Natio onal Food d Policy P Plan of A Action an nd Count try Invest tment Pl lan

Mon nitorin ng Repo ort 201 12

Ju uly 2012

FPMU, Food Div vision Ministry o M of Food an nd Disast ter Manag gement Gover rnment o of the Peo ople’s Rep public of Banglade esh

This document is the result of a joint effort by the: Ministry of Agriculture Ministry of Finance (Finance Division and Economic Relations Division) Ministry of Fisheries and Livestock Ministry of Food and Disaster Management (Food Division and DMR Division) Ministry of Health and Family Welfare Ministry of Industries Ministry of Local Government, Rural Development and Cooperatives (LG Division and RDC Division) Ministry of Planning (Planning Division, Statistics and Informatics Division and IMED) Ministry of Primary and Mass Education Ministry of Social Welfare Ministry of Water Resources Ministry of Women and Children’s Affairs Coordinated by the

FPMU, Food Division Ministry of Food and Disaster Management with technical support from the National Food Policy Capacity Strengthening Programme (NFPCSP) ISBN 978‐984‐33‐5416‐7

Published by FPMU, Ministry of Food and Disaster Management. For copies/update on the Monitoring Report please contact: DG, FPMU – Khadya Bhaban, 16 Abdul Ghani Road, Dhaka‐1000; dg@fpmu.gov.bd

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Table of contents
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Table of contents ........................................................................................................................... iii Acronyms ...................................................................................................................................... iv . Foreword ....................................................................................................................................... ix Executive summary ........................................................................................................................ xi 1. Introduction ........................................................................................................................... 1 2. Approach to monitoring ......................................................................................................... 3 2.1. Outcome/impact monitoring ....................................................................................................... 4 . 2.2. Output monitoring ........................................................................................................................ 4 2.3. Input monitoring .......................................................................................................................... 5 . 2.4. Institutional monitoring ................................................................................................................ 5 3. Progress towards NFP goals and outcomes ............................................................................. 7 3.1. NFP goals ...................................................................................................................................... 7 3.2. Objective 1 outcomes ................................................................................................................. 10 3.3. NFP Objective 2 outcomes ......................................................................................................... 18 . 3.4. NFP Objective 3 outcomes ......................................................................................................... 23 . 4. Availability: progress towards CIP and NFP PoA outputs ....................................................... 29 4.1. Programme 1: Sustainable and diversified agriculture through integrated research and extension .................................................................................................................................... 29 4.2. Programme 2: Improved water management and infrastructure for irrigation purposes ........ 35 4.3. Programme 3: Improved quality of input and soil fertility ......................................................... 38 4.4. Programme 4: Fisheries and aquaculture development ............................................................ 44 4.5. Programme 5: Livestock development, with a focus on poultry and dairy production ............. 47 5. Access: progress towards CIP and NFP PoA outputs .............................................................. 51 5.1. Programme 6: Improved access to markets, value‐addition in agriculture, and non‐farm incomes ............................................................................................................................................. 51 . 5.2. Programme 7: Strengthened capacities for implementation and monitoring of the NFP and CIP actions .................................................................................................................................. 57 5.3. Programme 8: Enhanced public food management system ...................................................... 61 5.4. Programme 9: Institutional development and capacity development for more effective safety nets ......................................................................................................................................... 67 6. Utilization: progress towards CIP and NFP PoA outputs ........................................................ 73 6.1. Programme 10: Community based nutrition programmes and services ................................... 73 6.2. Programme 11: Orienting food and nutrition programmes through data ................................. 80 6.3. Programme 12: Food safety and quality improvement ............................................................. 85 7. Food security and CIP financing ............................................................................................ 90 7.1. Recent trends in food security in the National Budget .............................................................. 90 7.2. Financing of the CIP .................................................................................................................... 91 8. Overall assessment and recommendations ......................................................................... 106 8.1 Overall assessment .................................................................................................................... 106 8.2 Recommendations ..................................................................................................................... 107 Annexes ...................................................................................................................................... 111

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Acronyms ADP ADW AI AIS ANC AoI ATIs BADC BARD BARC BARI BAU BB BBF BBS BCC BCIC BDHS BFDC BFRI BIHS BINA BIRDEM BJRI BLRI BMDA BMS BRDB BRRI BSRI BSTI BWDB CARS CBN CD CDC CED CFPR CIMMYT CPI CPRC Annual Development Programme Alternate Drying and Wetting Artificial Insemination Agriculture Information Service Antenatal Care Area of Intervention Agricultural Training Institutions Bangladesh Agricultural Development Corporation Bangladesh Academy for Rural Development Bangladesh Agricultural Research Council Bangladesh Agricultural Research Institute Bangladesh Agricultural University Bangladesh Bank Bangladesh Breastfeeding Foundation Bangladesh Bureau of Statistics Behavioural Change Communication Bangladesh Chemical Industries Corporation Bangladesh Demographic and Health Survey Bangladesh Fisheries Development Corporation Bangladesh Fisheries Research Institute Bangladesh Integrated Household Survey Bangladesh Institute of Nuclear Agriculture Bangladesh Institute of Research and Rehabilitation in Diabetes,Endocrine and Metabolic Disorders Bangladesh Jute Research Institute Bangladesh Livestock Research Institute Barendra Multipurpose Development Authorities Breast Milk Substitutes Bangladesh Rural Development Board Bangladesh Rice Research Institute Bangladesh Sugarcane Research Institute Bangladesh Standards and Testing Institute Bangladesh Water Development Board Centre for Advanced Research in Sciences Cost of Basic Needs Cooperative Department Centres for Disease Control Chronic Energy Deficiency Challenging the Frontiers of Poverty Reduction International Maize and Wheat Improvement Center Consumer Price Index Chronic Poverty Research Center iv CIP CMNS CNU CSISA CSOs DAE DAM DAMA DCI DDP DEI DES DGFP DGHS DoF DoForestry DLS DMB DPHE DPs DRF DRR DSS DU DWA ECRRP EGP EEP ERD EU FAO FCT FPMC FPMU FPWG FSNSP FYP GAFSP GAM GHP GDP GIZ GoB GMP HACCP

Country Investment Plan : A Roadmap Towards Investment in Agriculture, Child and Mother Nutrition Survey Child Nutrition Units Cereal Systems Initiative for South Asia Civil Society Organizations Department of Agricultural Extension Department of Agricultural Marketing Department of Agricultural Marketing and Agribusiness Direct Calorie Intake Desirable Dietary Pattern Dietary Energy Intake Dietary Energy Supply Directorate General of Family Planning Director General of Health Services Department of Fisheries Department of Forestry Department of Livestock Services Disaster Management Bureau Department of Public Health Engineering Development Partners Development Result Framework (of the 6th FYP) Directorate of Relief and Rehabilitation Department of Social Services Dhaka University Department of Women Affairs Emergency 2007 Cyclone Recovery and Restoration Project Employment Generation Programme Economic Empowerment of the Poorest Economic Relations Division European Union Food and Agriculture Organization Food Composition Tables Food Planning Monitoring Committee Food Planning and Monitoring Unit Food Policy Working Group Food Security Nutritional Surveillance Program Five Year Plan Global Agriculture and Food Security Program Global Acute Malnutrition Good Hygienic Practices Gross Domestic Product Gesellschaft für Internationale Zusammenarbeit Government of Bangladesh Good Manufacturing Practices Hazard Analysis and Critical Control Point v HFSNA HIES HILIP HKI HPNSDP HSDP IAPP IEC IDA ICDDR,B ICN IDD IEDCR IFA IPCC IPPC IPH IPHN IPM IMCI IMED INFS‐DU IYCF JCS LCG‐AFSRD LGD LGED MAPP MCHTA MICS MoA MoC MoEF MoFDM MoFL MoHFW MoI MoLGRD MoP MoWR MoSW MoU MoWCA MTBF

Household Food Security and Nutrition Assessment Household Income and Expenditure Survey Haor Infrastructure and Livelihood Improvement Project Helen Keller International Health, Population and Nutrition Sector Development Programme Health Sector Development Programme Integrated Agricultural Productivity Project Information, Education and Communication Iron Deficiency Anemia International Centre for Diarrhoeal Disease Research, Bangladesh International Conference on Nutrition Iodine Deficiency Disorders Institute of Epidemiology, Disease Control and Research Iron Folate Supplementation Intergovernmental Panel on Climate Change International Plant Protection Convention Institute of Public Health Institute of Public Health and Nutrition Integrated Pest Management Integrated Management of Childhood Illness Implementation Monitoring and Evaluation Division Institute of Nutrition and Food Science – Dhaka University Infant and Young Child Feeding Joint Cooperation Strategy Local Consultative Group on Agriculture, Food Security and Rural Development Local Government Division Local Government Engineering Division Micro‐enterprise and Agricultural Promotion Project Ministry of Chittagong Hill Tracts Affairs Multiple Indicator Cluster Surveys Ministry of Agriculture Ministry of Commerce Ministry of Environment and Forests Ministry of Food and Disaster Management Ministry of Fisheries and Livestock Ministry of Health and Family Welfare Ministry of Industries Ministry of Local Government, Rural Development and Cooperatives Muriate of Potash Ministry of Water Resources Ministry of Social Welfare Memorandum of Understanding Ministry of Women and Children Affairs Medium Term Budgetary Framework vi NAPA NARS NC NCD NCHS NFP NFP PoA NFNP NPAN NGOs NNP NNS NSAPR NSPS NWG OMS OP ORS PA PMO PoA PRSP RDA RDCD RDRS REACH REOPA SAAOs SAM SFYP SMART SMILE SPA SPRING SRDI SSN SUN TAT TLS TSP TTs TVET USG WFP

National Adaptation Programme of Action National Agricultural Research System National Committee Non Communicable Diseases National Center for Health Statistics National Food Policy National Food Policy Plan of Action National Food and Nutrition Policy National Plan of Action for Nutrition Non Governmental Organizations National Nutrition Programme National Nutrition Services National Strategy for Accelerated Poverty Reduction National Social Protection Strategy Nutrition Working Group Open Market Sale Operational Plan Oral Rehabilitation Project Assistance Prime Minister’s Office Plan of Action Poverty Reduction Strategy Paper Rural Development Academy Rural Development and Cooperatives Division Rangpur Dinajpur Rural Service Renewed Efforts Against Child Hunger Rural Employment Opportunities for Public Assets Sub‐Assistant Agricultural Officers Severe Acute Malnutrition Sixth Five Year Plan Specific, measurable, achievable, relevant and time‐bound Sustainable Market Infrastructure for Livelihoods Enhancement Strategic Partnership Arrangement Strengthening Partnerships, Results and Innovations in Nutrition Globally Soil Resource Development Institute Social Safety Net Scaling Up Nutrition Technical Assistance Team Truthfully Labeled Seeds Triple Super Phosphate Thematic Teams Technical and Vocational Education and Training Urea Super Granule World Food Programme

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Foreword

The Government of Bangladesh is firmly committed to the progressive realization of the right to food, as enshrined in the Constitution. The National Food Policy (2006) outlines a comprehensive strategy through increased food availability, food access and nutrition. Its Plan of Action (2008‐2015) is a set of prioritized and coordinated actions and targets towards NFP goals, while the Country Investment Plan 2011 states the corresponding investment requirements in line with the Sixth Five Year Plan and the Millennium Development Goals. At the May 2010 Food Security Investment Forum, this framework received the endorsement and support of the Honorable Prime Minister Sheikh Hasina, in recognition of its role for the realization of the Electoral Manifesto of the Awami League and the Vision 2021. Food security for all can be achieved most rapidly through a coordinated and sustained effort between the Government, development partners and civil society. This entails the regular monitoring of achievements against targets. The Monitoring Report 2012 is the latest iteration of this process, following the one published in 2010. It jointly monitors commitments in all three documents: the NFP, the PoA and the CIP. The production of the Monitoring Report 2012 was led by the Food Planning and Monitoring Unit (FPMU) of the Ministry of Food and Disaster Management in consultation with 17 partner ministries/divisions, and technical assistance from FAO under the National Food Policy Capacity Strengthening Program (NFPCSP) and financial support from EU and USAID. Overall, the Monitoring Report 2012 indicates that Bangladesh is becoming a more food secure, better nourished and healthier country. However, progress has been uneven. Food is more readily available in the country, but many people still need to access it in adequate quantity, quality, diversity and regularity. The CIP has achieved substantial results in scaling up food security interventions: the budget is now 9.1 billion USD of which 5.2 billion are already financed. Of the total financed, the government contribution is 3.3 billion USD (63%) and the remaining 1.9 billion (37%) is the contribution of Development Partners. Moreover, as of June 2011, a total of 1.75 billion USD had been pledged by the donor community to cover the 3.9 billion USD residual gap. While progress towards filling the financial gap is satisfactory, the rate of implementation of funded projects needs to be scaled up. Monitored policies lead to more effective policies. With this in mind, I trust this Monitoring Report will be widely read and its recommendations will provide a basis for upcoming activities of the Government, development partners and civil society who share an interest and heartfelt desire to eradicate food insecurity in Bangladesh. Dhaka, 5 July 2012 Dr. Muhammad Abdur Razzaque, MP Minister Ministry of Food and Disaster Management

Executive summary Progress towards NFP goals The overall goal of the NFP is to ensure dependable sustained food security for all people of the country at all times. Progress has been encouraging, most notably on under‐5 underweight and under‐5 stunting for which the targets set for 2015 appear achievable. For undernourishment, given the trend observed from the limited information available, the target does not appear achievable without additional efforts. Quite satisfactory is the progress toward the targets for poverty and food security set in the Monitoring and Evaluation Framework of the SFYP. Indeed, all the indicators ‐rate of growth of agricultural GDP, government spending on social protection, poverty, real wages and under 5 underweight‐ have moved in line with the targets. Progress towards NFP outcomes Availability: Food supply has been steadily growing with limited volatility of rice production. The limited increase in rice import dependency registered in 2010/11 is only a result of the significant imports carried out by the GoB for stabilizing domestic supply. The main constraint to improved availability is highlighted by the lack of significant progress in diversification but rather a marginal rise in the share of rice value added in total food value added. Recommendations include: Further promoting intensification, sustainability and resilience of rice production in response to a rising demand in the context of high population and income growth. Adjusting interventions to favour more diversified food production, including promotion of investments in processing and marketing. Investments in agricultural research to tackle risks associated with climate change and promoting the valorization of unused land in coastal areas. Updating/implementing policies on sustainable management of natural resources. Facilitating agricultural mechanization in the context of increasing labour scarcity. Access: A committed focus and continuity in anti‐poverty policies by successive Governments over the last 20 years has led to sustained decline in poverty with people having become less poor and extreme urban poverty having sharply dropped. However, gender‐based food insecurity persists with women earning substantially less than men. On the whole, real wages expressed in rice terms increased significantly, while food prices rose faster than other prices. Recommendations include: Further implementation of legal protection against gender‐based and other types of discrimination, promotion of social inclusion, and strengthening of rights‐based institutions. A more equitable growth pattern to accelerate food insecurity reduction. Ensuring that poverty is also measured using the Direct Calorie Intake (DCI) method in the Household Income Expenditure Survey (HIES) so that food access in Bangladesh can be more accurately assessed. Mainstreaming interactions between migration and food access into policies and programmes. xi Utilization: While the trend in diversification is limited in terms of production, it is more encouraging in terms of consumption although the dietary energy supply coming from cereals is still above the recommended 60%. There has also been improvement in the chronic energy deficiency of women, but the incidence of overweight is steadily rising. Children receiving a minimum acceptable diet reduced over the period under review, although this is partly due to the adoption of a stricter definition of complementary feeding diversity. Consumption of adequately iodized salt has declined. Anemia in pregnant women has decreased although it remains a severe public health problem. Recommendations are to: Mainstream nutrition in agricultural and key sectoral policies and programmes. Focus policy targets on maternal malnutrition. Devise strategies for reducing iron deficiency anemia among pregnant women. Maximise the impact of poverty reduction on nutrition by integrating food security, livelihoods, social protection, health care practices and nutrition interventions. Translate policies into practice, by strengthening the existing institutional set‐up for multi sectoral coordination and reinforcing the planning process, resource allocation and committment by all partners. Output monitoring: CIP Programmes and associated NFP PoA Areas of Intervention Sustainable and diversified agriculture: The development of new varieties has been steady over the years for rice. Over the recent years, development for vegetables, oil seeds and fruits has been more dynamic than for wheat, maize, potato and pulses varieties. Farmers’ training declined in 2010/11 after three years of growth. The share of rice on the total area cropped and share of rice area planted with HYV have increased with a positive impact on productivity and self sufficiency. Overall, most major crops had a positive production performance in 2010/11. Recommendations for further actions in this area include the need to: Focus on coordinated, problem solving and integrated research. Undertake agro‐ecological zone‐based research to face impacts of climate change. Scale‐up agricultural research funding to allow a ‘technological breakthrough’. Strengthen linkages among research, extension, education and farmers. Water and irrigation: Coverage of irrigation has continued expanding albeit at a slower pace than in the early 2000s. At the same time, the groundwater level fell significantly in 2010. The share of irrigation on boro production cost declined slightly. Recommendations for further actions in this area include the need to: Approve and implement key legislation and policy documents. Improve efficiency and reduce irrigation costs while ensuring sustainable use. Accelerate the promotion of conjunctive use of surface and groundwater irrigation. Develop agro ecology differentiated water management systems. Modernize existing irrigation and water management systems and community participation. Inputs and soil fertility: Production of improved cereal seeds has been volatile in recent years. Yet, supply of improved seeds for foodgrain as a proportion of agronomic requirements has xii been increasing. However, the supply of non‐cereal seeds is far from adequate. Fertilizer supply has increased and become more balanced in recent years. Yields have risen for most crops, steadily for cereals. Finally, agricultural credit disbursement surged, reflecting Bangladesh Bank’s decision to scale‐up credit supply in order to boost agricultural production. Recommendations for further actions in this area include the need to: Train farmers on quality seed production and strengthen capacities of seed producing and certifying institutions. Establish inter‐institutional coordination in development and promotion of new varieties. Strengthen existing trainings on balanced fertilization, further promote use of USG technology and organic fertilizers and strengthen fertilizer quality control. Fisheries and aquaculture: Fish production increased consistently in recent years and largely exceeds population growth. Yet, the share of fisheries on total agricultural GDP has remained static. Recommendations for further actions in this area include the need to: Replace brood stocks and adopt selective breeding. Develop community‐based co‐management that ensure sustainable wetlands and productive fisheries and meet the needs of resource users and other stakeholders. Support affected fisher communities during fishing ban periods. Monitor shrimp farm development, ensure quality and boost productivity of this sector. Strengthen the Bangladesh Fisheries Development Corporation. Livestock development: As in the case of fisheries, the value produced in the sector continues to grow but at a pace not sufficient to exceed the growth of the crops subsector, preventing a significant diversification of food production. Repeated outbreaks of avian influenza contributed to this result. At the same time, artificial insemination, a key factor for improving livestock breeds, slowed down in 2010/11 but showed an overall satisfactory progress since 2007. Recommendations for further actions in this area include the need to: Develop public–private partnerships in diversified vaccine production and marketing. Use crossbreeding through progeny testing to improve local cattle and adopt initiatives to improve local goats. Strengthen biosecurity in poultry farms as well as in slaughter houses and live poultry markets. Scale up formulation of initiatives and budget allocation in the livestock sub‐sector. Strengthen livestock research institutions, including Bangladesh Livestock Research Institute. Review policies on dairy and dairy products to provide adequate incentives to local producers as well as to protect the consumers. Access to markets and value addition: No clear trend was observed in the markup of retail on farm gate prices in the past four years. On the input side, the proportion paid by farmers above dealer prices for fertilizer has remained constant. Growth centres, rural markets and Union Parishad Complexes developed by LGED have multiplied steadily. The gender wage gap remains xiii at about 40%. The small scale manufacturing has steadily grown at a rate above that of agricultural GDP. Finally, the number of students in Technical and Vocational Education and Training continues to increase. Recommendations for further actions in this area include the need to: Develop adequate storage and processing to increase value addition and reduce waste. Maintain quality in rural infrastructure development and integrate rural infrastructure development with safety net programmes. Promote farmers’ organization in marketing farm products. Narrow the gender wage gap. Develop technical skill adapted to the specific needs of the country. Scale up agricultural credit disbursements. Implementation and monitoring of the NFP and CIP: In the first year of CIP implementation, 90 new projects were initiated, valued at 1,863 million USD out of a total additional financing of 2,170 million USD. Implementation, however, appears slower than required, as indicated by a delivery of just 51% of the budget available for the financial year 2010/11. The Government’s institutional arrangements are operating for implementing, coordinating and monitoring the NFP PoA and CIP, with TT meetings regularly held. Recommendations for further actions in this area include the need to: Institutionalise the annual monitoring process, promoting a sustainable consolidation of the related capacity. Enhance timeliness and coverage of the information supplied by all relevant stakeholders (GoB, DPs, etc.) for the CIP monitoring. Streamline the monitoring process and results in GoB’s and DPs’ programming principles and priorities. Take into account civil society’s perspectives and experiences in the monitoring process. Scale up and strengthen implementation capacities. Public food management: In view of the increased volatility of foodgrain prices in the domestic and international markets, the Government is scaling up its capacity to stock foodgrains. As expected, the Government has procurement less in years of high or increasing prices and more in years of low or declining prices, with a main exception in 2008 when large procurement was needed to replenish the stock. Except for 2009, when prices plunged, farmers’ incentives, in terms of domestic wholesale price relative to cost of production, have been preserved. Finally, OMS have been moving counter‐cyclically relative to market prices and have been substantially scaled up during the price surge of 2010‐11. Recommendations for further actions in this area include the need to: Flexibly adjust procurement price, source (domestic vs. international), in light of the changing conditions determined by the high price volatility. Develop a better understanding of impacts of alternative procurement modalities (time of price announcement, procurement of rice versus paddy, etc.) on procurement effectiveness and of the parameters required for food operation planning. Speed up the identification, formulation and financing of programmes to enhance food management and build related capacities. xiv Introduce a country‐wide computerized food stock/storage monitoring system. Develop an effective early warning food information system. Effective safety nets: Spending on social safety nets relative to GDP has increased steadily between 2008/9 and 2010/11 with the coverage of households benefiting from at least one social safety net substantially increasing. On the one hand, the scale of VGF and GR reduced while OMS (through Fair Price Cards) increased. On the other hand, the scale of the VGD programme remained constant. Recommendations for further actions in this area include the need to: Finalise the National Social Protection Strategy. Scale up graduation models. Place greater priority on productive (rather than relief based) safety nets. Stabilise access to food through timely safety net provision in lean seasons and during shocks. Ensure livelihoods are resilient to climate change through adapted safety nets. Community‐based nutrition: Exclusive breastfeeding has expanded and the target (50%) has been achieved. A decline in home gardening has been observed in 2011. Diversification of consumption has moderately improved, while acute malnutrition (wasting) has improved but severe wasting deteriorated. Some progress is registered in antenatal coverage. Recommendations for further actions in this area include the need to: Further strengthening IYCF practices, in line with international norms and codes. Develop and promote recipes for safe and nutritious complementary foods building on local knowledge. Seek to reduce child stunting and maternal anemia through improved complementary feeding and consumption of protein and micronutrient rich foods, respectively Expand home stead gardening to homestead farming to leverage benefits for nutrition. Strengthen micronutrient supplementation and food fortification, as necessary Data for improved nutrition: A small decline in behavior change communication activities was registered over 2009‐2011. In the meantime, desirable dietary patterns are in the process of being established and food composition tables updated. A number of sources on food security and nutrition exist but need to be coordinated and harmonized in methods and indicators. Recommendations for further actions in this area include the need to: Monitor impacts of food security and nutrition interventions. Update Food Balance Sheets. Implement food based dietary guidelines to inform relevant policies. Enhance the human and institutional capacities of NNS and other line directorates with the responsibilities for delivering nutrition services/interventions. Devise a more efficient media communication strategy for nutrition. Food safety and quality: Only 64 out of 143 enlisted foods are certified. A decline in prevalence of diarrhea is observed and almost universal coverage of safe water supply for domestic use has been reached. Access to tube well facilities is increasing, although further efforts are needed xv since many are suspected to be contaminated by arsenic. Thus, the percentage of population having access to safe drinking water, which now stands at 87% still needs to be increased. Recommendations for further actions in this area include the need to: Finalize a food safety and quality policy and action plan. Promote healthy street food vending. Improve Information, Education and Communication/Behaviour Change Communication programmes on food safety and safe food practices. Set up food borne disease surveillance systems and strengthen food safety inspection systems. The CIP 2012: financial input monitoring The CIP currently has a budget of about 9.1 billion USD which is already financed for more than 5.2 billion. This compares to a total CIP 8.2 billion USD in 2011 with 3.1 billion USD financed. In the financial year 2010/11, funding for public investment in agriculture, food security and nutrition thus increased by almost 2.2 billion USD. In this year, 35% of the financing was provided by donors compared to 49% in 2009/10. As of June 2011, a total of 1.8 billion USD had been pledged by the donor community to cover the residual gap now estimated at 3.9 billion USD. Although filling the financial gap so far has gone according to plan, the large pipeline of projects requires an acceleration of implemention and increased attention to subprogrammes lagging behind. The monitoring exercise In preparing the Monitoring Report 2012: National Food Policy Plan of Action and Country Investment Plan (CIP), a results‐oriented monitoring approach was adopted, coherent with the national planning processes in place, namely the national MDGs and the SFYP results framework. A four‐level results chain was defined whereby NFP goals are articulated into outcomes/impacts that are expected to result from outputs, which are in turn generated from inputs. Monitoring indicators have been chosen at each level, within the data available, against SMART criteria: Specific, Measurable, Achievable, Relevant and Time‐bound. These provide targets, baselines and proxy indicators for performance. Institutional framework for monitoring Bangladesh has a composite institutional structure for food security and nutrition that provides coordination at different levels, including for monitoring. This includes at its top the Food Planning and Monitoring Committee (FPMC) which provides strategic orientation on food security issues and establishes a high‐level commitment to inter‐sectoral collaboration. The National Committee (NC) is tasked with overseeing CIP implementation and monitoring processes. The Food Policy Working Group (FPWG) is the mechanism for coordinating collaboration at the technical and operational level through the four Thematic Teams (TTs) that carry out the monitoring process of the NFP PoA and the CIP consistently with monitoring of progress towards MDG1. The FPMU provides support to the unified framework. In addition to this, GoB agencies involved in running programmes pertaining to the CIP (over 30) as well as the DPs provide inputs towards the CIP financial monitoring. xvi 1. Introduction

The policy framework The National Food Policy (NFP) endorsed by the Food Planning and Monitoring Committee (FPMC) and thereafter approved by the Cabinet in August 2006, provides strategic guidance on the way to address the key challenges facing Bangladesh in achieving food security in all its dimensions, including food supply and availability, physical, social and economic access to food, as well as nutrition/utilization of food, as embedded in its three core objectives: NFP Objective 1: Adequate and stable supply of safe and nutritious food NFP Objective 2: Increased purchasing power and access to food of the people NFP Objective 3: Adequate nutrition for all individuals, especially women and children The overall goal of the NFP is to ensure dependable food security for all people at all times. The NFP Plan of Action (PoA) translates the provisions of the NFP towards achieving its three core objectives into 26 strategic Areas of Intervention (AoI), priority actions to be undertaken in the short term, medium term and long term over the period 2008‐2015, identifies responsible actors (government and non‐government) and suggests a set of policy targets and indicators for monitoring progress. The document also provides a set of guidelines regarding inter‐ministerial coordination, sectoral planning and budgeting, with a view to promoting implementation effectiveness. It also gives an outline of the strategy for monitoring progress. The Bangladesh Country Investment Plan: A road map toward investment in agriculture, food security and nutrition (CIP) is a five‐year (2011‐2015) comprehensive plan that aims to ensure sustainable food security. It is a country‐led planning, fund mobilization and alignment tool. It supports increased, effective public investment to increase and diversify food availability in a sustainable manner and improve access to food and nutrition security. Its interventions also aim to mobilize investment by smallholders and other private sector food security actors. The CIP was originally developed in 2010 and discussed in the Bangladesh Food Security Investment Forum held in Dhaka on 26th and 27th May 2010 with the inauguration of the event by H.E. the Prime Minister Sheikh Hasina. It was further developed through a wider consultation process involving main stakeholders in government, civil society and development partners that resulted in the publication of a revised version in June 2011. The CIP has been conceived as a living document and the monitoring exercise contributes to keeping it updated, based on progress against its results’ framework and needs emerging from a changing context. The CIP is anchored in the policy, programmatic and financial framework of Bangladesh: (i) it is the investment arm of the National Food Policy (NFP, 2006) and its Plan of Action (PoA, 2008‐ 2015); (ii) it is embedded in the Sixth Five Year Plan (SFYP); (iii) it is a strong advocacy and financial tool for increased resource allocation from the budget (through the Government process) and Development Partners (DPs) in the context of the Joint Cooperation Strategy
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(JCS).The CIP benefited from the commitment expressed at the national level in support of food security and nutrition materialized in the Scaling up Nutrition Movement (SUN). The CIP provides a coherent set of 12 priority investment programmes to improve food security and nutrition in an integrated way. Introducing the monitoring exercise The effective implementation of NFP depends, among others, on the establishment of an effective monitoring system that enables policy‐makers to timely assess progress towards the achievements of NFP goals, objectives and specific sectoral targets and to take appropriate action on this basis. This important requirement guided the formulation of the National Food Policy Plan of Action (PoA) and is reflected in the National Food Policy Plan of Action (2008‐ 2015) Monitoring Report 2010 which among others, served to inform the Government of Bangladesh in the elaboration of the CIP. The monitoring framework of the CIP has been built upon the NFP PoA monitoring framework and the monitoring of the NFP PoA and the CIP has embedded under Programme 7 of the CIP. Given the complexity of jointly monitoring the NFP PoA and the CIP, a ‘Roadmap for producing the 2011 CIP and NFP PoA Monitoring Report’1 was elaborated over the summer 2011 by the NFPCSP Technical Assistance Team, in consultation with the Thematic Teams (TTs) and the FPMU. The document was presented and discussed with the TTs and FPMU staff during a training workshop on ‘Monitoring Food Security Framework in Bangladesh’ held in September 2011. The workshop refined the approach, indicators and the monitoring responsibilities and enabled participants to be effectively involved in the monitoring exercise as a learning process to independently and sustainably carry out the monitoring process. Description of this report The Monitoring Report of the CIP and NFP/PoA captures the progress towards results identified in the PoA and CIP result frameworks, as well as the evolution of financial delivery and commitment in food security for the period July 2010 ‐ June 2011, the fist financial year following the one used as baseline for the CIP. The report begins by describing the approach taken to monitoring. Indeed, monitoring two documents jointly has required careful thinking on how to organize the exercise to ensure adequate coverage. Progress towards the NFP Goals, the NFP Objectives reflected in the CIP outcomes, i.e. availability, access and utilization, pointing out issues and policy challenges is then given. For each NFP Objective, outputs are then scrutinized assessing progress in the indicators and providing an overview of policy developments/programmes under way and needs for further action. The following section describes general financing of food security by the GoB and then turns specifically to the progress in the financing of the CIP. The report ends with an overall assessment of progress and recommendations based on the analysis carried out.

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http://www.nfpcsp.org/agridrupal/content/roadmap‐producing‐2011‐cip‐and‐nfp‐poa‐monitoring‐report

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2. Approach to monitoring
A results‐oriented monitoring approach has been adopted, coherent with the national planning process in place, and the targets fixed in the national MDGs and SFYP results framework. A four‐level results chain has been defined, whereby the NFP goal is articulated into outcomes/impacts that are expected to result from outputs, which are in turn generated from inputs2. This is shown in Figure 1 and described below: 1. Outcomes/impacts correspond to the three objectives of the NFP, which are the intended improvements in food security and nutrition. Outcome/impact indicators are mostly composed of aspects of food security and nutrition that are not under the control of any individual implementing agency. The CIP and PoA share the same expected outcomes/impacts, and so a common set of indicators is used to evaluate them. 2. Outputs are medium‐term development results that interventions seek to produce. The CIP has outputs linked to its 12 programmes, with 40 prioritised sub‐outputs under these. For the PoA, its 26 Areas of Intervention (AoIs) define the output level. Output indicators capture factors that are to a large extent under the control of implementing agencies. 3. Inputs into the CIP are the financing and financial execution of the projects by the government and donors. Inputs into the PoA are more multidimensional, flagging more than 300 action/strategic actions lines ‐and the relative financing through the Government budget‐ that can be served by one or more programmes or policy decisions, as well as one or more implementing actors.

Figure 1.CIP monitoring levels

___________________________________________________________________________________ In the CIP, the terms used for the monitoring have not followed the United Nations Evaluation Group (UNEG) terminology. Indeed, emphasis has been given to coherence with existing strategic documents and particularly with the NFP PoA and its first Monitoring Report, given that the CIP and the NFP PoA (2011) will be monitored together. It is thus essential that same terms refer to the same monitoring level for the sake of clarity.
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Monitoring indicators, at each of inputs, output and impact levels, have been chosen, to the extent possible given data availability, against SMART criteria: Specific, Measurable, Achievable, Relevant and Time‐bound. These provide targets, baselines and proxy indicators for performance. 2.1. Outcome/impact monitoring Because the outcome/impact level is common to both documents being monitored, progress at this level is evaluated through a common set of indicators. Efforts to streamline the indicators that had been used for monitoring of the NFP PoA were made, substantially reducing the total number of indicators. 2.2. Output monitoring The CIP is a prioritized coverage of the AoIs in the NFP PoA which called for some streamlining of the indicators use for the monitoring of the NFP PoA in 2010. This means that the CIP is narrower in its breadth3 and that some important outputs of the NFP PoA may not be simply reflected in the indicators selected for the CIP monitoring. The list of indicators proposed for the monitoring of progress at the output level of the CIP and NFP PoA is therefore the result of: i) an effort to streamline the output level indicators selected for the NFP PoA monitoring exercise in 2010; ii) an effort to reflect the thinking and consensus reached during the extensive consultations with the many stakeholders of the CIP; iii) a methodical examination of all the AoIs of the NFP PoA to ensure that the proposed indicators will cover all of them. To this effect, the first step was to define a set of SMART output indicators for each of the CIP programmes, using the output indicators of the NFP PoA Monitoring Report 2010. The second step was to match the CIP programmes to the NFP PoA AoIs. The latter were all found to have been covered, largely speaking, by the CIP4. Having carried out this matching exercise, specific areas of the NFP PoA not covered by the indicators selected for the CIP were identified and appropriate indicators added to the list of indicators to be monitored to ensure full coverage of both the CIP and the NFP PoA in this report. Annex 1 presents the result of this exercise with the list of output indicators to be used for the joint monitoring of the CIP and NFP PoA. The CIP programmes are shown with the corresponding AoIs of the NFP PoA. These are monitored together using the indicators listed in the column ‘CIP/NFP PoA output proxy indicators’.

___________________________________________________________________________________ There is one exception: Programme 7 of the CIP (Strengthened capacities for implementation and monitoring of NFP and CIP) is not covered by the NFP PoA, for obvious reasons. 4 Conversely, as mentioned above, the NFP PoA does not cover all the CIP Programmes (see Programme 7).
3

4

2.3. Input monitoring In order to gauge delivery performance at the action level, as in the NFP PoA Monitoring Report 2010, the present analysis highlights recent/planned programmes or policy developments considered most representative of the move towards the achievement of the policy targets. The inputs level monitoring of the CIP regards the financing and financial execution of the entire Programme. This involves: The updating of ongoing projects relevant to the CIP (this includes projects completed since the production of the CIP); The updating of GoB needs for funding; The updating of DPs current and future commitments. This exercise has resulted in an updated version of Tables 4.1 to 4.6 included in the CIP published in June 2011, which are now replaced by Tables A.3.2 to A.3.5 of this monitoring report. Thus, the monitoring exercise does not merely constitute an occasion to take stock of the progress in implementation, it also provides the opportunity to update the CIP as is expected for a ‘living document’5. Though the PoA does not correspond to a specific budget, inputs for the implementation of its actions are provided as part of the annual budget of the Government. For this reason the monitoring of the CIP budget (financing and execution) is complemented by a review of recent trends in food security spending in the National Budget, which includes both the investment and the current (revenue) expenditure. 2.4. Institutional monitoring Bangladesh has a composite institutional structure for food security and nutrition that provides coordination at different levels, including for monitoring (Figure 2). This includes at its top the Cabinet level Food Planning and Monitoring Committee (FPMC), chaired by the Food Minister and with membership of various Ministers and Secretaries. This Committee provides strategic orientation on food security issues and establishes a high‐level commitment to inter‐sectoral collaboration. The National Committee (NC) also chaired by the Food Minister is composed of the Secretaries of the various concerned divisions, Heads of Universities/Research Institutions, DPs, private sector and other NGOs. Among other things, it is tasked with overseeing CIP implementation and monitoring processes. The Food Policy Working Group (FPWG) is the mechanism for coordinating collaboration at the technical and operational level through the four Thematic Teams (TTs)6 that carry out the monitoring process of the NFP PoA and the CIP consistently with monitoring of progress towards MDG1.
___________________________________________________________________________________
GoB (June 2011) Bangladesh Country Investment Plan – A road map towards investment in agriculture, food security and nutrition p. 1. 6 Annex 2 provides the structure and list of Ministries/agencies participating in the TTs.
5

5

Figure 2. Institutional framework

The FPMU provides support to these institutions acting as the secretariat of the various Committees and providing technical and operational support to the FPWG and TTs. In addition to this, GoB agencies involved in running programmes pertaining to the CIP (over 30) as well as the DPs provide inputs towards the financial monitoring section.

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3. Progress towards NFP goals and outcomes

3.1. NFP goals The overall goal of the NFP is to ensure dependable food security for all people of the country at all times. Progress towards the NFP goal is monitored using three proxy indicators, all referring to nutritional wellbeing. This is in line with the GoB’s comprehensive approach to food security as reflected in the NFP and in the CIP. In this approach, the final outcome of food security is improved nutrition of all, including the most vulnerable segments of the population. Thus, adequate nutritional wellbeing is considered to be the only sufficient condition for food security, while adequate access and availability are seen as necessary but not sufficient per se to ensure food security. Agreed targets exist for the three indicators as part of MDG and national planning processes, and these targets are adopted for NFP and CIP monitoring.

Table 1. NFP goals and SFYP indicators relating to food security
SFYP indicator and NFP goal 2007/08 (PoA baseline) 26.8% (2005‐7) 41% 2008/09 2009/10 (CIP/SFYP baseline) 2010/11 Target 2011 Target 2015 Source

Undernourishment Underweight (0 to 59 months ‐ with using WHO standards) Stunting (0 ‐59 months)

7

26.3% (2006‐8) na

NFP & CIP Goal 25.8% na (2007‐9) na 36%

na na

19 % (MDG ‐1) 33% (MDG ‐1)

FAO, SOFI BDHS

38% 43% na na 41% na (revised 2016 BDHS HPNSDP target ) Sixth Five Year Plan – Development Result Framework for poverty, agriculture, food security and rural development8 BBS, Rate of growth of Yearbook of agricultural GDP in 3.00% 3.97% 5.24% 5.24% 5.0% 4.3% Agricultural constant prices9 Government spending Finance 10 na 2.25% 2.52% 2.64% on social protection 2.0% 3.0% Division, as % of GDP MoF Poverty headcount 40.1% 31.5% BBS, HIES index (CBN upper na na 29.7% 29% (MDG1) (2005) (2010) Report poverty line) BBS Change in national 7.16% Statistical wages expressed in kg ≥ GDP growth ‐8.11% ‐1.38% 5.71% 7.73% (GDP growth Yearbook of rice (3‐year moving + 0.5 + 0.5) (wages) and average) DAM (prices)

___________________________________________________________________________________ The status of persons, whose food intake regularly provides less than their minimum energy requirements. The exact requirement is determined by a person’s age, body size, activity level and physiological conditions such as illness, infection, pregnancy and lactation (http://www.fao.org/hunger/en/) 8 The indicator underweight for children under five years of age is also included the SFYP Development Result Framework. 9 The agricultural GDP includes crop, horticulture, fishery and animal products, but excludes forestry. 10 The figure included in the DRF was an estimated one: 1.7%.
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The overall assessment is that there Box 1. Why we cannot do without official estimates has been encouraging progress, most of DCI poverty notably on under‐5 underweight and In its HIES 2010, BBS did not report estimates of the population under‐5 stunting (Table 1) for which incidence below a minimum calorie intake. Does this matter? the targets set for 2015 appear Official analysis of HIES 2010 reports poverty estimates using achievable, if the current pace of only the Cost of Basic Needs (CBN) method and not the Direct decline is sustained (NIPORT, 2012)11. Calorie Intake (DCI) method. This is a problem for monitoring food security: Indeed, the CBN poverty measure is based on For undernourishment12, inter‐ food and non‐food expenditure, and therefore is an indirect nationally comparable indicators are measure of what people actually eat. A more direct method is only available with a three‐year simply to quantify foods that people consume and to convert delay, making an assessment of the this into a calorie equivalent – which is what the DCI method more recent situation difficult. does. This has the advantage of capturing calorie consumption from all entitlements, whether through market, community or However, considering the trend public sources and independently from the way people decide observed in the recent past and to spend their income. It allows monitoring of calorie intake projecting it linearly over the seven adequacy which may not be perfectly correlated to income years between 2008 and 2015, the adequacy. target does not appear achievable without additional efforts13. The concern is also expressed by the Bangladesh Progress Report 2011 for the MDGs14. Analysing DCI poverty, a measure of incidence of undernourishment, from various HIES, the report states that: ’Bangladesh, in all likelihood, may not meet its target of halving the proportion of the population below the level of dietary energy consumption by 2015’. The slight decline in undernourishment, whether measured by FAO or by BBS through the DCI method, contrasts with the steep decline in poverty measured by BBS using the Cost of Basic Needs method. Rapid reductions in income poverty have not resulted in reduced undernourishment.
___________________________________________________________________________________
NIPORT (2012) BDHS Preliminary Report 2011 p.32 FAO defines undernourishment as the proportion of the population whose dietary energy consumption is less than a pre‐determined threshold. This threshold is country specific and is measured in terms of the number of kilocalories required to conduct sedentary or light activities. The undernourished are also referred to as suffering from food deprivation. 13 In the GoB 2009 and 2011 MDG Progress Reports, the baseline for undernutrition (Target 1.C, indicator 1.9a ‐ Proportion of population below the minimum level of dietary energy consumption (1805 Kcal)) is 28% and the target 14%. The latest available information however, is drawn from the BBS HIES 2005, as the HIES 2010 report does provide an update of this indicator. If the very marginal improvement observed between 2000 and 2005 is anything to go by however (a mere 0.5 percentage point drop), the target will be difficult to achieve. If a trend similar to that observed for poverty (‐21.3%) and extreme poverty (‐29.9%) in the period 2005‐10 is assumed for undernourishment, then the undernourishment target would appear reachable. However, such an assumption may be questionable given the much lower progress observed for undernourishment between 2000 and 2005 (20.0% to 19.5%) than for poverty (48.9% to 40.0%). 14 GoB (2012) The Millennium Development Goals. Bangladesh Progress Report 2011: p22, General Economic Division, Bangladesh Planning Commission
12 11

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Possible hypotheses to explain this include: 1/ undernourishment is not confined to the poor, which might occur if recent reduction in poverty resulted in many people being only just above the poverty line; 2/ poor households do not proportionately increase food consumption with increased income, i.e. the elasticity of nutrient consumption is less than one with respect to income, as shown in earlier empirical studies in Bangladesh15. In any case, it is evident that the CBN method, whilst useful as an overall poverty measure, is not an adequate food security measure as it only captures the access dimension. Accordingly, as BBS did not publish the DCI measure of poverty from the HIES 2010 unlike for previous HIES rounds, whether the relation between undernourishment and poverty significantly changed over the recent past cannot be assessed. The divergent movements in undernourishment and poverty underscore the need to strengthen nutrition interventions under the food utilization pillar of the NFP as well as in a cross cutting manner along all the other dimensions. Table 1 also reports on the indicators included in the Development Result Framework of the SFYP for poverty and food security. In addition to children’s underweight, four indicators are considered with targets specified for 2011 and 2015. Available information shows satisfactory progress against the targets. In particular, the rate of growth of agricultural GDP in the last two years has been above both the 2011 and 2015 targets stated in the SFYP16. Government spending on social protection has been steadily rising, reaching 2.64% in 2010/2011. The poverty headcount is not available for 2011, but the 2010 BBS estimate points to a significant reduction of poverty since 2005: ‐8.6 percentage points or a 21.3% decline. Characteristics of this shift in poverty, as described in section 3.3., include the fact that poor people have become less poor and that extreme urban poverty has sharply dropped. Overall, considering the current level of poverty and the growth elasticity of poverty between 2005 and 2010, the target of halving the incidence of poverty by 2015 appears achievable17. The decline in poverty was accompanied by an increase of the rice wage significantly above the target, reflecting an improvement in purchasing power which is expected to facilitate access to food. The improvement in the real income of wage earners has taken place at a time of high food inflation, which reached a peak of 14.4% in April 2011, mainly as a result of upward pressures on non‐rice food prices18. The rapid increase in the rice wage reflects an increasing scarcity of labour, which could be signalling the end for Bangladesh of a labour market able to supply infinite amounts of labour at subsistence wage. While this may be perceived as a step closer to reaching middle‐income status, it also signals the emergence of a new dynamic in the labour market with potential impacts on the competitiveness of labour intensive productive
___________________________________________________________________________________
See Ogundari, K. and A. Abdulai (2012) A Meta‐Analysis of the Response of Calorie Demand to Income Changes Paper presented at the Conference of the International Association of Agricultural Economists, August 18‐24, Foz do Iguacu, Brazil (http://purl.umn.edu/123287) 16 At the time of developing the CIP monitoring framework, the interim SFYP target of 5% has been adopted. The figure in the SFYP was revised to 4.3% which was also changed for the CIP monitoring. 17 GoB (2012) Op. cit. p.16. 18 By mid‐2012 however, inflation had dropped to 9.15% mainly as a result of the decline in food inflation (to 7.46%) itself led by the decline in rice prices.
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activities beyond the agricultural sector ‐the garments sector in particular. This calls for reinforced policy attention to the price wage dynamics and its linkages with labour productivity. 3.2. Objective 1 outcomes 3.2.1. Assessment Food availability is Objective 1 of the NFP. Adequate and stable supply of safe and nutritious food is the first necessary condition for food security. Progress towards NFP Objective 1 is assessed on the basis of changes in the agricultural GDP in constant prices as an aggregate measure of supply19. Stability and import dependency are measured with reference to rice considering data availability and the role of rice in the country’s food security. The share of rice on food value added is used as an indicator of diversification with a reduction of the rice share indicating an increase in diversification. Table 2. NFP Objective 1: selected performance indicators
Indicator Rate of growth of agricultural GDP in constant prices20 Rice import dependency22 (3‐year moving average) Instability of rice production23 Share of rice value added in total food value added in current price 2007/08 3.00% 2008/09 3.97% 2009/10 5.24% 2010/11 5.24% Target 4.40% Source BBS website21

2.40%

4.30%

1.40%

2.50%

0%

FPMU/MIS, BBS Yearbook of Agricultural Statistics, BBS Yearbook of Agricultural Statistics, BBS and communications with BBS

4.09%

3.69%

4.07%

3.38%

0%

41.5%

43.1%

42.2%

42.9%

p

Decreasing over time

Rate of growth of agricultural GDP in constant prices Food supply growth is expected to exceed the 4.40% target in 2010/11. Indeed, BBS estimates agricultural GDP growth in 2010/2011 at 5.24% which is almost identical to 2009/10, but significantly higher than levels in previous years. This positive performance is due to the combined increase in crop and other productions. Favourable weather conditions, a relatively
___________________________________________________________________________________ 19 Monitoring adequacy and stability of food supply is challenging because of data limitations. For example in the case of the wheat the comparison as of 2010 of consumption as per the HIES (26g per day per capita) with total wheat availability (imports + production) yields a huge differential, with supply being three times more than consumption. This clearly questions the suitability of the available information for calculating consistent food balance sheets. 20 The agricultural GDP includes crop, horticulture, fishery and animal products, but excludes forestry. 21 http://www.bbs.gov.bd/WebTestApplication/userfiles/Image/BBS/GDP_2011.pdf 22 Imports/ (net production+ imports – exports) 23 Measured by the coefficient of variation of the difference between annual production and its 10‐year rolling linear trend.

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effective management and distribution system of seeds and fertilizers, as well as an increase in agricultural credit brought about a substantially higher production of crops, especially aman and boro rice, wheat and potato. The livestock and fishery subsectors also experienced steady growth rates, as result of continued investments and absence of new major disease epidemics, though the persistence of avian influenza and other disease has prevented faster growth. Rice import dependency Until the early 1990s, the Government adopted a policy of self sufficiency shifting to a policy of self reliance from 1993. This approach worked well, as shown by the limited impact on domestic availability of the disastrous 1998 and 2004 floods, thanks to the prompt reaction of the private sector in importing food grains available on the international markets24 (Figure 3). However, the major Figure 3. Rice imports: public, aid and private food price crises 3500 experienced in 2007‐ 3000 2008 as a result of 2500 domestic and international climatic 2000 events coupled to the 1500 restrictions on exports 1000 put in place by major exporting countries, 500 challenged the validity 0 of this approach (Deb 25 et al., 2009) . A widespread concern emerged in Bangladesh Private Public Aid regarding the reliability Source: MIS,M, DG Food of the international market as a source of supply for rice at time of crises. In this context, the incumbent Government pledged to achieve ‘food26 self sufficiency’ by 2013 in its electoral manifesto. In 2010/11, rice import dependency remained relatively low (2.5% as three year average), but increasing significantly relative to the previous year (1.4%) though remaining well below the record levels registered in the aftermath of the food crises (4.3%). Figure 3 shows that in 2010/11, rice was mainly imported by the public sector. The decision to supply the public food distribution system by importing rather than by procuring domestically during the aman season
___________________________________________________________________________________
24

Self‐reliance implies importing food from the world market when international prices are lower than domestic prices. 25 Deb, U.K. M. Hossain and S. Jones (2009) Rethinking food security: self‐sufficiency or self reliance, BIDS Policy Brief 26 Although this is the term commonly used, it is to be understood as foodgrain and specifically rice rather than all foods.

thousand MT

11

allowed the government to avoid fuelling the already spiralling rice price and availing from the international market the quantities required for domestic market stabilization and safety nets operations. Instability of rice production The instability of rice production ‐ measured by the coefficient of variation of the difference between production and its Figure 4. Rice production in Bangladesh rolling linear trend over a ten year period‐ decreased by 0.69 percentage points in 2010/11, reaching a minimum level in the recent past. Indeed, important year‐to‐year varia‐ tions are experienced in aman and aus rice production (e.g. +20% for aman in 2008/09 or +25% for aus in 2010/11), but they tend to be compensated by boro production changes27. Source: BBS Share of rice in total food value added The share of rice value added in total food value added (in current prices) has marginally increased in 2010/11 relative to 2009/10, indicating a faster growth of rice production value relative to other agricultural products. More importantly, the share remained stable in the long run, showing no clear trend since 2000/01, as both rice and total value added grew on average by 9% per annum between 2000/01‐2010/11. This corresponds to the fact that no significant food production diversification has taken place despite the significant growth observed for some productions, e.g. fisheries. In other words, the fastest growth observed in some agricultural sub‐sectors has taken place to the detriment of others, such as pulses, leaving unchallenged the predominance of rice. Rice price volatility The seasonality of rice price in Bangladesh is a well‐known phenomenon‐characterized by a distinct twin‐peak pattern in the pre‐harvest periods of February and October. The food price crisis has added a new dimension to the rice price pattern in Bangladesh. Indeed, while the increased volatility of international cereal prices has been only partly passed through to the domestic prices28, the emergence of a price cycle of about three years duration has overshadowed the persistence of the usual seasonal pattern (see Figure 5). High volatility is a

___________________________________________________________________________________ Annual changes in aman and boro paddy production were indeed significantly and negatively correlated (‐0.57) between 2000/01‐2010/11. 28 Dawe. D. (2010) Cereal price transmission in several large Asian countries during the global food crisis Asian Journal of Agriculture and Development Vol. 6, No. 1
27

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source of concern for both producers and consumers because it increases the risk involved in production or consumption decisions. Figure 5. Dhaka wholesale rice price Increased rice price volatility has raised the case for scaling‐up domestic production and public stocking capacity (in terms of both size and shelf life of the stock) so as to be able to safeguard domestic supply in periods of tight international markets supplies and operate cyclical stabilization interventions in addition to the traditional seasonal interventions taking place through open market sales and safety nets food Source: DAM distribution.

As Bangladesh approaches self‐sufficiency in rice, increasing attention needs to be given to combining trade interventions (including exports) and stock management, in line with recent evidence from the literature on food price stabilization29. Bangladesh rice prices remains Figure 6. Wholesale prices in Bangladesh, India and strongly correlated with the main Thailand international reference markets 80 (Figure 6), with two main Dhaka Kolkata 70 differences however: on the one Thailand 60 hand, prices have been significantly less variable than 50 world market prices; on the 40 other hand, the level of volatility 30 registered since the beginning of 20 the food price crises has not 10 been significantly different from the long term volatility recorded since independence. This has not been the case for countries more Source: DAM, Government of India, USDA integrated in the international rice market such as Thailand, where a significant increase in price volatility has been observed over recent years.

___________________________________________________________________________________ Gouel, C. and S. Jean (2012) Optimal food price stabilization in a small open developing country CEPII Document de Travail 01/2012
29

Taka per kg

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3.2.2. Issues and policy challenges

Rising demand for foodgrain in the context of high population and income growth Population and income growth are expected to place increasing demand on domestic food production. For example rice consumption is expected to increase by 2.4 million between 2010/11 and 2011/1230. However, the average annual rice production growth (3.69%) has significantly outpaced the population growth rate (1.37%) over the last decade (2001‐2010), gradually moving toward self‐sufficiency. Sustaining this trend will require continuous efforts in promoting intensification, sustainability and resilience of rice production. Rice self‐sufficiency, farmers’ incentives and diversification As Bangladesh achieves self‐sufficiency in rice, the issue of preserving farmers’ incentive takes on a new dimension: the usual policies of containing cost of production ‐through input subsidies and procurement prices adequate to guarantee minimum profits‐ tends to become less effective, more expensive, and less desirable due to their impact on production diversification. Indeed, in the short run, as rice production approaches self‐sufficiency, downward pressure on prices is observed independently from the volatility derived from international markets. In times of price slump resulting from bumper harvests, the public opinion calls on the government to preserve farmers’ incentives, arguing for more procurement or a higher procurement price (to ensure remunerative prices) and for more input subsidies (to reduce costs). However, in a situation where domestic production exceeds demand, these interventions will become increasingly less effective and more expensive if the production in excess of the domestic consumption is not permanently withdrawn from the domestic market. For this reason, the Government is considering promoting the establishment of export trading channels to be activated during years in which domestic production exceeds self‐sufficiency levels. But, to the extent that rice is exported, benefits of the input subsidies will be transferred from domestic rice producers and consumers to foreign consumers. In other words, the issue of desirability and affordability of subsidizing low value added exports arises. In the longer run, as self‐sufficiency is permanently achieved, the trade‐off between generating a larger exportable surplus of rice, and promoting diversification and a higher degree of self‐reliance for other foods needs to be carefully considered, too. Overall, while farmers’ incentives should be adequate to promote the investment and innovations required for a growth of rice production able to satisfy the needs of the growing population (in terms of quantity and prices), they should not aim at creating a large exportable surplus to the detriment of investments in a more diversified food production system which would contribute to the diversification of diets and to income growth.

___________________________________________________________________________________
30

USDA (2011) Bangladesh Grain and Feed Annual 2011 Gain Report BG1101

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Expansion of arable land in southern coastal area As the scope for lifting up cropping intensity above its already high level of 179%31 and the potential of expanding arable land are limited, the possibility of bringing into cultivation the unused land in coastal area becomes an increasingly attractive option. As much as 15% of total cultivated land in the southern region is either fallow and/or not being used because of soil salinity, water salinity, and water logging. There is good potential to increase coverage and productivity of transplanted aus rice in the southern region using improved management practices. The total potential transplanted aus area is estimated at 740,346 ha of which 38% would be suitable and 40% moderately suitable. The potential boro area under surface water irrigation in the region is estimated at 695,200 ha32. Khan et al (2008)33 suggest that an additional million hectares of land could be brought under cultivation in coastal areas during the winter season if appropriate saline resistant varieties can be developed with assured irrigation. In this regard, two saline tolerant rice varieties (BRRIdhan 47 and Binadhan 8) have been developed and are now being introduced in coastal areas. Another promising rice variety for the area is Binadhan 10, which is awaiting approval from the Seed Certification Agency of Bangladesh, while further efforts are ongoing for developing additional varieties. For example, the project ‘Strengthening and capacity building of biotechnology laboratory in BRRI’ focuses on developing rice varieties for both favourable and unfavourable environments. Some non‐rice crops such as water melon, sesame and linseed have also good potential and are being promoted in the area. Increasing fragmentation of the farming system Fragmentation of land holding has not only increased but also accelerated over the decades. The number of farm holdings increased by almost 50% between 1983/84 and 2008: from 10.0 million to 14.8 million and the average size of cultivated area per farm has decreased from 0.81 to 0.51 hectares during this period. However, the number of landless rural household has reduced between the last two censuses, inverting the previous trend. The increased fragmentation and the reduction of landless rural households are in contrast with the widespread perception of increasing inequality of land holding that has given rise to calls for land reforms. Land is thus continuously being redistributed, as a combined result of inheritance and market transactions, from large (>3.0 ha) and medium (1.0 – 3.0 ha) holdings to small and marginal farm holdings (