Bangladesh's land productivity declined by 0.44 percent from 2011 to 2020, likely due to soil degradation, reduced fertility and unsustainable farming practices, according to a study of the Bangladesh Institute of Development Studies (BIDS).

The land productivity increased by 2.75 percent from 1991 to 2000 and the upward trend continued, rising by 3.30 percent in 2010.

However, it followed a downward trend from the following year, declining by 0.44 percent in 2020, according to the study.

The study, titled "Agricultural Productivity and Technical Efficiency in Bangladesh", was presented on the last day of an Annual BIDS Conference on Development at Lakeshore Hotel in Dhaka yesterday.

Land productivity measures the output per unit of land, such as per hectare, reflecting the efficiency of land use in the production process

BIDS Research Director Mohammad Yunus, Professorial Fellow MA Sattar Mandal, Research Fellow Azreen Karim and Research Associate Rizwana Islam conducted the study. BIDS Research Fellow Taznoore Samina Khanam presented the study.

Land productivity measures the output per unit of land, such as per hectare, reflecting the efficiency of land use in the production process, said Khanam.

She said Bangladesh achieved some of the most rapid agricultural land productivity gains over the 2001–2010 period.

To conduct a micro-level analysis, the study used data from three rounds of the Bangladesh Integrated Household Survey (BIHS), which was implemented by the International Food Policy Research Institute (IFPRI).

It used secondary data from the Bangladesh Bureau of Statistics (BBS) and the United States Department of Agriculture (USDA) for a macro-level analysis.

Referring to data from the agriculture census in 2019 on the area of land cultivated, Khanam said it showed that there has been a significant decline in the net area cultivated per holding.

It reduced to 0.21 hectares in 2019 from 0.28 hectares in 2008, she added.

"So, this change has significant implications for agriculture productivity," she said.

The researchers also analysed the growth in total factor productivity (TFP).

The TFP compares the entire range of farm outputs -- such as crops, livestock and aquaculture commodities -- with the combined inputs of land, labour, capital and intermediate resources used to produce them.

The TFP trend shows an increase from 2000 to 2011, followed by stagnation from 2011 to 2017, and then a declining trend from 2018 to 2021, Khanam said.

The level of farm output in 2021 was 196 percent higher than that in 1990, growing at an average annual rate of 6.32 percent. During the 1990-2021 period, total input use increased by 4.66 percent annually, according to the study.

A notable increase in inputs was witnessed in the 2016–2021 period, at 4.27 percent per year on average, driven by growth in hired labour and material inputs.

Average annual TFP growth went from a negative 1.16 percent in the 2016-2021 period to 0.54 percent during the 2019-2021 period, which allowed 2021 farm output growth to return to a positive level after slowing in previous years, it said.

In an analysis on the cost of production of paddy, the study showed an increase by 3.45 percent from 2012 to 2018.

"This reflects rising costs of production inputs," it said.

Although output prices have also been increasing, they increased at a slower rate of only 1.31 percent over the same period.

The declining ratio of gross value of output to total production input costs implies that the profitability of rice farming is decreasing over time, it said.

"Farmers are receiving less return on their investment as costs rise more rapidly than the prices they receive for their produce. This trend underscores a growing economic challenge for rice farmers," it added.