Manufacturing of agricultural machinery in Bangladesh: opportunities and constraints
Keywords:agricultural machinery, spare parts, manufacturing, supply chain, marketing, import vs local quality, constraints
Despite numerous limitations, agricultural machinery (AM) manufacturing sub-sector inBangladeshis growing quite satisfactorily and has potential to make substantial contribution to much needed non-farm economic growth, employment generation, mechanization of on and off-farm agricultural activities, and as a whole orientation in the national development. This study made an attempt to take account of AM manufacturers, importers, traders/wholesalers and retailers, their associations, assess market potential and identify serious bottlenecks associated with this sub-sector. Stratified random sampling technique was used for identifying respondents in quantitative survey, while focus group discussions (FGDs) and Key Informant Interviews (KIIs) were conducted for qualitative investigation. In recent years, there are about 70 foundries, 800 agricultural machinery manufacturing industries and workshops, 1,500 spare parts manufacturing workshops, and about 20,000 repair and maintenance workshops are engaged in AM sub-sector of the country. The annual estimated market size of AM and spare parts in the country is about US$ 802.3 million with an US$ 105.2 million annual repair and maintenance service market, estimating an annual total AM market size of about US$ 907.5 million of which local production market share is about US$ 402.7 million. The spare parts market size in the country is about US$ 309.3 million of which domestic production of spare parts is estimated US$ 237.9 million. The significant shift in the supply of spare parts in the country underlines the growth potential of the local spare parts manufacturing sub-sector and potential for substitution of imported spare parts. Bogra has emerged as the center of manufacturing AM and spare parts especially for irrigation pumps, threshers, maize shellers, piston, liner and numerous spare parts of small diesel engines and machines, casting of machine components etc. and contributing about 80% of the local production in the country. However, infrastructures for production of AM and spare parts in Bogra and elsewhere in the country are still inadequate. The study recommends declaration of Borga and Jessore as ‘Agri-machinery districts’ and establishment of special ‘Agri-machinery Production Zones (APZ)’ in these areas. To promote export market to Indian subcontinent and other developing countries, tariff and non-tariff restrictions would be waved on AM through bilateral negotiations and border markets (hats) withIndiato be allowed for AM sales.