Distortions to Agricultural Incentives in Bangladesh
Bangladesh has substantially liberalized its trade and agricultural pricing policies since independence in 1971, removing most distortions to agricultural incentives by the mid-1990s. Although trade protection for some agricultural and industrial p...
| Main Authors: | , , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
Washington, DC : World Bank
2022
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/374841468149087776/Main-report http://hdl.handle.net/10986/37203 |
| Summary: | Bangladesh has substantially liberalized
its trade and agricultural pricing policies since
independence in 1971, removing most distortions to
agricultural incentives by the mid-1990s. Although trade
protection for some agricultural and industrial products has
increased sharply since 1998, total distortions in
agriculture remain small. In particular, domestic and
international trade policies for the major staples, rice and
wheat, are substantially more liberal than in Pakistan or
India. In the early 1970s, Bangladesh pursued a highly
restrictive trade and exchange rate policy characterized by
import regulations, high import tariffs, export taxes,
pervasive quantitative restrictions, and an overvalued
exchange rate, similar to policies of the 1960s when it was
part of united Pakistan. The policy regime in the 1970s was
especially restrictive for the agricultural sector. The
government had a monopoly on import of most agricultural
commodities and placed major restrictions on exports of raw
jute, the major agricultural export. As a result of these
distortions, agricultural price incentives were
substantially reduced throughout the period (Rahman 1994).
This chapter describes the changing structure of distortions
to agricultural incentives in Bangladesh, and the forces
that have driven it. The next section describes the growth
and structural changes of the Bangladesh economy with
particular emphasis on the agricultural sector. An overview
of the evolution of agricultural policies in Bangladesh
since independence is then provided, before reporting time
series of estimates of nominal rates of assistance (NRAs)
for selected agricultural products. The changing political
economy of agricultural price and trade policies is then
discussed, followed by some concluding observations. |
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