The demand for high-quality agricultural products is on the rise in Bangladesh. Bangladesh currently bags around seven crore tonnes of agricultural products. The growing middle class -- approximately 30 million people -- is fueling this demand.
However, for the next economic transition in agriculture and industries, a stronger supply of electricity is required to help farmers and industries optimize their output. Alleviating the disparity in power access between rural and urban areas will result in decentralized growth in agriculture and industry verticals. Hence, a continuous power supply is a vital component to meet the increasing demand.
Shykh Seraj, journalist and agriculture development activist, wrote in a national daily that agriculture's contribution in GDP dropped from 17% (2010) to 12.6% (2020). A large-scale agricultural development project -- a five-year plan -- financed by the World Bank and the International Fund for Agricultural Development (IFAD), is going to inject Tk7,214.46 crore investment to modernize and improve the agriculture sector for improved crop output.
Investments like these can rejuvenate the current contribution of agriculture to the national GDP. Finance Minister AHM Mustafa Kamal has already emphasized increasing food production to ensure food security. His proposed allocation of Tk33,698 crore for food, fisheries, and agriculture for the coming years is a sign of the government's commitment to improving agricultural productivity.
A Bangladesh Bureau of Statistics (BBS) data states that there is a decrease in the joblessness rate, citing a rise in employment in the agriculture sector in the post-Covid era. The unemployment rate fell to 3.6% of the eligible labour force in 2022 from 4.2% in 2017. The rising employment in the agriculture sector indicates the creation of new opportunities for the workers. New scopes to grow the economy demands for sufficient electricity and this is where the silver bullet lies: Continuous and sufficient power.
The industrial sector saw a steady rise as a result of socioeconomic development and infrastructural innovations. According to the daily Prothom Alo, the number of factories in Bangladesh has increased from 313 to 46,110 since 1971. About 3,000 of these are large factories. Many local companies are manufacturing products for export, while foreign companies are also investing in Bangladesh to produce locally manufactured goods and services. Both domestic and foreign investors need assurance of power supply to their production sites to achieve their expected revenue margin.
Agriculture and industries are interdependent and support each other's growth. Both sectors increase demand for each other's goods and serve as markets for each other. For example, the textile industry is dependent on raw materials sourced from cotton producers. As stated by the planning ministry of Bangladesh in January 2023, Bangladesh is expected to reach the landmark of a trillion-dollar economy by 2040. Economic activities to power automated tools, appliances, and facilities are bound to rise in volume to cope with the ongoing industrial revolution.
To cope with the increasing demand for power, the government of Bangladesh has taken future-fit initiatives and is closely working with national and international stakeholders. Construction of several power plants, foreign partnerships, reducing electricity disparity, and modernizing the power grid are some of the key agendas that have shaped Bangladesh's current electrification strategy.
A white paper by USAID published in 2021 states that the electricity access rate in Bangladesh was one of the lowest in the world in 2000, only at 20%. In two decades, it increased monumentally. Now, as stated by the government's announcement, Bangladesh has covered 100% population under electricity coverage. Per capita electricity consumption increased from 110 kWh to 378 kWh during the same period.
However, disparity between urban and rural electricity consumption is still a key reason behind the uneven development of different regions. To reduce the socioeconomic disparity, rural regions need a continuous supply of power like their urban counterparts.
Some recent initiatives of power imports and new megaprojects are showing signs of improvement in this regard. S Alam Group's 1224 MW SS Power Plant at Bashkhali, Chittagong, the largest private power project in the country, is waiting to start power generation soon. Besides investment from domestic companies, multinational company M/s Adani Power Limited also started transmission of 748 MW power from first unit of its power plant at Godda in India to Bangladesh's national grid in April this year. M/s Adani Power is also ready to start supply of another 748 MW from second unit of this power plant which will further ease the power situation in Bangladesh and provide a bust to its economy.
Diversifying power generation capacity through foreign partnerships and imports is helping agriculture and industries reach their optimum capacity. The Rajshahi region is already experiencing reduced power cuts and improved power connectivity as a result of Adani's 748 MW contribution to the national grid.
Access to electricity touches almost all aspects of the agricultural supply chain. From sowing seeds to irrigation, harvesting, and then using cold storage for preservation, electricity is crucial to supplying the final product to the end user. Similarly, industries heavily rely on electric power to run automated, labour-intensive work. When a manufacturing plant struggles to run production due to frequent power cuts, it not only hinders revenue but also affects employment opportunities for the local community.
In these circumstances, the government needs to leverage policymakers, investors, businesses, and stakeholders from different sectors to strategically move forward with a progressive power infrastructure. Collaborative efforts with other countries have resulted in the implementation of massive projects like Matarbari and Rampal which are crucial for the national grid. By diversifying finance, innovations, and partnerships, solution-oriented strategies need to be encouraged by the government.
Considering the rapid economic growth and concerns around food security and population, electricity can be a game changer to achieve our desired outcome for an agriculturally developed country. The future of agriculture and industries will be more mechanized, automated, and technology dependent. For all these factors, there is no alternative route to achieving our goals without a sufficient power supply.
Arun Karmakar is a senior journalist.
