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It said fertiliser subsidies remain the largest form of farming support, accounting for about 80 percent of the agri ministry budget.

These subsidies have helped farmers maintain production and price stability. However, because support is linked to the amount of fertiliser purchased, farmers with more land receive a larger share of the benefits, the report said.

The World Bank noted that Bangladesh places a high priority on agriculture, allocating about 10 percent of total public spending to the sector.

“Yet, agricultural growth has slowed, productivity gains have weakened, and diversification into higher-value products has lagged.”

According to the report, correcting these imbalances could substantially raise yields and improve productivity.

The World Bank recommended expanding soil testing, strengthening farmer advisory services and rolling out the Farmer’s Card and e-voucher system so that agricultural support reaches poorer and climate-vulnerable areas.

It said better-targeted support could gradually free up resources for investments that raise productivity, promote higher-value agriculture and benefit poorer farmers.

MAKING SUBSIDIES MORE PRODUCTIVE

Jean Pesme, division director for Bangladesh and Bhutan, said that by modernising subsidy delivery and aligning public spending with emerging opportunities, Bangladesh can build a more resilient and productive agricultural sector while ensuring better value for public resources.

Selim Raihan, professor of economics at Dhaka University and executive director of Sanem, said the composition of agricultural spending has become a central concern.

“A growing share of the budget is allocated to recurrent subsidies, which limits fiscal space for high-return public investments such as research, extension services, irrigation, rural infrastructure, storage, marketing systems, food safety, and climate adaptation. These are the areas that drive long-term productivity growth and structural transformation,” he said.

Food and Agriculture Organization (FAO) Representative in Bangladesh Jiaoqun Shi said Bangladesh faces significant challenges in fertiliser use because of reliance on traditional farming practices, urea-heavy subsidies, limited soil testing and weak extension services.

“Fertiliser use is often guided by generalised recommendations rather than soil-specific nutrient requirements, as access to soil and fertility mapping remains limited. The subsidy structure favours urea, encouraging its overuse while discouraging balanced application of other essential nutrients and organic inputs,” he said.

Uzma Chowdhury, director at the PRAN-RFL Group, said all government departments are working to increase production, but insufficient attention is being paid to market development and distribution systems.

“Without alignment between producers and consumers, market distortions arise. The presence of multiple intermediaries prevents farmers from receiving prices that cover production costs or generate adequate income,” she said.

“Livestock, fisheries, and other sectors operate under different cycles, and even products like salt have distinct supply chains. A uniform policy approach cannot address these diverse needs,” she added.

Agriculture Minister Mohammed Amin Ur Rashid highlighted ongoing efforts to reduce production costs and improve efficiency through better soil management, reduced fertiliser overuse and the expansion of solar-powered irrigation systems.

“We are also working to reduce import dependence in selected commodities such as onions, jute seeds, and ginger through structured medium-term planning,” he said.

Referring to structural challenges in the sector, the minister highlighted issues related to market information gaps, post-harvest losses and price volatility.

“To address these challenges, we are promoting better demand forecasting, decentralised storage solutions, and improved supply chain efficiency to ensure fair prices for farmers and stable access for consumers,” he said.

He also noted efforts to improve soil health and irrigation systems.