Habiganj, Bangladesh – Cassava, a valuable cash crop with vast potential, is transforming the agricultural landscape of Bangladesh, thanks to a partnership between the Asian Development Bank (ADB) and PRAN-RFL, a leading food company. This collaboration has not only expanded contract farming but also positioned cassava as an attractive crop, propelling the growth of the agribusiness sector in the country.
Previously, Bangladesh heavily relied on imported starch, which accounted for about 90% of the country’s needs in industries such as food processing, textiles, and pharmaceuticals. With increasing demand and a desire for locally sourced supplies, cassava has emerged as a lucrative option.
Contract farming has played a pivotal role in convincing skeptical farmers to shift to cassava cultivation. These agreements provide farmers with capital, expertise, and a guaranteed market, while ensuring buyers receive consistent and high-quality produce.
PRAN-RFL, Bangladesh’s largest private food and agribusiness group, has been at the forefront of promoting local sourcing. With the support of a $12.5 million loan from ADB, PRAN-RFL established a starch and liquid glucose plant in Habiganj in 2013. The company now has over 2,500 contracted farmers cultivating cassava on 3,700 acres of land. The plant’s monthly production capacity reaches 2,250 tons of cassava starch and 2,400 tons of liquid glucose derived from starch.
Farm households participating in the contract farming program have reported significant increases in both production and income. A survey conducted in 2017 revealed that the average cultivated area per cassava farmer had tripled since the program’s inception, and cassava-related incomes had risen by an average of 80%. Moreover, farmers hired around 18,000 day laborers during the recent 11-month harvesting season, creating approximately 2,800 full-time jobs.
Contract farming arrangements address several barriers that farmers face when transitioning to new crops. For example, Mashuk Mia, a 28-year-old farmer, was initially skeptical about cultivating cassava but was ultimately persuaded by the terms of the contract, which offered interest-free capital from PRAN-RFL and allowed him to repay the money after the harvest.
Monirul Islam Dhali, a 42-year-old farmer, also found the interest-free capital and the guarantee of fair market rates for raw cassava appealing. He highlighted the company’s direct purchase from farmers, eliminating middlemen and ensuring competitive prices. Farmers note that cassava requires less care, has fewer risks, and offers lower production costs and higher profits compared to rice and vegetables.
PRAN-RFL’s local source of cassava enables them to produce high-quality liquid glucose within Bangladesh, reducing their reliance on imports from India. This opens up new opportunities for the company to develop value-added products, such as dextrose, acetic acid, citric acid, and commercial alcohol, to meet the growing industrial demand. PRAN-RFL plans to introduce a high-yielding cassava variety that allows for two crops per year, doubling the current productivity of 7 tons per acre of land. The company aims to expand cassava cultivation areas to 10,000 acres within the next two years, up from the current 3,700 acres.
The success of the contract farming model not only benefits PRAN-RFL but also contributes to the overall development of Bangladesh’s agribusiness sector. By providing a domestic alternative to imported glucose, cassava cultivation supports the production of higher-value food products for export, strengthening food security and diversifying crops. The ADB-supported PRAN Agribusiness Project aligns with the government’s objectives of enhancing agricultural productivity, increasing private sector participation, and attracting investments in agribusiness. Furthermore, the project generates additional employment opportunities, with the starch and liquid glucose plant employing 200 workers, of which 32% are women.