Bangladesh has successfully attained 100% self-sufficiency in animal meat production, with the agriculture sector playing a pivotal role in this achievement. Additionally, this sector makes a significant direct contribution of approximately 12 percent to the country’s economy. Furthermore, within a relatively short span of less than a decade, Bangladesh has risen to the esteemed rank of third in the world for rice and vegetable production, and second for fish production.
However, despite these remarkable accomplishments, farmers in remote regions of Bangladesh continue to rely on manual labor to carry out their entire range of productive activities. The technology and machinery necessary for farming and farm management remain prohibitively expensive for these farmers. Furthermore, acquiring high-quality seeds, fertilizers, and pesticides incurs substantial expenses, consequently escalating the overall cost of production. Regrettably, the farmers are not receiving fair prices for their produce, exacerbating their financial challenges.
Compounding the situation, the credibility of most farmers in the country is relatively low, leading to their inability to secure loans from banks or financial institutions. In response to these challenges, several agritech companies have embarked on their journey in Bangladesh in recent years. These companies are tirelessly working towards the advancement of agriculture and the betterment of farmers across the nation.
Bangladesh is an agricultural country. It has been cultivating various varieties of paddy, wheat, jute, maize, pulses, and different types of vegetables in this fertile land since ancient times, which plays a special role in the economy of the country. According to data from the Bangladesh Bureau of Statistics, the agriculture sector contributed about 12 (11.66%) percent to the country’s GDP in the fiscal year 2021-22. Agriculture provides employment to 43 percent of the country’s total labor force, comprising more than 2 crore people, through productivity, income growth, and employment generation in rural areas.
In the past few decades, Bangladesh has been progressing towards becoming 100% self-sufficient in terms of food production. According to data from the Bangladesh Ministry of Agriculture, the country currently has a total of 161 lakh hectares of cropland, where rice, wheat, maize, mustard, potato, and various types of vegetables, and fruits are commercially cultivated. Among them, Bangladesh ranks 3rd in the world in terms of rice and vegetable production. Additionally, Bangladesh has risen to the 2nd position globally in fish production. At present, Bangladesh has achieved self-sufficiency in meeting the needs of non-vegetarians.
The main reason behind such development and increase in production in the agricultural sector of Bangladesh is the various types of allowances and subsidies given by the country’s government. The current government has reduced the prices of fertilizers used in agriculture four consecutive times. Besides, the opening of bank accounts for farmers in exchange for 10 Tk, direct transfer of subsidy money for irrigation water to the accounts of farmers, and distribution of material support records among 1 crore 82 lakh farmers have played an important role in the development of the country’s agricultural sector.
In addition to this, the current government has continued to provide various agricultural machinery, including tractors, power tillers, and harvesters, at a 25 percent subsidy to 35 districts of the country. They also offer free fertilizer and seed supply under the agricultural rehabilitation program, as well as an incentive package for Aush varieties of rice. Even after receiving so much assistance, allowances, and subsidies, the farmers of Bangladesh are still far behind in terms of financial support. Although the government provides free fertilizers and seeds, they do not reach all farmers across the country due to various reasons. As a result, farmers have to buy essential fertilizers, seeds, and pesticides at high prices.
In this case, although the farmers get small loan facilities from organizations like the country’s state-owned Krishi Bank, BRAC Bank, and various NGOs, the obligation to submit various documents in these cases makes the process of taking loans more difficult for marginal farmers. Due to this situation, farmers usually have to take loans from village moneylenders or relatives at high-interest rates. Meanwhile, due to the non-availability of fair value during the crop season, most of the profit from the crop is spent to meet the debt obligations.
Transition to Technology
Even at the beginning of the 21st century, most of the farmers in Bangladesh used plows and cows to till the land. From sowing seeds to applying fertilizers and pesticides, harvesting and processing the land involved manual labor. However, at present, various technologies are being employed in Bangladesh in agriculture, fish farming, cattle rearing, and poultry farming. Tractors are used for plowing, power tillers for seed sowing, machinery for fertilizer and pesticide application, and harvesters for harvesting. Importers like ACI Motors currently import high-quality machinery, tractors, power tillers, and other essential equipment like harvesters from abroad and deliver them to the farmers of the country. Although crop production has increased continuously, the adoption rate of technology in agriculture in Bangladesh is still very low. Increased adoption of these technologies has the potential to further increase crop production in the country. However, it is not feasible for farmers in marginal areas of the country to buy these machines due to the high costs involved.
Apart from this, advanced technologies like Automated Cleaning Robots, Egg Collecting Robots, Temperature Control Systems, Water & Feed Control Machines, and Recycling Devices are being used in poultry and cattle rearing. Additionally, large-scale agro farms are increasingly using IoT-based AI-integrated devices, automated milking, feeding, and cleaning systems, and temperature control to monitor various aspects such as body temperature of all species of cattle, feeding, maternity, and disease. However, the use of these advanced technologies is limited to only a handful of large agro farms in the country. As these technologies are quite expensive, it is almost impossible for farmers in rural areas of the country to afford and utilize them. Consequently, farmers and ranchers in remote areas of the country still rely on manual labor for their work. Adopting these advanced technologies requires a substantial initial investment that is not accessible to marginal farmers.
Several agritech start-ups have emerged in Bangladesh in less than a decade with the aim of helping the country’s farmers manage agriculture and farms in a more sustainable way by removing various financial barriers. These agritech startups assist the country’s rural farmers by providing low-interest loans, agricultural information, seeds, and fertilizers at reasonable prices, introducing various types of assistive technologies, and providing supply chain support to ensure fair prices and improve living standards.
Rise Of Agritech
Agritech companies in Bangladesh primarily focus on various aspects of farming, such as farm inputs (seeds, fertilizers, pesticides), financing (lending to farmers), output (crop sales), and addressing supply chain challenges. These organizations work on one or more of these issues.
One of the most significant challenges faced by farmers in the agricultural sector of Bangladesh is financing. iFarmer, one of the country’s most popular agritech start-ups, commenced its journey in 2019 to offer low-cost collateral-free financing to meet the diverse financial needs of farmers. This includes purchasing agricultural implements and machinery or managing the farm during the farming season. The start-up verifies customer eligibility using alternative data and its credit scoring algorithm, collaborating with various financial institutions and lenders. So far, iFarmer has onboarded more than 84,000 farmers in Bangladesh and facilitated a total financing of Tk 204 crore (2,040,000,000). Additionally, another agritech company called WeGro works to provide essential funding and credit support to farmers from various investors. Besides financing, iFarmer also collaborates with the supply chain to ensure the collection and distribution of agricultural outputs across the country, ensuring fair prices for agri inputs, including quality seeds, fertilizers, pesticides, and crop sales.
Agritech start-ups in the farm input segment are involved in sourcing quality seeds, fertilizers, pesticides, etc., and supplying essential agricultural inputs to farmers. Apart from iFarmer, other start-ups operating in this segment, such as WeGro, iPage, Bhalo, and Deshi Farmer, collaborate with local input vendors and various NGOs to source high-quality, hygienic seeds, fertilizers, and pesticides for farmers at affordable prices. Additionally, several agritech start-ups in Bangladesh provide crop-specific advisory services, starting from complete soil testing of farmers’ land to offering advice on various agricultural matters. They guide farmers on the profitability of cultivating different types of crops on specific lands. Furthermore, these agritech companies offer IoT, RFID, AI, and ML-based digital services for farm management, including genetic information collection and storage, breeding, dairy management, and primary care services. They also provide early notifications of livestock diseases, continuous temperature monitoring, and alert SMS to farmers about maturity stages, crop-related issues, or invasive insects. Moreover, some agritech companies in the farm management segment offer insurance facilities, ranging from livestock death insurance to theft insurance and disability insurance. Notable agritech companies in the farm management sector include iFarmer, iPage, Adarsh Praniseba, Smart Gowala, Ajker Krishi, and Fosholi.
Another major obstacle for farmers in Bangladesh is the lack of fair prices for their hard-earned crops. Due to various reasons, farmers often do not receive fair prices during the crop season, and sometimes they are forced to sell their produce at lower prices compared to the previous year. Moreover, even at the consumer level, the prices of all agricultural products, from rice and pulses to vegetables, curry, fish, meat, eggs, and milk, are increasing every year. This situation is primarily caused by issues in the country’s supply chain. To address these challenges and ensure fair prices for marginal farmers while maintaining affordability at the consumer level, several agritech start-ups have emerged. These start-ups typically source products directly from marginal farmers for the country’s big supermarkets and other institutions. Additionally, some organizations operate as marketplaces, delivering farmers’ produce directly to customers’ doorsteps. Alongside iFarmer, other agritech start-ups operating in the agri supply chain sector include Agroshift, Amader Khamar, Nagar Khrishi, and fashol.com.