Why Bangladesh’s farmers do not benefit much from smart farming

Smart farming has increased productivity, improved crop quality, better market access, and reduced post-harvest losses. Photo: TBS

Bangladesh has made significant progress in smart agriculture. Enhanced seed varieties, faster cultivation tools, shared machinery, mechanised harvesting, and climate-adaptive practices are now common in agricultural projects and progressive farming clusters. These interventions have increased productivity, improved crop quality, better market access, and reduced post-harvest losses.

However, higher yields do not necessarily mean higher incomes for farmers—a reality often overlooked in current agricultural strategies. My recent visit to a climate-smart agricultural initiative highlighted this contradiction. Improved inputs and tools led to significant yield increases, yet farmers still rely on the same syndicate-controlled supply chain at harvest because they lack alternative transportation. 

Bitter gourds, sold for Tk16 per kilogram at the local wholesale market, rise to Tk80 per kilogram by the time they reach Dhaka. This fivefold increase is not due solely to transport costs, spoilage, or quality differences. It reflects deeper issues of market control after the crop leaves the farm. This situation exemplifies Bangladesh's agricultural paradox: while innovation occurs on the farm, the market structure remains largely unchanged.

Where the money really goes

Research by the Asian Development Bank and local market analyses indicate that Bangladeshi farmers typically receive only 26–40% of the final retail price of vegetables. The remaining 60–74% is absorbed by intermediaries such as transporters, commission agents, wholesalers, and retailers, as well as informal tolls, cartel practices, and political interference. These inflated margins contribute to urban food inflation and affect consumer welfare. Connecting farmers' hardship to consumers' struggles from these inflated costs strengthens the case for market reform.

Price spreads ranging from 100% to 300% between farms and urban retail markets are common across crops. In Bangladesh, 25–30% of vegetables are lost after harvest, mainly during transport and wholesale handling. Farmers ultimately bear these losses through reduced prices. In short, the primary challenge in Bangladesh's agriculture sector has shifted from production to distribution.

Productivity without power

Many agricultural interventions assume higher yields automatically lead to higher incomes. This fails in market reality where farmers lack pricing power, transportation options, and fair access. 

Transport syndication is a critical choke point. In many regions, farmers cannot choose how their produce moves. Wholesale markets, though legally regulated, often operate as closed systems where price discovery is opaque and bargaining power unequal. As a result, even well-designed agricultural projects often fail to improve farmers' livelihoods.

Do we have alternatives?

The current system is not fixed. Bangladesh already shows viable alternative models. Organised retailers such as Swapno source directly from farmers, bypassing multiple layers of intermediaries. These arrangements ensure quality standards, predictable pricing, faster payments, and reduced waste. If a single corporate buyer can do this at scale, why are farmers unable to access markets directly on their own terms?

This is why an online wholesale market should be considered—not as an idealistic notion but as a practical reform. Imagine farmers accessing urban markets directly, setting prices through transparent, competitive bidding rather than accepting undervalued offers. Direct access could transform rural economies and empower farmers to reap the full benefits of their labour.

Online wholesale market: A grounded solution

Farmers in Bangladesh are already registered with local wholesale markets, and an online platform could leverage this legitimacy rather than replace it. Pilot programmes could begin in regions with smart farming initiatives, strong infrastructure, robust governance, and active cooperatives. Farmers would list produce volumes, harvest timelines, and expected prices, while buyers—wholesalers, retailers, processors, exporters, and organised consumer groups—could view supply in real time and select preferred suppliers. Prices would be transparent, negotiations traceable, and coercive practices reduced.

The system would aggregate volumes, optimise routes, and standardise costs, reducing reliance on syndicates. Leveraging network-effect theory, the platform becomes increasingly valuable as more users join, providing a practical path to weaken monopolies and create meaningful alternatives, even if intermediaries are not immediately eliminated.

Stress testing the model: Where it can fail

Resistance is inevitable. Transport syndicates and entrenched market actors thrive on opacity. A transparent platform threatens their dominance, so technology alone is insufficient. Institutional backing from market committees, local administration, large buyers, or cooperatives is essential. Gradual engagement and targeted incentives—such as revenue sharing from logistics efficiency or exclusive licensing—can secure stakeholder support.

Logistics quality must also be maintained. Fresh produce is highly perishable, so courier or transport partners must ensure rapid delivery, proper handling, and loss-sharing mechanisms. A phased rollout, starting with hardy crops like potatoes and onions, can demonstrate reliability before expanding to perishable produce.

Digital literacy cannot be assumed. Farmers may be uncomfortable with apps or dynamic pricing. Assisted models via cooperatives, NGOs, producer groups, or trained local agents are essential early on. Government-supported training and incentives—subsidies for adopting digital tools or partnerships with tech companies—can bridge the digital divide. Minimum price floors or forward contracts may also help manage risk as technology exposes farmers to market fluctuations.

Lessons from elsewhere

Bangladesh would not be starting from zero. India's National Agriculture Market (eNAM) connects over 1,000 regulated wholesale markets, enabling online bidding and transparent price discovery. While adoption has been uneven, evidence shows improved price realisation and faster payments where infrastructure and governance align. 

Similarly, ITC's e-Choupal model in India connects farmers directly with buyers, offering real-time pricing and reducing reliance on local intermediaries. In Africa and Southeast Asia, digital agricultural marketplaces paired with logistics have increased farmers' earnings by enhancing market access and reducing waste. The key lesson: technology succeeds when it strengthens local institutions rather than bypassing them.

The real reform questions

Bangladesh has ample agricultural innovation but lacks willingness to reform market structures. Vegetable prices can increase nearly fourfold as they pass through intermediaries and face extortion and weak oversight. Simply introducing an online wholesale market will not solve all challenges until farmers gain more control over sales and distribution. But it can shift power back to farmers, slowly yet decisively—representing perhaps the most significant agricultural reform available today.

Impact measurement is crucial. Policymakers should establish baseline studies to understand market structures and set clear KPIs. Pilot evaluations can provide insights into practical effects and ensure the reform delivers tangible benefits to farmers.

Shafiq R Bhuiyan writes on how communication, culture and corporate social responsibility (CSR) converge to shape a more conscious and compassionate society.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.