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Agricultural exports are compatible with food security

  • Published at 07:31 pm October 16th, 2021
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File photo of farmers harvesting crops Mahmud Hossain Opu/Dhaka Tribune

The article does not advocate nor defend any specific trade theory

In light of Prof Rabbani’s thoughtful response to my article, I am happy to offer a few points of clarification.

The article does not advocate nor defend any specific trade theory.

On the contrary, it begins with the observation that patterns of international trade are not consistent with the predictions of classical trade theory, whether based on absolute advantage or comparative advantage.

The article also does not promote an “exports only” development strategy, or any other such extreme position.

The premise of the article is that agriculture production in Bangladesh has reached a level, such that it makes sense to seek to expand into export markets.

Such diversification is imperative for a country that relies heavily on two sources of foreign exchange.

Exports of food, or the paucity of food, were not responsible for the catastrophic Bengal famine of 1943.


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Food production was actually higher in 1943 than before.

An unexpected food price spike, triggered by government wartime measures, left vulnerable populations unable to buy food, and neither the provincial nor the central government had the wherewithal to take the obvious step of imposing price controls or rationing.

The authorities forgot, or perhaps did not understand, that markets serve people. Not the other way around.

With a more useful understanding of the roles of governments and markets, exports can serve the people of Bangladesh.

The recent history of India, Vietnam, and Ecuador suggests agricultural exports are entirely compatible with food security.

The remarkable achievements of Bangladesh agriculture over the past few decades have been widely discussed, including by this author, elsewhere.

Export agriculture, however, is a qualitatively different activity from domestic agriculture.

The former requires resources and competencies that developing country farmers, especially those working on a small scale, typically do not possess.

Organic cotton, for instance, was promoted as a boon for African farmers, something that leveled the playing field.

In reality, it did little for farmers in Africa, who could not find a way through the thicket of paperwork and certification requirements to reach the buyer.

Organic cotton did turn out to be a boon for Turkey, however.

With respect to the price of Hilsa fish, price signals motivate and influence resource allocation in a functioning free market economy.

So if Hilsa prices rise, market actors will seek to supply more Hilsa, thus driving down prices, and making the fish more affordable, to more households.

But this process assumes low barriers to entry, and the existence of institutions that can educate, finance, and otherwise equip farmers to grow and harvest Hilsa.

Banning exports of Hilsa is easier, but it is increased production and consumption that grows and develops an economy.

Export bans would not discourage Bangladeshis from seeking the services of human smugglers, but creating livelihoods in the rural economy might. 

And the trafficking of women and girls has less to do with exports, and a lot to do with the persistence of one of the most pernicious extractive institutions ever created: the dowry system.

It is work in garment factories that have given countless Bangladeshi women a way out; fish and shrimp export processing plants could do the same.


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To create rural livelihoods that will change the lives of men and women, the city and the government have a part to play.

Actors and institutions from the city offer technology, financing, and access to markets; the government can offer land.

Public lands, if redistributed among the landless, or among those living in homesteads too small to be viable for agriculture, would create hundreds of thousands of farmers in Bangladesh.

So those who have given up their careers or lives in the city, to invest and share their knowledge, energy and resources in farming, are not displacing others; they are empowering them.

Finally, if previous generations failed to create export industries, then that hardly warrants pre-emptively abandoning future attempts to do so. Rather, it calls for learning, and trying again.

Can Bangladesh learn to do what India, Vietnam and Ecuador have done? To ask the question is to answer it.

 

The author is a writer and researcher in Dhaka, who teaches at ULAB. He previously spent a decade in investment banking, in New York.

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