Agricultural businesses keen to invest through PPP

Agricultural businesses have expressed their growing interest in investing through Public Private Partnerships (PPP) as the government has recently initiated massive inputs of PPP aiming to boost agricultural investments.

The businessmen recently presented their interests in a meeting of the Agriculture Ministry on the activities and projects of the agriculture sector that can be initiated through the PPP.

Businessmen from various organisations including Square, Bombay Sweets, Alim Industries, Lal Teer Seed, Syngenta, and Janata Engineering have expressed investment interest in PPP in the agriculture sector.

Although currently PPP has a significant contribution to infrastructure, health and service sectors but agriculture sector stayed behind. The Agriculture Ministry believes that PPP can make a big contribution in this sector to enhance the agriculture sector’s role in future GDP growth.

According to the decision taken in the ministry meeting, the interested private entrepreneurs will submit unsolicited proposals in this regard while the meeting also identified 11 potential investment areas under PPP. 

These areas include - setting up agricultural entrepreneurship training centres, seed production and export, Molecular breeding, pesticide production and export, agro-processing and export facility expansion and establishment of terminal markets, agricultural production through creating glass houses, establishing agricultural machinery manufacturing and servicing institutions, joint researches, making cool chain, increasing storage and preservation facilities to reduce post-harvest losses, undertaking import substitution schemes for agricultural machinery and parts. The Ministry has decided that entrepreneurs can propose for investment in these areas in PPP.

Agriculture Minister Dr Mohammad Abdur Razzaque said “The post-harvest loss in agriculture is about 25-40 per cent. The production of vegetables and fruits will surplus after meeting the domestic demands if we can manage to decline the rate of post-harvest losses.”

“In the future, export earnings will rise if we can improve the processing, supply and value chain. In this case, PPP can make a significant contribution to increase investments in the country's agriculture sector.” He wanted to introduce agricultural products in the international market through PPP projects which will make it easier to achieve the goal, he said.

The minister said, agriculture is a very risky business due to dependency on nature, and decomposition issues. Amid such conditions, the agro-based industry will develop if the banks come forward with assistance. There is an opportunity to set up factories with other countries through the PPP or G2G method. Different positive policies including reducing interest rates can be initiated if the investments are made under the PPP. He called upon industrial entrepreneurs to come forward in PPP to increase agricultural investments.

The ministry will move forward with how PPP can be done through the government, private sector and foreigners to expand exports, he said, suggesting that agriculture should be commercialised through PPP

Besides, an additional secretary of the ministry told The Business Post that the country needs to develop adversity-tolerant technologies, improve seed production and distribution, reduce post-harvest losses, and increase irrigation coverage and mechanisation. For this, he thinks that investments and projects can be taken up under the PPP initiatives in the fields of agricultural products processing, seed production, mechanisation, and value chain development.

Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Vice President Md Amin Helaly said, "The way production in the agriculture sector has increased; it is not possible to store and process them at the same pace." Multipurpose processing should be arranged in vegetable hubs as around 50 per cent of production becomes decomposed within 10-15 days of harvesting, he said, suggesting that Processing centres can be set up at the upazila level by creating entrepreneurs through stimulation.

In the meeting, Square Food and Beverage official Parvez Saiful Islam said, that recently Square has exported mangoes and jackal to Europe, the Netherlands, the UK and Germany. For expanding exports it is essential to build basic infrastructure, and cold storage to reduce the loss of fruits and vegetables, he said, adding that storage capacity should be increased by creating a cold chain. Cold chains can be established in northern and southern regions of the country to reduce post-harvest losses and in this case, Square is interested in making two cold chain centres, he stated.

Bombay Sweets Proprietor Khurshid Ahmed Farhad said that Bombay Agro has started cultivation on 700-800 acres of land in Panchgarh through mechanisation. They are interested in increasing mechanisation in agriculture and want to expand mechanisation and establish a cold chain in agriculture through PPP.

Entrepreneur Mortuza Khan who is associated with Dutch Green House Delta wants to work on the agro-park concept under the PPP model in Bangladesh. Meanwhile, entrepreneur Md Masum proposed to establish a joint research centre and tissue culture lab through PPP.

 Alim Industries Executive Director Alimus Sadat Choudhury said, “Agricultural machinery is imported from abroad. If these machines can be produced locally that can save foreign exchange. His organisation is interested in conducting joint research by establishing a research institute through PPP.” This will contribute to producing agricultural machinery in the country instead of importing them from abroad.

Lal Teer Seed MD Mahbub Anam said, “We need to import seeds as the demand is gradually increasing every year. Seed production should be initiated locally through PPP to facilitate exports instead of imports. Country can also produce adversity-tolerant varieties of seeds in this regard.”

Meanwhile, the export income of the country has exceeded $50 billion recently. Of this, the export earnings in the agricultural sector have crossed $1 billion last year. The government has fixed a $2 billion export target in the current year and $5.8 billion within the next 2030.