On 15 June 2026 the World Bank released a report in Dhaka, Repurposing Agricultural Public Spending for Quality Growth and Jobs in Bangladesh's Agrifood System. It found that Bangladesh allocates about 10 percent of total public spending to agriculture, but that a large share goes to subsidies and rice-related support while research, advisory services, irrigation, market access and climate resilience remain underfunded.
Agriculture employs nearly half of all workers in Bangladesh and contributes over one-tenth of GDP, according to the report's policy brief. Yet growth has slowed, productivity gains have weakened and diversification into higher-value products has lagged, the World Bank said.
Where the farm budget goes
Between FY19 and FY23 the government spent about BDT 321 billion (USD 3.2 billion) a year on food- and agriculture-specific programmes, equal to 10.1 percent of total public spending and 1.1 percent of GDP, the policy brief says. Subsidies alone absorbed more than 40 percent of it. Agricultural research received only 4 percent of total outlays, knowledge dissemination 8 percent and irrigation infrastructure 5 percent.
Livestock, fisheries, forestry, fruits and vegetables together received less than 20 percent of that spending, although they contribute nearly three-fourths of agricultural GDP.
A large subsidy that favours bigger farms
Fertilizer subsidies are the largest form of agricultural support, accounting for about 80 percent of the Ministry of Agriculture's budget. The brief shows that share rising from 63 percent in FY19 to nearly 80 percent in FY23, when the subsidy bill reached USD 2.5 billion, driven by global price shocks and rising import dependence. Imports supply about three-quarters of national fertilizer demand.
The subsidies helped keep production and prices stable. But because the subsidy is linked to the amount of fertilizer purchased, farmers with more land receive a larger share. The top 20 percent of landholders receive about half of all fertilizer subsidy benefits, while the bottom 40 percent receive only about 15 percent.
Unbalanced fertilizer use and a tilt toward rice
Only about 5 percent of farmers apply a balanced mix of nutrients within recommended ranges. Using 2019 survey data, the brief finds that about two-thirds of farmers overapply phosphorus, nearly nine in ten apply too little sulphur and six in ten underapply potassium. Correct nutrient balance could raise yields by about 33 percent for Boro rice, 65 percent for T. Aman rice and 87 percent for potatoes, the report estimates.
Spending is also skewed toward rice, which discourages diversification. Rice occupies around 72 percent of cultivated land and receives about 80 percent of subsidy benefits, even though livestock, fisheries, vegetables and agro-processing offer stronger opportunities for income growth and employment.
"Agriculture is central to Bangladesh's development, job creation, and poverty reduction. But climate risks, shifting consumption patterns, tighter fiscal space, and rising price and supply disruptions of fertilizers due to the Middle East conflict are exposing gaps in policies and spending," said Jean Pesme, World Bank Division Director for Bangladesh and Bhutan.
Reforms in stages
The report recommends reforms in stages. In the near term it calls for expanding soil testing, strengthening farmer advisory services and rolling out the Farmer's Card and e-voucher, so that agricultural spending reaches poorer and climate-vulnerable areas. The brief places the card, a digital farmer registry and e-voucher pilots under the World Bank-supported PARTNER programme. Better delivery, it argues, can later free money for research, extension and irrigation.
In April 2026 Agriculture Minister Mohammad Aminur Rashid said 22,065 farmers in 11 upazilas of 10 districts had been initially selected for the card's first phase, UNB reported. Each was to get Tk 2,500 a year in cash; the card works as a Sonali Bank debit card for buying fertilizer, seed and feed.
"Modernizing fertilizer subsidy design and delivery offers a significant opportunity to save foreign exchange, increase agricultural productivity, improve soil health, and ensure that support reaches the farmers who need it most," said Mansur Ahmed, Senior Economist at the World Bank and a co-author of the report.
Photo: Shahidul Hasan Roman / Wikimedia Commons (CC BY-SA 4.0)
Sources: World Bank (press release and policy brief, 15 June 2026), Dhaka Tribune (15 June 2026), UNB via Dhaka Tribune (12 April 2026)
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