DOING

AGRIBUSINESS
in

BANGLADESH
Flourishing Agriculture for Blossoming Bangladesh!

Foreword
Bangladesh has maintained an impressive track record of growth and development. In the past decade, the
economy has grown at an average of 6% per year. The countrys economy is largely agrarian as it comprises
of 18.6% of the GDP and 47.5% of the total labour force. In recent years, Bangladesh has transformed from a
country of food shortages to one of food self-sufficiency. Strong demand for imported processed foods
suggests that food consumption patterns in Bangladesh will continue to shift from subsistence agriculture
towards consumption of processed foods, leading to strong growth in domestic demand over the next
decade.
On the other hand, the country is modestly exploring different avenues for agricultural commodity export.
Fish and fish products, including shrimps, account for the major share in Bangladeshs agri-food products
exports. Other export items include vegetables, fruits, spices etc.
Board of Investment (BOI), the apex investment promotion and facilitation agency of Bangladesh under the
Prime Ministers Office (PMO), was established in 1989 to encourage and facilitate investment in private
sector in Bangladesh. Services provided by BOI include investment promotion and facilitation covering policy
advocacy and aftercare support to the investors. BOI promotes domestic and foreign investment to enhance
competitiveness and contribute to socio-economic development of Bangladesh.
The Government of Bangladesh has identified agribusiness as a thrust sector. This publication aims to provide
some of the basic information required for investors when considering an agribusiness investment. We hope
the information presented proves to be useful guidance to the investors in exploiting investment
opportunities highlighted.
Our goal is to collaborate with agri-investors in creating more value in the agribusiness sector, generating
more exports and ensuring job and food security for the country. For any further assistance, please contact
us so together we can ensure a business-friendly, open and thriving agribusiness industry in Bangladesh.

Syed A Samad, Ph.D.

Dhaka, Bangladesh
September 2014

Executive Chairman
Board of Investment
Prime Minister's Office

DOING AGRIBUSINESS
IN BANGLADESH
Bangladesh has been lauded by the World Bank's 2010 Report as being one of the
top ten reformers, owing to substantive regulatory reforms and enhancing the
investment climate in the country. With Gross Domestic Product (GDP) growing
steadily by 6% per annum in the last decade, it has emerged as one of the
promising countries to invest in South Asia. The Foreign Direct Investment (FDI)
inflows and the country exports have grown progressively over the years.
Agriculture is a key component of the Bangladesh economy with more than
47.5% of the population dependant on agriculture for livelihood. The country
produces a wide range of crops, given its favourable climate and resources.
Although, Bangladeshs agriculture production and processing is gaining
impetus, the country is an importer of many essential agricultural commodities
and processed food products. Progressive agricultural practices, improved

marketing technique and modern processing facilities would enable agriculture

and the processing industry to improve the quality of food produced, expand
production levels significantly and enhance the food processing sector. The
Government of Bangladesh has identified agriculture as its thrust sector and
provides wide range of unique incentives to encourage and protect investments
and establish profitable agri-business in Bangladesh. It has been ranked by World
Bank ahead of many South Asian countries for starting a business.
With growing GDP, FDI and exports, unique policy reforms, favourable
agro-climatic conditions, industrious workforce, competitive human resource and
key geographic location near key markets like India and China, Bangladesh
presents a profitable offering for setting up an agro-based business.

BANGLADESH THE COUNTRY TO INVEST

BANGLADESH HAS EMERGED AS A FAST GROWING

ECONOMY OVER THE LAST DECADE

With annual GDP growth rate of 6.2%, Bangladesh is one of the

most promising economies in South Asia

GDP
growth
rate of 6.2%

Lower
inflation
6.8% rate
Agriculture
share in
16.3% GDP

Investment
contribution to
GDP19.5%
GDP at current prices including
sectoral contributions (Billion US $)
Agriculture

Industry

94

106

2009-10

2010-11

Per capita GDP (US $)

976

Services
114

122

880

860
780

2011-12

2012-13

2009-10

2010-11

2011-12

2012-13

Bangladesh has been ranked 16th out of 74 FDI recipient countries

(World Bank). FDI stands at US $1.6 bn

FDI Inflows (in Billion US $)

0.96

0.91

2009-10

2011-12

% Country-wise Share
of Total FDI (2013-14)
6.0

South Korea

7.2

Eqypt

8.0

UK

9.2

Malaysia

Bangladesh has

0.78

2010-11

Singapore

1.6

1.19

2012-13

2013-14

% Sectoral Share of FDI

(2013-14)
Agriculture 2
Services 4
Power Gas and Petroleum
Trade and Commerce
Telecommunication

19.5

Manufacturing

5
17
30
41

been ranked one of

the best countries
in South Asia to start a
business (Starting a
Business as per the
Doing Business Survey
2014-World Bank
report)

Export- Import Scenario (US$ bn)

Import Export

Top 5 Export products by

Value (2012-13)

Top 5 imported items by

value (2012-13)

In US$ bn

In US$ bn
Capital
machinery
Raw
Cotton
Iron, steel and
other base metal

Frozen Foods 0.5

40

Agri-Products 0.6
Jute Goods 0.8

20

2009-10

2010-11

2011-12

1.8
2.0
2.3
3.3

Textiles

Knitwear

10.5

Woven
Garments

11

3.6

POL*

*POL- Petroleum Oil

and Lubricants

2012-13

Strategically Located, Conducive Climate and Favourable

Socio-economic Conditions

It is a
Democratic
country

Exports have risen by 11% while imports have declined by 2%

during 2011-12 and 2012-13

Motivated,
working
and English is hard
and industrious
the second
workforce
markets-China preferred
and India
language after
Bengali

Situated
near mega

Climate

Transportation Network

Mild winter (October to March);

Hot, Humid summer (March to
June);
Humid, Warm Rainy Monsoon
(June to October)
Rains: 1100 mm to 3400mm
(June - August). Agriculture
mainly dependent on
monsoon

Road: Extensive and remote

connectivity.
Rail: 32% of area covered.
Air: 13 operational airports
including 3 international
airports.
Water: 2 major ports Chittagong
and Mongla.

Mobile Network
The mobile network penetration
is about 32% of the population
with almost all the cities having
wide mobile network coverage

INVESTMENT INCENTIVES
BANGLADESH OFFERS COMPETITIVE FISCAL AND
NON FISCAL INCENTIVES
No FDI Cap-100% foreign equity is allowed (Except for defence, nuclear energy, currency
and forest plantations)
Tax Incentives
Tax holidays: For 5-7 years (Location and industry dependent)
Tax exemption on royalties and technical know how fees
Tax exemption on capital gains from the transfer of shares of public limited companies
Cash Incentives
Electricity consumption special rebate of 20% to agro-processing sector including
poultry
Cash Incentives and export subsidies are granted on the FOB value of selected exports
products ranging from 5% to 20%
Tariff-free access to the European Union (through EUs Generalized System of Preferences,
GSP), Canada, Australia and Japan
Accelerated Depreciation Allowance at the rate 50%, 30% and 20% in the 1st, 2nd and
3rd year of commercial production on cost of plant and machinery (Applicable for
industrial undertakings not enjoying tax holidays)
Agricultural and Rural Credit Policy and Programme of Bangladesh Bank states that
All private banks will have to disburse at least 2.5 per cent of their total loan
disbursement to the agriculture and rural sector
Loan disbursement target in agriculture for all the state owned and private banks is USD
2 billion
Maximum interest rate for agricultural term-loan is 13%
Concessionary duty on imported capital machinery at 5% ad valorem on capital
machinery. No import duty for 100% export oriented companies.
Foreign Technicians- Income tax exemption for 3 years

Industries eligible
for tax holidays
include
agro-processing
textiles, jute
goods, agri-input
industry,
agriculture
machinery.

Bangladesh is a signatory to
MIGA
OPIC
ICSID
WIPO

Other incentives offered

Local banks full working loans are available to foreign investors
Foreigners employed in Bangladesh entitled to remit up to 50% of their salary
Foreigners employed in Bangladesh enjoy full repartriation of their saving and
retirement benefits
Portfolio investments in Bangladesh stock exchanges allowed by
non-resident institution / investor
Facilities for repatriation of invested capital, profits and dividends
Special facilities and venture capital support will be provided to export-oriented industries
under "Thrust sectors". According to industrial policy order 2010 issued by Ministry of Industries,
Agriculture has been identified as the Thrust sector
International Agreements: Bangladesh has concluded bilateral agreements for
avoidance of double taxation and investment treaties for promotion and
protection of investment

Comparitive monthly average

minimum wages (US $)
Bangladesh
Sri Lanka
Pakistan
Vietnam
Indonesia
India
Malaysia
Jordan
Phillipines
Thailand
China

70
72
87
96
142
163
191
211
212

294
432

BANGLADESH AGRICULTURE AT A GLANCE

BANGLADESH, WITH VARIED AGRO CLIMATIC ZONES
HAS IMMENSE ADVANTAGE IN AGRICULTURE PRODUCTION
Sowing Period
Harvesting Period

Cultivable
land:
8.52 mn
ha

47.5%
labour
employed

Total
cropped
area
14.93 mn
ha

AGRICULTURE

Agri-allied sectors

Potato

Horticulture

Fibre

Grains

50% Double
cropped
area

Cropping
intensity:
191%
60%
Cropland to
total land

Crop Cycle for Main Cereals

Crops Jan Feb Mar Apr May Jun Jul Aug Sep Oct Now Dec
Aus Paddy
Transplanted Aman
Local Boro Paddy
High Yielding Boro Paddy
Wheat
Potato
Maize
Tomato
Brinjal
Mango
Litchi

Wheat

2012-13 saw the largest crop production in 10 years-1.26 mn tonnes

Government support prices raised by 4% in 2012-13
Cultivation of high yielding varieties is growing rapidly

Rice

Rice production is vital to economy in Bangladesh

Current production is at 51 million tonnes; 2% growth during 2012-13
Number of Rice Mills have increased three fold to 600+ in 2013

Maize

Production has doubled during 2012-13 to 2.24 million tonnes

Strong growth driven by the expansion of the poultry industry
It is grown predominantly in the northern areas of the country

Jute

Bangladesh accounts for 41% of Jute production in the World

Jute production is 1.4 million tonnes in 2012
Export by value Raw jute: US$ 230 million & Jute products: US$ 800 million

Cotton

Production 108,000 bales in 2012, a growth of 25% yearly

Cotton development plan is major growth driver in cotton production
Production meets 3% of demand of raw cotton used for textiles

Fruits &
Vegetables

Mango, Litchi, Pineapple Banana and Jackfruit are the major fruits
Total fruit production is 34 million metric tonnes (2011-12)
Tomato, Brinjal and Cabbage are main vegetables grown
Vegetable production is growing rapidly; usually undertaken in winter.

Potato

Bangladesh ranks 8th in world for potato production

Annual production exceeds 8 million tonnes due to favourable climate and soil
Per Capita Potato consumption is 23kg (China: 35kg; India: 15kg)

Dairy

Annual milk production is 3.46 million tonnes

Milk production grew by 6.2% between 2005 and 2012
95% of milk yield is accounted by Cows

Poultry

Presence of up to 112,000 poultry firms and 30+ poultry feed mills

Poultry output is estimated to rise by 1% in 2013 to 212000 tonnes
Employs 5 million people

Fisheries

Aquaculture sector worth more than US$1.5bn

Growth rate of 5.5 % in 2012-13
Accounted for US$ 437 million worth of exports

OPPORTUNITIES FOR INVESTMENT IN AGRIBUSINESS

Edible Oil
Rice
Wheat
Food
processing

Sugarcane-Sugar and
Confectionaries

Dairy
Processing

Potato- Chips, Flakes,

Starch
Fruits & Vegetables -Jams,
Jellys, pickles, Canning,
pulp, juices, Sauces and
Ketchups

Post-harvest
infrastructure

Spices- Processing and

curing, Masala

Cold Chains
Food Parks

Aqua

Poultry

Agri-input sector

Seed
Fertiliser
Pesticide
Irrigation
Farm Machinery

Agriculture Sub-Sectors

Agri-allied Sectors

AGRI INPUT SECTOR

Seed Industry
Seed industry in Bangladesh is growing significantly due to crop diversification,
realisation of better yields and incomes, better dealer and awareness.
Also, the country has recently ventured into GM crops and has tested the
performance of BT Brinjal. The scope for investments in seed sector with hybrid
varieties having traits like higher yields, flood tolerance, drought tolerance etc. is
immense.

Crops for Seed Industry

Rice
Wheat
Maize
Potato
Jute

Oilseeds
Vegetables
Spice seeds

Total Seed
Requirement
1.25 million Tonnes

Seed industry
Estimated to be more than
US$ 500million

Seed supply
Government: 66%
Private: 34%

Growth in Seed demand

since 2007
Maize- 77%
Jute- 29%
Vegetable- 67%
Potato- 69%

Seed supply
Companies involved: 100
Registered Dealer: 18000

Seed Industry

Popular use of
Farmers Seed &
Open Pollinated Varieties

Fertiliser

Irrigation

Farm Machinery

The National Agriculture Policy

envisages promotion of organic
manures, bio fertilisers and
composts
Awareness campaign to
promote Balanced Plant
Nutrition is being extensively
undertaken
The annual fertiliser consumption of Bangladesh is about 3.2
million tonnes.
The production and supply of
traditional fertilisers is regulated
by government

The area under irrigation has

significantly expanding from
3.45 million hectares in 2001-02
to 5.1 million hectares in
2012-13
Government provides irrigation
facilities to more than 0.5
million ha through deep tube
wells, shallow tube wells
floating pumps and low lift
pumps as well as re-excavation
of canals etc.
Use of Mirco-irrigation
techniques including drip &
sprinkler irrigation are new and
awareness is growing .

Farm machinery is utilised

mainly for tilling, ploughing,
spraying threshing etc.
The use of tractors, power
tillers, threshers, weeders has
increased rapidly.
Mechanisation in Bangladesh
has been a challenge with
decreasing farm size from 0.81
ha during 1980s to 0.61 ha. The
energy available is 1.17 kW/ha.
About 0.7 million power tillers,
more than 35000 tractors and
agri-machines like 14, 50,000
sprayers , 1,80,000 open drum
threshers are available for use
and hire testifies the huge
market for farm machinery in
Bangladesh (BARI).

Opportunities for investment

Micronutrients
Bio fertilisers
Organic fertilisers
Vermiculture
Compost

Opportunities for investment

Irrigation Pipes, Pumps
& Tubewells
Drip Irrigation
Sprinkler irrigation

POST HARVEST INFRASTRUCTURE

Cold chains
The cold chain is a temperature controlled supply chain that includes pre-cooling, cold storage and refrigerated

transport.
Bangladesh has about 393 cold storages across the country having average capacity of 2500 tonnes with a capacity

of 4 million tonnes of potatoes and potato seeds.

The capacity of refrigerated warehouse in the country stands to about 8 million cubic meters (Global Cold Storage

Capacity Report by International Association of Refrigerated Warehouses)

Almost all the cold storages in Bangladesh are primarily used for storing potatoes and are inadequate for storing
high value items like fruits and vegetables.

Food Parks
A Food Park is a large cluster based facility to provide modern infrastructure for the food processing sector along the

value chain from the farm to the market.

Includes cold storages, creation of processing infrastructure near the farm, transportation, logistics and centralized

processing centres.
Such facility will provide food processors with cheaper, assured and better quality services, in turn reducing the

post-harvest losses and creation of efficient supply chain

Investments in up gradation of technology, establishment of new

flexi-cold storages and building multi-facility food parks is key to provide
impetus to food processing industry.

FOOD PROCESSING
The US$ 2.2 billion Food processing industry that is industry grew at an average 7.7 % per annum between fiscal

years 2004-05 and 2010-11.

The beverage industry more than doubled during the same period to US $29 million, showing an average growth

rate exceeding 8 % per annum.

Opportunity for food processing

The demand for processed foods and beverages is growing with growing middle class population of over 30 million.
Government policies supporting agro and food processing industries.
30-35% of wastage in agriculture produce, fruits and vegetables.
Rice and Potato surplus production.

OPPORTUNITIES FOR INVESTMENTS IN FOOD PROCESSING

Food
processing

Edible Oil

Rice Bran

Palm Oil

Sugar

Rice

Confectionary

Molases

Mustard

Wheat

Fruits &
Vegetables

Potato

Flakes

Bread

Pulp/ Can/
Juice

Chips

Snacks

Cookies

Jam/ Jelly

Flakes

Bread

Noodles/
Pasta

Sauces/
Ketchup

Starch

Tea

Cured Spices

DAIRY PROCESSING
Milk production is one of the important economic activities, providing
3.6 million households with supplementary income.

Livestock

COW

Total no. (million)

Share of milk yield by species (%)
Yield (kg/lactation)

BUFFALO

GOAT

23.2

1.4

25.1

95

793

10.5

Crossbred: 2016
Indigenous: 280

Bangladesh requires approx. 12.8 million metric tons of milk; about 1 million ton of this demand is fulfilled

domestically
The demand for milk and dairy products is growing by 10% per annum whereas the local production is expected to
grow little over 7%.
The per-capita milk consumption is considerably lower than neighbouring countries. It is therefore a potential
industry for development of value chain in local markets.
For modern dairy industry to take shape, investments are needed in diary clusters, efficient cold chains, processing
and use of high quality inputs.

INVESTMENT OPPORTUNITIES IN DAIRY

Cold Chains
Milk and Milk Powder
Processed products

Ghee, Butter
Cheese
Whey
Flavoured Milk
Ice Creams
Cattle feed

AQUA
Bangladesh has a 720 Km long coast line and total marine water area of 166,000 sq. km. Also, the country has more than
200 rivers.
Brackish and freshwater aquaculture in Bangladesh is growing due to unique aqua-friendly landscape, climate and
culture

Aqua sector is worth

Export earnings in
2009-10 were as much as

US$ 437.40
million

190,000

registered shrimp
farms mostly located in
Khulna Division

US$1.5bn

8%

population directly
engaged in fishing

Bangladesh
exports shrimps to more than

40 countries all over

the world

POULTRY
Commercial poultry farming is patronised by private players by distributing commercial broilers and layer day old hybrid
chicks.
With about 130,000 farmers mainly small and medium farmers are engaged with flock size of 500 birds. Poultry clusters
also exist in the country with Gazhipur and Savar districts being hubs of cluster poultry.
It is estimated that poultry production is growing by 4% every year.
The feed is major component of cost of production accounting for 65%. Special mills supply about half of the feed while
farmers themselves mix the rest.

INTERESTED? LETS START!

THE PROCEDURES, TIME AND COST INVOLVED IN LAUNCHING A COMMERCIAL OR
INDUSTRIAL FIRM, WITH UP TO 50 EMPLOYEES, IS GIVEN BELOW
Steps for incorporating a company
Description and
Costs involved

Agencies involved

Whether an online
procedure

Number of days
required

Decide the company structure and verify the uniqueness of proposed company name with RJSC
Registrar of Joint Stock Companies and Firms (RJSC)

BDT 600

1 day

1 day

1 day

1 day

Finalise authorised share capital. Pay stamp duty accordingly

Account of Treasury at Sonali bank (challan) or
any bank (pay order)

For authorised share capital of BDT

1,000,000 the total stamp
duty fee is BDT 2500.

Register company*
Registrar of Joint Stock Companies and Firms (RJSC)
website

Registration fees : BDT 3645

Registration filing fee: BDT 1200

BDT 30-50

None

Obtain Tax Identification Number (TIN)

Deputy Commission of Taxes of Company Circle,
Zonal Taxation Department of the region

No Charge

Register for VAT

Register with Customs, Excise and VAT commission
of the region

No Charge

SIMULTANEOUS PROCEDURE

Make a company seal

4 day

3 day

Obtain trade license**

City Corporation

* Documents to be submitted for company registration

Name clearance certificate
Memorandum and Articles of association
Forms I, VI, IX X, XII
Proof of payment for Treasury Stamps

BDT 5000

3 day

** Documents to be submitted for obtaining trade license

Certified copy of Memorandum and Articles of association
A copy of certificate of incorporation
TIN no. certificate
A copy of lease agreement of registered office

COSTS INVOLVED IN DOING BUSINESS IN BANGLADESH

Particulars

(In US $)

Industrial estate rent (monthly) (per sq mt)

Land: 0.083-0.183
Factory: 1.25- 2.75

Office rent (monthly) (per sq mt)

6.24- 23.38

Gas Tariff (per cubic meter)

0.04-0.14

Power Tariff (per kw/h)

0.02-0.08

Labour Force (per month depending on skill)

70

Mid-level Management salaries

400-500

Top level management salaries

1000-2500

Sea Frieght Charges

Destinations

20 FCL (US$)

40 FCL (US$)

New York, USA

3050

3750

Sydney, Australia

1250

2100

Rotterdam, Netherlands

1625

2970

Hong Kong, China

550

870

Jebel Ali, UAE

850

1420

LIST OF AGRICULTURE SUPPORT AGENCIES IN BANGLADESH

Category

Name

Function

Extension
Services

Department of Agricultural
Extension (DAE)

DAEs objective is to provide efficient and effective needs

based extension services to all categories of farmer, to enable
them to optimize their use of resources, in order to promote
sustainable agricultural and socio-economic development.

Agri-Input

Bangladesh Agricultural
Development Corporation
(BADC)

BADC works in production, procurement, transport, storage

and distribution of essential agricultural inputs.

Bangladesh Seed Association

(BSA)

An association for seed manufacturers, importers and dealers

to protect and promote seed business in Bangladesh

Bangladesh Fertilizer Association (BFA)

An association for fertilizer manufacturers, importers and

dealers to protect and promote all measures towards free
competitive marketing, trade and manufacture of fertilizer in
Bangladesh

Bangladesh Crop Protection

Association (BCPA)

BCPA is the apex body of pesticide companies in Bangladesh

and works to protect and promote the trade of crop protection technologies in Bangladesh

Bangladesh Agricultural
Research Institute (BARI)

BARI is the countrys largest multi-crop research institute

Bangladesh Rice Research

Institute (BRRI)

BRRI is an autonomous research organization for conducting

research towards development of rice varieties their management technologies

Rural Development Academy

(RDA)

RDA works as a specialized Rural Development Institution for

training, research and action research.

Bangladesh Standards & Testing

Institution (BSTI)

BSTI develops standards and maintains quality control of

products

Seed Certification Agency (SCA)

SCA is the only Government authorized body for quality

control of all kinds of seeds in Bangladesh

Financial
Institutions

Bangladesh Krishi Bank (BKB)

The state owned bank provides credit facilities to farmers and

agri-business owners.

Exporting
Entities

Bangladesh Export Processing

Zones Authority (BEPZA)

BEPZA is the official wing of the government to promote,

attract and facilitate foreign investment in the Export Processing Zones.

Bangladesh Rice Exporters

Association (BREA)

An association of rice exporters working to develop and

promote policies in the export of rice

Bangladesh Fruits, Vegetables &

Allied Products Exporters
Association (BFVAPEA)

An association of exporters working to develop and promote

policies in the export of fruits, vegetables and allied products

Bangladesh Agro-Processors
Association (BAPA)

BAPA works to develop and apply policy in the manufacture

and trade of value added agro products

Bangladesh Cold Storage

Association (BCSA)

BCSA protects and promotes the trade rights of cold storage

owners and other stakeholders

Research
Institutes

Regulatory
Standards

Relevant
Associations

Board of Investment (BOI), the apex investment promotion and facilitation agency of Bangladesh under the Prime Ministers
Office (PMO), was established in 1989 to encourage and facilitate investment in private sector in Bangladesh. Services
provided by BOI include investment promotion and facilitation covering policy advocacy and aftercare support to the
investors. BOI promotes domestic and foreign investment to enhance competitiveness and contribute to socio-economic
development of Bangladesh.
International Finance Corporation (IFC) is providing technical supports to BOI to strengthen investment promotion and
facilitation services including agribusiness.
Ernst & Young (EY) is providing research support to promote agribusiness sector.

For further information and support, kindly visit www.boi.gov.bd