LuLuiI W4J" b

1_ 1--4f .U . _ :n_____g0v

X I11 d1 : I 1 7UU pe±:L.uu, Ldit JUUI.-y gL-auu'. ,ycAoiuc;u 4.1 both wings in the production of both desi and white sugar, with the most rapid expansion in white sugar- Vccur-ing in West Pakistan. In tULs periLod three additional modern sugar mills were constructed in Bangladesh and five in West Pak-istan. From 1961 tO 1970, this expansion was continLued with seven additional mills being built in Bangladesh and 10 in West Pakistan. By 1970, the total production of white sugar in Pakistan reached about 800,000 metric tons annually. of which only about 100,000 tons were produced in Bangladesh. In addition, according to official statistics, by 1970, Pakistan was producing around 750,000 tons of desi sugar annually. About 300,000 tons of these unrefined brown sugars were produced in Bangladesh.

I.06 In terms of per capita consumption, assuming a population of approximately 73 million in Bangladesh and 55 million in West Pakistan as of 1970, total consumption was 11 pounds per person in Bangladesh (less than a third of the level in West Pakistan) including 3 pounds of sugar and 8 pounds of gur. However, as will be elaborated later, official figures probably overestimated cane yields and gur production was probably nearer 180,000 tons. Total per capita consumption of sugars was therefore probably about C pounds per year.

1.07 Throughout the 1960's. Pakistan continued to import some sugar in most years, using badly needed foreign excnange. Most of this sugar was consumed in West Pakistan where per capita incomes were higher, but the commodity was in short supply and relatively high-priced in both wings. The per capita consumption in Bangladesh, less than 3 pounds of refined sugar and a total of only 9 pounds of all sugars, is among the lowest in the world. These facts indicate that an efficient sugar industry producing a larger volume of sugar for the nation could improve standards of living and reduce foreign exchange requirements. With the very low per capita availabilities in Bangladesh, additional sugar supplies for local consumption at reasonable prices could contribute to the development of the country.

1.08 From 1961 to 1970, the production of refined sugar in Bangladesh increased from about 80,000 tons to 100,000 tons annually, or an increase of only 20% in 10 yeals. This is a rate of 20D% annually, or only one-tenth the rate of increase for West Pakistan. Because of climiatic factors, sugar beets are poorly adapted to Bangladesh and a multiple-use approach using beet as well as cane has not been possible in the region. Past trends in the production of both refined centrifugal sugar and desi sugars in Bangladesh are presented in Table 1. As already pointed out, desi sugar production in Bangladesh may have been overestimated and revised estimates are shown together with estimates derived from official sources.

1.09 The yield per acre of sugar cane has probably remained static. In evaluating the Bangladesh sugar industry, the reasons for the differences between the proportionate volume processed in modern centrifugal mills and the yield per acre should be examined. - 3 -

II. RECENT TRENDS

2001 Official statistics of area planted, production, and yield per acre of sugar cane planted in Bangladesh annually from the 1962-63 to the 1969-70 seasons and modified estimates made by the Bank are presented in Table 2. Cane data is difficult to collect because of the large proportion of the erop used on the farm for chewing or gur manufacture. Informa- tion from m.any competent observers (including Bank staff and consultants),) and informnation from supar factories indicates that the averAge vield is probably 60% of yield reported in official statistics. Consequently the average vieLd over the nast 3 years is estimnted at about 11 tons cane per acre.

2.02 According to official statistics the area planted to sugar cane in Bangladesh increased fr-m ahnot 300 000 acres in the e<7^1wr 1960's to around 400,000 acres in 1966. Since this time, the acreage has remained nonstant. rnformation reviewed by the BAnk tends to confirm thA nffir9ci.qi acreage estimate. Cane production probably rose from about 2.9 million tons in 1962-63 to a neak of )4.8 milli-on tonsR in 1966-67 ann has RtabiliePd at around 4.4 million tons over the last three years.

2.03 The total production of sugar cane in Bangladesh and the use of this voliime fnr seed and waste, fodAer and cnhawing, ffor centrifcnr1 - sugar production and for the production of gur, are summarized in Table 3. Officinl figLres are again shown, toge+her wi.th Bank estimates based on lower cane yield levels. The industry reported that about 10% of the anrLual crop was used for seed a-d waste a_d around 5% for chewin-- ad for occasional fodder for livestock, but in the revised Bank estimates, 15% has been used for seed end- asta+..on +a a fo1r a+ leas+ 1.5 t-r-os seed cane per acre per year. This left around 1.0 million tons annually in the early 1960's for 4 ,v, 1 4nn Ca, nC A anna --_A nhn+ 'It C: 114 +a Ca,-F_ +ha -Ai,,+-;__ -r A1 J.L4.^LA15 a v C.A4 C LW * I *.a j .v LWJAL VWA 4 |J4.v# WAvLw | - gur. By 19656, the resudual use for gur had increased to about 2.5 million

Vo44, A.;i 1.4 AI.J'.J.L Aton V V ud %A L t LfLor .h Vrod uLcio.L o U.LIr:.ed Lf and around 1.0 million tons for seed, fodder, and chewing. Since 1966, the 11.as 4- - 4at n - -eel .4- use for~ ~,LL4.g-a t~ ~L~O CstCabilLLzed tS~ ...LI CA L U Ci o.VJUALL'A.. Ltk U1 C_2. . C_ J.L.-LJL'.i.,i''ion tonLAVIL A.LVU-L, W4i1.LkLIL,.ich at the asswned level of 8%, produced about 180,000 tons of gur annually. In

CICuU C FJV. s '> 1 L4JV U U.LV.1L.L.Ji. V L Jc1; O.L%d jJ. UIALL .L U1 UtU_L.XXt:L U from around 1.4 million tons annually, to less than 1 million tons. III. THE GUR INDUSTRY

3.01 inthe late 1960 and early 1970 period, more than 65%-70% of the total can,e available for manufacture in Bangladesh was used in the production of gur. In addition to sugar cane, about 50,000 acres of date palms were tapped for sap and the sap processed into gur in Bang-ladesh. Gur represents the only sugar food product consumed by the great majority of the1_ Fpopu'at:LVLo -n angla,desn.

3.02 G.ur is produced byy relai±ve.Ly- prvIu.lutive r±eblnouis but au LlitUle casn cost. The sugar cane harvested by hand from nearby farms-is transported mainly i-n oxcarts to thousands oI smail cane crushers operated by local farmers or villagers. These primitive units consist of 3 vertical cast-.Lron rollers, about 6 inches in diameter and 8 inches long. They are usually powered by bullocks and crush the juice out of 2-to 2.2 tons of sugar cane daily, feeding by hand one to two stalks at a time.

3.03 The extracted cane juice is then evaporated in open pans, using mostly the bagasse from the sugar cane stalks as fuel, to reach a point of almost dryness, at which time it is molded or cut into blocks and prepared for consumption and sale. It is then wrapped in date-palm mats, banana leaves, or other local materials, and sold in the local markets. Similar practices are used in producing gur from date-palm sap.

3.04 Gur is light to dark brown and has a saltish-sweet taste. It is generally molded to a hard mass, but it is sometimes crushed to a powder and on other occasions is sold as a syrupy mass. Most of the gur moving to local markets is sold in molded or cut blocks. It contains around 10% moisture and does not keep well, especially in areas of high humidity where it tends to lose color and absorb moisture to become a gummy mass, Thus, it is normally sold locally and soon after it is produced.

3.05 The production of gur results in a relatively inefficient utilization of the sugar content of sugar cane in comparison with a modern sugar cane centrifugal mill. In an efficient gur mill, only about 60% of the available juice is removed from the sugar cane stalk and as the gur mill rollers wear, this production declines to around 50%. (In the modern sugar cane mill, the extraction rate is around 92%.) The result is a recovery of only 60% to 80% of the available sugar. Gur normally sells for about two- thirds the price of plantation white sugar. Molasses, a by-product of white sugar manufacture adding about 15% to the value of white sugar, is left in the gur. Because of the low recovery, allegedly low quality of the product, and loss of the molasses, some authorities have recommended that the manufacture of gur be eliminated. They believe that this would result in producing the same amount of sugar now grown on 400,000 acres on only 300,000 acres, thus releasing this acreage for important food or industrial crops. Because molasses remains combined with gur, the amount and calorie content of sweetening material (for human consumption) is roughly the same per ton of cane or per acre from gur and sugar processing. Switch- ing from gur to sugar would not save acreage. Furthermore, the suggestion to eliminate the thousands of small gur making plants, scattered throughout the country side, may be impracticable. Attempts to prohibit gur manufacture by seizure of gur and gur making equipment led to widespread resentment and civil unrest.

3.06 In spite of inefficienciesj the nroduct±On ofgiur in Bangladesh is likely to continue for many years. It can be produced at low cost utilizing otherwise unemnnlved family labor during th.e dry season when there is little else to do. There is no need, as in the white sugar industry for skilled technicians, foreign exchange, large caDital investments and government subsidies. Above all, there are practically no cane transport problems - one of the main problems of sugar factories. This means that gur making does not require a network of good roads and sophisti- cated cane transport equipment and management. So far. gur has a rpnrh market. It provides the opportunity for many rural people to obtain some sugAr as they do not have the purchasing power to binv white sugar. It is used in the preparation of certain local "'sweet meat" dishes which cannot be masde from whi-te .sugar. It is also required for certain religious ceremonies. Because of its content of many minerals, gur is somewhat more nutritious than whi4te smuar as shown in a sunmmarv of the mill recoverv differences in the production of white sugar and gur, and of the food value and mineral content of the +wo mater±als presented in Tahlae .

3407 Fur^t.hgermn-ore, grui nm,3 g Qo4> mg a Anfety-vmlV trvos+ keep operntnrn of refined sugar mills "honest"; in a competitive situation the millers must pa a cm.petitive price fonr migar cnmn nr it will be diverted to gur nrodxe.- tion. Under the price-control program for white sugar in Bangladesh in the 1965-1970! period, this vwas clearly demxonstrated; when the omnP.etitive market price for gur moved up in the )968-69 period, growers receiving the fixed price for carne based on +the fi-xed price millers rec&eirii for sugar; quickly shifted their deliveries from the refined sugar mills to the produiction gei'a ofThi a taionn isc+vreviewed in soesn11 A-ate belot.

a modest research and advisory program.. Considerable research has been done -;_ _+..,v ,A i.y+ ,~i A rn ~ at4+ ~ 1 i m "r-,~ makers by some specialist advisory workers. Some additional research on *v*-+- 4- 4-4- n-1 444-+ ara 1 r .A.pro. VAr . LcAr4..e03, A-.. v44 r wJMJ JC C v Cw_S'4& 'jk.-a-z -J of gur might also assist gur makers.

3.09 The economics of gur production are different from the produc-tion at,L% Mi.LJLL1g f.-o whlitue a gar. "teLL sugar MLL.L..s depLendtV V.I Ppl.Js froJn local growers have frequently had shortages in available sugar cane result-

-i_g in inefficient oper-ation,s -an .l gh costs' wher Q'LpFLies were diverted to gur production. This situation has led some observers in Bangladesh Lo concl…de £.tL £1.he. UWL....-. al beL.2.rlve lL.A4.lq oUtlbS foc Ul. same farm enterprise cannot co-exist in the same area, and that each community where sugar cane is produced should be completely a gur area or a wiu e sugar area. This is not necessarily true.

3.10 If a flexible price policy were established, one which adjusts with changes in tne demand of gur as related to the demand and prices for sugarz, supplies could be related to demand and both segments of the industry could continue to operate. in the long run, it may be preferaDie to permit tne forces generated by changing competitive relationships and changing consumer demands to determine the final place of both gur and white sugar rather thanL the arbitrary conclusion that one or the other should be eliminated.

IV. 'WHITE SUGAR INDUSTRY

4.01 The import substitution policy which was to be one of the major objectives cf development policy led to the expansion of the sugar industry in Bangladesh. In 1947 there were five white sugar mills in Bangladesh. If operated at full capacity for the usual 120-day crushing season in Bangladesh, these mills could have processed about 500,000 tons of sugar cane into 40,000 tons of white sugar 1/annually. Average annual production

1/ The type of sugar produced is "Plantation white sugar". It is in the 97 degree to 98 degree purity range compared to 99.5 degree purity for refined sugar. I'lantation white sugar does not have the uniformly small graint and completely white color of refined sugar. Plantation white sugar is cheaper to produce than refined sugar and is normally produced where sugar is domestically consumed in S.E. Asia where long periods of storage is not needed. - 6 -

duringUU.J thiJs4.J4IIJL' ' per-od9±LOLL -waWC C_), 00'JS J UIJA1Zn. * Iuo-soJ.IULPW.J UQ W.L - uarwr-. ust-aLr,- n the foreign exchange drain decided government to expand sugar manufacture 'slongago as Ile First 'Fi vear Pl"an.

14.02 ~ £ ±7)L'From195 to I.1960, three adt.i.LVnAAL Im"ILL4s were constru cte. These mills expanded the total capacity to 7,400 tons of cane daily or aboutO.UVLID7'JV 9n0V0,00Q IJAA tons4J. I LI-r a season or 72,0-uOjJAnIJ. V.IL tons4VLI ofL04. sugar.A+ AtWA tvb.e4-U -JA endJ-- AL of-- this period, the white sugar actually produced annually averaged about 60,000 tons, iLndiLcaLUing a ,maJor increase i cLlapaciy ulization as well as expanded capacity. From 1961 to 1970, an additional seven mills were

.AAAAA VA_4 . __ T -4--_ 4 UoiA Ur.uL ted daU.adsee i:E V ::i G tI 0±SUol er MillsO expan'dl i1n cp>aci t D, UuO U available records show that, at the end of this period, the total capacity .LUr processing whit,e sugar reachbed 114,4U -lor.g Itons cane a day ori .lor than 1,700,000 tons for the season with a potential white sugar production

o.f abouu ±L4V ,oo v1ons. I1n fact , soUmi increase - - c- - -uillingiy older mills does not seem to have been recorded and manufacturing capacity m-ay be closer '..o 2 million 'Loons carxe per season or- 1U6,VUU Lons sgr-. During this period, actual production varied from a low point of around 80,0 tons0o in 1960-1967 to a high of s ghtily more thJian 100,000 t,ons annually in 1966-67 and 1967-68. The location of each of the 15 mills, dall-y capaclty,A_~, and__C- total seasonal UapaL;.,Y- are-- present,eU…4- -"I TabUlmt_ , v. The annual production of white sugar, tons of sugar cane crushed, and the annual recovery rate are sum-arized in Table 6.

n.IV3 lf.± L …3".1... .34.l 4.0) Mios,t 01. Ud1o -CadIIL1Was Ueu Lou U-LeIc guVvutiien ie-V ment through the Industrial Development Corporation. In 1969-70, the CUorporatiion o-0w-iedLard.u operatI,edLe- t,e of t,he 15 fct,oUries. ±llI fctoUiUsb have good equipment, and are capable of high efficiency. Most of them operated with the so-called sulphitation process, which requires only about one tenth the lime needed in the double carbonation process (lime- stone of superior quality for sugar refining has not been easily available in Bangladesh). The mill machinery was manufactured by leaders in the field, including Duncan Stewart & Co., Lta., blairs & Co., ana w.w. Smith, of Glasgow, Scotland, Fawcet Preston, Liverpool, England, George Fletcher & Co., Derby, England, Buckau R. wolf and Hallesche Machinenfabrik, Germany, Stork Company, Holland and Skoda, Prague, Czechoslovakia.

4.04 The average capital cost of a factory was recently estimated at TKs 22 million whihe makes a total investment bf Tks 330 million ;n sugar factories, out of which the government share was Tks 220 millio& @. While most of the then privately owned factories were making profits, the average BIDC mill showed a loss of Rs 256.68 per ton sugar in 1967-68. Detailed cost- ings are shown in Table 7. However, sugar (unlikc 1 gur) is a source of tax for the government. As shown in Table 7, tax revenue4/amounted to Rs 16/20 per maund sugar (Rs 442.26 per ton) between 1962-63 and 1965-66, Rs 16/45 per maund (Rs 449.09 per ton) in 1966-67 and Rs 18.90 per maund (Rs 515.97) in 1967-68. The tax is paid by the factories and represents government revenue which would not otherwise have been collected. However, the taxes may not have been passed on to the consumer because sugar retail prices were fixed for a number of years and most of the tax went to the Food Department - the main wholesale distributor of sugar - to offset losses made in sugar distribution. In addition, the operating results of the industry must be judged against a background of high sugar prices fixed by government. The price rose to

1/ Since this study was prepared, the Bangladesh Government has nationalized the white sugar industry. 2/ Includes both Central Excise Duty and Provincial Dues. -7-

PR 2300 per 4,, 10i60/70 ex facto y, c," wdo... T 4-mvt+. 'Po 'I80 ... ? 'W u..l. ~. *,~,. I-- J% aAL '/-// ' - - - - .,-- at the official exchange rate and Rs 760 at Rs 9.50 FEUS$. A recent study of' 4the 4-A--4.- by the- CG-Wv er.men 4 pl^-4- T4-4ivison ocue h+ K. J.L IJkLO .LLI%ALI.LO AJ.LJ&J UIWO VAI~A._UI~.. LL4JA16 Aj.I.LV .LO.~1 - ~ ".L I/CA.M of economic benefits to the econorrm, sugar manufacturing now yields a neizative rate oI return. Based on this conclusion it is clear that serious thought a.,d effective action is needed for improving the performance of the industry. 4.05 The basic reason for the high cost of sugar production is the low car.e yieV.Ld WIL.LVh W.L.L UV U s.L L .LL '-Lhe s I.LULi onLL c LV L1UeLdLVci. ...e main problems of the white sugar factories are:

(1) an inadequate cane supply partly because of competition for cane with gur makers anu partly because some facuories are situated in areas unsuitable for sugar cane; and (2) low recovery of sugar from cane, partly because of the innerently low quality of cane grown and partly because of the high proportion of stale cane delivered by farmers. Both factors are interrelated, as discussed below.

4.o6 The government attempted to protect its investment by a system of complete price controls, allocation of markets, and in earlier years rationing of supplies. mhe fixed price which mivlers were required to pay for sugar cane delivered to mills was as follows:

1959-60 and 1960-61 price - Rs 1/62 per maund (Rs 44 per long ton)

1962-63 to 1967-68 price - Rs 2/50 per maund (Rs 68 per long toni)

1969-70 price - Rs 2/75 per maund (Rs 75 per long ton) 4.07 The wholesale price at which millers were permitted to sell white sugar was fixed at Rs 53.75 to 58.84 per maund of 82.2 pounds in the 1960-61 to 1962-63 seasons, fixed and held at Rs 63.95 per maund for the 5 years from 1963-64 to 1967-68, reduced slightly to Rs 63-33 for the 1968-69 season, and then increased to Rs 84.35 for the 1969-70 period. 4.08 The price of sugar cane delivered by neighboring farmers to gur manufacturers and the local wholesale and retail prices for gur in all markets was not controlled and was left to be set by competitive conditions. A comparison of the average annual wholesale price for uncontrolled gur as related to the average annual wholesale price for fixed-price white sugar in the Dacca market is presented in Table 8.

4.09 The gur manufacturer can expect to obtain at least a 7% recovery rate in terms of gur per unit of cane processed. At this rate, 14.3 maunds of sugar cane are required to produce 1 maund of gur. A comparison of the value of gur in 14.3 maunds of sugar cane in relation to the prices received for this sugar cane if sold to a white sugar mill in different periods since 1960-61 is presented in Table 9.

1/ The Economics of the Sugar Industry in Pakistan, Planning Division Government of Pakistan (undated - probably written in early 1969). - 8 -

4.10 Table 9 shows that in 1960-61 the net value of gur was higher than income from the same cane sold to wh"ite sugar mills. fmCionsequen rt-ills had some difficulty in obtaining sugar cane, and cane deliveries to mills dropped by 150,000 tons in 1960-61. In the period flom 1962-63 to 1967-68, becaus of an increase in the support price for sugar cane and relatively stable prices for gur, the advantage shifted to saLes to t,he mLill rather than making gur. In this period, the sugar cane available for crushing in the white mill s increased to about 1,400,000 tons and white sugar made went -up to more than 100,000 tons. In 1968-69, the price of gur began to climb in the open market and it suddenly became much more profitable for farmers to make gur than to sell to the mills. They dropped deliveries to the white sugar mills to only 900,000 tons and the amount of wnite sugar declined from 110,000 tons in 1967-68 to 57,000 tons - the lowest level in more than 10 years.

4.11 A more complete picture of the impact of changing gur prices in the open market on the supplies of sugar cane available to the white sugar mills can be obtained by examining the monthly variations in wholesale prices of gur as presented in Table 10. Like all seasonal commodities, the price of gur was usually lowest at the peak of the harvest and marketing season in December and January and highest just before the new crop moved to market in August and September. In the June to September 1968 period, howevever, the price of gur continued to advance and by the beginning of the 1968-69 harvest season, far outstripped the comparative fixed price for sugar cane if sold to the white sugar mills. In the 1969-70 season, government raised the price of cane, the price of gur weakened slightly and the spread was not as wide between sugar cane sales for gur and those for white sugar. Although the data on the tonnage available for use in each area are not available, the indications based on these comparisons are that the volume did not reach the peak of earlier years.

4.12 This analysis leads to the conclusion that one of the major factors retarding efficiency and growth of the white sugar industry in Bangladesh may be the fixed price system for sugar cane delivered to the mills and sugar sold by the mills. A variable price system based on markets for competitive products may be essential if the industry is to maintain a long-time profit position and to expand to the level of the needs of the nation. Most other sugar regions of the world have varioble prices to growers based on the competitive price they receive for sugar and a similar formula may be needed for Bangladesh. - 9 -

1.13 The location of factories may be as important a factor governing cane supply for sugar manufacture as competition with gur makers. Some of the newer factories have been built in areas which are unsuitable for sugar cane production. Expansion of existing factories has in some cases taken place without due regard to the cane production potential of the area. In other cases new factories have been built close to existing factories so that the cane supply is inadequate for both plants. In many cases there may be no alternative to relocating factories.

4.14 Another factor affecting mill efficiency, which may be related to the gur problem, is that of the gradually declining recovering rate of sugar produced per ton of cane crushed in the white sugar mills. The trends in sugar recovered per ton crushed for recent years are indicated in Table 6. A longer-time series from 1950-51 through 1969-70 is shown in Table 11.

4.15 Annual sugar recoveries are influenced by climatic conditions, mill equipment problems, labor problems, anid the like. Five-year averages, however, tend to eliminate these influences and assuming there have been no maior technical changes, provide a picture of long-time trends. The sugar recovered per ton of cane crushed in all white sugar mills averaged 8.98% for the five-year period, 1950-55, declined further to 8.23% for the 1960-1961 to 1964-1965 period and to 8.04% for the three-year period, 1965-1968. The loss of one whole point in recovery, or a loss of about 12% in the rate of recovery, represents a very large volume of unrecovered sugar and could be the difference between a very profitable industry and a relatively unprofitable one.

4.16 Sugar mill operators have reported that one of the major reasons for the gradual decline in the amount of sugar recovered per ton of sugar cane crushed is related to the gur situation. Because there was one fixed price ner ton of smiar cane delivered to the white sugar mills, there was no encouragement to the farmer to deliver high quality sugar cane to the mills. The farmerj however, knew that freshly-cut, fully mature sugar cane would yield much more sugar than old sugar cane and sugar cane harvested early in the sensn when the mcrose nontent is low, or late in the season when the rains start and sucrose declines again. Thus, the innreasing practice of the local farmer was to deliver a larger and larger part of his inferior quality sugar cane, or that part of the crop that had been harvested and left cut for several days before delivery, often because of cane transport difficulties to the mill, and to use his higher quality crop for bur production.

4.1f T-he probiem of stale sugar cane is especially important in evaluating the reasons for low recovery of sugar at the mill. Although no datGa were found in Bangladesh to illustrate this issue, research in many other sugar cane areas spells out the problem. In Louisiana, for instance, with a harvest season somewhat shorter than in Bangladesh but, with similar climatic conditions, sugar cane processed within 24 hours after cutting produces the maximum recoverable sugar. In the next 12 hours, the rate of recovery declines 3%. At the end of 3 days, only 92% of the recoverable sugar can be removed from the sugar cane. At the end of 6 days, this declines to only 87%, and at the end of 10 days to - 10 -

around 80%. These results are summarized in Table 12. A joint premium- quait4nd prgr edcton -rogr_m mayr be neeaea to *poeti situation in Bangladesh. 4.18 This type of problem is solved in other parts of the sugar world by a vai able price plnn based on the sciirnse content of the suanr cnAn the quality of the juice in terms of recoverability, and the content of trash in, the lroads deivred,r as deeminne hy smn1e evauatii-nn when the sugar cane is unloaded at the mill. These plans also usually include a mwiniymTmn qmuali+ty below which the miller has the right to refuse to accept the sugar cane because the age or condition of the load is such that recoveries will 'ha toon low to isi f nilli. In the absence of quality testing; sugar mills in Bangladesh probably paid the highest price for the lowest quality cale J-1 the worlU. ln Bagladesh the bulk ol factory cae supplies is from smallholders. A factory may deal with as many as 40,000 outgrowers -- 20,000 isn t a The vv.fnl o imn'4 viAiinl ++ting rof each lot delivered by a large number of individual farmers each day is a very serious one forwhr In4achIn i4, satisfacto,ry soluti^vns haM,.e not been foun in many countries. Substitute solutions, which d-o not entirely solve the , n,,,A nA * a no * + * P +h a .A n+ * A Aol 4 A r IJ~LI.L~AI h+ vUvnI lCAfh prLAnjJ±s i Lv.. 0 L.ea. L 1r J of high-quality sugar cane, have been developed in some areas.

4.19 One approach is to audit the production of sugar of a given mill i relation to the tons processed and-o-ers to pay all each week on the basis of the average weekly yield per ton of sugar cane. Another somewhat 4 vnn,-oAn a 4 ,-o -la r%IM rnV ,.,, i V1,n 11 nn' aOf0C ,+-a0710sIn r.ore desirableapproach ic to check +he r ll each week as.to the ava-- e sucrose content of the tons ground, and then to require that the mill pay th,- growern,e on thle basis of +1,t nP.. o -f _ +suga+ couldtheoeticl'7-hat be recovered by an average mill. Still another approach is to make spot t eststLSfwor soucrose and inversion due t'UostI-a'le cane olf Veach-I gro,rw-er abWout once weekly, and to pay individual growers on the basis of relative quality.

In c. In 0uareas ofJ.0.... -a large num-berIIUcIUV[ of- LIU.-44divdual .±.Ur.LUO.A deliveries YO1 ILO Jn±1. srmallJL0.A. .4041lIots v such,14..LA0 as in Bangladesh, tests of sucrose could be made at the delivery point for each cord,,,anIty with all growers at this delivery point paid the sa-e price for sugar cane based on these tests each week. When accompanied by an educational prog"ram., thisL Lma-) no±1-.AJULA0e etL.L U p ers to0 forc their more inefficient neighbors to improve methods as all are hurt when poor '.{l0.ity 4carl is Udvelvere. 101,e psOs.LLi.Le, lo.cL coopa.Li.LVeO might± be1/0 organized to deliver tested cane in large volume so that daily payments are made to all based on the cooperative testiW pugram.

I n -- 1- L. - D 4 .2 -u lIle major proubem may bewe uVeve±Lup a sa L~S,acu±oy Ls>i±iD P,U-.oam that would reflect back to producers the profits available by delivering high- quality sugar cane and the losses possible 'when low-qualiy cale is mo-ved to the mills. The price incentive is one which farmers all over the world understand and react to. For Bangladesh, the specific metbod of ilntr- ducing a variable cane price based on cane quality may need on-the-spot study and may vary from area to area. The establishment of a variable price may be essential to the improvement of the industry. So long as farmers are paid the same price, irrespective of cane quality tney will continue to deliver poor quality cane to mills and keep higher quality cane for home manufacture of gur.

4.21 Cane transport problems, prevalent in all countries where small- - 11 - holders deliver cane to sugar factories, contribute to the operating difficulties of sugar factories and to the ready switch of cane supplies to gur manufacture. Bullock carts, each carrying about a half a ton of cane, are the main means of transport. Each cart can only complete one trip to the factory per day at the best of times, and sometimes a trip may take several days. To feed a 1,000-ton per day capacity factory requires 2,000 cartloads per day, and it is not surprising that most carts need a half-day turnaround time in the cane yard. Some factories draw cane up to 30 miles away and operate a mechanized transport system-- trucks or tractors and cane trailers--which pick up cane from transloading points. Factory cane transport services are severely handicapped by the inadequate road network and by the poor condition of most of the existing roads. The average transport charge levied by factories was Rs 0.60 per maund of cane and charges rose to Rs 1.0 per maund for longer distances -- over one-third of the cane price. Transport difficulties discourage farmers from delivering cane to factories and in many instances are the main reason for the high proportion of stale cane delivered to factories. The logistics of receiving, weighing, recording and paying for cane from up to 20,000 farmers each, result in high costs and frequent delays. The system seriously hampers factory efficiency. Improvement may require a major effort to concentrate cane production closer to factories, provide an adequate road network in cane areas and more efficient cane transport systems. In addition, organizing growers into cane growers cooperatives, so that the factory deals with 400 to 500 cooperatives rather than 20,000 growers, might reduce the administrative burden of factories.

4.22 There are other factors affecting the efficiency of sugar mill operations that are not related to the volume available and the initial quality of the sugar cane delivered to the mill. These include the efficiency of the extraction process in the mills, the proportion of the grinding season period in which the mills were idle due to various factors, and the relative volume processed per day as related to overhead costs. Although detailed data on the usual operating results, that are considered standard records in a sugar mill year, were not found for all recent years, results for two consevcutive years, 1962-63 and 1963-6h, were available for all white sugar mills. These data appear representative of the 1961-1970 period and are summarized in Table 13.

4.23 A study of the variations from mill to mill in these two years reveals several important factors involved in relative efficiency of sugar production. Some of the more important are as follows:

(a) Although the percentage of sucrose in the sugar cane delivered to the mills averaged 10.3% in 1962-1963 and 10.4% in 1963-196h, there were great variations from mill to mill in each vear. These variations may be due to several reasons, including the distance from the producing farmers affecting differences in the time required for delivery after harvest, the time of the season in which the larger volume of sugar cane was processed, and, more important, the specific location of the mills. These variations suggest the possibility that some of the mills are located in climatically-disadvantaged areas where high-sucrose sugar cane is difficult to nroduce because of abnormal rains, flooding. and the like. This further suggests the possibility that some of the mills might be relocated. - 12 -

(b) The overall extraction rate br the percentage of sugar actually recovered from.that available in the sugar cane delivered, varied from about 74% to 80% each year. This factor measures the efficiency of a given mill to extract all possible sugar that is available. Since they all pay the same price for sugar cane, the financial performance of a mill is closely related to the efficiency of sugar recovery. The recovery rate in relation to the sucrose percentage in sugar cane is determined by the efficiency of the machinery in the mill and the efficiency of the management. There are apparently substantial differences from mill to mill in Bangladesh.

(c) A third important factor affecting efficiency and low-cost sugar production is the proportion of idle time. The greater the percentage of idle time during the season, the higher are the overhead costs per unit of sugar produced. In each year, the proportion of total crushing-season time in which the different mills were idle varied from about 18% to 32%. Idle time, or hours in which the mills were not producing sugar during the peak harvest season, are caused by a number of factors, including holidays, periods in which there was no sugar cane available for milling, machinery breakdowns, choking up of the receiving system, full capacity of the final processing units, cleaning of the equipment, and other similar causes. The proportion of idle time for more efficient sugar cane industries is normally no more than 10% to 15%. Table 14 presents the idle time losses and causes for 11 cooperative sugar cane mills in Louisiana for three years. For these years, the total idle time losses varied from 8% to 11%. The most serious factor--machinery breakdowns--caused about one half of the total losses. The idle time losses were about double the losses in other areas. The difficulty of obtaining spare parts quickly may have been an important reason for the high idle time losses. Lack of adequate cane supplies has been an increasingly important cause in recent years. Cutting down on idle time losses represents a major area for efficiency improvement.

(d) A fourth important factor is the relative size and volume of production of the different mills. As in any business, volume is important and increased volume reduces overhead and fixed costs per unit resulting in lower total costs and higher net returns. The tons of sugar cane processed per mill in the eight mills studied in detail for the two seasons varied from less than 25,000 tons to more than 225,000 tons, normally low-volume mills have higher total costs per mill and lower net returns. In a detailed study of 26 mills in Louisiana for a 13-year period, with a crushing season of about one half the season in Bangladesh but with similar recoverv rates and other production factors, the mills with the largest tonnage processed had lower costs and higher net returnsl/. In general, the mills processing less than 50.000 tons in the season had costs averaging $6.50 per hundredweight of sugar produced and net losses of about $O.50 ner hundredweight. The mills processing more than 75,000 tons annually in the 70-day season had costs

1/ Financial Results of the Operation of Raw Sugar Mills in Louisiana, 1937 to 1949, by j. Norman Efierson and Mildred Cobb. Louisiana Agricultural Experiment Station Bulletin No. 457, June, 1951. - 1 3 -

averaging only $5.88 per hundredweight of sugar produced and a net profit of about $0.35 per hundredweight. The low-volume mills made average losses in 9 of the 13 studied. The mills with above- average volume had net losses in only 2 of hne 13 years. The reductions in the unit costs with increased tonnages occurred in the costs of manufacturing and in marketing. This indicated that increased volume was associated with greater efficiency in the milling processes and in marketing.

4.24 There are other factors affecting sugar cane mill efficiency that are partially related to farm deliveries and partially related to mill operations. The most important of these factors involves the changes in rates of recovery per ton processed in different parts of the harvest season. For an industry that harvests an annual crop, the recovery rate is usually relatively low the first month or two, then increases rapidly to a peak high-recovery month, and then declines as a new climatic situation moves into the picture. Bangladesh is a typical example of this situation. A summary of the average sugar recovery per ton of sugar cane processed by months, from the usual harvest season starting in November and ending in April, for each of the eight mills is outlined in Table 15.

4.25 I'hese data indicate wide variations in the sugar recovery per ton from month to month, with the recoveries being relatively low in November, increasing in December, reaching a peak at least 15% higher than the initial, results in January and February, and then gradually declining in March and April as the initial rainy season starts. The variations of the different mills indicate also the comparative advantage of different locations. The mills located at Gopalpur, Darasana, and Dewangani had higher yields per ton processed initially, and this advantage continued into the season. The mills at Charsindur and Kishoreganj had very low yields initially and this relative disadvantage continued throughout the season. These differences may at least be partially related to differences in climatic and soil conditions in the various regions. In building new mills, or in providing for expanding capacity for existing mills, these regional variations may be worth considering.

4.26 The data on sugar recovery from month to month also point out the possibility of increasing over-all efficiency if the crushing season could be forced into a 3-month season, December through February, so as to take advantage of the higher yields in this period. This could be done if adequate supplies were available for full operation in this 90-day period and if idle time losses were reduced so as to operate at nearly 100 capacity in this period.

4.27 The by-products from sugar manufacture are molasses and bagasse. Molasses has a wide range of uses including alcohol production in mill distilleries, the production of acetate and polyethylene, use in the tobacco industry and use for cattle feed. A urea, molasses mixture may hold some promise for helping to solve the cattle feeding problem in Bangladesh. Average mill results, between 1960 and 1965. indicate molasses production equal to 40% of sugar production, or about 40,000 tons molasses from the 100,000 tons ner vear suiar nroduntienn ThA - 14 -

value of molasses production may be about 15% that of the sugar processed The other by-product, bagasse, was traditionally used as fuel for internaf consumption by the sugar mills. However, the development of a paper industry provided a potentially profitable use for bagasse as an input in the manufacturing of paper products. Without careful consideration of the available supply of bagasse BIDC decided to establish the North Bengal Paper Mill, which used bagasse as raw material. Upon the opening of the mill it was determined that insufficient bagasse was available to both fuel the sugar mills and supply the paper mill. The decision was then made to use diesel for the sugar mills and the bagasse for the paper mill. With an appropriate shadow price for the diesel the real cost of sugar rose to a point at which the question of closing the mills may have to be seriously considered. One immediate step might be to restudy the entire prospect of the sugar industry, the supply of bagasse, and the viability of the North Bengal Paper Mill.

4.28 Despite the many difficulties of sugar manufacture in Bangladesh, the formerly privately-owned factories were allegedly consistentlv profitable. The older factories may have been able to do so because they were carefully sited in potentially productive sugar areas and because some of them have factory estates to even out the cane supply to the factory. A more relevant example is the Rangpur factory. Disinvested at book value in the summer of 1968 by BIDC (under whom it was running at a loss) it made good profits under private sector management. Consequently, the possibility of further improvement in the performance of the sugar industry by maximum disinvestment of BIDC factors warrants careful examination. Potential investors might require adequate incentives to match other investment opportunities. The lifting of controls on the cane and sugar price suggested in any case may be a prerequisite to further private enterprise investment in the sugar industry j .

4.29 Alternately, government might consider separating the sugar industry irom BIDC - into a semi-autonomous organization exclusively responsible for sugar production. Such a move may ensure the undivided attention of the management of the authority but there is a danger that the new authority might be unable to attract first class management or adequate funds necessary to rationalize the sugar industry.

4.30 Lifting Drice controls mav help to stabilize the cane sunnlv. A careful investigation may be necessary for an action program to improve the performance of the industrv. All points enimerated might find a place in such program, including concentration of cane production, transport development, cane qualitv testing, imnzrnvPd factory technology and the possible resiting of some factories. The improvement of sugarcane yields, the subjec-t of the next section of this pAper, may be basic to any improvement of the sugar industry.

1/ Despite the recent (Iviarch 1972) nationalization of the suginndustry, disinvestment to private investors may be worth considering in the f 1- tuare - 15 -

V. SUGARCANE PRODUCTION METHODS AND PROBLEMS

5.01 The size of the farm and the fragmentation of the land under the control of a given farm family are especially important in the production of a commercial crop such as sugarcane. Bangladesh has about 22 million acres of farm land and about 7 million farm families or an average of about 3 acres per farm. Over the long history of Bangladesh, and the prevailing inheritance practices, farm lands have become badly fragmented. In terms of tenure, 61% of all farms in 1960 were owner-operated, 37% owned part of their farm and rented part, and 2% were full tenants. The typical farm in Bangladesh is an owner-operated farm of six different scattered fragments totaling 3 acres, or an average of 1½ acre per fragment. Since 80-90% of the population is rural and most of them are on farms, this means that a typical farm is supporting around eight people.

5.02 Alother facet of the Bangladesh rural economy is that the farms are largely subsistence farms, producing very little for sale. The rice enterprise dominates their farm program, occupying 80% of all crop- land and providing 85% of all calories consumed. The crop is either pro-- cessed in the farm home by primitive but effective methods or toll-milled in nearby village mills. Rice is legal tender; it is used for paying the rent, buving supplies in the villaze, and many other similar uses. No other crop has such versatility and diversified value. A direct cash crop such as sugaircane has only two markets, the white sugar mill and the sale of gur after being processed. Cane must be processed and marketed when mature and cannot be stored for emergencies or for a better market. Thus, Bangladesh farmers give this crop and other cash crops such as jute second priority. Until these farmers gain the experience of years of dependable markets for sugarcane and gradually move from a subsistence to a commercia:L farming program. this attitude can be exoected to prevail.

5.03 Sugarcane is grown to some extent in all districts of Bangladesh. However, more than one third of the total acreage is grown in two districts. Dinainur and Raishahi.. Another 30% is produced in Mvmensingh. Rangpur, and Faridpur.1/ These districts are all located in the northern and north-central nart of BanxiadeRh where' the lands are not eubiect to flooding for extended periods and where deep flooding in the rainy season is confined to a small nart of the area.

14 A -nL-1-Eco1- ori - -4tUp '-s1tar., byJ Na 4fis A 1-. .aA 0.PLJ University Press, London, 1968. - 16 -

5.04 While temperatures in Bangladesh are very favorable for sugar cane production, soil moisture conditions due to rainfall distribution and topography, present serious limitations to high cane yields. Sugar cane is sensitive to drought and to impeded drainage. Both conditions inhibit cane development. During the 5-6 months dry season, cane growth is seriously limited due to lack of sciJ moisture. On the other hand durin, the 3-4 months peak of the monsoon rains over 85% of the soil is either flooded or saturated. These conditions are the basic reason for low cane yields in Bangladesh. High yields on the order of 30 tons cane per acre or more woula require dry weather irri,ation and careful choice of soils with reasonable water holding capacity which do not become water-logged during the rains. Much of the cane in Bangladesh is flooded for 1-2 months most years and most of the cane is afflicted by impeded drainage during the monsoon season.

-5.05 The suzar cane plant can take waterlogged soils and submergence for several weeks without being killed, ana will continue to 7row after drainage. A detailed study made in India on the influence of floods on cane growth and quality- reports a wide variance in the ability of different varieties to resist flooded conditions. In a re,7ion in Central Travancore where repeated floods occur and sujgar cane remains under water for 7 to 15 days; this study reports that floods early in the season have little effect on normal yields or on the quality of sugar cane. FLoods in the se-veral months immediately preceding harvesting and processing, however, have some impact on total yield and very seriously affect the quality and recoverability of sugar in the sugar cane. In this region before the establishment of a white sugar factory, local farmers produced sugar cane only on highland areas not. snbieCt to floods as they recognized the need for high- quality juice to produce good gur. After the mill was established, with the prevailing practice of narinn farmers by the ton without aualitv beingD considered, the farmers found they could obtain reasonable cane yields on t.hp nllii-rla1 qnilq Aiihi;nt.t to fr(Rmnlnt. flnnio ina- this. thev nlanted sugar cane in these areas for sale to the mill. Based on reports from white sugar milll operators in Bangladesqh, farmers in t.ls area have also disc.overed this fact and are delivering their sugar cane harvested from flooded fields to the m,ills w.hi lp keepning their non-flooded sugar cane for nronessqing into gur. As already mentioned some of the new mills were located in areas TThere land is linahle to flonnoding r waterlogging.

5.o6 Detailed sugar recoveries, by months, for each of the eight Bangladesh white sugar mills presented in Table 15 indicate a wide vNriation in the mos+. irn-ta-r'tnn+. fact+or nffo+i-nn- profti+s of .hi sugar mills -- the recovery rate. Of the many factors that could inflianpa oprovr-vrtyr, soil condrit+ions mic+ notbeI- 6.k-,4 4-b-ut-- -- graphy as it affects drainage may be even more important. Poor drainage mayr Paf-f'cta,, Y-anrirray-, bthep++i-,- -- 4-4-1 'ffet-of. floodirg may be to lower the cane yield drastically. Consequently, careful selection of soils for cane production, ignored n some recent instances, may be a basic prerequisite to success. The Soil Survey has identified sorie

1/ "Studies on the Influence of Floods on Cane Growth and Quality in the Pamcba River Valley!! by R.D. Rege and J.P. Mascarennas. Proceedings of the Ninth Congress of the International Society of Sugar Cane Technologists, Volume I. New Delhi, India, 1956 - 17 -

4 million acres of land suitable for cane production. Some of this land, notably the Madhupur tract in Dacca and Tangail Districts (LDU 013), nave little cane production at present. Large contiguous areas of suitable soils could be given preference for relocating factories which cannot obtain an adequate cane supply in their present location.

5.07 Sugar cane in Bangladesh matures in 12 months similar to production in Louisiana, some areas in India, and other regions of the world where climatic conditions prohibit production of maximum yields and maximum recoveries by growing l8-month to 24-month crops, as is common in Ouba, Southern India, much of Latin America, and parts of Asia. In Bangladesh, the abrupt monsoon rainy season followed by the equally abrupt; rabi or winter dry season dictate this practice. It means (as it does in Louisiana) that the recovery of sugar per ton of sugar cane harvested and the tonnage per acre will of necessity be less than in the 18-month to 24-month procduction areas like Hawaii and Cuba. It means, however, that the recovery and production per year could be equal to the long-growing- season regions because only 9 to 12 months are required for each crop.

5.08 In Bangladesh, sugar cane should be planted in November and December, using residual moisture from the previous rainy reason and irrigation facilities where available. With irrigation, growth starts immediately; without irrigation, substantial growth is delayed until the first rains in March and the abundant rains of June and July. The rainy season in Bangladesh slows down in October and November and stops in December; the harvest season for sugar cane is December through March, when the dry weather affects the sugar cane by forcing maturity and higher sugar yields. With the start of rains in April, sugar yields per ton begin to decline again.

5.09 Very little irrigation is used for cane production and this is one reason for low cane yields. In fact, where irrigation has been installed farmers prefer to use it for paddy production and, for instance, in the Thakurgaon area mill managements associate increased irrigation facilities with declining cane supplies. Lack of irrigation is partly responsible for the low plant population of many cane fields. Many farmers do not risk cane establishment on residual moisture and wait until March/April to plant. Is the land is then flooded in July, the cane has very little chance to grow before soils dry out again in November, and poor cane yields are not surprising in these circumstances.

5.10 The usual planting practice in Bangladesh is to cut "setts" or short joints of immature stalks and plant these vegetative parts in prepared soil 2 to 4 inches deep in rouzh rows 3 to 4 feet apart. Planting material is supplemented by cane tops. The fields are prepared by bullock plowing or by hand and planting is by hand. Normally some animal manure is applied to the fields before planting and if chemical fertilizers are available, they are apnlied at planting time.

5 11 Aft'1r nlanting; the "setts" beglin to sorout at each node and casual weed control is practiced, by hand, until the growth of the sugar cane is Qiff'ifn1-. t.ha1t. weeds are shaded ont. LTf irrigation facilities are available, the crop is flooded soon after planting and occasional water applied until the rains of the April-May period become common. Generally, no additional care is given the crop until it is harvested in the December-M1arch period. Harvesting is by hand, with the crop being cut with typical cane-knsives, all of the leaves stripped from the stalks, and the denuded stalks transported to the gur mill or to the white sugar mill. Sugar cane is treated as an annual crop and instances of ratooning are rare. This, added to low cane yields, is the reason for the very high price of cane and, consequently, of sugar in Bangladesh. Cane establishment costs are usually three to four times as high as the maintenance of ratoons and in most cane growin! countries planters expect to recover establishment costs from the plant crop (first harvest) and make their profits from ratoons. The reason for the absence of ratooning in Bangladesh may be a combination of poor plant population, plant debilitation by pests and diseases and inadequate manuringz and fer- tilizing. There are no reasons why ratooning should not be successful in Bangladesh and there are reports from the sugar cane research station a nd from factory estates of successful ratooning. Annual planting, besides bein2 expensive, is wasteful of cane. At present if at least 1.5 tons millable cane are used to plant 1 acre, the a,lual cane requirement for seed is 600,000 tons. as already indicated this Is a low seed rate and should be raised to at least 2.5 tons per acre. Nevertheless, with at least 2 to 3 ratoon crops, seed cane consumption could be more than halved.

5.12 A number of different plant pests and diseases of suc!ar cane occur in Bangladesh and affect the over-all yield per acre. Among the more important are red-rot, collar-rot, and sett-rot or pineapple disease. Red-rot is particularly prevalent on badly drained soils. Poor stands of cane resulting from red-rot is one of the many reasons nreventin7 successfulT ratoonin, at present. itesearch workers report that the diseases can be controlled bv resistant varieties. careful seed selection. improved cultural practices, especially draina7e, rotations, and in -the case of sett-rot, which resiilt.s in noor st-nmd Anc] the use of ecssivesee;i. hy seeci treattment. Research on a preplanting fun-icidal treatment of settsl/ indicates that this re-Ilartively ine-oensive tr'ea+ment Will provlde a -4-imnim inrerase in v-iPe.I of 5o% or more. In addition, the losses from sugar cane borer ri.mage in Bangladesh are Ps serious as the losses from red-rot. somron fields, up to 90% of the stalks were reported as bein- affected by th borer with re Sultin 3r-dam.n ,,aget yireldsq ondi tos-n cotn. . oec onapoce to reducin- losses from borer damage around -uhe world include the introduction of parasites Wh-J >ch attack the `bo---r, the develo1-pment of resistant vreis and the use of special insecticide applications.

5.13 Research workers report that sugar cane y_elds could easily be

35Ifto U 1~-11.041)1 4---tnsUU±ILC) Y~- acre---- V_ilv uhh;-e sucrose conten if44productionL± YF- uw,L,L methods were improved and adapted varieties used. These conclusions appear 4ustfe4 ase on exeAec in-ot4her areas. 'l a produLct-on of aroundu 300,000 acres, Louisiana obtains a yield of 26 tons per acre and a sucrose contI elntu of nearily 13±,o as cor,IJ.Jpar.ed '±-Ilith ±11 uons -W-L ad.h sucrose conten t. of 10;g in Bangladesh. Both regions plant their crop in October and November

1/ "Effect of Preplanting, b`ngicidal Treatment of Setts Upon Emergence and Yieid of Sugar cane," by M. Ishaque. Pakisutar Journal of Scientific Research, Dacca, January, 1967. - 19 - and harvest in November to January. Bangladesh has a longer harvest season than Louisiana and, with irrigation, prospects for higher yields than Louisiana.

5q.L Sigar beets have been suggested as a possibility for increased utilization of mills in Bangladesh. The crop, however, has not proved tn be qdanted to hot humid tronical conditions and the onlv p)ossibility in Bangladesh might be planting in the Boro season. This would mean mmrincP a-. thbe smme time as sugarr cnne and comnetition rather than supplementation of the sugar cane crop. Also, the crop would require irri- gationr - be successfully gprown And would compnet- for the ve-rv scarce water supplie8 needed for rice and other crops during this period. Although sugar beets are a possibility in -angladesh, -Ad this possibilit-4,i^ be thoroughly explored by careful research, the crop does not offer any irnyn^;a+ve opportun.it* f-i-vv. + sunar s-it-anon. of sugar cane are grown in _._< A large number of different varieties Banigladesh. The older Coimbatore-developed varieties, such as C042l, 507, 513, 627, q72. 633, and 636 still predominate, but locally bred Ishurdi (ISD) varieties have been widely distributed. By 1969, nine varieties had been isnued to mqnn farmers and five more were undergoing final testing. Other varieties have been introduced over the years, including BO-3, 11, 21 and 32. A Mo-re -recently, the OP varieties 50-6, 50-9, 34-79 have been introduced. large importation of new varieties was made in 1967 but few of the varieties -rovedI suitable and thev have now largely disappeared. Al9, two of the old native types -- Tena and Gandaria--continue to be produced±4 The production of vnime-roim varietieg with different fiber content and milling characteristics complicates the processing problem. Apparently, however, the reason for this m_1tiplicity of varieties is at least partly due to variations in adaptability to flooding and to the variations in demand for varieties with special qualites for the manufacture of gur. cane 5.16 The main cause for low cane yields may be the cultivation of on unsuitable soils and generally poor cane farming standards. No only most do Rangladesh farmers give highest priority to rice production but are rmch more skilled rice growers than cLry iand ±-l . of them known may be an urgent need for aggressive research (see below) enough is to bring about considerable yield improvements. inmproved farming already seed, nractices could include the choice of suitable soils, the use of healthy beu ; seed treatment, an adequate seed rate, correct planting wale, u- v- fertilizer use and effective pest control. The effect of these adequate au U-e measures on cane yields has already been explored and demonstrauad to date Sugar Cane Pesearch Station and at various mill plantations but to sr,;ll improved cane farming has not yet been energetically demonstrated consideration gTRe cane growers. A vigorous extension program already under by Government may be worth implementing; about 20 graduates and 200 diplo-ma staff with adecuate funds for travelling and for mounting demonstrations may to sugar be required. These services could cover cane growers who deiiver cw.lC

1/ Sugar Industry - Its P-roblems and Prospects in East Pakistan, by G.A. Matin. l96LM Proceedings of The Pakistan Society of Sugar Cane Technologists, (ajranwala, West Pakistan, October, l964. - 20 - factories and those who convert cane into gur. The recurrent cost may be about Tks 3.5 million per annum. Sugar factories already have field staff to arrange cane deliveries from outgrowers. This staff may, with adequate training, be able to play an increasing role in a dynamic program of agricultural extension for the sugar cane industry. Supported by an adequate research program cane production might increase by at least 50% during the first ten years of the program, even assuming that no irrigation water could be spared for cane production during this period.

VI. iRESEARCH

5.17 Sugar cane research in British India was served by a series of research stations includina the main breeding station at Coimbatore and a station in Pakistan serving the region which is now Bangladesh. After partitioning, this station was abolished. In 1953, the government established a provincial sugar cane research station at Ishurdi in the District of Pabna. This station has received inadequate financial support and has not been adequately staffed. In the 1960's it released nine variety selections that were reported to be higher-yielding and disease- resistant, but because of insufficient demonstration and farmer education, they have not been distributed as widely as possible. Apart from breeding, fertilizer requirements have been explored, in conjunction with the Soil Fertility Survey, and fertilizer recommendations N-100, P90o<-60, k-40, were made as long ago as 1967. Table 16 gives the summary of a further 325 trials since the recommendations were made, indicatinz a good response to all three main plant nutrients and an unexpectedly strong response to potash. In addition. recommendations have been made for better cane establishment by a simple treatment of planting material and the control measures for important pests have been worked out.

5.18 Nevertheless, the sugar industry may need an improved, expanded, more comprehensive research program. Government has recognized the need for improved research and has prepared proposals for a research program to be conducted by an autonomous sugar research institute.

5.19 In most other sugar areas of the world, sugar industries of the size of Bangladesh (around 500,000 acres) have one malor modern research center staffed by 20-30 professional scientists, and several branch research centers to ohtain facts rpl;tive to snecific climatic andi soil connritinnq. The Louisiana industry and the Australian industry are examples of industries with a similar voliime and a Tmich more prongrsive research progranm with resulting higher yields, lower costs, and greater efficiency.

5.20 In providing the basic research needs for the sugar industry of Bangladesh, the center +. Tchivrri mayiv first ned +.t hp PInh1flate as to its potentials for serving the industry. With the land, buildings, and laboratories lanread navailable it may behcd tornma-intanA- this location as the basic center, with the selection of two or three other areas o,;_ A4so~-~rsearing ,~ ~-ilsoin1 and" cli-reas^rA-1i- Mn+i ^^"a thedprodu+A ,"vC +^ tionr~_,-,'Avw o +11,c-oimproved ~s+l t ; apefor ,,_Ac,A For research in all basic areas and the production of improved types for distribution -to producers, a land area of from 300 to 500 acres may be needed. Such an institution may need minimum office and laboratory space, screen-houses for special work, equipment for research and evaluation needs, an irrigation system so that all parts of the farm can be irrigated in the dry season, a drainage system so that water can be controlled at all times, a basic library and statistical analysis unit, and a communications and extension service office to quickly and effectively transmit to the industry all facts assembled.

5.21 To supplement the limited facilities available in 1970, a capital outlay fund of around $1.0 million appears to be needed to expand the center. Under Bangladesh salary and maintenance provisions, a minimum cost of $10,000 per scientist man-year to pay salary, support needs and necessary supplies, may be needed. Because of the past low level of support for research, top-quality personnel have been been hard to recruit and harder to keep; a higher rate is suggested to improve efficiency.

5.22 A minimum of 30 scientist man-years annually is suggested. This could include trained research workers in agronomy, plant breeding, ento- molo-,v. plant pathology. Dlant physiology. irrigation engineers, farm equipment engineers, agricultural economists in farm management and in marketinEr, extension specialists. aur and plantation white process engineers, and others in related areas of work. At $10,000 per man-year, this would be an annual operating budget of $300,000O

5.23 Tn the first five vears of this exnanded research program; out- side help may be needed. Although Bangladesh has a nucleus of trained agriL- cultural research workers. including some Ph.D. trini-ng, sunnort has been at so low a level in the 1965-70 period that most of these individuals have moved to more lucrative emnlovment. Thiiq_ to assist in mos+ rapi development of an overall research program, and to train the available Ang_adesh scAentio t it i suggested that cltsLde help be obtained to the extent of up to 10 foreign trained and experienced scientists to serrve for ._ouit 5 yers to gradiiually- rid lop the research program. hese men could be recruited from Australia, Mexico, Brazil, the Carribbean, the TTnited States, and other areas wh-ere cnurrpnt. suga-r cnne research progrnms are being conducted. The costs for such men, including transportation and support, is likely to average around t2000 per man- or a total of ?2qno-nn aqnnualmy for this init:ial 5-year development period. At the end of this period, local wrTners- cold handle t+he prgram.

- * '-* '-*""a .13lBa-¢la )S obta from 10 to 12 tons of 'sca.epe acre and around 8% or less sugar per ton of cane grown. Based on results in other parts of the world, the industry should produce 20 tons per acre w-i+hout irrigation and over 30 tons per acre with irrigation and obtain 10% or more sugar per tn g-.. .dll' +otl produ^tio ' -- in.-uga n. au.a.ly is estimated to be about 100,000 metric tons of centrifugal sugar and 180,000 tons of~~~~~~~~~L ro-etiglga.I.r m potjentil'.C leve.ls wer-e achiLVteved, this production could be doubled without an increase in acreage. Thus a research program; andl relIated pKU -tr4.-w-i 1ducation a c i-ves L4 .ost4U of 1 million dollars and an annual maintenance cost of less than $500,000 a year

c L d lay lh±e fo.LdjatioJn0 forU±.s a, addi0lonalL 300,00 t o . ±Ine Gove/J`L1A ment cost for research would amount to about $1.60 per additional ton produced.

TABLE 1

BAN'GrAMSHEl - SECTOR STLUi

PRODUCTION OF CENTRIFUGAL AND NON-CENTRIFUGAL SUGAR IN BANGLADESH AND pAT5STAN 1 961 -62 TQ 1 96C-66 ANnNA,TTTAT.T.Y 1 CA.-A7 TpO 1 57-71

Average,

.L,1961=6 '..' - +^~__ 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71

------1000 Metric Tons ------

Centrifugal Sugar

Bangladesh 80 113 110 57 100 100*

Pakistan 192 350 243 449 694 668

Total 272 463 353 506 794 768

Non-Centrifugal Isuar

Bangladesh 236 352 324 343 350* 350* 150 - 190 1/ 180 - 200 1 180 1/ 180 V

Pakistan 380 207 370 337 361 -371.

Total 616 559 I/ 694 I/ 68C,/ 7111/ 721,/ 530 V 397 ' 550 - 537' 541- 551-

Source of Basic Dakistan Data: World Sugar Production, 1970-71, U.S.D.A., F.A.S., July, 1971.

Source of Livision between Bangladesh and : Pakistan Economic Survey. Pakistan 1969-70.

* Estimate based on interviews in Dacca, Bangladesh, Feb., 1971.

1/ Bank estimate if different from other sources. TABLE 2

BANGLADESH - SECTOR STUDY

AREA. TOTAL PRODUCTION. AND YIELD PER ACRE OF SUGAR CANE. BANGLADESH

ANM PAKISTAN. ANNUALLY, 1962-63 TO 1969-70

Area Planted Total Production Yield per Acre

Season Bangladesh Pakistan Bangladesh Pakistan Bangladesh Pakistan

---- 1000 Acres ------1000 Tons ------

1962-63 318 1 31 2 k' 4750 2800- 18,500- 14.9-/ 8.9-/1 4.1-/

1963-64 346 1180 5360 3200 15,890 15.5 9.3 13.5

1964-65 356 1243 6230 3700 18,370 17.5 10.4 14.8

1965-66 379 1476 7550 4500 21,960 19.9 11.9 14.9

1966-67 413 1605 8070 4800 21,640 19.5 11.7 13.4

1967-68 412 1245 7590 4500 18,360 18.4 10.9 14.7

1968-69 407 1330 7300 4400 21,620 17.9 10.8 16.2

1969-70 410 1422 7400 4400 23,100 18.0 10.8 16.2

1/ Pakistan Statistical Yearbook, 1968, and Pakistan Economic Survey,

- I '.i, CoV ±11114.Wln o'.JJ. I V n fal. ±

BarIka/ et e if different fromm o.fflcia-l s aOisvls. TA!31E 3

BANGLADEMI - SECTOU STUDY

TOTAL PRODUCTION OF SUGAR CANE IN BANGLADESH AND USE FOR SEED. FODDER AND CHEWING, REFINED SUGAR, AND THE MANUJFACTURE OF GUR,

ANNUALLY, 1962-63 TO 1969-70

Total 1/ Seed & Fodder & For wnite Balance Production Waste 2/ Chewing 2/ Sugar for Gur

------1000 Tons ------3/ ~~~~~~~~~~3/ 1962-63 4750 28003/ 475 420 3/ 238 140 J 913 3124 1330-

1963-64 5360 3200 536 480 268 160 1089 3467 1470

1964-65 6,230 3700 623 560 312 180 987 4308 1970 1965-66 7550 4500 755 680 378 230 1037 5490 2550 1966-67 8070 4800 807 720 404 240 1436 5423 2400 1967-68 7590 4500 759 680 379 230 1368 5084 2200 1968-69 7300 4400 730 660 365 220 924 5281 2600

1969-70 7400 4400 740 660 370 220 4F*

1/ Pakistan Statistical Yearbook, 1968 and Pakistan Economic Survey, 1969-70

2/ Proceedings of the Pakistan Society of Sugar Cane Technologists, 1964.

3/ Bank estimate if different from official statistics.

* Data not available TABLE 4

BANCLA]DESHT - SECTOR STUIDY

COMPARISON OF THE RETURNS FROM TIE MANUFACTURE OF REFLiED

SUGAR AND GUR FROM A TON OF SUGAR CANE AND OF THEi CILLCAL CONTElNT

OF REFINED SUGAR AND GUR

Refined Item Sugar Gur

Per cent sucrose in sugar cane processed 11.5 11.5 Per cent of juice extracted in the mill 92.0 60.0 Percentage total recovery 1.5 10.5 Sucrose content of the final product '9.5 75.0 Over-all efficiency rate of milling process, per cent 83.0 68.3 Sugar recovered per long ton of cane milled, pounds 213 174

Moisture content, per cent .5 3.1 Caloric value per 100 grams 385 365 Protein, per cent .0 .11 Fat, per cent .0 .1 tlineral matter, per cent .0 .6 Total carbohydrates, per cent 99.5 90.6 Ca (calcium), per cent .0 .03 'hosphorus), per cent .0 .04 Fe (iron) in mgs. per 100 grams .0 11.4 Carotene (Int. Vitamin A units per 100 gm) .0 280.0 Nicotinic acid, mgm per 100 gm .0 1.0 Vitamin B-1 (micrograms per 100 gm) .0 20.0

Source: Adapted from "Problems of Gur in India," by S. V. Parthasaraty, Pro- Ceedings of the 9th Congress of the International Society of Sugar Cane Technologists, Volume 2, New Delhi, India, 1956. BANGLAUESH - SECTOR STUDY

CENTRIFUGAL SUGAR NILIS IN BANGLADESH, 1947 TO 1970, BY LOCATION, 24-HOUR CAPACITY, AND SEASONAL CAPACITY

Long-Tons Long-tons of of Cane Cane per Mill s EDdsting in 1947 Per Day 120-Day Season

1. Charsindur 250 30,000 2. Kishoreganj 350 42,000 3. Setabasgni 800 96.000 4. Darasana 1,000 120,000 5. Gonalnur l.S0O 18.00 0 0

Total 3;900 468;000

Mills ConAtructed in the 1951-60 Period

6. Mahimagani 1,500 180,000 7 Dngnn; 100nnn 17n-nnn 8. Dinajpur 1,000 120,000

Accumulative total 7 ,400 888,000

Mills Constructed in the P91 1-70 Period 9. jani:rhat 1,000 120, 000 10. Kushtia 1,000 120,000 11 .R 4sahahi 1,000 120, nnn 12. Mobarakgani 1,000 120,000 13. PachaghA 1,000ooinn i0 n 14. Nilfamari 1,000 120,000 15. KAlichp8ra 1,000 !20,000

AcCUm,lative total 14 !,n?277o Ann

Source: 1947 to 1960 data: "A Decade of Progress in Pakistan's Sugar Industry," The Sugar Touvanl v,ol 23, No. 6, Nov. 19o60 mew nrq&An&_ 1960 to 1965 data: 1964 Proceedings of The Pakistan Society of Sugar C-^on Teclsh-l01op-it=p Qj_4_fi""a«l tFatF VaUfe+Fan no- F-lUm_ lOf^ 1966 to 1970 data: Pakistan Industrial Credit and Investment Cor- poration, In v-.-. ¢ r9'c, Karaci, In7I BANGLADESH - SECTOR STEITY

SUGAR CANE GROUND FOR WHITE SUGAR, SUGAR PRODUCED, AND

RECOVERY RATES, ANNUALLY, 1959-60 TO 1968-69, BANGLADESH

Sugar Cane White Sugar Recovery Season Ground Produced Rate

- - - -1000 Tons- - - - Por eant

1?59-60 778-735 61 7?.8 1960-61 615,666 54 8.79 1961-62 779.824 67 8.54 1962-63 912,931 75 7.89 1963-6'4 l-038566 RR 8.13 1964-65 987,179 77 7.80 1965-66 1jO36j585 85 R.20 1966-67 1,436,000 113 7.87 ls67-6R 1,36,-0MO 110i.04 1968-69 924,000 57 6.17

Soutrce:' Pakistan WRonomier Surve 1969-70, fGmyo-vnmpnt nf PaLita-n,a V-rnd-h4, for 1964-65 to 1968-69 data; 1964 Proceedi:ng of the Pakistan

_opiety of Sugar Gane Terhnologtsts, Gu-ran.a1a, west Pakistan, October 1964, for the 195)-60 to 1963-64 data. TABLE 7

iANGIAMSEa - SECTOR STuDY

PRODvTC-TION COST IN ,AN aiTmphrm RTGTT)r. TAR MTT.T.

(Rs per maimd)

1967/68 % of ey- 1962/ 1963/ 1964/ 1965/ 1966/ 1967/ Factory 1963 1964 1965 1966 1967 1968 Cost

Sugar Cane 32.10 33.47 36.76 34.10 37.76 29.82 41.4

Cane Incidental 2.57 2.14 2.86 3.29 4.41 0.96 1.3

Sulphur 0.18 0.24 0.22 0.21 0.22 0.18 0.3

Other Chemicals & Prod. Stores 0.49 0.64 0.74 0.49 Q.74 0.43 0.6

Salary & Wages (Factory) 2.68 3.64 3.93 3.65 4.20 4.93 6.9

Packings 0.90 0.88 0.89 1.18 1.28 1.,11 1.5

Spares 1.15 1.1.7 0.91 1.10 1.20 1.60 2.2

Depreciation 2.53 3.53 4.10 3.36 3.39 6.14 8.5

Insurance 0.60 0.56 0.41 0.53 0.30 0.47 0.7

Central Excise Duty 10.30 10.30 10.30 10.30 10.55 - 13.00 18.1

Other Factory Overhead 0.08 0.20 0.65 0.55 1.49 1.59 2.2

Admn. Salaries 0.68 0.91 0.97 l.Ql 0.43 (1.55 0.8

Admn. Other Expenses 0.42 0.50 0.76 0.95 0.40 0.32 0.4

hlead Office Overhead 0.72 0.41 0.34 0.34 0.26 0.36 0.5

Interest on Government Loan 0.13 4.39 0.05 0.22 0.37 0.91 1..3

Interest on Overdraft 0.14 0.05 0.01 0.16 0.84 1.53 2.1

Selling Expenses 0.23 0.08 0.13 0.13 0.19 2.13 3.0

55.90 63.11 64.03 61.54 68.03 66.03 91.8

Provincial Dues 5.90 5.90 5.90 5.90 5.90 5.90 8.2

Ex-Factory Cost 61.80 69.01 69.93 67.47 73.93 71.93 10U.0

Rupees per ton 1691.99 1888.25 1937.25 1850.14 2017.82 1957.93 Fixed ex-factory selling price 1701.25 Loss: (256.68)

Source: Industrial Developmnent Corp. TABLE 8

BANGLAI)ES1 - SECTOR STUDY

WHOLESALE PRICES OF GUR AND OF REFINED SUGAR, ANNUAL AVERAGES,

1960-61 TO 1969-70, DACCA, iBANGLADESH

Wholesale Prices Gur Per Refined Sugar Year Maund Per Maund

I 60-6LI 29.79 53.75

1961-62 35.91 56.50

II965 2 -6633 27.58 58.84

1963-64 28.82 63.95

39 .77 63.95

1965-66 40.10 63.95

1966-67 34.30 63.95

1967-68 35.19 63.95 i968-69 52.00 63.33

1i69-70 48.80 84.35

Source: 1960-61 to 1967-68, Pakistan Statistical Yearbook, 1968. 1968-69 and 1969-70, Agricultural MarketinR Directorate, Department of Agriculture, Government of East Pakistan, Dacca. TABLE 9

BANGIADESH - SECTOR STUDY

A COMPlMISON OF THE POTENTIAL INCOME RECEIVED BY SUGAR CANE FARMERS

IN MANUFACTURING GUR AS COMPARED WITH SELLING TIE HARVESTED SUGAR

CANE TO A WHITE SUGAR MILL

Period or Year 1960-61 to 1962-63 to Item 1961-62 1967-68 1968-69 1969-70

------Rupees------

Average wholesale price for one maund of gur which is produced frorn 14.3 maunds of sugar cane 32.85 34.29 52.00 48.80

Less the estimated cash costs of making the gur on the farm 5.00 5.00 5.00 5.00

Net return received by the farmer when converting sugar cane to gur, per maund 27.85 29.29 47.00 43.80

Value of 14.3 maunds of sugar cane if sold to the mill at the controlled fixed price 25.02 36.25 39.32 39.32

Source: Computed using the fixed price for sugar cane as reported in para- graph 4.06 and the listed wholesale price received by faxmers for gur as presented in Table 7. The estimated cash costs of making gur are based on interviews with farmers in Bangladesh. BANGLADESH -- SECITOR STU)Y

MONTHLY AVERAGE WHOLESALE PRIC(ES OF GllR (CANE,) IN BANGLADESH

1-962 1963 1'?64 196, 19 66 1967 19 68 1969 1970

Janiuar 31.69 23.42 23.96 31.82 33.92 31.17 32.38 47.56 44.71 February 27.34 22.47 25.91 30.70 34.35 29.37 32.36 43.52 47.46

March 21.02 23.17 26.34 32.34 35.98 29.61 33.11 48.12 43.00

April 28.56 22.63 25.Q7 35.67 37.25 30.01 34.76 50.31 43.95

May 29.61 25.49 25.34 40.44 317.50 31.38 37.59 52.83 44.60

June 29.87 26.15 32.15 43.21 38.28 31.34 39.34 56.85

July 29.45 28.00 34.89 43.44 38.28 31.19 42.22' 58.19

Au gust 30.34 23.55 36.75 44.22 37.13 28.75 45.14 57.56

Selptem'ber 30.08 28.00 35.75 41.94 37.76 33.22 46.16 55.31 October 27.90 28.13 35.13 40.07 36.28 33.23 48.46 49.60

November 25.13 28.14 34.36 35.00 31.81 31.90 51.44 47.44

Dercember 24.05 26.57 34.03 31.77 30.75 34.08 51i.11 48.98

Annual Average 28.63 25.46 30.89 37.55 35.77' 31.28 41.17 51.52

Source: Agricultural 'Marke tin& Directorate, Department of' Agriculture, Da,cca, October 1970. __ ~~~~~~~~~~~~~~~0 TABLE 11 BANGIADEffi - SuECTO1K STD1Y

- . . ~, ,.,~¶yTTT"%rV'TKtT AT T TRENDS IN SUGAR RECOVFEREID PER TON OF SUUft CANEl CRUSrEliD 44A1

REFINED -wHiTE SuLiGAR MI.lS IN IZ -L UiESH,L4h91MALLYs,

1950-51 TO 1Y69-70

Nwnber Sugar Recovered of per Ton of Cane Year Mills Crushed

Per cent 1950-51 5 9.99 i51l51-52 5 8.35 1952-53 5 8.39 1953-54 5 9.09 1954-55 5 9.07

5-year Average - 8.98 i955-56 5 8.32 1956-57 5 8.09 1957-58 6 8.92 1958-59 8 8.66 1959-60 8 7.83

5-year Average - 8.36

1960-61 8 8.79 1961-62 8 8.54 1962-63 8 7.89 1963-64 9 8.13 1964-65 11 7.80

5-year Average - 8.23

1965-66 12 8.20 1966-67 13 7.87 1967-68 15 8.04

3-year Average - 8.04

1969-70 6.17

Source: 1950-51 to 1963-64 data from 1964 Proceedings of the Pakistan Society of Sugar Cane Technologists. 1964-65 to 196q-70 data computed from Pakistan Economic SurveY, 1969-70. TABLE 12

BANGLADESH - SECTOR STUDY

CHANGES IN RECOVERABLE SUGAR IN SUGAR CANE ACCORDING TO THE PERIOD

OF TIME BETWEEN HARVEST AND MILLING,

LOUISIANA, 1954-1956

Days After Harvest Recoverable Sugar Proportion of Total Before Milling in Sugar Cane Recoverable Sugar

Days Pounds per Ton Per cent

1 150.4 100.0

14 146.1 97.1

2 142.0 94.4

3 139.0 92.4

4 136.5 90.8

5 134.0 89.1

6 131.5 87.4

7 129.0 85.8

8 126.5 84.1

9 124.0 82.4

10 121.5 80.8

Source: "'re'sher Clane Increases ',ug,ar Recoveries andu ProfitsJLfor Dboeflh G,rowers and Processors," Sugar Bulletin, Vol. 36, No. 24, Sept. 15, 1958, Ai sr-can Sugar Cane Tag-e, ew Orleari. BANGLAXDESE - SECTOR STU)Y

AVERAGE MILLINCG RESULTS FROM THE OPERATION OF 8 REFINED SIUGAR CANE: MILLS IN BANGLADESH 1962-63 AND 1963-64 SEASON

I.^>ation of tke Stigar Mill.s

1 2 3 6 7 8 rsindur kishore tj SetAb- saa G Ma j fle r

19,62-: a t: 1. % sucrosle in sugar cane 9.74 9.16 10.21 11.31 10.97 10.19 10.86 10.32 2. a suigar recoverei from seugar cane 7.43 7.08 7.69 8.79 8.81 7.53 8.68 8.10 3. Over-all. extraction rakte, Z 76.07 73.18 75.22 77.45 80.12 73.90 79.94 78.39 4. Duriation of season, d*ys 125 117 178 175 150 137 99 141 5. Days, actually cirushing lCtO 95i 120 157 124 1L10 75 122 6. Hours ac:tually crushing -2431 ?O5r) 2890 3251 2913 2372 1602 2941 7. Hours lost or idle 568 731. 1139 906 637 890 773 595. 8. Z ofE hours idle 19.0 26.2 28.3 21.8 17.9 27.2 32.5 16.7 9. Tomn milled (000) 23 32 93 160 234 155 74 138 19,63-64i Resiults: 1. % mscrosie in sugAr cane 10.07 1CI.24 10.34 11.64 10.81 '.88 10.55 10.11 2.. suigar recovered from sugar cane 7.49 7.09 7.60 9.04 8.54 7.31 7.64 8.44 3. Over-all. extraction ratte, Z 74.38 74.51 73.40 77.66 78.81 73.48 79.81 78.14 4. Duraktioti of seasiDn, s draty 162 114 179 - 174 138 128 170 P; 5. Days, actually criah .ng 127 98 126 - 145 93 110 144 6. Hours actually I crushing 30417 192 3028 2893 3478 2228 2394 7. Hours lost or idle 841 733 1248 732 764 107 5 678 658 8. 7 of hours idle 21.6 26.9 29.2 20.2 18.0 32.2 22.1 16.1 9. Tonts milled (000W 21 32 97 157 224 133 113 169

Sourcee: I164 Proceedinis of The Pakistan Societv of Sugar Cane Technologists, Curjranwgla, West Pakistar, October 11-12. 1964. TABLE 14

BANGLADESH - SECTOR STUDY

CAUSES OF LOST TI=E AND PROPORTION OF TOTAL CRUSHING TIME LOLE

11 COOPERATIVE SUGAR CANE, IFLLS, LOUISIANA, 1968 TO 1970

Cause 1968 1969 1c'70

Hours Lost From:

Holidays 8.48 - 12. 6-

No Cane 7.02 2.17 19.82

Machinery 100.82 61.41 65.50

Chokes 22.60 11.08 17.21

Full House 1.08 .12 2.10

Cleaning 31.80 22.05 34.85

Misceellaneous 14.60 10.06 8.93

Total 186.42 1Ob.0Y 161.10

Total hours available to work in 1729.27 1251.63 1608.02 Season

Per cent of time 10.78 8.18 10.14 lost

Source: New Orleans Bank for Cooperatives, New Orleans. TABLE 1',

BANGLADESH - SECTOR STUDY

PROPORTIONATE SUGAR RECOVERY PER TON OF SUGAR CANE CRUSHED

FOR VARIOUS INDIVIDUAL SUGAR CANE MILLS IN BANGLADESH,

1962-63 AND 1963-64 SEASONS

Month

Location of ]!ll November December Januarv Februarsr March April

------Per cent------

1962-63 Season

Charsindur 5.90 6.90 7.64 7.16 -

Kishoreganij 5.85 - 7.02 8.17 8.27

Setabagni 7.23 7.30 8.56 8.73 8.34 7.35

Darasana 7.75 8.63 9.41 9.45 9.77 -

Gopalpur 8.48 9.10 9.30 9.17 8.97

Mahimagani. - 7.50 8.68 8.04 -

Dewangani 7.61 9.19 9.39 9.47 - -

Dinajpur - - 8.06 9.08 8.85 8.42

1)63-64 Season

Charstndur 6.26 6.53 7.33 7.78 7.25 -

Kishoreganj - 7.00 7.42 8.05 8.31

Setabagni 7.48 - 8.30 8.20 - -

Darasana - 8.71 9.80 9.54 9.03 8.76

Gopalpur 7.68 8.45 9.16 9.06 8.69 7.68

Mahimagani - 7.02 - 7.81 7.03 -

Dewangani 7.02 7.55 8.40 9.14 8.79

Dinajpur 6.47 7.79 8.32 3.24

Source: !964 ProceedinR of The Pakistan Societv of Su2ar Cane Technolop:ists. Statistical Section, Curjranwala, West Pakistan, October, 1964. TABLE 16

RJThT,NG nS - SErvTOR SnTUY

RESPONSE OF SUGAR CANE TO VARYING RATES OF FERTILIZERS

TNT PANflTAM{

(average of 325 trials)

Rates of Application Yields Yield Increase Over Control lbs/acre lbs/acre lbs7 acre % N P O0 KO 2 '

0 0 0 43,300

120 60 0 54,500 11,200 26

120 60 60 61,400 18,100 42

150 60 60 68,200 24,900 57

120 80 60 65,000 21,700 50

150 80 0 58,h0O 15,100 35

150 80 80 69,800 26,500 61 R 'qPTCTWT)

I:NTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

INTERNATIONAL DEVELOPMENT ASSOCIATION

BANGLADESH

LAND AND WATER RESOURCES SECTOR STUDY

(in nine volumes)

VOLUME IV

CROPS, LIVESTOCK AND FISHERIES

TECHNICAL REPORT NO. 10

TEA

December 1, 1972

Asia Projects Department

BANGLADESH - SECTOR STUDY

VOLUME IV - CROPS, LIVESTOCK AND FISHERIES

TECHNICAL REPORT NO. lbY

TEA

TABLE OF CONTENTS

Page No.

SUMMARY AND CONCLUSIONS ...... i-

I. INTRODUCTION ...... 1

II. TEA CULTIVATION ...... 2

III. TEA PROCESSING AND MARKETING ...... 4

IV. TEA INDUSTRY ORGANIZATION ...... 5

V. PROSPECTS ...... *.* a *.* 6

TABLES

1. Area under Different Tea Age Groups 2. Consumption and Production of Made Tea 3. ComnaLrison of Evapotranspiration and Minimum Exnected Rainfall in Drought Years 4. Tea Auction Prices 5. Average Production Cost per Lb Made Tea on a 1,000-Acre Estate in Bangladesh

FIGURE

1. Rainfall and Evaporation - Srimangal 1955-64 and 1966-67

1/ This report was prepared by Mr. A. Seager (Consultant). Use was made of a draft appraisal report dated December 8, 1970, prepared by Messrs. G. von Gontard, P. Pohland (IDA), R. Henderson, H. Schlidt and G. Starbuck (Consultants).

BANGLADESH - SECTOR STUDY

TECHNICAL REPORT NO. 10

TEA

RTTMMARY ANT) CrlJ(T.TLSTONM i. ThIe tea industry has had a relatively poor record in Bangladesh. .and rPfn,,wi mz.eeslr rere imii-ed qtAml1atina that no landhnldino.c C-uld exceed 125 acres without special permission, granted only for five-year nPriods RSinca mosQ+. to+.ht 1h7 +.a ates earxiaeedd +h4q xiga and werPe owned by foreign companies, there has been a reluctance to invest in new plant4ngs or mproved techn±ques. Most nf thA tan hunhes are morA than 50 years old, well beyond their prime productive period. Plantation owners have not a-ken advan+tageof recert researeh results in other parts of the tea-growing world and this is reflected in much lower yields. Bangla- Ac ch fnv- c,vaismnla r%"^Aii-aA snr vnt nrsna 4n thc arc+. Ifl IT.nn f deq sh, _for xmple, produced ag-- 10 J of-o 665 lbs of made tea per acre compared with 1,000 lbs per acre in India. Yet, there i.s scope for 4 mvs,'roaA ,_eriasA siA bt w,se'nai resullts. In particular, irrigation would make it possible to grow clonal stock 50% more productive thcan t-he seednling tea c-yre.ntly plant+-ed. This rjnr1A hom to be accompanied by improved pest and weed control. ii. All tea produced in Bangladesh is marketed as black tea. It is processed in 95 factories using outModed t andeqoea n+-ripm Tnt.e

Governnant required 4the estates to sell 80% of their yield at auction in CM4 4-. ngtan. T7l.a pi ces were ecv lyn cotr.ro"ed a becal- t-.a tjor IIVM.J. A.A.U jAJU S W 5. L.. ~WV JLJ '.J_ U Lt~L .., l W~ . 1 SfJ blenders putrchased 70% of all the tea auctioned, both imported and locally produced. ohMe .-aln marke wa Wes Paist^ar. RAecent poli-ticl ILevelop- ments will therefore have a major impact on the tea industry. The implica- V.LvJ54 A.L U.II &=W JUJL4.0L%LU%.L %4UCLtO.ULV I O iLIA1 PLULAU%.%O.LV&I 1JIUVOJUL.Uoo UIO.J AUVV% to be assessed carefully at the same time as steps are taken to rehabilitate the plan.tatsions damaged by the war.

.1.34 A ~ .J 'a-....L .~4 4 .L e .s4.-.. 0 a'-. iiL. IL proJ'eCcO pLrvide credi t V e Loa U8t 4L0VL Ir.P.ati, r.iode L4za- tion and electrification of existing tea factories or for establishment 4 4 4 4 4 a4' a..4'.s4.~~4s ',co 4Aan4-44'4-A -,.44-1. l..- -te - - -s s. TlA -+e ' 4,. l1.4 o.J new faCtFUries was ideIntif.i.LJ.'. WJ.A tLUIL s U %.' .AJXLDA .tA&i Lat 1970. The project would have had a total cost of US$9.6 million, with a

.L A . I. .11GLAr'%V LrVUUWV A VU.L Vow ? MlL...L.L | .L U V LL VWG LAVLI& v .LV %L processing capacity of 25 million lbs of tea, representing some 35% of the totaL.. LOeCLUAC.LLZJ caCpaciLUyJ W.Lof U6a.'.LVades. ItU pu oisoIJ.LzLj for. fL%eas ibi- ity study on the use of natural gas instead of imported coal and oil for

%..LL.L1L4gr anAL %A I.L "teigtOU.UL .J.A11~, CLOswl ;eL.@~ aS Au,-As.ULU.LLUJ. for- tc44c-caU5LLGJ C L VJ.t.C toteto 'I,ceLL "'ea Board to strengthen tea research. The scope and economics of the project re qu-ire udeaile.u 1-vLe- to take uV 0±o theLdi acti of teU cLv.l W±ar and of the need for the Bangladesh tea industry to face stiffened competition in worid rn.riEWAZ.U iv * iniormation recei-Veu in April 19F(72 sIowedu L.ha U LJIe i1uUsbry suffered greatly as a result of the war. Most of the gardens (126 out of 147) are in Syihet, and were thus directly exposed to the hostilities. Over 100,000 tea laborers (many of whom are Hindus) had to take refuge in India. Most managers also had to flee, including those oI the Sterling companies, leaving practically all estates unattended. Tea production in 1971-72 is unlikely to exceed 22 million lbs, compared to 69 million lbs in 1970-71. Even with this sharply reduced output, large stocks of made tea have yet to be exported. rne garaens are now overgrown and 4u (about one third) of the factories have been damaged. Stocks of supplies as well as tractors and vehicles were taken away. Some of the estate roads badly need repair. The Government has taken over 23 tea estates abandoned by their Pakistani owners. With the return of most laborers from India, and the drop in sales, the entire industry is in a very difficult liquidity position. rhe prospect for production in 1972-73 is poor. Not more than 50 million pounds can be expected in view of the numerous drawbacks mentioned above. The most immediate problems are the marketing of the last yearis production and the repair of factories. Steps to restore the industry are under consideration by Government and aid agencies. 'The prospects are that the 1969-70 production level may be regained during the 1973-74 season. v. With the disappearance of a protected market for tea in Pakistan, tea planters have to face a sharp drop in their export price--from Tks3.5 0 per lb to perhaps Tks2.50 per lb. Discussions are under way between the industry and Government to define a new marketing strategy for tea. BANGLADESH - SECTOR STUDY

TECHNICAL REPORT NO. 10 - TEA

I. INTRODUCTION 1.01 Tea has been grown in the area that now comprises Bangladesh for over 10() years. Its culture has spread from neighboring Assam and Tripura. The crop is grown in the four eastern districts contiguous with the hill lands of Northeast India. Percentage distribution by district, fairly constant since 1947, is given below:

Percentage Distribution of Tea in the Four Tea-Growing Districts of Bangladesh

Sylhet 93.23 Chlt.tagong 6,53 Chittagong Hill Tracts .13 Co.mill 211

Total inn-.0

1.02 Between 1947 and 1960, the acreage devoted to tea increased by 8,000 acres. In tne foliowing decade, the increase was 28,000 acres. in 1970 the total acreage reached 106,000 acres operated by 147, estates. M[uch of the tea is more than 50 years old. The proportion oI tea in various age groups is shown in Table 1. The recent acreage increase resulted from a Government ruling that all estates with suitable land would have to increase their planted area by 3% per annum. The objective of this fiat was to keep output in line with rapidly increasing consumption in West Pakistan. This policy met with limited success. The export surplus of 26 million lb in 19>4 dwindled to 7.4 millon lb by ly65, ana to zero in 6yooonwaras (see Table 2). Some 12 million lb had to be imported in 1970. Of the total available supply of 80 million lb, some 75% was consumed in West Pakistan. Thus, following rehabilitation of the tea estates damaged by the war, Bangladesh should still have an exportable surplus of nearly 50 million :lbs.

Total Area, Production and Yields of Made Tea Per Acre

Area Yield Production Year kac) ___U_E)luL.L±±or lb)

i.960 7760(1U- 44 -/ 42.25 1.961 78,303 747 58.46 "n Of Ir _ r'-i Q - 1.963 82,763 671 55.53 i.964 Ou, 431 (U.20 .965 90,155 670 60.36 .966 93,549 672 62.90 1.967 97,091 664 64.50 1.968 100,331 627 62.91 1.969 103,561 645 66.80 1.970 105,731 643 68.00

1/ Drought year. II. 7ETA CUULrlVAAr1ION

Garden Sites

2.01 Tea grown in Bangladesh is all lowland tea, grown below the 300 ft contour line. Three distinct environments can be distinguished: tillah, high flats and low flats. The itillahs' are steeply rounded hills, separated by flat-bottomed valleys, usually quite narrow. They account for some 327%of the tea acreage and are the only areas where, after clearing and before a canopy is established, there is an erosion hazard. The 'high flats' comprise undulating, sometimes deeply dissected areas but, as the surmmots are much flatter than the tillahs, there is little or no erosion hazard. Tney account for 45% of the tea. The !low flats! are valley floors, usually quite flat with low gradients. They carry 23% of the tea. In many of them there is a drainage problem exacerbated by the usually stiffer, heavier soils.

Climate and Soils

2.02 While the annual average rainfall, even during comparatively drier years, appears more than sufficient, there are periods of water shortage amounting to, on the average, no less than five months in the year. Even in favorable years, there is at least a partial shortage for about three months (see Figure 1), and the serious water shortage in a dry year is illustrated in Table 3. Water shortage is somewhat more serious for shallow rooted bushes--i.e. in poorly drained areas where the high seasonal water table hinders root penetration. Water shortages are serious for both young and old tea so that its severity affects yields as well as quality.

Pro-uaction

2.03 The country average yield, over the past ten years, has varied between 540 lb and 750 lb of made tea per acre, averaging about 660-670 lb. This compares to India's i,000 lb and Ceylon's and East Africals yuu lbs. About two-thirds of the area is run by large tea conpanies that average 765 ibs; the ten largest average 860 lbs. The smaller estates, wnose management is relatively inexperienced and who lack facilities, average about 565 lbs.

2.04 A major cause of poor yields is the condition of moisture stress and consequent reduced plucking period; lack of timely water makes it virtually impossible to establish clonal stock (which is much higher yielding) because of high mortality percentages owing to an initially poorer root system. Mortality in seedling plantation is also very heavy. The following figures referring to seedling tea were obtained from a cross-section of tea estates. Composition of tea plantation section six years after planting

Age in years 6 5 4 3 2 1 to be planted

Percentage of tea of given age 62 14 7 6 4 4 3

2.05 This implies the following losses:

Expected production losses due to establishment problems

Calculated yield Actual Lost Age in years if full plant (lbs) Yield (lb) Tea (lb)

4 240 160 80

CAl 3901702° 6 800 590 210

Cumulative Total 1 600 J60

Other observations in established sections of estates reveal vacancies of up to 50%. While a given vacancy percentage is not necessarily equal to the same loss of production, the difference is not very great and the figures are indicative of a serious situation.

2.06 One of the major complaints of tea planters is that there has been no subsidy on plant protection chemicals and equipment for tea. Moreover, pesticides purchase has had to be done at the bonus rate and import licences have not beerL readily granted.

2.07 Since 1947, but particularly during the past ten years or so, the industry has been cut off from the mainstream of world tea development. The Tcocklai research station in Assam (and to a lesser extent the one in Darieeling in West Bengal) had previously coped with the agronomic problems of the Bangladesh tea areas. Their place, since 1950, has been taken by the Tea Research Institute in Srimangal. They have done excellent work, but, inevitably, are lagging behind the old established stations with world-wide repute. Shortage of funds and foreign exchange have further handicapped their work. Restoration of research links with Indian stations ought to be considered by the authorities. - 4 -

2.08 A particular weakness is moisture conservation technology which is of ovLrriiing importance under prevailing ondtions= The use of weedicides is just beginning and is much hampered by the cost factor t.n uhicrh refernren -ns mnrlad PearIierr Muilchingf ond -wad ontrol espnoe-inIlyr the latter, while in theory possible without weedicides, is very sensitive to ti.ming nnd it is often qieun iTossible to meet this criterion without chemicals.

2.09 For estates located in low flat areas, there is a serious and v'nA r -in-~'n ,c- nrer, Th_ -ir , n a- , 1g.11 -e ,,->. -. -~.- - - rapidly ir nl ne forIh Aed 1 J -_lWa surfacei0 W.-4-a.nasge hAlas always been practiced, but this only copes with flooding and does not create condi tions s_itablefor good root development.- Furthermore, there is geological evidence that the Sylhet basin is sinking. As a result, major scti~ no nsIC nn en particular+ tea estate are lronwin to have gone out of-P cul 4 . i4. t.J.tjVitA . i J , W --IL~A LiL llaV ~ ~ JA3 LL i JI ,...t4. vation. Even when the effects are not as drastic as this, continuous 'work onfl A v,n, no i+ require+,4 rcA A , c + +tor maintain h e + no ve + c ctr, situation. In the long-run, however, areas which are marginal for tea may h±a-ve too bke witL'ALawr.W from cul-- tiLva 4i4on.

* LU~~~~J.~ A 1 -4 4-V1, -Liid-i -,I -J -~L.L~- --.IL A jJLI-4±- LIi4.L L 4. absolutely correct and that it would benefit from critical trials regarding +n-cg .and methods.

III TEA PROCESSING AND MARKETING

3.01 All tea in Bangladesh is marketed as black tea, Lnvolving fLer.ientatLion. T,he proucLess Inas thieI: folloWing stages: (a) Wi Ltheiung;118, (b) rolling; (c) fermenting; (d) drying; (e) sorting, grading and cleaning;

(Lf) packidng. lls tLhe green 'Leaves do nriotLJLk-eep f±or 1more th0.arn a fewL hAouArs, _L U is important that processing facilities be readily at hand for every estate.

±Iierefore, aULL buu tihLe sma0LlestL ownUW th eiLr faci. lltes:; Uthe -1-4 Uea etCLiadtLes process their leaf in about 95 factories, with capacities varying between 3million lbs and iOO,OOO lbs per season.

3.02 lThe Ulac's tUea canI U proUUUesU ll UWU IVdyUv: 01 £10uI21. dUd CTC, the latter being the abbreviation for cutting, tearing and curling machines. These latter hasten the rolling and subsequent partial drying operauion necessary prior to fermenting and enable the fermenting to be a more even, controllable process. It is regraded in advance on the simpie roto vane cones which is the type of machinery installed in new plants throughout the world. Lack of foreign exchange, and the virtually guaranteed market for all of Bangladesh production in the past has hindered the spread of this type of processing machinery. - 5 - 3.03 While, on the whole, the quality of the made tea produced is adequate, there are great variations from factory to factory. Possibly tnis section of the industry has suffered more through isolation from worldwide developments, marketing pressures and the means of purchasing equipment, than any other. Drying is the most costly part of the operation; the high cost of imported fuel and tne old, not very efficient drying equipment has had a serious impact on costs. Much drying is done with coal; con- version to fuel oil is only just gathering momentum. Natural gas, practically all of which comes from wells in the Sylhet district, is not yet used for drying. Few estates have access to the electricity grid for their power requirements to operate machinery. In some cases, quality suffers from factories being overburdened at peak picKing seasons so that they are unable to deal adequately with their daily workload.

3.o4 Formerly, made tea was mostly sold in Chittagong, by auction. Estates had to send 80% or all but 20,000 lbs of their production to the auctions. The system was quite rigidly enforced by the Government as it enabled them to stop major leakages of excise revenue, amounting to Rs 1.10 per lb of made tea produced. As noted before, buying for export ceased in 1966, at which time Bangladesh and West Pakistan together became a net importer of tea and not just of grades for blending which had been balanced until then by corresponding exports; 1969-70 auction prices were abolt Rs 3.50, compared with the London price of similar grades at Rs 1.50 at the official exchange rate and prices since 1955 are shown in Table 4. Imported tea was also sold at the Chittagong auctions, the Government profiting from the price difference. Seventy percent of the tea, imported and locally produced, was purchased by three major blenders who, because of their dominant position and their unofficial undertaking to Government to keep the retail price around Rs 6.50 per lb, controlled the market as well as the prices.

iVV. TEA INDurSTx URGANrZA1A1U0NY

4.0l The Tea Association has been the professional organization of the tea estates. It had 137 member estates out of a total of 1L7. It was the body which represented growers' interests with the Government, obtained growers' import licenses and allocated them on an acreage basis to members. In fact, it treated the non-members as if they were members. It controlled the collection of statistical information which was passed on to Government bodies. Unfortunately, the foreign exchange allocation made to TA did not keep pace either with risina prices or with the increasing tea area. In 1969-70 it was still based on 1956 requirements, acreages and factory numbers. 4.02 The Tea Board has been a semi-autonomous body, controlled by the Ministry of (Commerce. Its functions were as follows: (i) formulation of tea policies, submitted to Government for approval; (ii) implementation of approved policies and programs; (iii) regulation and control of tea production and marketing: (iv) organization and promotion of tea research:

1/ As of this writing, April 1972, it is believed that a similar organization sti:Ll exists. The details of its structure are unknown at this time. - 6 -

(v) collection of tea statistics and their analysis. Its composition was as follows: the Chairman was a full-time senior civil servant, appointed by the Government. He was also the Executive Officer of the Board. Three members were elected by the Tea Association; two by the Tea Traders Asso- ciation; one was nominated by Government, to renres8nt the proprietarv estates; one used to represent the Central Government; one represented the Provincial Government; one was the Deputy Commissioner of Svlhet District. Two were technical members, nominated by the Government and one was nominated by recognized labor unions.

4.03 The Board's Tea Development Committee consisted of the Chairman, a Board member who used to be nominated by the Provincial Government, two members nominated by GOP, one of whom had to be a TA member. The Tea Research Station situated in Srimangal, was run and financed by the Board. This and all other Board activities were paid out of a cess of Rs 2.50 per 100 lbs of tea and by budgetary grants made to Tea Board. The Board's activities and policies had the confidence of tea planters. Its direct- ives have had power of law and have been administratively enforced. Probably the most important of these concerned the expanding of the tea area by 3% per annum. The Third Plan (1965-70) target was 10,000 acres; nearly 9,500 were actually achieved. Other aims were the modernization and expansion of processing facilities and the introduction of irrigation. The research objectives were mainly centered on the propagation of existing clonal stock and the development of other planting material. Lack of funds and technical know-how limited proeress in these areas.

V. PROSPECTS

5.01 In common with all the tea industry of the sub-continent, Bs-.ladedhA sufferz, from the fact that most of its+ tan uhe are we ll over 50 years old. Not only does this mean loss of vigor and production from the actual bushes, but also, as roted before, a --gipr pl nt. e tl and considering the circumstances and the resources of the estates, most prob-,bl_y w-isely, p-lantuLn efforts were more concer.trated o.ne are3s th& on replacements. In the future, always considering resources and short-term effects on production, consideratio may- need to be given to the replacement aspect.

5.02 One factor working against all forms of investment in the estates - of -Lwhich, of coaulse, replanu.tirLi s oine o.f the h1ea.viestL - .isi Ut%e i1LU.yU.' insecurity. This was caused by the land reforms that set a landholding ceiling of 125 acres. Most tea estates are considerably in excess of this; they were granted permission to hold the extra area only for five years at a time. Tne Bangladesh Government has nU1tiolalized sUUe estates, b-ut if private estates are to play an effective part in the future tea industry, they may require greater security of te-nure. One way of achievire this may be the grant of 99-year leases.

5.03 A further factor is that most of the estates were not owned by local investors and Government pronouncements in the recent past were iess than unequivocal as to their continuous security of occupation. One reason may have been that associated companies have estates on the In'lian side of the border too and they therefore tended to be regarded as actually hostile -7-

organizations. Recent developments may, hopefully, change this attitude. An early and clear declaration by Government on the future ownership pattern may be necessary to ensure much needed investment for the industry.

5.04 Technically, the implications are not only a reluctance to uproot and replant, tnereby foregoing immediate revenue for ruture improvement, but reluctance to invest in irrigation facilities. As indicated, good clonal stock will outyield seedling material by a considerable margin. How- ever, its establishment is dependent on irrigation for the first two or three years. It was noted before that losses are heavy in seedling tea. In clonal stock, that has a yield potential of up to 50% higher than seedlings, plant losses would be prohibitive without dry-season irrigation. Facilities may not be installed by privately-owned tea gardens until there is security of tenure and no risk of interference with estate ownership and assets.

5.05 While in the past there was a captive market for tea surplus to internal requirements, this is by-no means ensured in the future. At best, Bangladesh tea must compete for its former West Paldtan market with the comparable Ceylonese grades, that in the past could be landed in Chittagong for Rs 2.0 per lb less than the sale price of local tea. It is more likely, however, thait it will have to compete on the London market. Nevertheless, it is expected that there will be no major problems in selling the surplus, perhaps some 50-60 million lbs initially, on the world market, but certainly manufacturing technology and costs iust conform to that of potential competitors.

5.06 The lowest price of plain south Indian tea in the London market is slightly over 36 new pence per kilogram equal to Tks 3.10-3.15 per lb. Bangladesh tea will probably sell for a similar price. The local industry expects a drop in price from Tks 3.50 a lb to Tks 2.50 a lb, presumably in Chittagong and this would only just meet production costs also estimated at about Tks 2.50 a lb (see Table 5), excluding duties and taxes. The cost of placing tea on the London market (shipping, forwarding, brokerage and auction fees) is estimated at Tks 0.50 a lb leaving a very narrow profit margin only, provided the industry can be exempted from duties and taxes. The industry and Goverrmient are consulting on measures to overcome the financial problems of the tea industry.

5.07 In late 1970, an IDA mission identified a tea processing project to improve the efficiency of the tea factories and facilitate their expansion. Project cost was to be US$9.6 million, including US$5.0 million in foreign exchange. The project drawn up in the light of a non-competitive sellers' market may have to be substantially reviewed. Its salient features were the following: (a) factory electrification from the main grid; (b) enabling the renovation and modernization of existing manufacturing units by making foreign exchange available for spares; (c) replacing small factories and increasing annual capacity in accord with increasing production; (d) assisting in the organization for the use of natural gas for drying. 5.08 Provisions were made in the project to strengthen the tea research station and eenablee foreeign training fo'-^b griveen to sor-me- of its staff; h^pe - fully this can now be done more cheaply and effectively in Tocklai and Darjeeling. Their new, recently anleed, iscnal . 'ie l (Tocklai 450, said to be very suitable for Bangladesh) may now also become ava,1iab ,+ 1-lea+ for +tO+etng

5.09 Specific researchi proble.1 nO-0 seem +0 be' oe xrdd .e- gations into cultural practices, particularly pruning and skiffing and the correct u..Lingtrn an%-A'a tec,hr.iqueL L..L of, mul clJ4 ng, nder iriae-ro-4.e and r.on= irrigated conditions. It may, further, be desirable to review past work and on soil4-JL frtility, VL.L G.L. and 1 CIV 1A.~4.fertilze 1 WI practices.--VA . V J.A. 4CC A.Recent " U Work,AA_ .in A4 Tockl-iV-'-LU.J. 1. VJL. le± L4 U_LJ..L1EU ~ Darjeeling would seem to cast doubt on the belief that urea is unsuitable J 4-ea. 'PI,- s~ c, -..1A 'In, 4 n-.4- 4~ ,.P4,a4n.4.14 for 4 ea ILsL cu'd. L ,mportantL , Ln vlew of.the fertil14 zer manufacturing facilities contemplated for Bangladesh.

5.10 Once the tea industry is established as a foreign exchange earner _a 4..S +U- _- - _AA_ n AS-AA AA -_ 4+A;- +_ + SA n_n+1i4 LIU L J U saver IL A LL. U, £I%J uwv. uJ v UIVA. 1Xs.U V.JVVj .^ U VJ1AI UVW VA VVVJ'.LVl.A.Ls UJX necessary imported inputs, like pesticides, sprayers and irrigation equip- r..et, WLL-vtI are W- tILrL thelu industd- f.r.ancUiaLLD tLOUJ LJ.)cY, LVCge 1 LI1h opportunities and stability to do so. This, along with free information and exchange once agan available -with the world tea industL-y, may do rmore than anything else to make Bangladesh's tea industry once again competitive or. the world muarAket TABLE 1

BRAMIT.AflSH - SEGr.TOR qTTMY

A.REA UNDER DIPWFRFRNTT TR4 ArG.PE GlROTTPS

Acres PerePnt 1966 1967 1968 1966 1967 1-968

Seed Area and Nurseries 2,012 2,231 2,241 2.1 2.3 2.2

Young Tea (up to 7 years) 21,349 23,586 25,104 22.5 24.0 24.7

Mature Tea (up to 60 years) 48,721 48,240 50,073 51.5 49.0 49.3

Old Tea (above 60 years) 22,578 24,318 24,217 23.9 24.7 23.8

MTM.T 9466 L e~75r'98,r 3 10 3v 100.0 100.A 0 nA A TABLE 2

BANGLADESH - SECTOR STUDY

CONSTI'PTION AND PRODUCTION OF M4ADE TEA

Oversea Production Imports Exports Consumption= ------m lb ------

1952 52.3 1.0 23.0 30.3 1953 54.7 0.4 24.3 30.8 1954 54.6 0.3 26.2 28.7 1955 52.5 0.5 12.3 40.7 1956 56.2 0.3 24.8 31.7 1957 47.6 0.2 7.3 40.5 1958 57.6 0.1 11.5 46.2 1959 57.1 0.2 17.7 39.6 1960 42.3 0.2 0.5 40.2 1961 58.5 2.3 12.1 43.7 1962 51.8 0.2 4.? 47.7 1963 55.6 1.0 52.9 1964 63.2 0.3 5.9 59.4 1965 60.4 8.12 7.4 61.6 1966 62.9 3.25 - 66.2 1967 64.5 8.70 - 68.5 1968 62.9 8.40 - 71.3 1969 66.8 10.5 - 77.3 1970 (est.) 68.o 12.0 _ 80.0

1/ Not additive because of stock movements. Eight percent of the consumption was in West Pakistan. TABLE 3

BANGLADESH - SECTOR STUDY

COMPARISON OF EVAPOTRANSPIRATION AND MINIMUM

EXPECTED RAINFALL IN DROUGHT YEARS

Sylhet Srimangal Chittagong

Evap. Rain Evap. - Rain Evap.- Rain ------inches------

Oct-ober 4.6 2.5 5.5 1.5 2.2

NOVMe.m.10 a 0 AI'JV £~ n), £4*V CFO -_ .J * / -_ t4**.1. R

De e-Iib,.e)r = 3Q. - 3l

T3 w- 32 7 3 7 = nu n' li _ aA.str O I 4

I. 3, 2~~~~~~h0 - 7 I'.L,> VSL£49£4 94*I -

M-rch 6*'5. - 'J.J - U.)

April 6e5 3*7 3e5 '7 1 A AP A .L.L.U~ "I7) .I.. f.- *.)

iMPA- 5 v 6 10 w 5 7 * 1 8 Q7 r' i. ° i/ svapot-ranspiraf I.Ol

. /' rnup - .lI D

CO r-I I\ f - CC) UJ\"O 0' C) : rt t- C\lj n (10 C' \ 0s i-r4 U\ f\ CX)CO0 r- O O\ I 0 * 4, * * * * * l * . * $ \ C\j\J C\J C\J C\J C\JC\j CN J\ C\j NC\j (N 0

U) W E-

pJ 1 43

In O 4-i I C' 4-P E-l *L \C)0 t- cc) C) r C'J\ -tr J' .\C) r-cc) ON\ 0 .0 ~~ fVLCAI-\'ILr\ b . \.O\ '\D)\'0 '0 \.'0\D 0 \0C \.0 ~~'r-I ~ 0 I I 1 I I I I I I 1 Ii I I I I U) 0c .41 r\ '.O 0) \-- O)\ 0 H C\J c.Zt) 4u.\\0 C)--) 00O x~~~~~~~1 hA IA u Ice IAUxxU Asr, \0 ) \0\0 \)slD <)o \0u0 cni

(D rt: c)

IP4

h- lO \El- 00a\oC) HC\J \ ~t<) tv c) ,0 ID cD O`\ a ONOO\ O\ \ 0 ONON0\ 0N No\N, o\ 0 HIrH r1 r rH rH r- r rl rH rHH4 r r- r r H tj1U) BANGLADESH - SECTOR STUDY

AVERAGE PRODUCTION COST PER LB MADE

TEA ON A 1000 ACRE ESTATE IN BANGLADESH

Cost Item Tks per lb of Made Tea

Green Leaf Production

Staff Salaries 0.268 Labor (incl. fringe benefits) 1.070 Tools, etc. 0.-149 Fertilizer 0.151 Pesticides 0.010 Irrigation Transport to Factory 0.050

Sub-total 1.698

Tea Manufacture

Staff Salaries 0.010 Labor (incl. fringe benefits) 0.042 Fuel for Drying 0.034 Fuel for Power Generation 0.068 Maintenance and Spares 0.100 Packing Materials 0.190 Miscellaneous 0.010

Sub-total 0.454

Dispatch 0.050 Administrative Overheads 0.188 Miscellaneous 0.150

TOTAL TKs 2.540

Figure i Page 1

BANGiiADESi - SECTi-iR S LUI

RArNFAJ.L AND fVAPORAT'O-N

SRiLANUAt L>'5-04

20F

,2L / \ RAINFALL . EVAPCRATION- X- X

0 , r j I j I A S I

WATER SURPLUS ------SHORTAGE -- Figure 1 Page 2 BANGLADESH - SECTOR STUDY

RAINFALL AND EVAPORATION

SRIMANGAL 1966-67

25rF I / \

20 -

| / \ RAINFALL=-

15 I \EVAPORATION X X

/0 / AY /

A36 t I J I JI A 1sIJ S D FT 1A 1

19S60- .- A196 7

.------WATER SURt'LUS ~- 4,- --SHORTAGE.| RESTRICTED

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

INTERNATIONAL DEVELOPMENT ASSOCIATION

BANGLADESH

LAND AND WATER RESOURCES SECTOR STUDY

VOLUME IV

CROPS, LIVESTOCK AND FISHERIES

TECHNICAL REPORT NO. 11

FISHERIES

December 1, 1972

Asia Projects Department

BANGLADESH - SECTOR STUDY

VOLUME IV - CROPS, LIVESTOCK AND FISHERIES

TECHNICAL REPORT NO. 11

FISHERIES/'

TABT.F. OF OONTRTITS

Page No.

S-UIIA1fY !Mti COU1LUSOiS ...... i-iii.

I. !NTRODUCTION .1

II. PRESE14T STATUS OF INLA-ND FISHEIlES . . . 2

III. RESOURCES . . . 3

A. Rivers and Estuaries. 4 B. Impoundment Fisheries .L C. Culture Fisheries . D. Man-made Lakes .6. 6

IV. PRODUCTION POTENTIAL. 6

V. PROBLEMS AND CONSTRAINTS .8

A. Socio-Economi^ Factors .8 B. Resource Use Conflicts. 9 C. Administrative and Organizational Aspects .11

VI. I)EVELOPME14T STRATEGY .. 13

Vii. SUfG'ESTIONS FOR DEVELOPMENT SCHEMES ...... 14

A. Scheme I - A project for the development of fish- industry in the Sundab ars. 15

B. Scheme II - Pioneer projects on the development of 'Bheri' and 'Bheel' fisheries .16

C. Scheme III - Establishment of fish seed supply and fish culture demonstration centers .17

D. Scheme IV - Pioneer project in the culture of Indian major carps .17

1/ This reportwas prepared by Dr. V.N. Pantulu. Fishery Expert. Mekong Secretariat, ECAFE working under the FAO/IBRD Cooperative Program. Table of Contents (continued) - 2 -

Page No.

E. Scheme V - Pilot project on the culture of live fishes in ponds and tanks unsuitable for carp culture ...... 18

F. Scheme VI - Pilot project on the culture of giant fresh water prawn (M. rosenbergii) ...... 18

G. Scheme VII - Pilot project in brackish water shrimp culture ...... 19

H. Scheme VIII - Development of fisheries in man- made lakes ...... 19

I. Research ...... 19

REFERENCES ...... 20

List of Tables

1. Principal Types of Commercially Important Fish Species in Bangladesh.

2. Analysis of Economic lleturns from Different Operations.

3. Principal Types of Gear Operated in Inland Capture Fisheries. CMlvTPV Avn rrMrT.TTr1GTt'1CZ i. As a deltaic country laced with rivers, estuaries, ponds and lakes, B-.gladesh is ideally suited for inlaMd fisherJr I nvelop"nt. Yet in the past the economic potential of such fisheries was neglected, pa-rt'ly duae +W thve ufishb,, of '4 a1rt buvn.4'4. ,,mo .e becausaQn ^r authorities did not understand the need for managing fisheries, the grave Av.nger ofaPdcl rir. fis stock, orA +nha fe asl1ity of incasirg fish production by using improved techniques. From top administrative 1 -An A- *+A 4a h+Qkr i nv-tA A; a-aaaoaaaA f4 ahnnn,av +1,0 nnmm- omn Aal .&fi Vii x.L L4t uVJ.Sf W V a *fls4 ao07t. Wa. SHiw9-J.tJC.-4 alw- V* - J*IBtflL. LCA fishing sector has been plagued with problems of a socio-economic nature, resource al-loc"atior corAflic+vs, a- orri-zatiwo.l cousion. a.nd prolifera= tion of responsibilities. ii. Never has fishing been a respected activity by the general I...,uHt. rIO....J of~ .n '7 r.llo co.P..ercal f .she..en. are nl comtma-LLL4LL L.y fU iv 13J. Loll f AILL_L±J.Vll L.I.JIU1MLV.lUL. .M L IOIa fLL0LA-.LLLLLS exploited by lessees and fish merchants ana thus kept in a state of1 pe rpeUalW indeLUtU 1jbUvdns. * ll.LdIJcL U.3 UlaJ.L IJ± jJ±tVZ1lO LpOILreetfromL.he making improvements in their vessels or equipment; and the lack of transportation from fishing sites to arkets disco-urages them from taking m-ch initiative or catching more fish. Such lack of assistance for fishermen accurately reflects past Government policies regarding the entire sector. In determining the use of available ponds and estuaries, the Government chose to dLsregard cost-benefit considerations that indicated a strong preference for expanded fisheries, choosing instead to proceed reclaining land for agricultural purposes, draining ponds and building embankmnents across estuiaries where fishing had yielded rich returns. iii. In still other ways fisheries have been victimized by the decided lack of concern about water pollution resulting from pesticides, jute retting, and industrial waste -- all of which have toxic effects on fish and the organic food they eat. iv. In no way +.hhere 'bOOn a gOT-rMP.e effort- top.nroecn e.lther fishermen as a group or the fish stock of the country. Not one but four d-i ff erent orgar.izati olns ram -- c+.isrvthe fi shing stor+n maing it4- ner y impossible to coordinate programs and activities. One group, the Revenue T'onnn4monI-n+. uAirbcn nr;m::iYnrr;noaE. T.Tncz -raironin nnr4 nnr)rmnr,-- rn nf' f; ah=i ax leased all bodies of water in various portions with exclusive fishing rig~hts-^ to the hih bidrsc.r T.ci .icl after pa-rin a steep price the lessees denuded these areas feeling no obligation to replace the stock.

UnfortA4.nate l.yL, -i +-,,+.JJ t. 4. . .i.j3-e o hd ,C44_;-- n f-ladh. the best methods for replenishing and improving stocks have not been in- .. AsL -a , 4 ,v -PA aL,-., A,-_.--1 ____,,,4- ,,ns+-; + Cl-A . Al +h,I-Ugh y.avy.,,A dKEJveoI.entA.' U v . gau4.5 A i.hough resea1ch1 is a hi-;.gh1". priotJAy, ±4.l l.. . could proceed immediately based on research done in West Bengal which has V- -4he1,,oe the re-lation- idAent+i1.54014LJ.UO.L-6cCal t-e150 rrai.L01 Jn ar.dUIL.±4044 fih,e l.- -4.e1 Se. 0 'AlU..LLUJ.L151V4. 0 cons4deringL UV.LL4L 1A5 U14. 4 J.atL.31.V4' ship now existing between India ana Bangladesh the market city of Calcutta

4'A. 0~~~~~~ .-for.hn +the V551l-- adesh--- fis aI'W oC in.4_iir . wouldlagal5 n beh a purchOaser 3 - 11 -

v. B-y oncentrating on i-n+1+and fi s h e riesrl,hMfIt'r.c In, niil b'h rc re a +n increase yields. In the short term, expansion of fisheries may give a livelihood to thousands of re+u-r1ing evacuees who-d losv boats ps so during the cyclone or the war. Over the long term fisheries could provide esscential protein fo'r1 WI1n in,m.i. To meet tihens-e twnao goals, several specific reforms and projects may be necessary. As a first step, it is suggested that+a only o. ti _be,-shnl_ charged wuiit-,Af1u1 responsibi for all aspects of the fishing industry. Instead of continuing the practice of scitionin-in fishing -i4- +the gove--.mn.+ migh+ give each f- sherlmn the 4.4.. - -Fl.&= -.1 -11. L:i1- _ 5.'V14 Ai1iSL 5=11 4V -.i..S 4.4 01 .- -Of LIL freedom to fish wherever he desires, provided he has proper equipment and skills To avoid exploitation of this prnactice, the gove=n-.m.ent could llcens fishermen, thereby protecting them from an encroachment that would deplete

e+ n I-, - tm,A A ,-.a .e 4,-n ^ e-A ,n+-_-1_ ¶.f,n_ '^.n-, -.; + n 1- a A4 i-.; n n-i- A I A in villages near their fishing grounds, facilities constructed for collecting -rd4 es.tn -helr a-.d-ragements-achs -,,ade for s;wiPt trar.sport to the 01.- '~-"~..4 LIAIOS.- 4. 0 LOi i , 0.4±1 cx.4.1 OJA65 -ALiuo l 11014c0 4. iJ. .! ...LI LI.]a.0IC ijJ. JvJ. LI LI v. LIAAMO fish markets in Bangladesh and Calcutta. Once the fishermen were reestablished, each0la4 sisrcI couldi .U Unaugarate a Ued-.UIA f of..1.ar 4.fi.suu where fish culturists could learn production procedures and obtain the necessary

J1. 1-O iCOu , UL1C1U1.dC±-i,tie' i oUo dIu t:eLjL.U_P14nh1

vi.V.]. ±Il11UGIJI,,rleit LU±6.b CL.L1-0efforts CUUI.LUc--- beunderta'-enDEO-l UIIOll idAOhiK toU obtiUUL,d.Li.& ±e-gIZi±dL.LUllegislation protecting fisheries and guaranteeing that all available water would be presez.-ved for fis

(a) To rehabilitate thousands of fishermen returning to the Sunndarbans, traditionally the most productive fishing area in the country, a project has been identified to develop capture fisheries. Boats and equipment couid be provided on easy-credit terms to project participants. The initial outlay for the project might be about US$2 m for each of five units comprising 1,000 boats and nets.

(b) To improve impoundment fisheries, ponds of about 1,000 ha in each of six selected provinces could be established as development projects, entirely managed by cooperatives of active fishermen. Each impoundment may require an initial capital outlay of $500,000. - iii -

(c) As an initial project a center for demonstrating fish culture and supplying fish seed eould be established in each district. Each fish farm might cost about $100.000 initiallv.

(d) For the intensive culture of carns one pond with an area of about 4,000 ha could be selected in each tii ctrirt. All necessarv inpnu_ts col ti he supplied by the district demonstration centers. Though the iniotl t-.apit1 outlay may vary frnm pond to pond, recurring costs for inputs might be about $300,000 Iper pond.

be used instead for the culture of live fishes. The success of such a project i4ng- depend on the aval- ability of supplementary inputs for feed. A pilot project . cost a[o U r.

(;f)~~~~~dvlp.rtin Reen o'hler par-s of thbe world Jndi=~ ± / ecentZI u UevelopiIt.L U _£1 UlIJI± jW U L0 ULIL WUJ. .L L %AL.. cate that the culture of prawns can be very profitable.

TTencefl an:IUW invesW.n-Lii V e S LjI~IjU of-40±L d)$.11 I -,,illionI.L L.L.VLOLI AIi=.Jry UVdeve laVO-L0V op procedures for breeding and rearing prawns in captivity anld cultured in ponds. k g) pilot project t o pro1i-IIoe sIhuLimp cultu re1 brakLshUin water might be implemented with an investment of $1 million, buldling on IlI kUJ-oWL value of suach fish as a foreign exchange earner.

(h) A fishery development project could be specifically prepared for integration into river valley development projects, to take advantage of newly-formed man-made lakes.

BANGLADESH - SECTOR STUDY

VOLUME IV - CROPS, LIVESTOCK AND FISHERIES

TECHNICAL REPORT NO. 11

FISHERIES

I. INTRODUCTION

1.01 Inland fisheries are of great importance in Bangladesh, since as an economic activity they rank only next to agriculture in importance and furnish over 860 of the animal protein requirements in the diet of the people. Over 5 million inhabitants of the State derive their livelihood, directly or indirectly from capture and culture fisheries in inland waters, comprised of rivers, fresh and brackish water impoundments and inundations of various sizes. Freshwater fisheries contribute to 90% of the total fish landings in the Sate and provide foreign exchange earnings of about Tks 15 million. Traditionally, inland fish are a very valued item in the Bengali diet. Once, in the not-too-distant past, these fisheries were considered adequate to furnish the clietary requirements of the people of the State. In the recent past, however, a combination of events, mentioned elsewhere in this report, has changed the picture radicaIly and, at present, the average per capita consumption of fish and consequently of animal protein in the State is among the lowest in the world.

1.02 Rapid population growth; injudicious fishing practices; lack of adequate governmental support for fisheries development; favoring agriculture in all resource use conflicts between agriculture and fisheries without an evaluation of relative benefits have been the causative factors for -fish production not keeping pace with supply needs in recent years. Hence, the already chronic state of protein malnutrition has deteriorated further. The one obvious way out of this impasse appears to be an immediate implementation of a program of action for development of inland fisheries.

1.03 Unlike marine fisheries, inland fisheries are labor intensive. Production centers in this type of fisheries are in the vicinity of consumer centers thus obviating the necessity of expensive refrigeration, transportation and marketing operations. A traditional base in inland fisheries operations and industry has existed for many centuries. Inland fishery development, unlike marine fisheries, does not require high inputs in the importa.- tion of mechanized craft, expensive gear, time consuming exploratory and preparatory activity to locate fishing grounds and train operatives in skiLls to which they have not been exposed before. All these factors may rende;r an all out effort to develop inland fisheries essential if significant increases in fish production are to be achieved within a reasonably short period.

1.04 Whi:Le a need may exist for immediate improvement in fish production, the extent of such a need, the magnitude of the gap between present demand and production, and projections for future supply needs cannot be estimated with any degree of exactitude for want of essential basic statistics. - 2 -

II. PRESENT STATUJS OF INLAND FISHERIES

2.01 Available statistics on inland fisheries are unreliable to the point of being of no value. Estimates of fish production given by governmental agencies are often at variance with each other. Nevertheless, the total number of active fishermen in the year 1970 was estimated at 500,000 and the total production of fish from inland waters at 730,000 m. tons. Considerable quantities of fish (10,000 to 15,000 m. tons annually) were being exported to India till the year 1964, after which these exports ceased as a result of political conflict and subsequently due to availability of increased supplies in India itself. Carrently, the export trade is limited to moderate quantities of prawns and dried fish captured from inland waters to countries other than India. Resumption of trade with India is expected to proviae a strong stimulus to inland fisheries activity.

2.0T2 Inland fish production in Bangladesh is derived from the following. sources:

(a) capture fisheries in rivers and estuaries;

(b) impoundment fisheries in brackish and freshwater areas;

(d) man-made lake fisheries.

2.03 The principal agency responsible for the development of inland fisheries is the Directorate of Fisheries, which operated under the administrative control of the Department of Agriculture. L The control of all water bodies, with the exception of privately owned ones, however, vested with the Revenue Department of the State, which leases out exploitation rights to individuals by auction, on a highest biader basis. Again. aeveloD- ment of infrastructures related to fish marketing, such as fish lanaing terminals, cold storages. ice Dlants. fish processina plants. etc.. is the responsibility of another autonomous organization, called the Bangladesh Fisheries Development Corporation. Yet another organization, the Coopera- tives Directorate of the Government of Bangledesh is responsible for the nromotion of fishermen's cooperatives. The DeDartment of Agriculture is charged with the function of coordinating the activities of all the above organizations, f/eyenpting the Revenue ePnartment.

All publir bodies, like river, lmTn1nnments, estuarie-q etc=, are divided into small sections styled locally as "shairat Mohals" or "Jalkars". >Lhts of expEloi tntiorn;in Peah of these unintsc are auciot;ned off onna:,h;ghest bidder basis, at periodic intervals, for specified short time spans varying between one to six yeears. The lese s.who are generally fish merchants or money lenders who have adequate capital to pay the lease amount, have the exclusive ri ghts of exploitaton in the water bodies taken on lease by them... Fishermen who intend to fish in these areas have to pay exhorbitant rents

1/ Since this paper was preparea, information has been received that the .rectora te of iLsheries is now adiUdnis tered by the newly- created Ministry of Forestry and Fisheries. - 3 -

and surrender a pre-determined part of their catches to the lessees, based on the fishing seaso.n, lenth. Of the boat, nat+i-ie of bear, etc. The fish harvested are purchased at the fishing site by middlemen known as "nikaries" who usa ,]y the agents of the lessees. -h e -r offh at the site is dictated by the middlemen, which is invariably to the disadvantage of the 4 r.hean.e. Themi-. 0 poor 4 cshemen InavTr e - Ppe rfrbn +, oiisubrj+ +n +1tot -+em 4.U~~ LO IU~,$ . .-S* jw .4 ...SIA -'J l~tfA *- -V . F -'± . ¼J -'. WV' 4 h-I.tW 4 '. SILt. since they are indebted to the lessee, having taken money on loan from him at an U,S-'OllS r,4-a o-4 in+'e +- pay fonr i+ cp- 4-.,e rP-,dnh a v aLt.~uj J 'ICO .1. a U .4 -. 441~LlU-. .;;c U u.j% Ja.J4.U WLJ .LAJ. V.4. av.. 'LJ Va..± - 1±L.~ -. .V41 the fishing operations and also for his and his family's sustenance during 4the fishing seaon Fi., haresed are ma-rketed through" wholeaesrh Ull~ ± .Loi"JJL, V1d144.' 1.4± llar.vest v~1. C" JIId2~..Lr Wu u UJ4.4. '4 L 6.lLw r auction the catch to retailers in big cities. In small towns fish are

._A4 re C45___1 1- - 4., .-,A '-_4_41 - M1TD4 _US: r .- .-_-_ _ _ ------4 4A 4'A L.LL2. 1d..L,Y iLae.L uu (I,JaJ. vu6I1 .:;L a...Le;00 Cr L -LO U01LACL_ L_ ± C0LJU . V1UtL -"I .L' U CGU the landing terminals and very often is marketed in an unsatisfactory condiL.tion o preservation. Doe fish, particu.1arly those caUght11 in mote areas, are sun dried. In recent years, some private companies have set up freezing plants in Chi tagong and Khuila for freezing shrI.ps and prawns.

2.OU,- nr K_ Fi;shermrlen.., L operate a variety of gear rarnging_ _ _, _ fromnt pr_irUtLvU, types of fish baskets and traps to the most efficacious and modern types of gill nets and seirnes-*Bangladesh's fisheLr,,1en111e±dli &±-e credie -uwi Uco.- siderable traditional skill and ingenuity in their profession, but eke out only a marginal subsistence from theLr activities due to exploitation by fish merchants and lessees. Bengal is considered the cradle of fish culture practices and. fishermen have considerable knowledge and skill in these operations.

2.06 The Directorate of Fisheries has, as its main functions, maintenance of fish ponds and reclamation of derelict waters taken on lease from the Revenue Department to be subsequently returned to it for leasing out for exploitation. Reports indicate that due to various reasons, technical, administrative, organizational and socio-econonic, very little positive, concerted development activity is pursued at present, with the result that "iproduction of fish in the state is not keeping pace with the gro-ing demands."

III. RESOURCES

3.01 Bangladesh is very rich in its inland fishery resources which are considered to be not excelled either in area or potential by any other freshwater fisheries. The main inland fishery resources are: (a) rivers, estuaries and their tributaries; (b) fresh water and brackish water impoundments (Bheels, Baors, Haors, Bheris, Bhasa Badas, etc.); (c) man-made lakes; (d) tanks and ponds; and, (e) paddy fields. No authentic information about the available areas of these different types of waters is availabl.e. Over 200 different species of fish and prawns have been recorded from these waters, of which about nine groups comprised of 27 species can be considered to be the principal varieties from the point of view of their economic value (see Table 1). - 4 -

A. Rivers and EstuiarieE

3.02 The Padma, the Meghna, the Brahmaputra and their main tributaries are important sources of capture fisheries for several species of fish, the more important of which are the carps, the catfishes, the feather backs, the murrels and the giant freshwater prawn (see Table 1). These rivers, with the exception of the very fast flowing sections, are also the sources of harvest of the much valued migratory fish, the Indian shad (Hilsa ilisha) which affords a lucrative fishery in the monsoons.

3.03 The deltaic region, commonly referred to as the "Sundarbans" is interspersed with numerous estuarine distributaries of rivers, inlets of the sea and defunct streams, which are inter-connected with numerous channels. The whole deltaic area has the appearance, consequently,of a conglomeration of islands. These estuarine areas are considered to be among the most productive in the world and support valuable fisheries of the anadromous Indian shad (H. ilisha), the Bhetki perch, the Indian salmon and several other threadfins, the Pomfret. and several species of marine prawns and fishes (see Table 1).

3.04 Fishing generally goes on in rivers and estuaries throughout the year, though maximum catches are obtained during the winter months (November to February) when the velocity of current and depth of water are relatively less. The monsoon season (July to September) marks the height of the main fishing activity for the Indian shad, which is perhaps the most important single fish species in the area. There are two runs of the shad in Bangladesh rivers, one smaller winter run, and a second larger monsoon run which provides the bulk of the catches of the species.

3.05 In addition to these capture fisheries, rivers and estuaries are important sources of "seed" ('-.atchlings and fry) of cultivable varieties of fresh and brackish water fishes and nrawns. The rivers supnort a lucrative "fish seed" industry for carp culture and the estuaries provide the tseedt" required for the extensive brackish water fish farming industrv in the "Sundarbans".

B. Impoundment Fisheries 3.06 Freshwater impoundments. Ox-bow lakes, low lying areas in the zone of 1n,ni 'ation on ei-ther side of the -rlver an deflnc streams ici main i ninr seasonal or perennial connection with adjacent flowing rivers or streams, varios1ly st-yTled as "1Bheels"O, "Baors" and "H1-aors", are categorized as impoundment fisheries. These water bodies being generally shallow and enrached by t-he fresh supplies of slt+ brought in byr ann1l flods r very productive. Young of several species of riverine fish enter these areas along T rt th flood - -atersevey -rar. After the floods -ubsesi +esh water bodies, generally, get isolated from the main streams. In some cases these areas are deliberately isolated from the main stream after the flood season by the construction of embariments and sluices. The young fish that are stranded thi1±ere, giow rappidly _aLpro-vide r ich darves's in Ile d-y season before the onset of next monsoons. This cycle of natural "stocking"t and harvesting repeats itself every year. Harvests from these water bodies comprise mostly carps, catfishes, murrels and feather backs (see Table 1).

3.07 Brackish water impoundments. As in the case of "Bheels", low lying areas on either side of the estuary, defunct river beds, tidal inlets and swampy areas get inundated during high tides. The tidal water, during certain seasons, carries large numbers of young of some important species of brakishwater and marine fish and prawns. Some of these areas known as "Bheris'" or "Bhasa Badas" are reinforced with embankments and provided with sluices to control the inflow of water and ingress and egress of fish. Fishermen who have a traditional knowledge of the seasons of availability of the young of desired species of fishes and prawns in the estuary, let in tidal water only during those seasons, thus "stockingt" the area with the fry of desirable species. The young of fish and prawns thus secured grow rapidly in these shallow, productive waters, which offer a relatively stable environment, and provide rich harvests. The main species that contribute to catches in such environments are the mullets. Bhetki Derch. threadfins. and several species of prawns (see Table 1). In some 11Bheris", fish are harvested before the onset of monsoons and rice is grown on the land after is flushed by rainwater, thus utilizing the same area alternately for paddy and fish culture.

' . U U-Iure Fishe1ies

3I_8 P.onds and tanks. There are innimerable ponnds and tanks in Bangladesh. Every other house in villages and small towns has a pond of its ownM TrI r1iition, there are a largp nimbehr of irrigation tanks. All these water areas are, or could be, utilized profitably for raising fish, generaLLy the India-n major carp complex, yielding valioable crops of protein food. Returns from these water bodies depend on the fertility of the soil, inputs and efficiency of managem.ent techn-iqu_es adopted- ponds a ewva1a as nurseries for raising fry and fingerlings for introduction into fish c-mll-ture ponds and tanks. This fish f-rv trade, besides making ava±lable the necessary ft eed" for fish culture, is a very remunerative operation.

3.09 Paddy fields. It is customary to consider paddy fields also as SOmLrces nof Nsh production. A wilci cron of fiszh ii_mnillv arnws in some fie:!ds in the region because of the young fish that enter along with irrigation wa-ter. Tn some case, yoring fish arp Pli'hPr+.Plv inthrodruiedAri anrd +.hp fipldsq mri prepared for paddy-cum-fish culture by heightening the embankments and digg:ing protectivre trenches. It is a-so t-heorized that c,ul tivratior of fich invi pmrl fields, simultaneously with paddy, is mutually beneficial to fish and the plar.ts. Toe.Tr. at gav-r,i-v'ren of eamrer-.al f;shez rkrri1nA4 ne the writer, has shown that in the context of the present day methods of inlntensivepad; i-ii.)-cQi ro nvi 1A,r c-U'tivtionyr',,1 +iArrti+A jiv which.wiji4rh inlue-einel-1 ii-lo +h.k *servcg ~of,f' ~-~+pesticides r-A -"A.,i- Iherbi1,)yI - - cides toxic to fish, successful fish culture is not compatible with rice growing. Hence in +hi8 qriutvi+. paddt+yr fielfia PirA nnt rega?rded as source of fish production, particularly since Bangladesh has to resort to modern aqethods of rlya c 'tivatii " he cereal nee -f the popmetiona adequately met. - 6 -

D. Man-made Lakes

3.10 Man-made lakes could be utilized for the production of fish. The TrV-rnaP.- 4 ,nd o +- -r al A na-nqnsno+ i dA.hl D nr+4 +tt; e so f i; ci I~L4 ta± U4~ . X QO7WL V IJL-1. .VWV_LJ _V 4V [ .fl '.l J 4.A U'.A |J 1tJ4AJA CAJ.. UJ U.J.'.- V1J4 J. L )J annually. Production from these lakes, however, depends on the adequacy and effl'4 cacy ofI .he ,anagem.nt program adopued. T1,,,.us, .W41hnnaproper anagement Bangladesh's existing and future lakes could be valuable sources of fish

produuc t.LtOn. It' .LD dL-UaIlso a-fAaIcI dA4 LI tha Uct o.LUn of .dJars cou't4Od.caUs considerable damage to erstwhile river and estuarine fisheries depending on a variety- of ne locatinn prto'lfetrso We m fsh fauana va-i'. 0±L N .L0d L,LULI CULLU UjJCI.Lct±OLLId..L ldLt-cUIUi-0± UIIC Witd .IL, I.-L I I of the river, and the volume of water impounded. Thus, man-made lakes cannot b----econsidered- an ur-,ixed blessing to fish production.

IV. PRODUCTION POTENTIAL

4.01 Estimation of production potential of a living resource like fish, LUhegrowlth of biomrass whlich depends onl varlous blotlc and abiotic environmental factors is, at best, difficult even if all the basic statistics and information relating to fish stocks and the enviromruent are available. In the case of Bangladesh, where even the minimum of essential information is not available, the est,imationl of the total production potential of the country is impossible. No reliable data exist even as to the extent of difIerent types of wiater bodies that could sustain fish Life. in all past publications where figures of different types of water bodies were given, it was specified that the information was incomplete and unreliable. Hence, no efforts have been made here to arrive at even gross estimates of production potential based on per hectare fish harvests in similar bodies of water in geographically contiguous regions. In view of this, figures of production potential presented in this paper represent fish harvests possible, or that have been attained elsewhere under broadly idential conditions on a per hectare/year basis. Since no data are available on the current per hectare harvests or the level of utilization of different types of waters in Bangladesh, it would not be possible to assess to what degree the resources are being under-utilized or unutilized at present.

4.02 Rivers and estuaries in Bangladesh yield, in addition to non- migratory fisheries, rich harvests of the ilisha. Estimates of landings of this fish in the years 1955 to 1959, place the total catches at 20,000 metric tons per year. It is generally believed that H. ilisha stocks are over- exploited. Large numbers of young fish of the species are destroyed by the use of improper fishing methods. Industrial pollution is suspected to have adversely affected the nursery and rearing areas. Hence, an effective management program based on adequate prior research and an efficient program of exploitation increasing harvests of this fish, several-fold. Non-migratory river and estuarine capture fisheries in tropical waters could yield 12 to 15 kg/ha/year and 15 to 25 kg/ha/year, respectively. In addition, there are a large number of seasonal migrants into the estuary like marine prawns, threadfins, catfishes etc. which contribute considerably to the fisheries. Effective exploitation of the estuarine region could increase catches from these fisheries considerably. - 7 -

4.03 Impoundment fisheries in fresh water regions could, under conditions of adequate management, yield anywhere between 100 to 400 kg/ha/year. Brackish water impoundment fisheries are generally more productive and yields ranging between 400 to 1,500 kg/ha/year have been obtained in Bengal (India) under similar conditions.

4.04 Recent advances in culture fisheries techniques have made the realization of high yields from these fisheries possible. Techniaues of artificial inducement of spawning of species that normally do not breed in stagnant ponds, and effective methods of rearing young,have made possible the supply of large numbers of young for stocking, thus removing a major constraint in the development of culture fisheries. The main types of fish culture suitable for development in Bangladesh under the present conditions are:

(a) Polyculture of Indian Carp Complex (C. catla, L. rohita, C. mrigala and L. calbasu) in ponds and tanks.

(b) Culture of live fish (C. batrachus and H. fossilis) in cages, ponds and tanks not suitable for carp culture.

(d) Culture of mullets (M. parsia and M. tade) in brackish water ponds.

(e) Culture of brackishwater shrimps.

4.o5 Intensive culture of Indian carps could yield harvests ranging from 1,000 to 2,500 kg/ha/year. with fertilization of ponds and supplementary feeding. Morpho-edaphic features of the ponds and water supply ana circula- tion also Dlav an important role in fish Droduction from culture fisheries. Yields currently obtained through culture of live fishes in some South East Asian countries vary between 2,000 to 7,000 kg/ha/year, depending on the inputs, particularly the nature and quantity of fish feeds used. Yields of about 1,000 to 1,500 kg/ha/vear are currently being obtained in pilot giant prawn culture operations in Hawaii. Mlullet culture operations in brackish water ponds could also vield 500 to 1.500 kg/ha/vear of fish depending on the fertility of the ponds and management practices adopted.

4.06 Fish yields ranging between 35 and 150 kg/ha/year could be realized from man-,made lake fisheries depending on the morDho-edaDhic features of tiB lakes, pre-impoundment preparations anci post-impoundment management effort. V. PROBLEMS AND CONSTRAINTS

5.01 Despite the richness of the resource and the importance and value of fish in the economy of the country and the nutrition of the people, inland fisheries have been a much neglected sector of the economy. This was in part cde to the prevailing abundance of fish in the past, but mostly due to ignorance on the part of authorities about the need for management of fisheries, about the danger of decline or decimation of fish stocks through improper resource use and about the possibility of increasing production several-fold, through the application of improved management practices.

5.o2 Problems and constraints that beset inland fisheries could be broadly categorized under three heads: (i) socio-economic factors; (ii) resource use conflicts; and (iii) administrative and organizational aspects.

A. Socio-Economic Factors

5.03 Emigration of fishermen and boat builders. Reputedly, Bangladesh fishermen have considerable traditional knowledge and skill in their profession. Similarly, boat builders in the State have a remarkable proficiency in building boats suited to local conditions and exigencies of particular fisheries operations, acquired traditionally, through centuries of' experience based on trial and error. Studies by boat building experts in WV.Bengal (India) have sho,,m that very often traditional designs are superior to ner ones experimented upon. A vast majority of boat builders and fishermen are Hindus by religion. Partition of India, Indo-Pakistan political corflict, and recent civil war, have been responsible for large-scale emigration of Hindu fishermen and boat builders to the adjacent Indian state of W. Bengal, Assam and Tripura. The 1970 cyclone is reported to have taken a high toll of fishermen's and boatmen's lives and fishing craft and gear. All these events have resulted in a precipitous decline in fishing effort and loss of traditional expertise in fishing operations.

5.04 Economic status of fishermen community. As in any other enterprise, the output from fisheries has a direct bearing on the well-being of the operatives, the monetary incentives, equipment used (craft and gear) and amenities for the pursuit of the occupation. Fishermen of the State are a cruellv exDloited communitv. hovering on the fringe of subsistence. Machina- tions of lessees and fish merchants keep the fishermen in a perpetual state of indebtedness. Tack of canital prevents improvements in. and nroner maintenance of, craft and gear. Lack of adequate supplies of ice and quick transnortation to market centers results in fenr of spoilage of catches and removes the incentive to harvest more fish. Lack of governmental protection against dacoits and vild animals and want of camping facilities and supnlies of necessities of life render fishing in remote but productive areas of sundarhans dangerous and unattractiveP All these factors resuilt in sbh- optimal operations and production.

5.05 Productive areas gone to dereliction. In the pre-partition era,

__ VPrTT nhT Five h-_-.mkivTinter itnonnt, nt fisherias were owned and -9-

managed by Hindu-zamindars (landlords) or their agents, who had considerable knowledge of their operations and had a strong profit-motive to maintain them efficiently. With the exodus of these Hindu-zamindars and their agents t0 India and the resultant loss of expertise in the management of such fisheries, these waters have become derelict due to siltation, breached embankments, proliferation of aquatic weeds and broken sluices.

5.o6 Control of the industry by vested interests. Fishery exploitat:Lon rights and trade are controlled, from the fishing ground to markets, by a chain of money lenders, middlemen and wholesalers, who manipulate the supplies, price structure and the entire trade to their own advantage. Lack of adequate capital forces the fishermen to take loans from money lenders, who in many cases are also the lessees of the water areas under exploitation, at high rates of interest, against forward hypothecation of their fish catches.

5.07 Multiple ownership. Many privately-owned fish ponds and tanks :in villages are under joiint-ownership of brothers, cousins or otherwise rela-ed individuals. Often, one of the owners leaves the village and lives else.- where in pursuit of employment, and loses interest in developing the pond or bank for fish culture purposes, The co-sharer of the property residing in the village is, in such cases, usually hesitant to invest money for culturing fish in these water areas for fear that the absentee sharer of the property -ould claim his legal right to a part of the profits derived therefrom.

B. Resource Use Conflicts

5.o8 When a conflict arises in relation to the use of the same area for development of more than one resource, an economically sound method of compromise woDuld be to decide in favor of one or the other resource on the basis of cost/benefit considerations of the conflicting uses. However, very often, the merits of fisheries are not even considered while making any resource use decisions. Such an indiscriminate subordination of fisheries claims to all others haF been one of the main reasons for the decline of fisheries, as elaborated hereunder.

5.09 Agriculture versus fisheries uses. It is reported that large numbers of "bheels" and "bherist in -Bang adesh yielding rich fish crops are being reclaimed for agriculture without any consideration of the fisheries losses resultant on such reclamation practices. Experience in several neighboring Asian countries has clearly shown that monetary benefits real-iz- able from fisheries could be about several times the benefits from agricuLture, under identical conditions of management and inputs (see Table 2), not to speak of the valuable protein "crop" derived from fisheries as compared to the carbohydrate crops yielded by agriculture.

5.10 Another area of conflict between agriculture and fisheries is the indiscriminate use of pesticides without taking proper care to avoid contamination of adjoining fishery areas. Most pesticides are directly toxic to fish. Even at sub-toxic levels, they are assimilated into fish flesh, rendering it inedible to even poisonous to human beings. There is no denying the fact that pesticides have a very important role to play in agriculture. Hence the brief is not for prohibition of pesticides but for their judicious use and avoidance of contamination of fisherv waters. - 10 -

5.11 Flood protection embankments. Several flood protection embankments have been constructed without due consideration of their effeCts on productive fisheries. Areas subject to periodic inundation on either of the rivers or estuaries serve as spawning and rearing grounds for several important species of fish and prawns. Denial of access to such inundated areas seriously jeopardizes recruitment to capture fisheries. as stated earlier, many of the inundated areas are being, or could be, utilized for impoundment fisheries. Here again, the brief is not for complete ban on ilood protection embanklents, but for a proper evaluation, in each case, of their probable effects on fisheries leading to planning of measures calculated to eliminate or minimize adverse effects on fisheries. Such ameliorative measures are easily feasible. It may even be possible, with suitable modifications in construction designs, to turn these flood protection structures to the advantage of fisheries.

5.12 Industrial and domestic pollution. Growth of industrial complexes and urban settlements that release untreated effluents into waterways, alters the aquatic environment to the detriment of fish stocks. In recent years, many such developments are reported to have adversely affected fisheries in East Pakistan. Adequate treatment of industrial wastes prior to discharge into waterways could minimize or eliminate the damage to fisheries, while proper treatment of domestic wastes prior to release into waters could appreciably enhance fishery yields. A case in point is the sewage-fed fisheries in West Bengal (India) where inordinately high yields of fish are obtained.

5.13 Jute retting in fish ponds. Indiscriminate retting of jute in all types of water bodies has seriously affected the culture fisheries in Bangladesh. Steeping of jute for long periods results in the increase of pH of water, procluction of hydrogen sulplhide and other obnoxious gases toxic to fish and fish food organisms and brings about other environmental changes unsuitable for fish. Large quantities of earth added to keep the jute submerged create a problem of siltation of water areas. Outflow of ret- water in large quantities into small streams and inundations is inimical to the survival of eggs and fry of several important species of fish. Adequate measures to isolate jute retting waters from fishery areas would go a long way in minimizing the adverse effects on fisheries.

5.14 diver valley projects. Dam construction across rivers for power generation and irrigation could be either beneficial, harmful or innocuous to fisheries depending on the location of the dam, its operational pattern, the fish stocks involved, etc. Without adequate pre-impoundment investigations into each individual case, it would be improper to hazard any general opinion on the effects of dams on the fisheries of the region. However, one point that, perhaps, needs to be emphasized here is that the prevailing apprehen- sion that Farakka Barage in India might have adverse effects on the monsoon Hilsa fisheries of Bangladesh appears baseless. Farakka Barrage does not alter the flow pattern in the monsoon months since during that season all the gates of the barrage would remain open. As for winter Hilsa. it is even doubtful whether Hilsa migrate to Upper Ganga. Studies in India have indicated that the Ganga Hilsa are a discreet, probably non-migratory stock. Any meaningful assessment of the future of imoortant Hilsa fisheries in Bangladesh would have to be preceded by detailed studies not only on present and future flow patterns but also on the behavioural and biological aspects of Hilsa stocks.

C. Administrative and Organizational Aspects

5.15 MultiLple control and lack of coordination. As stated earlier in the report7,inland fisheries administration and management in Bangladesh is controlled directly or indirectly by four different organizations, viz. the Directorate of Fisheries, Fisheries Corporation, Directorate of Coopera- tives and the Revenue Department. Such an organization setup has rendered effective coordination of activities difficult. For instance, derelict waters developed by the Directorate of Fisheries are handed over to the Revenue Department who in turn auction the rights of exploitation to the highest bidder for a short period. These waters, exploited without due consideration for maintenance of the water areas or fish stocks, soon becane derelict again. Similarly, fisheries cooperatives organized by the Cooperatives Directorate are said to be constituted and controlled by persons other than active fishermen, resulting in their functioning as mere money lenders and exploiters of fishermen. Directorate of Fisheries having no control over these cooperatives cannot question their activities; Directorate Cooperatives having no responsibility for development of fisheries do not interfere with their functioning. There are many such examples of malfunctions due to improper coordination. Thus, this inherently complicated system renders effective functioning of fisheries activities impossible, to the detriment of fish production.

5.16 Short-term leases of water bodies. All water bodies, rivers, estuaries Tha ponds and tanks writh the exception of those privately owned, are under the control of the Revenue Department, which leases out unit areas by auction to highest bidders (lessees) for relatively short periods of one to six years. These lessees have the exclusive right to exploit the areas and no responsibility to refrain from undesirable practices detrimental to the fishery. Extracting maximum returns from the water bodies being the sole aim of the lessees, they literally denude the areas of fish with catastrophic results to future fishery.

5.17 Lack of adequate research effort to support development. There has been an inadequate research effort in Bangladesh to support development of inland fisheries. No resource inventory exists, fishery biological studies pertaining to valuable species of fish and prawns are conspicuous by their absence, and adequate research even in the application of important techniques like artificial inducement of breeding of carps is lacking in the country. - 12 -

5.18 Paucity of funds for research and development. It is reported that allocation of funds for the Directorate of Fisheries is too meagre for any concerted action program for research or development. Out of a total allocation of Rs 868 miliion for the agricultural sector in Bangladesh in 1970/71, the share of inland fisheries was reportedly a mere Rs 6 million. mhe staff of the Directorate of Fisheries are also said to be discriminated against in terms of salaries, which is an impediment to recruiting qualified and efficient technicians.

5.19 Paucity of technical expertise in tne country. There are no notable educational institutions in the country which offer a course of instruction in fisheries. For obvious reasons Bangladesh has not been able to take advantage of the training facilities available in India - a situation which now can be remedied. A few technicians trained in western countries find the knowledge not directly applicable to tropical inland fisheries and for various reasons they are reluctant to make the efforts necessary to adapt their know- how to local conditions. - 13 -

VT. DEVELOPMENT STRA TEC'1Y

6=01 Past;ield of fiqh in Rangladesh and the present nerformance of geographically contiguous areas, gives room for optimism in the development np+-ent.al of inlandf fisheries while it is- nY-inm.at.i that ndmiuti - rqesarieh effort is an essential prerequisite to the formulation of an effective developrment st-rat+egy, in the as of Bnlds c-onsidr2bleT advantage could be taken of the research results achieved in West Bengal (India) where the nature and disposition of fisheries qnd terrain are identic-al. The suggested development strategy covers six general areas of action viz. institutional reorgarlzation,better.m.ent of oi-cn.l con.^;dion of fisher.men; rae emphasis on demonstration and. extension services; undertaking key research

r~~~~~~~~~~~~~~~~~~~~.Av--J -v vMw wfl .. _ri..4LAttf*Li-v WAv S.f .. i JJ..Jt vSJ specific investment projects.

6.02 Institutional reorganization. Multiple control of fisheries activities may 'est e abol4se d. It my aIdva.,tuags-U- --- on +_eto b res sible for all facets of fishery activity. To render administrative procedures

e s3s r s tVe v.ict V VL su ChAVf 01n.U r4.6 0LiW .LSat .Ji VW V M t JIh ,13. alA U't3.UVJ1ILt0U.O LUIJb.VA.J. VIV t1le MILLIL.L mum necessary governmental control. The emphasis may have to shift from the present f.lAction.L ofoL. 4iL,e3..3the "irec4t.raJ e as4 a institui b research to active development oriented functions, participating fully in the enhancement of fL-.sh producti.-LonI along wYitsLL4Lis..LU1rs oea-vs T1CU.LV=O. W-n} ., could concentrate on providing training to a large number of its technicians in vec.u=-,,aes, partticula'lLy in fish. culture dvlpdrcnl nohrcutLs which have an immediate applied value. A few such examples are induced breeding of carps, intensive fish culture techniques in fresh andJ brackish wateLs, cage culture of live fishes, breeding and rearing of young of the giant fresh water pra-wn, cultoue Of brackish water prawns, sewage-fed fish culture, etc. If training were strictly project oriented staff could acquire skills of direct applied-value.

6 .03 Betterment of socio-economic conditions. A first step in achieving this might be to give active fishermen the freedom to fish in any section of the river or estuary depending on their experience witn different types of gear. Such a measure pre-supposes the abolition of the system of auctioning off fishing rights to nignest bidders, which is one of the major maiadies oI the fishing industry. It may, obviously, be necessary to limit the total effort expended on fishing, not only to ensure adequate income to individuai fishermen, but also to avoid over-exploitation. In the absence of any fishery biological research, any limitation of the nunmer of gear could be only arbitrary at present. To avoid undue hardship to poor fishermen, it is suggested that all bona fide fishermen at present employed in fishing should be issued licenses. This may rake it possible to regulate fishing effort, as determined by future investigations and also to cancel licenoes of those that indulge in practices detrimiental to fisheries interests.

6.04 Fishermen could be resettled in villages as near the fishing sites as possible. Such settlements may need at least the minimum facilities required for living. In case of seasonal fishing activities in remote areas, adequate camping facilities may be necessary. Adequate capital may be needed for fishermen on easy terms, both for redeeming - 14 -

thnemselves from indebtedness to the fishI merchant and aiso to proviue thl-Iem- selves with the required craft and gear anew or to repair the existing ones. Wnerever possible, equipmentt rather utlaz uah dUvances may be preferable. Mechanically knit webbing of a suitable material might be made available at reasonable prices to facilitate operation of greater quantities of gear.

6.o5 Facilities for collection and preservation of fish at tne fishing grounds and their fast transportation to market centers may be required. Operation of mechanized craft with insulated refrigerated holds,, provision of mobile ice plants are some of the steps that may achieve this objective. To ensure effective implementation of these measures, it may be useful to associate active fishermen with all these operations. They could be encouraged to form cooperatives to handle different aspects of fish trade with assistance from the officials of the Fishery Directorate.

6.o6 Greater emphasis on demonstration-cum-production farms and extension services. A demonstration-cum-production farm in fish culture may provide a nucleus from which development activity could radiate into adjacent fish farms, thus gradually encompassing a whole district. These farms might also carry adequate supplies of fish seed, chemicals, feeds and equipment needed by fish culturist. At least one such demonstration-cum-production-cum- extension unit is suggested for each district.

6.07 Undertaking key research projects. Important research projects as indicated in a later section of this report may assist in the development of fisheries.

6.08 Legislation may be essential if fisheries interests are to be protected. Any water resource use project may have to give due consideration to fisheries aspects, and wherever possible may need to take adequate measures to eliminate or minimize harmful effects to fisheries. There may have to be a type of 'unutilized water area requisition and utilization act' which would vest -with the Government the authority of reclaiming all unutilized water areas for fish culture. Such measures may ensure optimum utilization of all water areas for fishery development.

TrrI QTT0J TflTONS FOR nTMT.TnP.CNT G1.RMS

7.01 The investment schemes suggested herein cover the three main types of fisheries viz. capture, culture and impoundment fisheries. This, it is expected, could not only spur uniform development of all types of resources, but may also utilize different types of traditional expertise and provide employment and livelihood to a large section of the fishermen population. Based on local and relevant research results from elsewhere it is iudeed that the schemes may be suitable for early implementation. However, considerable further field preparation may be necessary. The help of foreign experts may be needed for the schemes. - 15 -

Capture Fisheries

7.02 Capture fisheries are akin to hunting; here the objective is effec- | 4 AA4 e expiia r a4- A_ -4 sus _a_ ; ble " iO;" AnAqAllh-; o;nN +stn oAf 9 | e v w| V | W 9 | V s v u G&vU w . 1 ow a R _ . L -E*_V H*|wg nV , aspects, exploitational and conservational. Only the exploitational aspect;s whid cLh coMU'd.U r-esu.Lt i.L ULU1WiPU. j iLLcreLase 441iVLLUJLLU- ars Asussed hLre.e Formulation of conservation measures requires considerable knowledge of the fishery bfiology of partic-ular utocks of filsh conce.ed. Orgarnzed exploitation, as suggested here, could make such a research possible.

A. Scheme I - A project for the development of fishing industry in the Sundarbans 7.03 Among the capture fisheries of the country, Sundarban fisheries a:re the most productive. Recent natural calamities and political upheavals have resulted in displacement of fisnermen and destruction oI fisning craft and gear. Hence, this project aims at increasing fish production from Sundarbmns through effective exploitation and also at rehabiiitating tne large number oI fishermen who have been displaced. This project could also serve as a pioneer project, and its operation may gradually attract more and, more fishearmen 1o participate till ultimately a significant section of fishermen population -in the delta coulid be drawn into its organizational sphere.

7.u. Though -more thn 150 diferen4t specis of fish contribute to the fishery and a large variety of gear is operated in the Sundarbans, there are only lO principal species captured Dy nine major types of gear tsee Table 3). The project area may include the entire lower Sundarbans region which could be divided into a number of sub-regions for convenience in organization. in the initial phase, 5,000 active fishermen with experience in fishing in Sundarbans migrht be selected and provided with adequate nets and boats. T=he boats to be provided would be of a traditional type being used at present for the same fishery. immediate mechanization of boats may pose problems of training in handling, repairs, maintenance, etc. Numbers of different types of boats/net units could be decided on the basis of the present proportion of the contribution of the fish they are expected to catch to the total catch. Mechanized carrier launches with insulated or refrigerated holds are suggested to collect fish from grounds and transport them to base camps and thence to markets in reirigerated or insulated vehicies. Ice and provisions required. by fishermen at fishing sites could be supplied by carrier launches.

7.05 The fishermen participating in the project may need to be enabled to repay the cost of equipment supplied to them in easy instalments. A system of 10% deduction from the actual value of the catches made by individual fishermen towards repayment of cost of boats and nets may be a very fair proposition. Such a project, could be operated by a cooperative of participating fishermen. Expert technical and managerial assistance and generous governmental support may have to be extended at least during the initial phase of first five years. The initial outlay for the project may be of the order of US$2 million for every 1,000 boat/net units selected for participation and it is expected that this amount could be realized in about eight years with interest, besides building a substantial reserve capital for future expansion. - 16 -

B. Scheme II - Pioneer projects on the development of 'Bheri' and 'Bheell fisheries

Impoundment F;isheries

7.06 These projects envisage development of one brackish water bheri and one fresh water bheel on modern scielitific lines, in each of the districts of Bangladesh, where such areas exist. For the development of 'bheris' vast areas of Char lands, marshes, tidal creeks or other low-lying areas, at present lying unutilized, could be reclaimed. Similarly oxbow lakes, defunct river beds or inundated lands on either side of the rivers could be utilized for bheel development. Development may involve construction of embankments, provision of sluice gaarded inlets, erection of suitable fish trapping de- vices to control ingress and egress of fish, clearing the substratum of tree stumps and rank vegetation, control of aquatic macro-vegetation, etc. No stocking operations apart from the natural stocking that would take place due to ingress of young fish along with tidal or flood waters is envisaged. In the first phase, about 1,000 ha in each of six selected provinces (three each in the brackish and fresh water region respectively), are suggested for development. Actual operation and management of these 1,000 ha units could be the responsibility of cooperatives of active fishermen aided by governmental support in financial and technical matters.

7.07 Considerable care and expertise may be needed to select sites suitable for develoDment as impoundment fisheries since the choice of site is a critical factor for the success of development. A knowledge of fluctuations in tidal or water level amplitudes in the area, soil quality at different depths, availability of rainwater and degree of expected dilution in case of brackish water bheris, seed composition and availability in the adjacent waterways, etc., may be essential for deciding upon actual location of the project areas. Development costs would naturally depend on the terrain, thickness of vegetation, soil and other factors. Generally, an amount of US$500,000 of initial capital outlay may be required to develop a 1,000 ha area. At a conservative estimate, such an area could be expected to yield 400 to 800 tons of fish per year (for 1,000 ha), representing, at the current price (in Bangladesh) of US$.50 per kz at the producer level, a gross value of US$200,000 to 400,000 per year. It is envisaged that after these areas are fully developed their operation could be completely handed over to fishermen cooperatives. The project operation may then take over some other existing or new water areas for develonment. till finally all the 'bheris' and 'bheels' in the country are covered.

Culture Fisheries

7.08 Culture fisheries are somewhat akin to agriculture. Any large scale development of fish culture ooerations may. therefore, requnire:

(a) adequate supply of fish seed;

(b) easy availability of fertilizers- artifinial feeds, and chemicals needed for treating fish diseases, eradicating iinwanted fish and insects and weeds; - 17 -

(d) demonstration of modern methods of intensive fish culture; and

(e) adequate arrangements for marketing the produce in a fresh corndition. The suggested investment projects anticipate these needs.

C. Scheme III - Establishment of fish seed suDDlv and fish culture demonstration centers.

7.09 It is suggested that at least one fish seed supply and fish culture demonstratiorn center be established in each district. Where such centers exist already, they could be developed to meet the project needs. The functions of such centers might be:

(a) to rear fish hatchlings collected from natural sources to a size suitable for stocking (fingerlings);

(b) to breed Indian carps in ponds through the application of techniaue of hvpophysation, and rear the eggs so obtained to a fingerling stage;

(d) to manufacture fish feeds from inexpensive locally available raw material, for sale to fish culturists;

(e) to r-Arrv supplies of ohp-mir-cals and equipment rAqrired in fish culture, for sale to fish farmers.

7.10 The size of the centers in each district may depend on the fish culture needs of the dic;trint. On averag. 4i,0on fingerlings may be required to stock each hectare of stagnant pond area and 6K)00 fingerlings for earch hectarp of nond arta With water cirlnilation facilities. About one hectare of rearing area may be required for producino fingerlings reqmired to stoc-k Lo0 to 50 htArtqrPq ousn1y, it mny not be possible to build facilities to meet the entire needs of the country in onse. So -i r+ildvlorn r1 s consider- v9n or.e 5 fish farm in each district. The cost of such a development would again AdyFey,A on varioucs 1 fcn orsv fl,4,!nVs ri> .4w;"nsos+mori+ -Af TTZQcbnnn nn)n ^Q IAw_fS SJ.L^^VXu5.J 4L| VV.SSVVV ISII.C %JAt_4VV^CAJ .L.LIt VVJaa _VV' SSIJ LI A %lV *MjJL '.4f .5s aV 9 be adequate to develop one 50 ha farm excluding the cost of buildings and stafPP reqir.er.ts.- TM. Jinvesrer,t+ -c.4'd pay for ielP .4 ka-u+ +ter.yas' time through the profits from the sale of fish fingerlings.

D. Scheme IV - Pioneer project in the culture of Indian major carps

7.11 The project envisages selection of about 1,000 hectares of existing pond area JIM each distritorLLte i I n.LteiLVe UA.LLIu .L UocapD. The select_ ponds oDuld be improved by repairing embankments, removing weeds, eradicating - 18 -

predators. desilting and such other measures as and where necessary. The pond may need +- 'h stocked and culture operations conducted under expert advice. All necessary inputs could probably be supplied by the district demonstration center mentioned earlier. The pond areas mnight be owned and operated by fishermen cooperatives.

7.12 The initial capital outlay wuald depend on the present condition of the nonds selected for nroiect operation. Annual recurring costs for artificial feeds, fertilizers, fish fingerlings, control of weeds, diseases, etc. may be on the order of U3$300.000 for everv 1,000 hectares. The expected fish yields may be on the order of 1,000-2,000 kg/ha/year representing a monntarv vali_iof TTS5t OOO_o to UTS$1 million npr vyar from a 1,000 ha pond area.

L. Scheme V - Pilot project on the culture of live fishes in ponds andu tanks iunsuitable for carp culture

* a.) L1QeAIa lda.r-. L A4k- pod.L "-"' 8 '..d +VnV a + * n mm + i0 el*L¼8J1Uf t .L8JS-r 7.13 Seidrlc-od -- ard a-.-rA_-, -h cos of rcatinof whichfo carp culture is expected to be excessive, could be utilized for culture of lie fi shes, ir. ,a ges o in pndsr neq.1h operati+ns. are Lr.m +to give hiah yields of fish ranging between 2,000 to 7,000 kg/ha/year depending on inputs.

c,ch a c-ltr practice depends largely- o - pple.m-ta,-r feeding ao.v may b8 profitable in areas where raw materials for the preparation of fish feeds are availaiDle ir pler.ty.--. LSA. ofC live .dfish o8be ta;Aed .e8445 fro natural sources or through hypophyzation of mature adults. A pilot project w-;itha-ly rta -nfU TTheb .lir is s-gested -AfVirs phase.

f:lVA .5,_.A LILA. V.La.J 5J ULa IS) _ . JI..J..IU .L1 .LL _fa. _._: _1.D__ _ _1_

r. Ocheme__V1. - r±±ui UIujbU Uioil UIU ULUJlI U 1 4LaI1LU I'_Lil water prawn (M. rosenbergii)

7.14 M. rosenbergii is among the most valuable fisheries resources of Banglaeh I+Js poss-ible that sevreral1 Water use projectswnei,p= mentation in Bangladesh might change the environment to the detriment of thi.Ls sp±uLuo nL fUtULe. Thnis pvrawn requires access to fe water ri VersD for growth and maturity and to brackish waters of specific salinity (6-11 parts per L,000U) for spawniAllg. Maintenance of stocks of thLe species in good condition in natural waters requires not only considerable knowledge of its ecology and fishery-biology in its particular native envirornment utU also the cooperation of other water users. Hence, while steps may be necessary to preserve he natural S'cWKS, advantage UcU-ud be taken of somme recent developments in breeding and rearing the prawn in captivity and culturing it in ponds.

7.15 Recent advances in research on the culture of this species have made it possible to breed it and rear its young to cultivable sizes in small enclosed areas. It has also been demonstrated elsewhere that it is possible to realize yields of 1,000-1,500 kg/ha/year of this prawn through its culture in ponds. Hence, an investment of US$1 million is suggested for the development of culture techniques of this prawn in Bangladesh. - 19 -

G. Scheme VII - Pilot project in brackish water shrimp culture

7.16 The importance of brackish water shrimps as valuable foreign exchange earning commodity in Bangladesh is well known. Inundated areas in the estuarine regions of the State are ideally suited for development as shrimp culture farms. Estuaries are a well known source of seed (young ones) of several important species of marine and brackishwater prawns and shrimps (see Table 1). An expertise in shrimp culture, albeit of a traditional type, exists in the country. Taking advantage of all the above factors, it is suggested that a pilot project in brackish water shrimp culture be implemented with an initial investment of US$1 million.

H. Scheme VIII - Development of fisheries in man-made lakes

7.17 Development of man-made lakes includes both a culture and capture fisheries operation. To suggest specific development programs in these lakes, information on the lakes, their fisheries and environment is essential. Hence, no specific projects are being suggested here but nevertheless, a fishery development program may be im!nortant for every river valley development project.

I. Resea-rch

7.18 Inland fisherv research needs of Bangladesh are manifold and it would require an effort and a report of the same magnitude as this one, even to briefly outline the research needs and how these needs could be fulfilled. Hence, only a few of the more important items of research are being listed hereunder:

( 1) Reoqrmn' i nvAntoryv

(2) survev of fish seed resnvrces and requirements;

(3) Studies on the fishery biology and ecology of H_ iIisha and M- senbergii;

(I0) Tvnidii ,-,i bhweariii f TndTian Ai nt.hinee t-aris!

(5)D Pre- ndI/orv nost-im_ lnf1m.+.- sQ+udies on elmm proposed or completed;

(6) Disposition of fish seed in brackish water areas;

(7) PoLlutional effects of industrial and domestic -wa tes on 4fishAerLi es; - 20 -

REFDREVT7ES

1. Ahmad, Nazir (1953) Fish Fauna of East Pakistan Pakistan Journal of Science 5 (I): Lahore

2. (1956) Fishing Gear of East Pakistan Directorate of Fisheries, Dacca

Development of Fisheries in vast Pakista- Fresidential address. T'inth Pakistan Science Conference, Peshawar Pakistan Association for the Adv. of Sci. Lahorc

4. (1958) Socio-F:conomics of Fishery industry Directorate of Fisheries, Dacca

Delmendo, CT. cdina (1970') The Fconromics of Pih (litire Oprerations in the PhilioTines. IPFC Working Party on Economics of Fish, Culturc, 1R-22 Mac-- 970-,, FA--, E.engkok

6. Directorate of Fisheries, Dacca (1970) Survey of Inland Fisherics of East Pakistan Directorate of Pissheries, Dacca

7. Doha, Shams-ud (1965)

res.h -,it r Fi* 14sheri es of Paistar. .Present Statils er,d 4eesures for Development - 1. Production, Craft ard Gear.

. Hora, 'L . 7ndIP 4ll-ay, .V.R D .. J. ] Handbook on Fish Culture in the Tiudo-Pacific Regions. Fisheries Division, PAO, Rome. - 21 -

9. Pakrashi, B.B. (1965) A Report on the Preliminary Survey of Brackish WIater Impoundments in West Bengal. Central Inland Fisheries Research Institute. Survey Report Neo.3 Brkr-ct

10. Pantulu, V.R. (1965) A Plan for the Development of Fishing Industry in the Sundarbans, West Bengal. Central Inland Fisheries Research Institute, Barrackpur/Calcutta.

11. (1970)

Fi.sheries A'spects Or P'a Mo7ng Phlase II JLudies,- Development of Fish Culture in Pa Mong Irrigation Service Area. E onUom[Ic Co0-mLissLon Por As 2iad and t Fr ars t. Committee for the Coordination of Investigations of the Lower Me:kong Basin, Bangkok.

12. Saha, K.C. and Majumdar, B. (1970) Fisheries of lest Bengal West Benqal Government Press, Alipore.!Vest Bengal.

TABLE 1.1

BANGLADESH - SECTOK STUDY

PRINCIPAL TYPES OF COMMERCIALLY IMPORTATT FISH SPECIES

IN BANGLADESH

I. Carps

a)~ C;atla catla Fres hwater b) Labea rohita c) Cirrhina mrigala d) Lcbeo calbasu

II. Cat fishes a) Heteropneustes fossilis b) Clarius balrachus

d) Pangasius pangasius Freshwater and estuarine e) Tachysurus jella Estuarine f) Plotosus cdnius

III. Feather backs a) Notopterus motopterus Freshwater b) N. chitala "

IV. Murrels a) Ophicephalus striatus Freshwater b) 0. gachua "

UO. IliuLsL LA"

V. Indian shad a) Hilsa ilisha Freshwater and estuarine

VI. Perch a) Lates calcarifer Estuarin e TABLE 1.2

VII. Pomfrets a) Pampus chinensis Estuarine b) Stromateus spp. "

VIII. Thread fins a) Polydactylus indicus Estuarine b) Polynemus paradiseus c) Eieutheronemna tetradactylum!

IfX. .MU 1e t s a) Mugil tadc Estuarine b) M. parsia

V. Prawns a) Macrobrachium rosenbergii Freshwater b) Ponaeus carinatus Estuarine c) P. indicus d) Metapenacus monoceros e) M. brevicornis f) Leander styliferus TABLE 2

BANGLADESH - SECTOR STUI-L

ANALYSIS OF ECONOMIC RETURNS FROM DIFFEREPT OPERATIOIS

% Net Return % Net to Cost % !,et to of Production Land Value Income

_ _ ~_ ~ _ ~~ __~ ~

Freshwater F'ishponds 2

a)UplnTT b) Lowland 56 154 71

Rice I a) Rain 18 22D b) Irrigated 25.3 35 11 I Green Corn 3 4 0.3

Grain Corn 19 24 3

|Poultry o a)try production 33 50 1,029 b) Meat 26 35 405

Hog Raising (swine) 34 53 4099

| Cattle Raising 6 10 4

(from Delmendo 1970) TABLE 3

BANGLADESH - SECTOR STUDY

PRINCIPAL TYPES OF GEAR OPERATED IN INLAND CAPTURE FISHERIES

gearII NameOr Meshr Expected composition JiNdIZI~ 01 of catch

!1.Drift gill net 10 to 15 cm Hilsa, Pomfrets 12. Sale net 15 to 20 cm P. indicus

3. Bhetki net 12 to 20 cm Bhetki

!4.Boal seines 7 cm Hilsa

5. Shore seines 2.5 to 7.5 cm Mullets, prawns, I threadfins, Bhetki.

16. Khalpata nets 2.0 cm Bhetki, threadfins

17. Chorpata nets 2.0 cm Prawns, Mullets,

I Catfishes, Prawns 18. Long lines (big hooks) 2000 hooks Catfishes

| ; Long lines (small hooks) 2000 hooks Threadfins FES Tl.TEnD

TNTERNATIONAL BANK FOR R1EONSTRUCTION AND DEVELOPMENT

TNTERNATTON.AL DEVF.LOPMENT ASSOCTATTON

BANGLADESH

LAND AND WATER RESOURCES SETOR STUDY

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BANGLADESH - SECTOR STUDY

VOLUME IV - CROPS, LIVESTOCK AND FISHERIES

TECHNICAL REPORT NO. 12

LIVESTOCKI

TABLE OF CONTENTS

STTMMA DV AMT?1r C-hjrT T,TUTN .. - i

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A. mt.e rutrLPro o bl B. The Dairy Potential 7 C. Thle Poultr-y rotwenu±a±.8 D. The Meat Potential. 9

VI. INSTITUTIONAL FRAMEWORK .10

A. Government Services .10 B. Education and Training .10 C. Research. 11 D. The Development Plan .12

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1/ This reportwas prepared by Mr. P. Brumby, FAO/IBRD Cooperative Program.

C'TTAfl- A fr A r1 nlTf" TCTOT.INSTC' JUPWkif Aa± LJV Vil11U

There is practically no commercial livestock production in Bangladesh. Cattle are kept amainly for draft -w-ith meat and milk r,Mer-e by-products. Goats, sheep and poultry are kept by many smallholders mainly for subsistence. Because of land pressure ard the need for cash and food crops, there is no land devoted to stock feed production. Cattle feed is mainly rice straw, some roadside grazing and small amounts of bran and oil cakes. The existing feed supply is only adequate for 15 million of the 18 mllion catte. Small stock scavenge on crop resiaues and numbers tend to be regulated by feed availability. Because of increasing population presEure, it is unlikely that much land will become available for stock feed production. ii. As the major source of farm draft power, cattle (and to a lesser, extent buffalo) perform a crucial task. The primary policy for livestock development needs to aim at farm draft power improvement. Intensified agriculture imposes a greater workload from the cattle population because of the more critical timing of land preparation. Animal draft power is already inadequate and presents a significant constraint to increased crop production. Because of small animal size, inadequate nutrition and poor disease control, farm animals are often in poor condition for the expected heavy workload. However, the extent of the farm power constraint is not entirely clear and may therefore deserve additional studi- iii. Based on past experience, large-scale mechanization is unlikely to succeed. However, the problems and feasibility of agricultural mechanization may deserve study by means of a carefully monitored pilot scheme (see Technical Report No. 16). Chemical land preparation may also not be important in Bangladesh in the near future. Consequently, improving animal draft power and farm implements may be the best way of overcoming draft power constraints on agricultural production. iv. Government livestock services are responsible for improving animal health and nutrition. They should shift the emphasis from curing to preventing diseases. The expansion of veterinary hospitals and clinics should give way to strengthening the field services with trained staff, equipment and adequate transport. Provision of animal husbandry advice not available to farmers at present is also important and could become the duty of the Agricultural Extension Directorate. The Livestock Directo- rate requires central disease diagnostic facilities and a larger supply of vaccines. v. In the short term improved animal health (by regular vaccination and worming) and better nutrition (the use of catch cropping and urea- molasses supplements) may increase animal draft power to scme extent. It is suggested that provision of staff and funds to step up animal husbandry work be considered at least for the concentration areas suggested for early intensification of crop production. There is already an improved plough which can halve land preparation time but, in general, existing stock is - ii - not heavv enough to pull the plough. Immediate work to modify the implement for use by higher stock may contribute towards an interim solution of the land preparation problem. In the longer run, breeding heavier animals to use improved implements may provide the solution. A 15% reduction in stock numbers accomDanied by a 50% live weiRht gain per animal could lead to some reduction in feed requirements while the animals would provide more draft power. At the same time, there would be increased milk and meat production. vi. The livestock industry makes an important contribution to human nutritlon. Although mostly sick or old cattle are slaughtered. beef is a most important source of meat. Cattle improvement, while primarily aimed at increasing draft power, would al so provide extra meat aqnd milk. Little could be done for sheep and goats other than improving their health but an im.portant increase of eggs and polt1trv meat may be possible. vi; An valn/TPT?n .pnm hnc Jr1n+.ifipr1 thrpo nnqcihltz nrnipnrb- Thov require further preparation, but could be the basis, allied to institutional improvements already rutlined forfuture countrywlde st..ckJ imnrvpmmn.ts. The first project suggests a US$2 million scheme for expanding production and potency testing of vaccines. The second is a suggestion forva comprehensive pioneer livestock improvement scheme, including: artificial insemination and imnroving animal health and nuitrition onverinns 1 million cattle in 50 thanas selected for intensive crop production. Cost is estimnted at Tks 2 4 million. The third isa suggested pioneer pronect, for poultry production. It might also cover 50 thanas and include the breeding of cockerels, some deep litter units and farnmer credit. The scheme estimated to cost Tks 0.77 million is projected to improve 400,000 birds and raise meat and egg production by 25%. viii. Adequate prroionl +traling c -iis proided- hy the UTniversit-y- of Mymensingh, but research may need to be stepped up considerably to sustain the development effort. eggs, predicted by the draft Fourth Five-Year Development Plan, are most Vrobaby attainable Jif --gestions for instit++,+oal chan'Is nnct and research suggested in this report are taken up. BANGLADESH - SECTOR STUDY

VOLUMIE IV - CROPS, LIVESTOCK AND FISHERIES

TECHNICAL REPORT NO. 12

LIVESTOCK

I. INTRODUCTION

1.01 C(urrent projections of increased grain production in Bangla- desh resulting from the use of high-yielding varieties, flood control, irrigation, fertilizers and pesticides, indicate a supply gap is likely to persist throughout the decade. The focus of agricultural policy may therefore have to remain on crop output, particularly rice, for some time amd animal production is likely to remain a complementary activity based on the use of crop residues rather than pasture and fodder crops. There are, however, crucial questioms associated with the livestock situation which require examination within the context of agricultural planning and of national food supplies. The two key problems concern: (a) the limitation to more intensive cropping that might arise from insufficient availability of draft power for land preparation; and (b) the widespread occurrence of qualitative deficiencies in human diets which might be ameliorated by increased livestock production associated with increased grain production.

1.02 This report is based on the findings of an FAO/IBRD Livestock Mission to Bangladesh during 1971. It focuses on the above two issues in discussing the present livestock situation, in outlining a strategy for development, and in identifying possibilities for three livestock investment projects.

II. THE LIVESTOCK INDUSTRY

A. Livestock Numbers

2.01 Bangladesh has no specialized commercial livestock industry. Practically all of the livestock is maintained on small fraemented farms of 2 to 2.', acres. Taking limited census data from 19h5 and 1960, the following estimates of livestock numbers and production have been made: Table 1. Bangladesh Livestock Production (1969/70)

Livestock Rate of Slaughter Total production

'11Wb"L1/Der T .1*lncrase 1D+ ofJ.. meflat, h5,&.L 1969-70 and eggs \('I0nt) IvJIJI (SI%a(NfcNTons)- \.JJIO o4sr'a4- 4- 7 ni 0 11 n7 '7ff& u a"Le > L i7v 'I v *. LL .XLtI I7It v

fa P_ 1o A387 - 1. 12 13.'1 DULiOL'J ~~~~~~)'-'I- L. ~4IJ4

Goats 7,17L + 2.2 80- -L."5

c, 1- 4nn + 1~~~~~. APo nI. Shleep 620 + .4 88 7,948

I 1V.~4-L ., r '7 7 A rPuuls-y L79,345 n.a.1 [,(I6

ILLJ. 47 6,215

Eggs (numoers') 298U ,10U6 UU

B. Livestock Production

2.02 Cattle are kept as draught animals for the production of subsistence crops, and the milk or beef they produce are incidental by-products of their work functions. Their density corresponds to the need for cultivation purposes. During recent years, average liveweights of mature cattle have decreased considerably under the influence of deteriorated feeding conditions. Mature bullocks weigh on average only about 200 kg, and mature cows only about 175 kg.

2.03 Buffaloes are kept primarily for ploughing and heavy road transport. The lactating cows are milked but they contribute less than 5% of the total milk supply of the country. Although the climatic conditions and the fibrous nature of roughages available provide an environment suitable for buffaloes, their small number in relation to the cattle population reflects the dire shortage of food and the difficulty in maintaining large animals.

2.04 Goats are kept as scavengers on nearly all small farms in order to raise the cash income of the cultivators and to provide the bulk of the families' limited meat consumption. Their high quality skins are undamaged by thorn bushes and fetch premium prices on the international market.

2.05 Sheep are relatively few in number and are kept mainly in the deeply flooded low-lying areas of the south where their resistance to wet conditions gives them some advantage over goats. 2.06 Poultrv production is essentiallv a villaee industrv based on very small individually owned scavenging flocks of chickens and a few ducks. Commercial noultrv nroduction involving imnorted breeds is from about 6,000 layers spread over a dozen Government or university farms.

C. Livestock Diseases 2.07 Most official data on the incidence of livestock diseases under- many disease problems are unreported. The main cause of this situation 1~1-.~ -~mnhiliH--tris the i.obility ofe-f officersnfTir.jsw.Q of.tetf tha nl4.Director_te ,.+e-+.rvAa ofLiesoc---iesnf TA4tr~acinfIr wsavri,'Q who have no transport facilities from the district level down. This inaffi n1i-v in fielA worlkhas been worsene-d b the policy of the Directorate in constructing animal hospitals and dispensaries, to which individual fmamers have to bring ther ailing aenmals. This has been at the expense of providing well-controlled preventive medicine programs.

2.08 The major diseases which affect cattle and buffaloes are rinderpest, -riAndrna,-like tiseas an h-aY haem.orr--hagic septlcaemia, black-quart-er, foot-and-mouth disease, tuberculosis and brucellosis. There has been no attem-t to establJtsh ar. .J45.&r 'celtbzed atpinst rinderpe-st alonag A.fe Ja. or to set up a vaccination program. Foot-and-mouth disease is most prevalent du.r;^rng thne win 4er senson -ar.about 20Efout eks sach- novi, -at'Ieast4 ~SAL.~*5 .J..A&V ~~J- L 4&_A vI~U..~.AJv WJ.LIUc.I. 0 1 J LVJV..LVL&r L6 J. VMQ U 500 animals, are recorded each year. The strains of the disease present are A A r' n-.A A-4n T -I ,,- w n,+.1s-.,. , .4-.. 4-I,-- TT 4- * :4 A, I, G ar.d ^sa I., pJLus~ Va.ts.4LV MA 0%A-U-yF U o the.,m. Vcra. agair,tU all standard types is undertaken, but the total quantity of vaccine prepared does not xceed 100,000 doses a year. The bulk of th1.e 20 m..Illion cattle anJd buffaloes appear to be suffering from severe internal parasitism. Detailed st,Idies of r-ecenr.t years ,hasve re-vea"-ledLtAhatC at-- 4.' es Q--4n paas 4aruu-i species can be found in the livestock of the country.

2.09 The more common infectious diseases affecting goats and sheep include pleuro-pneumionia, anthrax, pox and scab. ThWe po-ulVtry diseasEUs ur2uoniy encountered are Newcastle disease, fowl pox, fowl cholera, coccidiosis, he-linthiasis, salmonellosis and avian leucosis complex. Of these, Newcastle disease is of overwhelming importance, even though 50% of the poultry

- a4 _ - X, '_ ____.L_,.. popuLation arel repourt~_ tv Ue vaccinatedU anUally.

2.10 Government laboratoriA prepare esselntial vaccines, but the quantities are far short of requirements, and no machinery exists for the quality control of these v As a result vaccination cw paigns ha-ve limited effect on the incidence of diseases.

III. THE FEED SITUATION 3.01 The foreign currency position of the country has led to a total ban of feedstuffs imports so that wibh the excepuion of by-products from wheat milling, the entire feed supply for the livestock population is U~I±V~U igviu (u1TIeVL..Ltc ijv i, uLL.61i iu~uo der-2ve' fro. does_ sU%cesLIUUI';%V0 DuiJLLV*U W .l hLigh deruandsu or. landl.LJL foarU iU.04"Llu-M food, the cattle must subsist on food crop residues and small ruminants and poultry on the fruits of genleral sckvengIng. The ualk of the livestock feed resources originate from the ubiquitous rice crop. Paddy straw, broken rice, rice bran and rice husks are the main source of cattle feed - h -

while poultry subsist on fallen grain, insects and household scraps. Additionally, a limited quantity of crop by-products such as molasses, wheat bran and oilcakes are available. Small quantities of forage legumes and pulse crop residues and sugar cane leaves, together with a very small quantity of grassland along roadsides, irrigation bunds and waste places largely complete the inventory of livestock feeds.

3.02 Based upon the likely composition of the national herd and the estimated liveweight of the various classes of cattle, and assuming that cattle should receive about 23 percent of their liveweight in dry matter, it is estimated that enough roughage exists to feed approximately 15 million cattle, compared to the 18 million which presently utilize this feed along with 8 million goats and sheep. The quantity of supplementary feed available is meager; it is sufficient to supplement only 7.5 million cattle with the equivalent of 1 lb. of oilcake per day for 5 months of the year.

3.03 The quantity of straw presently available each year for cattle feeding is about 22.7 million tons. Each additional ton of rice grown in future from improved varieties will add about 1 ton of straw and 70 kg of bran, i.e. roughly 20 percent of the annual roughage requirement per cattle beast. Increasing the supply of livestock feed involves an intensification of land use and an increase in land productivity, but this in turn is dependent on an increased work input by the existing cattle population. Table 2 indicates that a 15 percent decrease in cattle numbers associated with an average liveweight increase of about 50 percent in each animal would lead to a slight reduction in overall feed requirements. However, this cattle population would have a much higher productivity and satisfy the draught power requirements of a more intensive cropping pattern.

IV. THE LAND CULTIVATION PROBLEM

4.01 Land preparation is traditionally performed by bullocks pulling indigenous wooden ploughs. The pull required varies between 40 and 120 lb according to soil conditions and about one-quarter to one-third of an acre can be ploughed in a 6-hour day. Adequate cultivation usually requires 4-6 ploughings followed by two or more levelling passes. With some 22 million acres under cultivation each year at an intensity of about 150%, each of the 5 million pairs of working animals presently available has 6 to 7 acres to cultivate. This requires extending the cultivation time over several months. Where only one rice crop a year is grown, the pressure on time for land cultivation is not unduly serious; where multiple cropping associated with the expansion of irrigation programs is undertaken, the timing of land preparation becomes critical if optimum planting times are to be achieved.

4.02 The average planting date for present aus rice varieties is about mid-An l. The cron with a growing period of about 110 days matures in July. The high-yielding varieties suited to the aman crop, such as IR-20, a-re nhnto-s,en9tive crons and the planting date (mid-JuJ.y to mid-August) is important for maximum yields. To prepare for the transplantation of the amnn crnp using the tfraditional methods may require some 2-3 weeks of cultivation per acre. As each pair of bullocks may have to plough up to 4-acres of land, th,= may he a nyitical shortage of time between the aus harvest and the IR-20 aman transplanting. This is one example of the BAITGLADESH - SECTOR STIDY T,Rble 2. Encrgyr IRecquirsments of a Not:ional Herd of 100 Cows and FollowerS

N o w After Development Avera,ge I)aily ga:Ln Total Average l)aily gain Total Number Liveweight duxing DM/day DI/year Number l.iveweight during DIMl/day DM/ykuar period period _ _ (~~~k g (kgj _ _ C)( g 5

COWS 100 1810 C) 15.0 548 10CI 2'70 0 17.0 637

Calveas 38 100 220 15.0 208 62 145 310 17.0 385

1-2 yrs 14 135 100) 14.5 74 23, 210 180 18.5 155 (fermal 3)

].-2 yr3 20 156 110 15-5 11;3 23, 2.30 2'30 20.0 172 Imale)

2-3 ,Yrs 13 158 60 15.0 71 22 250 110 19.0 1-53 I(female)

2-3 yrs 19 1

3-4 yrs 12 174 45 15.5 68 - '(female)

3-4 jrs 18 210 60 16.5 111 - - (male)

Builock3 190 22 0) 16.5 1,144 100 300 0 19.0 693

UTo. tl 4A A RO .1 4r 3 8 7 -7

* Total IIvetrcLg]at of hErd in tons. - 6 -

of the Dossibilitv of inadeauate draft Dower acting as a critical development constraint. Similarly, lack of adequate farm draft power could be a constraint during aus and iute planting and may be the important cause of low land utilization during the rabi season and for poor crop vields during this season. The whole problem of availabilitv of farm draft power may be of sufficient importance to deserve more detailed stllu dv

1TTnier the diff'erent nossihi1ities of coninir with inereaqed land preparation needs, i.e. choice of varieties or crop rotation pattern, minimum tillage. mechqnization or imnroved animal drawn imnlements; the latter needs special attention. An improved light steel plough, such as the loc--ally available "cf-hashi" noqtinng about 'Tks 75, is canabhle of preparing almost twice the area cultivated per day by a conventional plough. A maxi-- Tmum Of tweo e-1tivAtinns are -euniiiredf with this implement, and, follnwed hv levelling, the cultivation time per acre is reduced from about 20 days to )[-6 days. In heavier clay soils, however, the pull requirpd is greatepr than the smaller local bullocks can sustain. The widespread use of the ,,,,n,,n.raA ni 1r,h;c e +ha"af'n,.a tt+ nwa lnh;r;+ Aorta1 an +bo n f 1 1I i +u rf larger and stronger bullocks.

4.o4 As noted in Technical Report Nos. 16 and 6 on mechanization and employment, the advantages of mec6hn jizationare mitigated by the abuhn- dance of human labor which large-scale mechanization could displace, the shortage of foreign exchange, the lack of adequate roads in ma-ny areas, difficult soil and plot size conditions, and the lack of maintenance facilities. Lf>le41 .e.oh^s' ,,atio,n 4s-,,rkl4 +ntoo-r ti9t +n.,aeto"ards solution of any possible land preparation problem in the foreseeable future, more determined at te.mpts may be Justified fairly soon toexplore the feasibility of mechanization by a pilot scheme (see Technical Report MN 1 A) T4 .n see..s likely thnt methods of msni- , tilg11 uin herbicide sprays will find wide application. Rather, the solution to redu,,ciAng the t-ime requi,,reda f,or land preparation ;nvolves the develp-mn-t .5. AU.,.l U,L 4.IL ~MAJ. ~A LA ..La, .4 jS OjJA. fV LL~.. Jf L. VI of improved animal-drawn cultivation implements to be pulled by larger ar.dLIsturonger cattl"'e. In tbhe long ter,., 4this m,z invlv - comiraio f 6i± ~)iJ...,.I.lA.L~* iL l1I~..LI11 LI± Al, 11. Lo 1510j .LLIV LJ.L V~ 0. '.sI5AJ. 1..L breeding heavier animals, improving animal nutrition and animal health, posilSSucn thjLYL-:UUL1rle numr.ber of, stock, ar,d them designL ofL new" -lr,plem,entsU. In the short run, the design of an implement with possibly half the performance of the chashi plough, but suitable for existing livestock may improve land preparation significantly. In addition, because breeding ______*- _- --. _L-~..…...A ______… Eis a luoger r,eri-ui erciS±5e, buit .JJUrIpurLdiul ± IlprUVUIrIflul ±11 dtIIJld± Ur..urL L power may be obtained fairly quickly by determined extension efforts to improve airmal health (by regular vaccination and dewourming) and by attempts to improve animal nutrition (possibly by means of introducing a urea molasses mix). Consequently, nim-ediate measures t,o accelerate implement design and to provide effective animal husbandry extension may bring about marked improvement and stabilize the situation until both animal breeding and mechanization can have a significant impact. It follows that, in areas where an integrated program for the intensification of land use is being implemented, a cattle development scheme may be a complementary input to water control, fertilizers, pesticides and the use of high-yielding varieties. -7-

4.05 It can be shown that a practical and economically viable farm impronvezmnt. plnn is present.ly -apable of rmoghly rirnihincy p-hnnri- nndi npdtdyr straw yields. In this event the roughage available for cattle feeding wuldi movre inn a 1nilus situation, even allonin' for An ince-ased size in working animals. Supplementary feeds are, however, likely to remain

V. PRODUCTION POTENTIAL

A. The Nutrition Problem

5.01 As noted in Technical Report No. 28 on nutrition, critical sbhortages of buoth-l-energy ar.-d protei4n 4intlake characterize 4the dilet Cf the-1 JUJ.L~J.a± d.IU J~.L1 .. L 1I.,O A IM . Uj..L. _.LL. u.LLe u-L u fI u1i people of Bangladesh. Average family incomes are believed to be about

*L C4..L411 jJFpey,o.h J~L UJ.wAVI, CILJA. UJtluh al-e_L '.J.of theUJLA ruaI L J. U.A..Ldi et V baJ. s 'beenL ~ LL~J est.,.re1LAILOUUUJ O.Uat Tks 15 per month per family. Some 45 percent of the population are

L vAu VULL U on .less 4_-_i a1 4 Ifnl 2) ,e _ A _._ _ i A . i_ basic requirement. Grains represent 85 percent of total energy intake andu even t1he hi1-ghLesu farily Uicur,ie groups take u0 percer.t ofL theu vlrerg intake from carbohydrates. Pulses and fish provide the major source of protein,frJ±~JU~iJ ,ardntaX .1U LILUMA.A4vrae 'JJ.of bot1per.LJVULL aV=IJ d. Z £a28- gr&m1-U llz4IJ k1W - UCLJY.dayAonsuIs,.o- l`t,L~UMeat U1.;UlI0I11JUULWL averages about 4 grams per day, egg consumption in the lower income grouLps is negligile Ua theirU cashL Iva lu e tVd-ark u pr -u -Uden.dAverage Uonsumllp- tion is four eggs per capita per annum. Milk consumption averages 17 grams per day, of which 1 .5 gra-s represents imrported products. Nutri- tional priorities involve raising both energy and protein intakes with energy inta;kLes taking precedence. Tihe prospects for increasing food grain produiction are reasonably promising. The prospects for raising livestock production are less so.

B. The Dairy Potential

5.02 One immediate problem in the livestock sector concerns the optimal means of supplying milk and milk products to urban populations. Present production of L76 thousand tons per annum originates almost entirely from cows kept as draft animals. Small, processing plants exist in Dacca, Chittagong, Pabna and Comilla, and the average total daily supply from these units is about 5,500 liters. A further 3,000 liters are reconstituted daily at the Chittagong Plant. The residual urban supplies are based on raw milk supplied by dealers directly to domestic dwellings. There are three basic methods by which future urban supplies might be produced:

(i) Producing the Dulk of supplies from large and efficiently operated Government or quasi-Government supply farms such as the Savar Dairy at Dacca. The difficulties in this approach involve the extreme shortage of land, relatively high production costs and a shortage of management skills. -0- 0

.(ii) Collecting small quantities of m*lk from large numbers of village producers. This approach has the advantage of channelling additional income into the villages included in the collection area. It has the disadvantages associated with a marked variation in seasonal supplies, quality control, hieh transport and collection costs and in further reducing the levels of home milk consumption of both humans and calves.

(iii)The reconstitution of imported skim milk powder and butter or vegetable oil The produnt can be sold as sterilized or pasteurized liquid milk, or as canned condensed and sweetened milk This alternative offers the advantages of stable supply, minimal retail prices and assured quality control. Its maior di sadvanftae is the fonreig n exchange costs, against which can be set the opportunity costs of the potential grain nroducitinn forfeited from land used for local milk production.

5.03 The question that arises in considering these alternatives is not merely one of applyning a cost/beneft analysis to alternative systems of milk production, but rather to decide whether in a country where millions are under-nourished, land that colld produce grain shrrlrd 'h u+tiized for the production of milk for consumption largely by the higher income section of the iurhsn ponlation. This question leads to a consideration of the alternative methods for ameliorating the national deficiency of protein foods. Will this best be accomplished by chqnges in cropping patterns to innciud more pul se and fewer rice crops, by genetic improvement in the amino acid composition and content of the rice varieties grown., by the fortifition of the diet wth synthetic amino acids, by the use of leaf protein extracts or by the conventional means of in ~crasing ivestocr,k- pw~Aiiro c n, poshbly usiyng urea to augment high fibre crop residues? Emphasis may also have to be given + .+n Aore-enn-ov,+ n 4rni C; -rA noQnfr 'T'h- nan,.l i o4 n+ VV V1O VW V W a4 . .. )I'..JV- .L J *ffi 4. CL'-) .j. Uv W O .L- '- v this stage is that the size of the grain deficiency in Bangladesh is suclh that-4 evidence ..uacs exist; before decidin-g that .J0L A1 U4JL LI .441Jrre^utabvle J L U Li-JL '. V .A'1L 11. O Z1.dL tU I~ 0.4 U. LASJ.~U.41~ U1A-U .L-4AU1-4l capable of producing food crops can be devoted primarily to livestock produtior.

C. The Poultry Potential

5.oLi tpgai-4 ric 4-e of angl--- - es-- U -- eA .W*~J4 .l.LOMUe jV 5 ±_1J~1'JL~A.Y L'J' _L -and±L'UL~JOD~uu -bae 0.5.-gr4cul . L.4.UAU tA . 'JV. D.I .~1j 0AI jJ.LX'J V..L UV ideal conditions for a large duck population. In East Asian rice-producing ar-eas eoiruIMenced " -AU byUJ kiJ1±1J.UDChies 1.I1511fal,n trdiios4uu4DIUCJ.IDI0, U"k;.A0ducks C..L-MnPare_ kep-4 UALUV.L-- s4der41- 0strict4 L control and herded continually. In Bangladesh, however, close herding is not practiced. In consequence, dlucks can cause consider-able daage to young paddy. Duck products also play a secondary role to the predominant chicken andu goat meab in hf-1ua! die-U.s. 1lU" preference for poultry and goa, meat together with the lack of control exercised over ducks discourages many Bangladesh villagers from duck farming. The lower feed conversaon efficiencies of ducks compared to fowls, and the lower price for duck eggs, limits the scope for their commercial development. Their resistance to Newcastle disease and their ability to escape from predators are favorable characteristics DUt,. Decause oI the preierence ior iowis, a substantial expansion in duck numbers is unlikely in the short-run. 5.05 Chickens and ducks rely on scavenging for feed; their diet is based on crop by-products, insects and household refuse. The present size of the poultry population is in equilibrium with this food supply, and any attempt to expand numbers or genetic quality must be reconciled with the feed situation. An increase in rice production from multiple cropping and high-yielding varieties could facilitate an expansion of numbers while the improved feeding of young chicks would reduce early mortality rates. Widespread vaccination for Newcastle disease is also required if wastage rates are to be minimized.

5.o6 High energy diet ingredients for commercial production, such as maize and wheat, are imported products, together with vitamin and mineral supplements. lNheat bran and rice polishings are locally available, togethe:r with oilcakes, molasses and limited supplies of fish meal. A commercial diet comprising 70 percent of local ingredients could be produced on a limited scale. The use of this type of diet under deep litter conditions would produce sufficient poultry manure to increase marginal grain yields by more than the quantity of grain fed. Experience elsewhere under similar environmental conditions,indicates that one ton of deep litter is produced by h0 birds in a year and that the fertilizer value of this litter is sufficient to raise grain yields by 1,200 - 1,500 lb. The annual grain consumption of h0 birds on a 33 percent grain ration is 1,200 lb. per year, thus a justification exists lor using grain for poultry feeding while medium energv supplements such as bran are available -to provide the residual part of the ration.

5.07I Blecause thue I,.-Lin constL±trair.t to the- Uexpansion of ciru,erIcial DuuIltry production in Bangladesh is the limited purchasing power of the population, improvements in the poultry sector may have to concentrate on. the llage industry and aim to increase "subsistence" supplies. The upgrading of local birds by the widespread and controlled use oI crossbred cockereis, vaccination against Newcastle disease, the improved feeding of young chicks and a critical evaluation of the seasonal variatio-s in natural feed supplies are suggested to be the basic requirements for an increase in poultry supplies.

D. The Meat Potential 5.08 Cattle and buffaloes are maintained principally for draught Far-poses andl orl'Jy goats and po-ul.b are L.be for _UIUC use. Beef is generally obtained from disabled, ailing and very old cattle, and goats provide the main s-upply of better quality-meat. Neevertheless, the slaughter statistics available indicate that the quantity of beef produced annually far exceeds that of any other type of meat. The annual oUtpUt of beef iS estimated at nearly 120 million kg as against 31 million kg of goat meat and abtUU U milit*on kg of pouultry meat. The prodauction of all forms of meat is severely constrained by the shortage of livestock fodder, and little change ±n either beef or goat production can be envisaged during the coming years. A smaller number of larger and better fed working cattle may produce marginally more beef, but the change is unlikely to be substantial. With increased cropping intensity, both goat and poultry production could be increased but, as they form only one-quarter of total meat production, the impact of even a doubling in production is marginal. - 10 -

vI. c 1rrTTMnT T A T TIOJ A TFiL-q.Tr rn; V.1 PUJ.L .L.L UJ.±IJIUt.Li l`IU1.LPYL~UkI.f

A. UoveriUment S1IerUvtces

A.01 Goverrns.v.,,,a.t s orvS-A in-ndpl +k-l, 1 estockl secto is manly directed by the Directorate of Livestock Services of the Secretariat of

AgrUA4.-ultJ is TheIstf . ofCZa~Litils.U.LL.ii tDisJ.atri pre5J5sently co..pisel~Ja,i ah^ut,L 300s veterinary graduates and 300 veterinary assistants. Their main task is prever,tion, contro" and 4trea .e---- oft- -liesc,-- diess--- Subsi'i- 4t'eull~ H" V L V isL,JVJ L,j 'JL d%Lxl~ UtL VCL LLILi3II U V.L -LVLxV US 6i.CiZ Ulo aS E U LLULLLd activities include vaccine production, artificial insemination, research and veterl LinlA..Y %dLI anLu-MLdJ ILLusUb.rLy tind.1.ingJL116. lilTh Uourd.iny budgetI U oLf tleDire- torate amounts to about TkslO million.

6.02 Development planning for the Veterinary Services has largely focused on the establishlment of tnana veterinary hospitals and dispensaries rather than creating strong and mobile field teams capable of undertaking intensiVt pre-ventiUve medicine programs.* Central udag1rnostic facilities, vaccine production and distribution facilities are quite insufficient to provide a rapid response to a major dosease ouutbreak. The organizaTion of the Service is not orientated to preventive medicine and a rigid classifica- tion of responsibii'ty of each post, particularly at the field assistant level, obstructs efficient work output. The lack of mobility of staff at all levels of the Service is a severe constraint to efficient disease control. 6.03 Reorgani1zatvion. of the Service around a primary fuction of preventive rather than curative medicine is suggested to be essential. Vaccine production facilities may have o be expanded, cen.tral dianIostic facilities established, and much greater emphasis may have to be given to the-problem-s of livestockL n.utIiAion znd-- nA r L. 4.o1- -sl-a4tter purpose closer coordination with the Directorate of Agriculture may be reqn --r nred. It mayr also be -dv4sabkle 4to conssder m,aking 4l Ariulur Extension Directorate responsible for animal husbandry, letting the TA TTrxcr D~4rectorate concentrate on -4- bea'I4-l and AI. isiS.S..Iisi isit ',i~ tis si.JAtSsLAUt . V VsU LI II Li LO . VLI A A~t-L.

B. Education anUd Trainlng 6.oh Agricultural education at the university level is provided by two separate Govermnent Departments. The Secretariat of Agriculture operates the Agricultural Gollteg of T)acna- and the Secretariat of Education is responsible for the Agricultural University of Mymensingh. At Mymensingh +he FciTso1+-aa ,-d N4gri,1+.,ieTpV.erinarv Scine- and Animnl Husbandrv are separate entities. Each faculty, in common with the Dacca College, offers a- A -,ar. r^llT'rQi f',- crina+corn -iroPx zthOnlivonaF n1lwn t1weo -prr intermediate course covering Bengali, English, maths and basic science. Each faculty also offers a Master's degree.

6.05 The Agricultural College at Dacca has in recent years been graduating some 5 stude:nts a year, and the Agricultural Faculty at Mymensingh about 125. This number of graduates represents the upper limtt of the 1970 emplo.ment opportumitiesj and the combined future enrollment was to be limited to about 100 students. Total applications for .t-he Ag,'.'nl -7r tya M,menrICi"h wepre 900 in 1970; and the jLU.L UL1J, ti±iUM .J Jtt4.-~ i-st~.J *- *-, ~ - A - - - -- _ University when completed will have a capacity of 3500 students with 590 studnvs sQ'-,.-4- 4^ -ra-u_f- -nar5+yr - 11 -

6.06 The parastatal authorities such as WAPDA, ADC and the Cooperative Banks are the preferred employers amongst graduating students. Veterinar--y graduates are largely absorbed by the Directorate of Livestock Services, whco are still under-staffed in relation to established posts. Their long-term requirement is for some Lo-50 veterinary graduates a year. The Faculty of Veterinary Science is capable of graduating about 80 students a year. Present output based up)on 1970 intake is about 40 per annuma. 6.07 Animal husbandry graduates, of which there are about 20 a year, heve few employment possibilities under present circumstances. The Directorate Of Livestock Services is seeking only veterinary graduates; the Directorate of Agriculture seeks only agronomists. Because of the small total number of graduates in animal husbandry produced to date, the employment problem has not been serious. However, policy changes in the Livestock Directorate and/or thne Agricultural Directorate may be required if adequate use is to be made of the Animal Husbandry Faculty. It is therefore suggested that the appointment of at least one animal husbandry graduate per District initially and more in later years be considered.

6.08 Land, teaching and research facilities are good at tYmensingh, and the staff have mostly been trained at Texas A and M. The three or four senior staff of each faculty have Ph.D degrees. Under a new bilateral aid agreement being negotiated prior to March 1971. USATD was to strengthen agricultural research and teaching at Mymensingh by the provision of six aoriCultnral spnecialits from the U3niversity of fsenrola.

C. Research

6.og Limited investigation activities in animal health and nrnduetion are carried out at the Animal Husbandry Research Institute at Comil1a, the livestock Research Centre at Noakhali and the Veterinnrv Research Tnsti-tutp at Dacca. These establishments have the prime responsibility for preparing viral and bacterial vaccines. Because of inadeoniate finsncring and npersnnnel training, they are unable to follow significant applied research programs or carrv out adenuate surveys nf animal health and production nrnhlams Ts Aar_i- cultural University at Mymensingh is gradually initiating a livestock research program mnd had access tn substant galAdRy. funds Thias woulivd appear t,o be the logical center for an expanded research effort in animal production problems.

6.10 Current research investigations in the field of animal production may not a'yJ flocu U&&- £,-J pler.s-J4t,J 4kegWh .lvec UUUA .UAI . ee ps-u- blems include:

(i) A study of the seasonal nature of the feed supply of sca.enrbntgn. ponn1l trynend a-nn-c ntH oP +)he remm that strategic supplementation might play in increasing 4 the ut 1iz4at' 0n+ of se-onnl food 1i-plUses.

4 (ii) A nnr%nAorin of -t-^ -wrkt -. Pfeed and \ .fM. 4JtyL &JJl%J V,X- w'..M fl U UjJLLU,a,4-.- 10 S JOttL VIOiUC OIU livestock production of draught bullocks and draught C"TiL? 0P V-&ra,51 z on rear-senta.4r fa,.4pnn -. -4-the main farming regions. - 12 -

(ii) TIie .eV JLUJJL.nt of a sovy 4aue Jor- g, r0t-U,ldut.1nd. ULSC.L.U-- Do proo- duce both vegetable oil for import-substitution, and oilcake as a i-i\estock feed sapplement

(iv) T-he -use of room temperature dlluents in artificial insemination and the field recording of the actual performance of artficialiy bred cattle.

(v) A comparison of the alternative methods available for increasing protein production and intake in the human population.

D. The Development Plan T.1Te uecaudue ending 1969/70 included the Second and Third Five- Year Development Plans. Of the total Rs 14,389 million budgeted for public developrm,ent expendlture during the Third Plan, 14.8 percent (Rs 2,121 million) was allocated to agriculture (excluding rural works developments). The s-um designated for animal husbandry was Rs 54.9 million, representing 2.6 percent of the agricultural projection or 0.L percent of the total budget. Expenditure was about 66 percent of the total allocation. The major reason for the investment shortfall was late allocation of funds. It was further aggravated by inadequate planning, poor training and the inexperience of supervisory personnel.

6.12 The start of the Fourth Five-Year Development Plan was postponed. In this Plan, agricuiture was to be allocated Rs 06)422.2 miilion, Of which animal husbandry at Rs 125 million represented 1.8%. Deducting the incompleted project carry-over from tne Tnird Pian, the new allocation to animal husbandry would have been Rs 96.9 million. This represented an increase of 400% over the actual expenditure during the preceding Plan. The proposed Development Budget for the Fourth Plan comprised a list of 49 projects. Major allocations sought under the Fourth Plan included the establishment of additional thana veterinary dispensaries and hospitals, expansion of the Government Dairy Farm At Savar, the construction oI a new Bureau of Veterinary Research and Biological Products, expansion of artiflcial insemination and increased disease control, especially New- castle disease and rinderpest.

6.13 The value of many of the proposals made for the livestock plan is doubtful. Heavy emphasis was given to the creation of veterinary hospitals and dispensaries rather than staff transport. Vaccine production was to be expanded and further training facilities for veterinary assistants were to be established. Further investments were envisaged in Government livestock farms. A new plan based on a careful revision of the Draft Fourth Five Year Plan may be required. Emphasis may need to be given to those measures involving preventive medicine, central diagnostic facilities, vaccine production, livestock advisory services and operational research. Educational training may be best eliminated from the responsibility of the Livestock Directorate and the policy of establishing veterinary hospitals may need considering. 2overnment livestock farms have a limited role to play in the livestock econormy and, apart from the development of Savar as a central research and dairy unit, they may warrant only minor priority. The development of artificial insemination and of poultry breeding facilities within the context of total farm management planning are the two key production activities that may need to be pursued energetically. - 13 -

VII. AN OVERALL DEVELOPMENT STRATEGY

7.01 The overwhelming problem facing agriculture in Bangladesh is that of providing sufficient food grains to at least maintain present consumntion levels of about 350 lb. per person per year. Given an increase in population in excess of 3 percent per annum, and the absence of virgin land for agricultural develonment. this task assumes an alarming dimension. By comparison, improvements in the quality of the food ninnlies brought about bv increased nroduction of meat. milk and eggs must be considered as less important, even though present consump- tinn levels of livestock products are so small. Nonetheless. it must be recognized that the widespread use of multiple cropping, so essential to in^rPced g:rain nrodiintion- mav require a substantial imnrovement in the size and work ability of the cattle population. Cultivation times between conseMtive crops may need to be reduced if critical nlanting dates for photo-periodic high-yielding crops such as IR-20 rice are to be met and if tlme is to he available for a fodder cron to be incorporated in the annual arab:Le rotation. As a by-product of the improvement in the draft nmqli+ty nf nAtt.1e, increased vielrds of meat and milk might become availa-- ble while greater crop yields and cropping intensities may yield greater niiqntitAes. o-1fale ninri and harvest rAesidues for utili%ation by poiltrv and goats.

7.02 It is equally important to recognize that, although substantial increases in land productivity are available to Bangladesh farmers, a substantial proportion of small farms in Bangladesh are presently incapable of ch.rnginr. their"mqnncag .enpnt syste.,ms andr ofP bhnm.inag peconom.icaly, viablei farm units. These are the farms so small that current income is too low to all…w further borrowing faPrs which seimply out of the nyici-l reach of the present Government advisory and credit services, and farms which are so horpeless'lyr ir. debht +rt m^n -rr.d +thn+a cor.ve r.tior. lerdincr to them may be impossible. Thirty percent of the total farm land of the province may fall into this categow. A 14i.etocaklr s+V.racTe for Bngla- desh may therefore have to be directed to where the farmer response is 14k-1- to be ..os+ vde-read =.d where the retu.. on+h ir- tial ivet ments made are sufficient to justify future extension of the development

I7J.03 Tl.e dec-velp.,m.er. of coherent livestock develo.,e.-,t policiesa. their successful implementation may need, as an essential starting point, an efficient _ cont'ro.A1 syst Am A_s noe A Aear ir A a _ impor tant weaknesses in the present organization of disease control. The shortcor,.ing.; of__4the.U prsntsser.ar eVas4-e IncreasedAuple ofP high quality vaccine, a better vaccine distribution system, a streng- thlelning of field-L vaccinatior1CL.UX sevices1-, CUI.A the17 %-_cration ofL cer.trl. . diagnostic facilities are suggested to be essential objectives. Reorga- ntzationr of ti.e medicine may wlLU be essentiau.cti of preventi'M rather than curativre medicine may well be essential. 7.04 Any reorganization of the disease control service of the country may also need to take account of the need to strengthen advisory services in animal production within the context of the integrated and complementary role that livestock must play in an intensive agriculture. Arguments have been brought forward from time to time supporting the establishment of a/new Directorate of Livestock Production and/or a Livestock Development Corporation. The obvious merits of this suggestion need to be tempered by the consideration that animal production is an integral part of the farming system and that the present need may be to reinforce this complementary integration at the farm level rather than handle livestock production in isolation from the total farm management problem.

7.05 The most critical restriction to livestock development in Bangla- 4 desh-A4 -i9 t.,e-I q-aI 4ad TT d mA4'e n ir. +h feed sup'yT for all farm animals. The response of farmers to this deofi cencyon o hasc been +heI logicl o:1 nn oa,falo IIi w ng na +.w.nl hPI r, +.A rn +A, produce smaller cattle. Snall and underfed cattle, however, make poorer use of th.e rna.tr.al feed resoi-ce +t-han would fewrer but somht.-.at lar. -r andr better fed animals. The logical objectivemay be one of reducing numbers and Lnrcreas;ing thne size, ru in ar. T.T "le ^ain-r of th a rm.t ctte thereby enabling a larger area to be cultivated more rapidly and mainte- ' nance rations to hbe a l .owr o.bn . r ,~.n,>w4;^-Tl n4'A toa+ rfniA ,^n mi The national fodder supply could be augmented appreciably by introducing, wherever---- oslb , a legI,nous fodder crop +'llk-;44t n- rice- by utilizing molasses and urea mixtures as a supplement to rice straw and rice h 't113, 'kwyten.J Aco, UJO aging 1tL'J.re J44t i 1--.,ill4ric-e -S uhat4 rl e bran may be separated from and not burnt with the rice hulls, and by using rikre-placers Por the fees:nG of ca_l.ves todceaeWorl and increase meat supplies.

7.06 Improvements in the numbers and productive ability of the poultry f`1.JI -- y u.eperd- on t4hree r,a:i fa0.ures 4a1) - 4. r,.ake-up-1- of4 the national flock; (b) the quantity and seasonal distribution of the feed suppL.y '-.of IsLIe scavenging birds/, (c/ W1he use of40st.rate.ic feed ng pzaci ces to minimize seasonal deficiencies in the feed available to scavenging bird.UL L'4).I.-1 Ai U1ruZj0-Uu0.LtU.LL1r,cr4s-bredin piugidillUprogra. UUL~L_LZ±L~±Luizngi,oedsck JJLP'J± WVUU Z~W& CO(U..LUoldrAp I-.p-LUJLy up-grade genetic quality. However, in the absense of a quantitative assessment of tDhe seasonval availability of range feed sOupplies, an-y improvement in poultry production rests on an insecure base. The quantification of range feed supplies is an urgent problem and its investigation may need to precede any attempt at up-grading the genetic quality of the national flock.

7.07 Regional patterns of livestock activity in Bangladesh are and will remain for some time linked the intensification oI arable agriculture. No land use specialization for livestock as distinct from crop production is foreseen for the next 10-20 years. Because of the small size of fanrs and of individual cattle herds, and because very few farmers can afford to keep bDils selected for size and quality, artificial insemination has an important part to play in improving the overall quality of the cattle herd. hne optimal breed or breed cross to be used remains - 15 -

to be determined. Good draught quality, moderate size, heat tolerance and reasonable milk production are the qualities which may have to be sought. The provision of urban milk supplies would, in all probability, be most readily and cheaply accomplished by the use of reconstituted milk, but further studies on altexmative forms of supply may be required before firm decisions on this matter are made. A review of the constraints and opportunities facing livestock production in Bangladesh suggests that a higher overall rate of growth is achievable than was attained over the last decade. The Draft Fourth Five-Year Plan gave annual growth targets averaging 3% per annum for meat and milk, and 2% for eggs. The growth rate figures then proposed are modest in relation to demands and should be attainable if the development strategy discussed above were adopted.

VIII. POTENTIAL PROJECTS FOR A LIVESTOCK DEVELOPMENT PROGRAM

8.01 The suggested development strategy for Livestock Development in Bangladesh covers four general areas of action -- namely, institutional reorganization, a greater emphasis on livestock advisory services and on key research problems, and the implementation of specific investment projects. The investment projects discussed below have been designed to be as independent as possible of the changes suggested for the institutional. advisory, and research fields to facilitate an early acceleration in the pace of agricultural develonment. Implementation of these projects may not offer a panacea to the problems of the livestock industry. Concomitant changes in the organization of Government servces. in educational and extension facilities, and in operational research work may be required if a secuire base for future nroient activities is to be established.

8.02 Three livestoek nroIec-ts are siuggested whic-h may warrant. earlv investment priority. All three require further preparation. The first nwe-+. isc fovy'r +.he exan.sio n of-vqtei-r n- nep iiirou ion and for po+tenc testing of the vaccine. The project suggests the construction of a new production rcomplex for bot+h vira-ml andr bacter_aln vq.-acncine The suino-ocsted m-nPro+ec might include the construction of suitable production facilities, the purchase and installation of manufacturing and storage equipment, Staff training and the organization of field distribution facilities. Project costs need ivtr a+A nit) sciantion wi+h pha.rm.aceu+ical firms. The capital costs might be of the order of US$2 million, and production costs should be comtitive wi+h the costs of imported vaccine. Because of the complexity of the technical problems involved in vaccine manufacture, overall technical mnnagement of the production co-.lex mny need to be provided by a pharmaceutical firm of international repute, if the Live- Stock Directorate is to cont+inue to produce vacc4es. Hwewvr, vair production is a burden on the Government and the possibility of letting high.'y reputable priJinate i-4.sa +vskeIra . wonrvaccine+4 4"n poutn I,na considering. Details on the project remain to be elaborated.

8.03 The second project suggestion covers a pioneer scheme for the A-eA1.a ^A. n,+ -4' a rm 4 a : n o-A4 a a-4P +Un hn e 4 VsI,4 +a+ , V a -L LVJVVJVd V U W.V.. .J_LJ.LV U.LSC*' LS 5 J ' * WI& UU.LA introduction of multiple crop production is already proceeding. The proposed proJect Lhas beer, suggestUedU fLo ILP.LemeILnui or iLnUabout n thar.as, likely to be involved in intensive crop production program. Within 50 thIIar-as tI here wo,U.LU Ube auout J.5. mILL.LiL.LVJI cLt,,.Le1. It , bsUeen, ass,LuIedU ULM - 16 -

one-third of these might participate in the project. The project would aim to establish a centiVra'l semien proUU4d.uio 1etrUI, semen storage an distribution facilities at the thana level, and approximately 20 cattle c rushes per Utinaia r inseminatlon1 p-urpus. Imprvemen-t of d control facilities in each participating thana would be an objective of the project and it is suggesteu that abuut 100 privately-ownedu!modeli farms be established in each thana on which the integration of livestock into intensive cropping programs coul Dbe duemounsbraeud.

°.01', Capital cost of the project may amount to about Tks 2.4 million. Expected benefits include an incremental beef output of 6,000 tons and 56,000 tons of milk annually at project maturity. Additionally, the intensified cropping patterns may be made possible by the increased size- draught power of the working oxen. The economic rate of retuurn expected in a project covering 180,000 cows may be about 27 percent It is suggested that the project might be administered by a central project authority which might be composed of the agencies responsible for irrigation, rural works development, the Directorates of Livestock and Agriculture. The project execution may need to be undertaken by a Technical Director and associated staff directly respon2ible -to the project authority.

8.05 The third project is also a pioneer type project. It alms at the improvement OI poultry production. The basic proposal visualizes the systematic up-grading of village flocks, the stringent control of New- castle disease and the strategic feeding of the improved stock A small number of layers might also be housed under deep litter conditions in areas of greatest market demand. The project is again suggested for 50 thanas, in which approximately 3 million birds might be found. The proposal assumes that 14 percent of these birds might be involved in the initial project, i.e. approximately IiUU,U0U village birds together with 14,000 crossbred layers to be housed under semi-intensive deep litter conditions. The -uggested project works may involve the construction and equipping of central facilities for producing young, high quality cockerels for up-grading of village flocks, the construction of deep litter units a-t village level, the widespread use of Newcastle disease vaccine in the project area, and improved feeding of young chicks by supplying a balanced feed supplement. Construction costs of the pro.ject may amount to about Tks 770,000, of which Tks 7)L2 000 may be accounted for by the Central Production Unit. Credit assistance to farmers using the deep litter units may also be required to the extent of about Tks 200 000 per annum. Project benefits are predicted largely from a 25 percent increase in egg production in village birds, an increase in body weight and therefore meat production and egg weight per bird, together with the output of 175 eggs per bird from the projected 16jo0o layers in deep litter. The overall rate of return for the project has been estimated at about 26 percent. It is suggested that responsibility for the project might reside with the Agricultural Development Corporation. who could appoint a Technical Project Director to implement the scheme. Close coordination and cooperation with the thana livestock officers of the LDS may be essential while credit and feed supplies may require the involvement of local cooperatives. 8.o6 Simultaneously with these three suggested projects, institutional reorganizations may be necessary. The primary function of the Department of Livestock Services in the veterinary sector may need to be changed to prevention rather than curative medicine, and for this purpose production, potency control and utilization of vaccines may have to be activated. Adequately trained field staff may be required to cater for the missing livestock husbandry advisory services. This could probably best be combined with the artificial insemination service in the areas of the suggested cattle improvement project, but in general, animal husbandry extension might best be carried out by the Agriculture Extension Directo- rate. It already has a higher staff intensity than the Livestock Direc- torate, and suggestions for intensive agricultural development (see Vol. :[) include proposals for a staff build up. Animal husbandry is as integral a part of farming as crop husbandry and would therefore fit well into the advisory duties of extension officers. All staff may require considerable training and the appointment of at least one animal husbandry specialist per district may be necessary to guide animal husbandry extension. The existing teaching and research facilities at Mymensingh University are adequate and it is suggested that the educational programs there may be strengthened in both veterinary science and animal husbandry. More attention may have to be given to animal husbandry, particularly fodder production and cattle husbandry in the curriculae of the Veterinary Training Institute at Mymensingh. Institutional and budgetary arrangements may need to be made to ensure the execution of research on key problems of the livestock industry as mentioned earlier at the existing university and Government centers, and the full utilization of the results obtained.

8.07 Animal production will most probably remain a complementary activity to crop production in Bangladesh. The projects and institutional arrangements outlined may lead the way to a livestock industry situation with a better balance between livestock numbers and their feed base, and rhich might make better use of the limited feed resources for the production of human food and the provision of adequate land preparation. It is expected that the results obtained during initial years may clarify existing problems and help to define livestock development proposals for the majority of the farms in the province.