Economists and sector experts have urged the government to prioritize the agriculture sector in the upcoming national budget for the fiscal year FY2026-27, warning that the continued decline in budgetary allocation could jeopardize long-term food security and inflation control.
The call comes ahead of the national budget announcement scheduled for June 11, with a projected outlay of nearly Tk 9.38 lakh crore.
Despite being a key economic driver that ensures food security, generates 40 percent of total employment, and keeps the rural economy functional, agriculture's share in the national budget has been under 10 percent for the last 14 consecutive fiscal years. In the ongoing FY 2025-26, the allocation plummeted to a record low of just 5.9 percent, according to an official document.
Expressing deep concern over this trend, the Bangladesh Agricultural Economists Association has demanded an allocation of at least 9.5 percent of the upcoming budget for agriculture, which would amount to roughly Tk 88,350 crore.
Professor ASM Golam Hafeez, a prominent faculty member at the Bangladesh Agricultural University (BAU) and General Secretary of the Bangladesh Agricultural Economists Association (BAEA), recently shared substantial policy recommendations for the national budget of FY2026-27.
Professor Hafeez pointed out a worrying downward trend over the last three fiscal years, highlighting that agriculture's share in the national budget dropped from 8.7 percent in FY2022-23 to just 5.9 percent in the current fiscal year, FY2025-26.
He urged the government to bump this allocation back up to 9.5 percent for the upcoming budget FY2026-27.
Given a projected national budget of Tk 9.3 lakh crore, this 9.5 percent allocation would translate to approximately Tk 88,350 crore for the agricultural sector. A major highlight of his recent budget recommendation was the call to significantly expand input subsidies due to soaring farming expenses.
Professor Hafeez demanded that the government increase agricultural subsidies to Tk 35,000 crore for the budget of FY2026-27. This is more than double the current allocation of Tk 17241 crore.
He argued that global energy market instabilities, geopolitical tensions (particularly involving Iran and the Strait of Hormuz), and exchange rate volatility have sharply driven up the import costs of fertilizer, fuel, seeds, and agricultural machinery—placing immense financial strain on farmers.
Talking with UNB, Tawfiqul Islam Khan, a Senior Research Fellow and Additional Research Director of CPD, said that the government has to increase allocation in the agricultural sector, considering the global geopolitical situation and its impact on food security.
“Bangladesh has a huge population despite limited agricultural land, flash floods and other natural disaster is occurred in every season, so the budget allocation should focus on additional food production to keep macroeconomic stability,” he pointed out.
He said that eroding crop land and the high cost of production have forced farmers to reduce crop production to recover from loss. In this case, the budget should emphasize keeping the price of agriculture impute rational for encouraging agricultural production at the national level.
Widening Gap in Allocations and Subsidies:
While agriculture contributes roughly 11 percent to the GDP, fiscal support has failed to keep pace with the growing economy. In FY 2011-12, the agricultural sector received 10.65 percent of the total budget. This dwindled to 8.7 percent in FY 2022-23 and hit 5.9 percent this fiscal year.
Furthermore, the actual crop sector received only Tk 27,224 crore—a mere 3.45 percent of the total budget—out of the Tk 46,268 crore allocated across five agriculture-related ministries. Concurrently, agricultural subsidies saw a decline, dropping from Tk 17,261 crore in FY 2024-25 to Tk 17,241 crore in the current fiscal year, said Tawfiqul of CPD.
"Agricultural subsidy is not an expense; it is a long-term investment," noted prominent agricultural economist Professor Jahangir Alam. He warned that lower investments will inevitably suppress production, increase import dependency, and aggravate food inflation, which has hovered above 10 percent for most of the last four years, he opined.
Structural Shifts and Market Bottlenecks:
Experts pointed out that while farmers have significantly ramped up the production of rice, vegetables, fish, maize, and potatoes, they are continually deprived of fair prices due to the dominance of middlemen and lack of state storage facilities.
The current public warehouse capacity stands at only 22 lakh tonnes against an immediate national requirement of at least 60 lakh tonnes. The lack of cold chains and processing industries results in massive post-harvest losses every year.
The nature of Bangladesh’s agriculture is also shifting structurally. The crop sector's share in agricultural GDP has fallen from over 75 percent post-independence to around 46 percent today, with fisheries, livestock, and forestry gaining rapid ground. However, skyrocketing prices of animal feed and poultry medication have left dairy and poultry farmers under severe strain, said Professor Hafeez.
Climate Vulnerability and Mechanization Slowdown:
The sector faces growing threats from climate change. This year, early flash floods and heavy rainfall severely damaged Boro paddy crops across the vast Haor (wetland) regions, crippling farmers' incomes. Experts have strongly recommended emergency compensation funds, weather-resilient crop varieties, and the introduction of comprehensive agricultural insurance.
Additionally, the government's agricultural mechanization subsidy project has largely stagnated. Policy analysts suggested setting up union-based agricultural machinery banks to help marginalized farmers and offering tax exemptions to boost domestic manufacturing of machinery spare parts.
Currently, Bangladesh spends a mere 0.4 percent of its agricultural GDP on research and development, compared to the 3 to 5 percent spent by many developing nations.
To deliver a truly farmer-friendly fiscal plan, experts summarized that the upcoming budget must elevate agricultural financing to at least 10 percent, raise subsidies to Tk 40,000 crore, digitize the procurement system via a national farmer database, and fast-track investments in climate-smart technologies.