World Bank says subsidy-heavy agriculture budget leaves little room for productivity gains

Top 20 percent of landowners receive about half of the total subsidies

Nearly 80 percent of Bangladesh’s public spending on agriculture is channelled into fertiliser subsidies, yet marginal farmers receive only a fraction of the benefits, World Bank has said.

The study, titled “Repurposing Agricultural Public Spending for Quality Growth and Jobs in Bangladesh’s Agrifood System”, was launched in Dhaka on Monday.

It found that the wealthiest 20 percent of landowners receive roughly half of all fertiliser subsidies, while the bottom 40 percent receive only about 15 percent.

The report argues that despite agriculture accounting for only around one-tenth of total public expenditure, the sector continues to struggle with slow growth, modest productivity gains and limited movement into higher-value crops and products.

Heavy spending on subsidies and rice-related support continues to crowd out investment in research, irrigation, market access, and climate resilience, the World Bank says.

The study also highlights inefficiencies in fertiliser use.

Only around 5 percent of farmers apply a balanced mix of nutrients within recommended levels, resulting in what it describes as a “highly imbalanced” pattern of fertiliser application.

Correcting that imbalance could significantly improve yields and productivity, the report says.

“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 fertilisers due to the West Asia conflict are exposing gaps in policies and spending,” the report quoted World Bank Division Director for Bangladesh and Bhutan Jean Pesme as saying.

“The good news is there is a clear path forward. By modernising support delivery and gradually rebalancing agriculture spending toward high-return investments, Bangladesh can build a more resilient and productive agri-food system that delivers more and better-paid jobs.”

The report calls for phased reforms, including expanded soil testing, stronger advisory services, and rollout of Farmer Cards and e-vouchers to better reach poor and climate-vulnerable farmers, while improving delivery over time to boost productivity and higher-value agriculture.

Agriculture Secretary Mohammed Aminur Rashid said the findings would help guide efforts to restructure public spending and promote quality growth and employment in the agri-food sector.