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Investment in land and water in Bangladesh - Khwalja Abdur Rahman

Khwalja Abdur Rahman, Additional Secretary
Ministry of Agriculture Secretariat, Bangladesh


The physical environment

Bangladesh lies between the 20o25' and 26o38' north latitudes and the 88o and 92o40' east longitudes astride the Tropic of Cancer and the 90o east meridian. Its total area is 144 852 km2, of which about 9 700 km2 is occupied by major rivers and estuaries. It has a tropical monsoon climate with four main seasons: pre - monsoon (March - May); monsoon (June - September); post - monsoon (October - November); and winter (December - February). The mean annual temperature is about 25oC, while mean monthly temperatures range from 18oC in winter to 30oC in the pre - monsoon season. Mean annual rainfall is 50” to 60” in the west and over 100” in the north, east and south, and exceeds 200” in the far north. Some 85 to 90 percent of total annual rainfall occurs between April and September, with regional variations.

The country is comprised of hills, terraces and floodplains. The northern and eastern hills occupy 12 percent of the country, so - called terrace areas (the Madhupur and Barind tracts) about 8 percent and floodplain is the remainder. Terraces are uplifted fault blocks and not river or marine terraces (Brammer, 1997). Floodplains are categorized in four types: active river floodplain; meander floodplain; piedmont; and estuary and tidal floodplains. Since 80 percent of Bangladesh is floodplain, flood control and drainage not only supports crop irrigation but also prevents damage to crops and land of special importance in terms of food security.

Agriculture operates in a dual water regime of flood during the rainy season and aridity in the winter. A complex network of watercourses drains an area of some 2 million km2 of which only about 7 percent lies within national boundaries. This physical setting severely limits the degree of control and management that can be applied to water inflow both in the monsoon season and during the dry winter. This variation in the temporal and spatial occurrence of water is a major constraint to economic development, especially for agriculture, which dominates the economy. The overabundance of water during the annual monsoon season causes widespread flooding and restricts cropping alternatives. It disrupts normal life. Significant areas of crops are damaged in years of high flood. Conversely, the scarcity of freshwater inflow during winter and at times of heavy groundwater use for irrigation has led to the progressive salinization of coastal aquifers and the environmental degradation of important economic resources such as the Sunderbans (Proceedings, 1992). The combined total annual monsoon flow of all rivers together is estimated to be 5 million m3/secs which dwindles to 0.25 million m3/sec during winter. About 71 percent of the total cultivable area is in higher areas (flood depth 0 - 30 cm) and medium high land (flood depth 30 - 90 cm), yet even the remaining land area is not entirely free of seasonal inundation.

Importance of land and water

Bangladesh is an overpopulated country with a population density of 891 persons/km2. The need to produce enough food for all has been a continuing concern for all governments since 1972. Land and water in this context constitute the two most important resources. All too often these resources have been used as though they are inexhaustible gifts of nature. Only in recent years has it been realized that these critical resources are limited, more so on a per capita basis, because of the huge population dependent on them. The current population estimate is 131.5 million (Bangladesh Economic Survey, 2001).

There are four principal modes of water development: (i) flood control and drainage; (ii) major irrigation, involving primary pumps, floating pumps or barrages; (iii) minor irrigation, involving traditional non - mechanized methods or modern mechanized methods using hand tubewells (HTW), low - lift pumps (LLP), shallow tubewells (STW) or deep tubewells (DTW); and (iv) flood control and drainage combined with irrigation using double pumping or single pumping with gravity distribution. Important subsidiary modes of water development include water conservation, command area development, and conjunctive operation of surface and groundwater irrigation systems.

Our objective is to highlight the major issues relating to land use and water management. This study in divided into four parts. Part I documents land and water development programmes executed in different plan periods, budget support including external aid and related issues. Part II delineates the historical trends in economic policies which influence investment trends including the priority given to land and water development and projections for future investment requirements. Part III deals with the growth of private investment in land and water, impediments to such investment and the areas and levels where a complementarity between the two could be established. Finally, in Part IV conclusions are drawn with emphasis on the Special Programme for Food Security (SPFS) and poverty alleviation through land and water development.


In Bangladesh, land and water development programmes cannot be kept isolated unless programmes of land development are narrowly confined to soil resource development to maintain and augment soil fertility. However, investment in soils resource development generally goes beyond the objective of maintaining soil fertility. The process of development in this respect includes soil mapping and classification of soils by type, checking the level of soil fertility in order to advise the farmers of the suitability of particular types of land for different crops. Bangladesh has made investments in soil resource development since the 1960s; it has institutional arrangements to continuously advise farmers on soil fertility issues countrywide. The Soil Resource Development Institute (SRDI) is the permanent institution in which investment is made under both development and revenue budgets; it is technically backstopped by the National Agricultural Research System (NARS).

Overall emphasis and consequent investment favours water resource development, which directly and indirectly serves the needs in both categories. The direct contribution of water resource development arises out of such programmes as coastal embankments, flood control embankments and flood control and drainage, land reclamation and river erosion control. The coastal embankment programme prevents salinity intrusion, thereby saving agricultural land. Flood control and drainage programmes save not only crops, but also infrastructure, human population and livestock. Flood control, drainage and irrigation programmes enable farmers not only to be free of flooding, but also increases cropping intensity through irrigation facilities. Programmes for river erosion prevention are important in reducing land loss. It is estimated that the annual loss of agricultural land due to such erosion is some 8 700 ha. Water resource development programmes since the early 1960s were largely piecemeal and not interconnected due to the absence of a coherent sectoral policy. The National Water Policy adopted in 1999 provides for a comprehensive framework encompassing all sectors. Investment in land and water therefore must be seen in this light. The integrated relationship of land and water development was acknowledged in 1989. The Bangladesh Water Development Board (BWDB), the major public sector agency responsible for water sector development, built 6 519 km of dykes including 3 674 km of sea dykes, 6 095 large and small sluices, 1 276 large regulators, 6 419 km of drainage and irrigation canals, two cross - dams reclaiming 124 000 ha of new land, one barrage to protect 2.84 million ha from upland and tidal flood hazards and brought 192 000 additional ha under irrigation (UNDP, 1989).

An estimated US$1 billion in foreign aid was applied to water projects from 1972 to 1989, including investment in minor irrigation, which until 1989 was the responsibility of a public sector agency called the Bangladesh Agricultural Development Corporation (BADC). A policy change transferred this responsibility to the private sector, with the exception of a few areas of integrated area development.

Budget support

Bangladesh began planned development in 1973 with development in the form of five - year plans on which annual development programmes (ADP) are prepared. There have been some discontinuities due to the exigencies of public situations. Thus, while the First Five - Year Plan was launched in 1973, a Two - Year Plan (1978 - 1980) followed it in response to worldwide inflation and uncertainty. In 1980, the five - year plan framework was reinstated and three five - year plans were implemented in succession. There was no development plan during 1995 - 1997, but the Fifth Five - Year Plan was launched in 1997. Bangladesh is now preparing its Sixth Five - Year Plan. Funds for investment in development projects are channelled through the development budget. Funds are also provided through the revenue budget for the permanent offices that execute the projects. All the above plans give varying priority to land and water development programmes to achieve national self - sufficiency in food. Allocations and expenditures for agriculture, water resources and rural development in different plan implementation periods is shown in Table 1.

Extent of foreign aid

The allocation shown in Table 1 includes external assistance from bilateral and multilateral sources. Foreign aid consists of project aid (loan or grant), commodity aid or food aid. Project aid dominates the foreign aid component. It sometimes includes technical assistance in support of project implementation as well.

From independence until June 1998, US$33.2 billion in foreign aid was disbursed to all sectors of the economy, 48.4 percent as grants and 51.6 percent as loans. Of this, 17 percent was food aid, 29 percent was commodity aid and 54 percent was project aid. Since then, significant changes have altered the total aid profile. In recent years, emphasis has been given to social sectors such as health and education, which has led to declining support for land and water sector programmes. The share of grants overall has declined as has bilateral aid, decreasing from 74 percent of total aid in 1971 - 1976 to 39 percent in 1997 - 1998. Food aid also declined consistently from 48 percent of total aid in 1971 - 1972 to 7.4 percent in 1997 - 1998. Commodity aid fell from 50.8 percent to 9.5 percent during the same period.


Allocation and utilization in the public sector during different plan periods

Plan Periods

Agriculture, Water Resources And Rural Development

Total Country













First Five-Year Plan (1973 - 1978)









Two Year Plan
(1978 - 1980)







Second Five-Year Plan
(1980 - 1985)









Third Five-Year Plan
(1985 - 1990)









Fourth Five-Year Plan
(1990 - 1995)









Fifth Five-Year Plan
(1997 - 2002)









Source: Plan Documents, Planning Commission, Ministry of Planning, Government of Bangladesh.

Note: For the Fifth Five - Year Plan actual utilization shown for the period 1997 - 1999. Figures in parentheses indicate percentage of the allocation. Average exchange rates of different plan periods have been considered for converting Taka into US dollars.

From 1996/1997 to 2000/2001 the flow of external aid for agriculture, including minor irrigation and the water resource sectors, remained static (see Table 2).

In this respect, it is important to refer to the global context regarding external assistance to agriculture, including water resources and land. Available data indicates that the decline in external assistance to agriculture in 1994 reflected a 30 percent real term contraction in bilateral commitments.

This was partly counterbalanced by a five percent real increase in multilateral commitments in 1994. Nevertheless, total multilateral commitment to agriculture in 1994 remained well below levels recorded in 1993.


Project aid 1996/1997 - 2000/2001



Agriculture, Water Resource and Rural Development

Billion Taka

Billion US$

Billion Taka

Billion US$


























Source: Revised ADP Documents, Planning Commission, Government of Bangladesh.

Notes: Allocations in US$ takes into account actual exchange rates in different years. Figures in parentheses indicate percentage of total allocation.

With regard to regional distribution of foreign assistance flow, the level of commitments to Asian countries fell more steeply than for other regions during 1990 - 1993 (FAO, State of Food and Agriculture, 1996). This was the trend prior to holding of the World Food Summit (WFS) in 1996. This trend has not been reversed. The share of concessional assistance to agriculture in total commitments was estimated at 65 percent in 1998, well below the 77 percent share in 1988 and 74 percent in 1996.

Targeted activities

Targeted activities in land and water can broadly be divided into (a) activities directly related to land, such as soil resource development, land reclamation and development and management of accreted land and (b) flood control, irrigation and drainage.


Even prior to its birth in 1971, Bangladesh had invested in soil resource development. Nearly all agricultural land was covered by a reconnaissance soil survey conducted in 1963 - 1964. According to the demands of agricultural research, extension and development agencies, further activities aided by the United Nations Development Programme (UNDP) and the Food and Agriculture Organization (FAO) were undertaken to update existing soil and land use data, taking into account changes in hydrology, irrigation and drainage since 1974. Efforts were also undertaken to establish a mechanism for the transfer of knowledge of soils and land use to farmers, development officials and students through varied project instruments. The Department of Soil Survey (DSS) became the SRDI.

The activities of this institute have since been extended to make it more pro - farmer to provide advice directly to farmers through mobile laboratory units. Further, it is engaged in continual updating of relevant information on soils in nearly 460 subdistricts. The data collected is published and distributed to the farmers. Regular training of farmers on soil health issues is conducted in the field with participation of research and extension personnel. Soil health cards have also been introduced as an experimental programme.

To improve zinc and sulphur deficiency in soils, the private sector has been drawn into the marketing programme for zinc and sulphur, with positive results. In addition, the Department of Agriculture Extension (DAE) in cooperation with NARS have ongoing activities to educate farmers in adopting cropping patterns conducive to soil fertility, better land management, and balanced use of bio - mass, green manure and chemical fertilizers.

The programme for land - related activities is further strengthened by a geographic information system (GIS) covering 30 agro - ecological zones (AEZ). A database of this biophysical information has been developed. The AEZ/GIS project also provides training for agricultural extension, research institutes, universities, NGOs and the private sector.

Water resources

Activities relating to water resources can be categorized into irrigation, flood control and drainage. Irrigation is further divided into minor and major irrigation. Other activities include land reclamation, development and management of accreted land and for river erosion control.

In practice, the three components (flood control, drainage and major irrigation) often merge to form distinct types of activities known as flood control and drainage (FCD) and flood control, drainage and irrigation (FCDI). The distinction between FCD and FCDI is based on the objectives and functions of particular programme activities. Some activities relate exclusively to flood control and drainage, while others combine flood control and drainage with irrigation, depending upon the objectives and the needs assessment of a particular programme. The overall objective - regardless of programme activities - is to ensure water resource management and development in an equitable, comprehensive and integrated manner. FCD and FCDI programmes are capital intensive and require public sector investment. Due to perceptions associated with large scale FCD and FCDI projects in the late 1950s and early 1960s when a feasibility study after severe flooding in 1954 - 1955 led to recommendations for large - scale flood protection schemes to save crops from flood damage. A master plan was initiated and in 1959 the Water and Power Development Authority (WAPDA) was created. Later, these perceptions changed. This will be discussed in Part II.

Management approach

The creation of WAPDA led to public sector - dominated management of the water sector with WAPDA as its focal point. In 1961 BADC took over minor irrigation activities. Its birth is associated with the Food and Agriculture Commission Report commissioned by the then Government of Pakistan.

Pakistan's net area of cultivated land is estimated at more than 9.0 million ha of which 7.56 million ha are suited to irrigation. Flood control and drainage facilities are provided to 4.45 million ha of land (Fifth Five - Year Plan Mid - term Review).

Since creation of WAPDA and BADC in the late 1950s and early 1960s, Bangladesh has followed a public sector management approach in water resource development, the broad objective of which aimed at achieving food self - sufficiency as well as to protect infrastructure and damage to human and animal lives. In many ways, however, over time these objectives also promoted optimal water use, securing people’s participation and integrated area development. FCD and FCDI programmes and projects remained within the WAPDA domain. Minor irrigation remained within the sphere of the BADC, which was also responsible for ensuring efficient delivery of inputs such as high yielding varieties of seeds (HYV) and chemical fertilizers. Further, it organized farmers to promote and develop horticultural production.


Public sector irrigation to 1978

Type of Irrigation

Irrigated Area (million ha)

Major Irrigation


Minor Irrigation








Total Public Sector Irrigation


SOURCE: Two Year Plan, 1978 - 1980, Planning Commission, Government of Bangladesh.

NOTE: LLP=low lift pumps; DTW=deep tubewells; STW=shallow tubewells

Achievement to 1997

By 1978, 1.16 million ha were being irrigated, with traditional methods dependent on surface water accounting for 0.39 million ha (representing private sector investment). The achievement by the public sector - led management approach is shown in Table 3.

Irrigation, specifically minor irrigation development has had a major shift from public sector to private sector investment since 1987. The removal of the import ban on diesel engines of specific makes and models led to a rapid increase in private sector investment on STWs and LLPs. From 1988/1989 further policy reforms to remove duties and standardization restrictions on imports of small diesel engines encouraged further expansion of private sales of STWs and LLPs. By 1996/1997 four million ha of cultivable land was brought under irrigation coverage by both the public and private sectors. Details on irrigation coverage by type are shown in Table 4.

Flood control and drainage facilities were provided to 1.82 million ha by 1978. Facilities were extended to 3.17 million ha by 1987/1888 and to 4.2 million ha by 1996/1997 (Fifth Five - Year Plan).

Impact on food security

It is understood that the concept of food security need not be fully dependent on food availability. However, the concept can nevertheless be viewed in terms of the fact that a rising level of food production and its availability is a necessary if not a sufficient condition for food security. Food grain production in Bangladesh rose from just over nine million tonnes in 1960 to over 16 million tonnes in 1987/1988. Through 1996 it ranged from 17 to 19 million tonnes and then rose again through 2001 to over 26 million tonnes. It may not be appropriate to link this rise exclusively to investment in land and water management. It was also affected by technological changes not only in the land and water sectors but also by the introduction of HYVs and the increasing use of chemical fertilizers, in which the NARS, the DAE and BADC and the private sector made significant contributions.


Irrigation achievement from 1987/88 to 1996/97 (million ha)







Surface Water



Gravity flow



LLP (including floating pumps)



Traditional method

















Source: Fourth Five - Year Plan and Fifth Five - Year Plan, Planning Commission, Ministry of Planning, Government of Bangladesh..

Due to the rising production of cereals in the past, cereal prices remained affordable. This contributed to food security because about 70 percent of average protein intake is rice. Additionally, due to recent achievements in food self - sufficiency, government has been able to expand safety - net programmes especially for women and children. These include the Vulnerable Group Development (VGD), Rural Maintenance (RMP or cash for work) and Food for Work (FFW) programmes. The beneficiaries of VGD and RMP are all women. Under the VGD programme about 0.5 million female - headed households receive 31.25 kg of foodgrain every month for an 18 - month period. New groups of women are brought into the programme after graduation of the existing groups. The beneficiaries are given skill development training to enable them to earn their livelihood after completion. A recent government study found that marginal propensity to consume is greater for transfers in kind than for cash. Consequently food transfers greater positive impact on food consumption than cash transfer of an equal monetary value, ensuring better food and health security for the hard - core poor. The larger investment in agriculture, water resource and rural development sectors is therefore a necessity to expand the safety net as well as to ensure food availability at an affordable price (Mid - term Review, 1997 - 2002). There is strong evidence that food assisted programmes increase household food security and promote human development for the vulnerable poor.

Employment and income generation

The impact of investment in land and water can be assessed by the fact that out of about 132 million people, 80 percent live in rural areas. They are directly or indirectly engaged in a wide range of activities relating to land and water. Sixty - three percent of the total population lives on land and water resource management.

The spread of new technology in crop agriculture instrumented through HYV seed, fertilizer and irrigation has increased the aggregate volume of marketable surplus of food grains. This has led to the creation of employment in agro processing, trade, transport and service sectors. As the new varieties are grown the demand for labour increased by 45 percent and work became available during the lean season (Mid - term Review).

Irrigation expansion has also led to increased employment opportunities in crop agriculture, as well as in the installation, operation and maintenance of pumps, preparation and maintenance of irrigation channels, on - farm water distribution, equipment trade, workshop facilities for equipment repair and spare parts manufacturing. Trading in seeds and fertilizers has also created significant additional employment opportunities in the private sector.

Investment in land and water centring on HYV seed - fertilizer - irrigation technology has made significant impact on poverty alleviation. The diffusion of agricultural technologies has also changed the nature and terms of tenancy in the land market with some favourable impact on income distribution and poverty alleviation (Mid - term Review).

Benefits from land and water

Apart from increased food grain production there are environmental and social benefits deriving from investment in land and water, in particular, flood control and drainage projects. These benefits cannot be easily quantified. Construction of 6 519 km of dykes including 3 674 km of sea dykes completed by 1989 (later rising to 7 900 km) saved the lives of coastal farmers and the crops they grew from salinity intrusion and tidal hazards covering some three million ha.

As noted above, investment in food distribution programmes leading to investment in land and water provided positive results in expanding the food security net. Programmes such as RMP and FFW have not only provided food, but also enabled government to invest in land and water in rural areas. Under RMP destitute women are organized for maintenance of rural roads; the programme currently employs 41 000 destitute women who are also provided training in other income generating activities. The annual maintenance of rural roads provides farmer access to markets. FFW added rural infrastructure during 1999 - 2001: 1 987 km of roads, 2 531 km of embankments and excavated 1 487 canals.

FFW, VGD and RMP address equity issues. While FFW benefits women with income, RMP and VGD serve both women and gender issues by providing training, which creates awareness, enabling women to make decisions and undertake initiatives in any business.


Projected economic internal rate of return: selected flood, drainage & irrigation projects




EIRR (%)

Small - scale FCD Projects
Small - scale drainage and flood - control project (SSD - FCP)




Small - Scale Irrigation Sector Project (SSIP)




BWDB Small Schemes Project




Small - scale FCDI Project (SSFCDIP)




Medium - scale FCD Projects
Drainage and Flood Control I (DFC - I)




Drainage and Flood Control II (DFC - II)



















Source: MPO, National Water Plan Project, Second Interim Report, 1984, p.8.

Redesigned food - assisted rural development programmes address environmental concerns. For example, roads were previously constructed under FFW without culverts allowing fish - passes. As a result, FFW threatened fish production. Under the new programmes, culverts are built under FFW schemes as well. Food - assisted programmes are now combined with afforestation projects to enhance environmental protection and increase fish production (Mid - term Review).

Various donor - funded projects have increased the internal economic rate of return of selected FCD and FCDI projects (Table 5).

Level of project success/failure

The level of success or failures of land and water sector projects is influenced by varied factors including faulty design and time overruns leading to cost overruns. Some failures are attributable to poor management. Public sector - led minor irrigation development, which lasted until the early 1990s, provides examples of failed management. Thus, DTW and LLPs were formerly rented to farmer groups who were meant to pay seasonal rentals to BADC at a fixed rate. DTW rentals have always been in arrears; concerted efforts by managers to collect rents on schedule or to provide timely repair and maintenance service were lacking. A joint Bangladesh Government/World Bank study in the mid - 1980s led BADC to phase out the rental system for irrigation devices in favour of a sales system.

However, where management is conscious and services to the farmers are satisfactory, rental systems can also work well in the public sector. For example the Barind Multipurpose Development Authority (BMDA) in northwest Bangladesh operates some 4 000 rental DTW units and rental recovery is over 95 percent. A similar project is managed by DAE in southern Bangladesh in which LLPs and power tillers are rented to farmers and recovery is satisfactory at about 90 percent.

Land reclamation and estuary control in coastal Bangladesh began in 1974. Until 1987 it concentrated on surveys, training and data collection, but some tangible success was achieved through building a pilot polder. NGOs helped organize landless farmer cooperatives, 30 of which took possession of the land allotted to them within the polder area in 1986. No follow - up action has been taken. This project cannot be measured in terms of economic benefits, which are outweighed by social benefits, evidenced by the fact that hundreds of landless families now have access to land.

People’s participation

People’s participation in project conception, planning, development and execution is vital to project success, but until the first half of the 1990s, such participation at all stages of project cycles did not take place. Beneficiary participation in project operation and maintenance developed in the mid - 1990s. Many completed BWDB projects did not realize projected benefits due to a lack of funds for operation and maintenance. The question of cost recovery from the beneficiaries arose as early as 1963, but little or no cost was recovered from the completed projects.

Under the BWDB rehabilitation projects an initiative was taken to organize and develop Water Users Organisation (WUO). A three - tier system of water users was developed consisting of Water User's Groups (WUG), Water User's Committees (WUC) and Water User's Associations (WUA).

It was learned that groups are socially very heterogeneous. As in other countries in the region, effective organization for irrigation management through beneficiaries can be difficult to achieve and takes time (BWDB Systems Rehabilitation Project, 1994). This emphasizes the need to attend to social engineering aspects of project design and management.


Bangladesh public policy regarding investment and prioritisation in lands and water development was influenced both by (a) the compulsion to protect the country from the ravages of devastating floods and to attain self - sufficiency in foodgrains. The initial thrust centred on a public sector - led management approach, mentioned above. Emphasis was on large FCD and FCDI projects until 1972, when a comprehensive study on the land and water sector was conducted by the International Development Association (IDA) at the request of the government. This study drew attention to the need for low cost irrigation systems by exploiting ground as well as surface water resources. That year some changes occurred in the institutional arrangement for water resource development. WAPDA was divided into two bodies, the Bangladesh Power Development Board (BPDB) and the Bangladesh Water Development Board (BWDB), the latter being exclusively responsible for major irrigation, flood control and related activities.

BADC took the lead and infused momentum in minor irrigation sector, while BWDB concentrated on FCD and FCDI projects. Privatization of the minor irrigation sector was addressed during the mid - eighties as already stated. In the first phase, the rental of minor irrigation equipment gave way to a sales system. In the second phase (after 1990), minor irrigation was left totally to the private sector and BADC withdrew from the procurement and sale of minor irrigation equipment. BADC was also required to sell its existing stocks in the godown and also those already operating in the field. This radical change from a public sector - led approach to private sector investment in the water sector was a difficult decision for the government. There were fears that such a radical change would impede growth in the minor irrigation sector.

Nonetheless, appropriate policy support for increased private sector involvement was provided by government which removed import restrictions (setting the approved brands and models of irrigation engines) and import duties and taxes. Public sector presence in minor irrigation, specially DTWs, was retained and coupled with integrated area development projects in the northwest through creation of a separate body, the BMDA.

In respect of large FCD and FCDI projects, BWDB retains its function as a public sector agency. There have been changes, however, in its approach to water sector investment. It has also opted for small - scale irrigation and drainage projects generally known as Early Implementation Projects (EIP). These are short gestation projects requiring smaller investment than the usual FCD or FCDI projects. A related development is the initiation of a National Water Plan during the mid - 1980s. The objective was to assess total water demand in relation to availability for competing uses such as agriculture, fisheries, water transport and public health. Completion of the National Water Plan led to the birth of a new institution called the Water Resources Planning Organization (WARPO). Its development during the early nineties following the devastating floods of 1987 and 1988 focused attention on the need to develop a long - term strategy to cope with the complexity of flood impacts. With this thought in mind, the government prepared a flood protection programme and with the assistance of United States Agency for International Development (USAID) specialists carried out a flood policy study. Through this process a Flood Action Plan (FAP) was born, under which a number of studies were completed.

Development in the nineties led to a greater awareness of water resource planning and management and to formulation of a National Water Policy (NWP) to provide a policy framework for competing water uses and priorities. The NWP recognizes that shifting development needs requires a broader perspective to address the diversity of emerging demands on water resources and services. The policy also reflects the awareness that the wider social, environmental and institutional components of water sector management are not only important, but are central to achieving national goals.

Yet another development providing means to invest in land and water sector took place during the 1990s. The Local Government Engineering Department (LGED), primarily responsible for construction and maintenance of infrastructure in rural areas, initiated through foreign assistance some projects in water resource use centring on surface water. Other important developments during the late 1980s and 1990s include: creation of WARPO; strengthening research in surface water system through River Research Institute (RRI); and establishment of a Surface Water Modelling Centre (SWMC).


The first comprehensive attempt to develop long term plans for land and water was undertaken by the government during the mid - eighties through the creation of Master Plan Organisation (MPO) which later took permanent shape as WARPO, a multi - disciplinary water resource planning body set up under an Act of Parliament.

National Water Management Plan (NWMP)

The establishment of the National Water Council (NWC) during the mid - nineties was a step forward to ensure participation of all stakeholders in the preparation and adoption of National Water Policy (NWP) 1999. Based on the policy framework provided by NWP, the draft National Water Management Plan (NWMP) was prepared to contribute to overall national goals and to provide a framework plan to guide but not prescribe, in an integrated and comprehensive manner, the actions of all concerned with developing and managing water resources and services.

The NWMP is a rolling plan to be reviewed and updated every five years, providing a firm plan for the first five years, an indicative plan for the subsequent five years and a 25 - year perspective plan for the long term, set in a projected context of what may happen in at least 50 years. The NWMP is realistic about the prospects for institutional and implementation capabilities, and seeks to rationalize and strengthen the institutional capacity of different stakeholders. It is intended to be of use to all agencies and organizations engaged directly or indirectly in the water sector (WARPO, 2001).

NWMP has developed and proposed a framework for a water management plan taking into account other sectoral and subsectoral policies, progressing steadily since 1992: the National Environment Policy (1992), the National Forestry Policy (1994), the National Energy Policy (1996), the National Fisheries Policy (1998), the National Policy for Safe Water Supply and Sanitation (1998), the National Agricultural Policy (1999), and the Industrial Policy (1999).

The draft NWMP notes that these policies in conjunction with the NWP provide an extensive framework for management of the water sector with no apparent major contradictions. It further notes that the main policy gap is in land use planning and the lack of an integrated transport policy, which has a bearing on navigation. However, it must also be noted that the policy framework provided by NWP has taken into account the needs of water transport including navigation and zoning of land for industrial use. It is expected that other related issues having relevance for land use planning will be taken into account based on the Land Policy which has now been finalized.

In preparing the NWMP, the future development challenges have been considered. The socio-economic challenges include population growth, urbanization, poverty alleviation, economic growth and development, and employment generation.

Population growth: Total population will increase by 37 percent from 132 million to 181 million by 2025, and 224 million by 2050.

Urbanization: Urban population will grow to 73 million (40 percent) by 2025, and to 136 million (60 percent) by 2050.

Poverty alleviation: Fifty - seven percent of the population in rural areas and 51 percent of the urban populace is poor.

Economic growth and development: Growth rates of 5.5 to 6 percent are projected over the next 25 years. Fourteen million new jobs will be needed by 2025 plus a further 21 million by 2050.

Democratization and development: Demand is increasing for full consultation and participation in all sectors.

Education and public health: Major efforts are required in education and public health with urgent attention to arsenic contamination of aquifers.

Food security: Maintaining rice and protein security will require yield improvements and agricultural intensification, particularly as agricultural land per capita is expected to markedly reduce.

In addition, it has also identified common water related issues and region specific issues (see Box 1). It is noted that many proposed actions relate to investment in land, specifically including: preservation of the Sundarbans; maintenance of coastal embankment system; flood proofing needs of accreted (char) lands and low lying areas; protection of newly accreted land and their development; and erosion in the major rivers.

The NWMP has also drawn attention to technical knowledge gaps. Significant challenges exist in dealing with river maintenance, erosion control, land accretion and coastal management. It has proposed research on implications and responses regarding climate change, including:

Arsenic: Assessing the current and future extent of contamination and the implications for food safety of irrigating with arsenic contaminated water;

Groundwater utility: Understanding how quality affects groundwater utility and the long - term strategic implications.

Natural environmental water requirements: Understanding the relationship between water and the natural environment and establishing key indicators and thresholds for environmental health and sustainability.

Long - term implications for water management: Promoting dialogue among riparian countries and developing appropriate long - term strategies in response to increasing demands on the system.

Devolved and decentralized water management: Determining the most appropriate models.

Promotion of private sector participation: Assessing how best to promote participation in major infrastructure development and management.

Recent approaches to investment in the water sector are holistic, encompassing all sectors of the economy. Research on water, and with it land and environment has been emphasized. This reflects a change in priorities from the brick and mortar approach that dominated previous investment decisions in water to one more consonant with national goals and future development challenges.

Funding the National Water Management Plan

The overall capital cost of the NWMP has been estimated to be a little over one trillion Taka or US$20 billion, distributed between eight clusters as shown in Table 6.

It is intended that these costs will be funded by a combination of traditional government allocations from Gross Domestic Product (GDP), beneficiaries, small - scale private sector and other sources. Other sources will include larger private sector instruments, public bond issues and water and environment funds, but will be highly dependent on the emergence of the enabling environment.

Inadequate provision for recurring is recognized as a major constraint on sustainable water sector management. The plan will facilitate increased cost recovery based on user pays principles and transferred responsibilities for scheme operation and maintenance. Furthermore, although the recurring costs will build up to considerable amounts by the end of the plan’s lifetime, the greater part of them will comprise service fees that can be sanctioned. In due course, and based on consultation and sensitization over a suitably protracted period, other recurring costs will gradually become the responsibility of users - leaving government with a small residue of recurring costs that it should rightly cover.



Common issues: urban and rural services, environmental management and pollution control; local drainage and water management facilities; and arsenic contamination.

South West Region: preserving the Sundarbans; restoring dry season freshwater inflows; maintaining coastal embankment system; alleviating coastal drainage congestion; Improved cyclone protection; Remedial actions for existing FCDI schemes; floodproofing needs in charland and low - lying areas

North East Region: environmental management of Haor Basin; remedial actions for existing FAC schemes; floodproofing of villages in Haor Basin; erosion of old Brahmaputra left bank; drainage congestion in the kalni - kushiyara and other rivers; local development of the irrigating

North Central Region: bulk water supplies and pollution cleanup for Dhaka; flooding and drainage problems; floodproofing in the charlands and low - lying areas

North West Region: right bank erosion of Brahmaputra; flooding, drainage problems; remedial measures for existing FCD(I) schemes; drought in western fringes; flood proofing needs in charlands and low - lying areas

South Central Region: maintenance of the existing coastal embankment system; salutation and drainage congestion; improved cyclone protection; flood proofing charlands and low lying areas

South East Region: gaseous aquifers; improved cyclone protection; maintenance of existing coastal embankment system and drainage congestion; protection of newly accreted lands against tidal flooding and their development; remedial action for existing inland FCDI schemes

Eastern Hills Region: small - scale irrigation development in CHT; mini - hydropower development in CHT; improved cyclone protection in CFCP; maintenance of existing coastal embankment system

Rivers and Estuary Region: affordable long - term strategy for erosion protection; affordable long term strategy for regional augmentation; floodproofing needs in charlands and low lying areas; improved cyclone protection in the Meghna Estuary; erosion of Meghna River; timely protection of newly accreted lands.

The Special Programme for Food Security

With assistance from FAO and other donors government implemented a Special Programme for Food Security (SPFS) with three components: intensification, water control and diversification. As part of the intensification component the programme will develop soil testing and analysis based on soil test kits. This activity is correlated with a programme of sample soil analysis in soil laboratories. Farmers and extension staff will be trained to use field test results to determine fertilizer needs. Crop recycling and rotation and the use of biomass compost and farmyard manure will be promoted. In addition, farmers in the pilot area will be encouraged and trained to undertake integrated pest management.

The results of the on - farm water management pilot programme in support of SPFS were encouraging. The irrigation command area has been increased by some 20 percent. Training programmes under the project have helped extension personnel and participatory NGOs in their capacity building and in developing knowledge and skill in improved water management and crop production technology. The major innovations introduced through this programme include: (a) delineation of manageable irrigation and drainage channels, (b) irrigation scheduling in accordance with crop water requirements and (c) supplementary irrigation for rainfed rice crops. This has had a demonstration effect; neighbouring villages have learned the usefulness of supplementary irrigation, which is vital for Aman rice in drought prone areas. Research showed that with supplementary irrigation in drought - prone districts (2.8 million ha), increased yields of 20 to 30 percent can be achieved.


Overall capital cost of the Bangladesh National Water Management Plan (NWMP)


Estimated Cost in Billion Taka
(mid - 2000 prices)

Percentage of Overall NWMP

Short Term

Medium Term

Long Term




Institutional Development







Enabling Environment







Major Rivers







Towns and Rural Areas







Major Cities







Disaster Management







Agriculture and Water Management







Environment and Aquatic Resources












1 005.94


Source: National Water Management Plan, Ministry of Water Resources, Government of Bangladesh, July 2001.

Note: ST = short - term; MT = medium - term, LT = long - term.


Discussion will now be made on (a) how private investment in land and water has grown independent of project support/area, (b) what are the perceived impediments to private investment and (c) in what areas and at what level a complementarity can be established between public and private investment on land and water.

How private investment has grown

In its simplest form, private investment in land and water has been driven by the struggle for survival. The level of investment started to increase as the demand for food crops, fish and meat increased with population growth. It has also been supported by policies adopted by the government from time to time. These measures initially included credit support for crop production. The advent of the Green Revolution in the 1960s resulted in higher productivity per land unit, while water demand for irrigation and additional crops increased. Large - scale FCD and FCDI projects required heavy investment and technical support at levels unattractive to the private sector. However, policy changes in the minor irrigation sector which led first to the change from rental to sale system and then withdrawal of import restrictions, gave further impetus for private investment.

The magnitude of private investment by farmers in the minor irrigation sector can be seen from the historical trend in the use of various types of irrigation pumps (Table 7).

Until 1989 there were restrictions on the import of STW and LLP. Only standardized makes and models approved by the Standardization Committee of the Ministry of Agriculture could be imported. When the restrictions were withdrawn, investment by farmers in equipment purchase increased significantly. It is significant that investment in DTW did not keep pace with STWs and LLPs primarily because of the high cost relative to other two types of equipment. Investment in minor irrigation is closely related to rice prices, in particular a rainfed rice variety called Aman (National Minor Irrigation Census, 1999 - 2000).

Performance in regard to investment in agriculture and water resources (Table 8) indicates that private investment is lowest in the forestry sector, followed by that of water resources. In all other cases, private investment is much higher than public investment. As explained, the relatively low level of private investment in water resources is largely due to the need for large amounts of funding. Limited private investment in commercial forests, however, is primarily due to the lack of available land plus the fact that the idea of commercial forestry as a business has not yet taken root in Bangladesh.

On the other hand, rising national demand for fish, poultry and dairy products - and in some cases export potential - has led to higher investment in these subsectors. The number of dairy farms rose from 26 000 in 1994 - 1995 to 33 000 in 1999 - 2000, while 76 000 poultry farms in 1994 - 1995 rose to 106 000 in 1999 - 2000 - all private sector led investments. Much of this can be explained by public policy factors conducive to business growth: first, government (through project intervention) provided necessary credit and technical support to develop agro - based industries; second, selected entrepreneurs were provided facilities and exposure to necessary technologies; and third, business incentives (lower tariffs or tax - free status, tax holidays and other concessions) encouraged growth.

On the other hand, rising national demand for fish, poultry and dairy products - and in some cases export potential - has led to higher investment in these subsectors. The number of dairy farms rose from 26 000 in 1994 - 1995 to 33 000 in 1999 - 2000, compared to 76 000 poultry farms in 1994 - 1995 increasing to 106 000 in 1999 - 2000 - all private sector led investments. Much of this can be explained by public policy factors conducive to business growth: first, government through project intervention provided necessary credit and technical support to develop agro - based industries; second, selected entrepreneurs were provided facilities and exposure to necessary technologies; and third, business incentives (lower tariffs or tax - free status, tax holidays and other concessions).

However, project intervention had only a demonstration effect. Major investment in these sectors has been generally independent of any project support being driven mainly by market demand and an attractive return on investment. Government established an infrastructure development company (IDCOL), which currently provides subordinated or junior loans for investment in infrastructure and utilities. IDCOL is examining the possibility of diversifying its products; if found appropriate loans could be provided for private sector investment in land and water. IDCOL, however, needs additional resources to continue its operation (Memorandum for Bangladesh Development Forum 2000 - 2001).


Operational equipment by season 1982/83 to 1999/2000


(‘000 UNITS)



































































































































Source: DAE, National Minor Irrigation Development Project, Minor Irrigation Census, 1999 - 2000.

Note: 1982 to 1993/94 data from Census of Irrigation in Bangladesh, ATIA

Risks in investment in land and water

The private sector investment in land and water, specially land should be judged in terms of risks associated with such investment from environmental and other considerations. One of the major risks, which are not particularly confined to private sector investment, is the rapid urbanization process and increasing demand for rural roads and other infrastructure for which public investment has to be made. Added to the above is the demand for more lands for housing, specially in the peri - urban areas. In these areas, private sector has shown increasing interest and has started increasing investment in real estate development. The combined effect of all these coupled with loss of land due to river erosion has led to a sharp decline in the total area of arable land. This is a matter of concern since the annual loss of cropland is estimated at 80 000 ha. This underscores the need for greater investment in land reclamation programmes and zoning of land with supportive provisions for industry and non - agricultural purposes.


Projected investment in agriculture and water resources 1997 - 2002





Crop Agriculture
















Water Resources








Source: Fifth Five - Year Plan, 1997 - 2002, Planning Commission, Ministry of Planning, Bangladesh

Note: Figures in parentheses are billion US$ at 1996 - 1997 exchange rate. i.e. US$1 = Taka 42.70.

Impediments to private investment for land and water

The major impediments to private sector investment on land and water may be discussed. In respect of land the major impediments are uncertainties or vagueness in respect of landownership, which lands the investors in problems of litigation. A related problem is the fear of acquisition of land by the government in public interest. Absence of provision of credit for purchase of land is another obstacle to invest in land. While these impediments would be applicable for investment in land for industrial purposes, investment in land for agricultural purposes is primarily impeded by atomized nature of plots of lands. According to the latest Agricultural Census (1996) out of 11.8 million households, 80 percent belongs to smallholdings defined as an area from 0.5 to 2.49 acres.

In respect of the water sector the major private investment is mainly done in wetlands and the prevailing system of leasing out the right to fishing needs to be vastly improved in terms of the length of the lease period and other terms and conditions. In the wetland locally called haors and baors there is a conflict between those who wishes to promote fisheries and those who have interest in producing rice. Unless this conflicting demand is satisfactorily solved large - scale investments in these areas will not be forthcoming. While this would apply to investments for fisheries sector, major impediment to irrigation is the requirement of capital for FCD and FCDI projects. The levels of investment are high and it will continue to remain within public sectors.

Complementarity for private and public investment in land and water

The NWP provides a policy framework to establish levels of complementarity for investment by public and private sectors. The strategic elements include: coordinating public and private sector stakeholders; associating beneficiaries and protecting their water management interest; transfer operation and management (O&M) responsibility of projects with command areas of less than 5 000 ha to beneficiaries responsible for O&M from their own resources; transfer operation and management responsibility of projects exceeding 5 000 ha by private sector contract (through open competitive bidding). Alternatively, the executing agency may jointly retain management responsibility with local government and beneficiary groups; transfer FCD and FCDI projects with a command area of 1 000 ha to local government institutions by phases; provide training and information to the private sector and beneficiary groups for capacity building in efficient water management.


The discussion on land and water sectors lends itself to several conclusions. In Bangladesh investment in land and water has a symbiotic relationship. Investment in the water sector, especially those relating to land reclamation, development and management of accreted land, prevention of river erosion, construction, repair and maintenance of coastal embankments etc. directly and indirectly contribute to land development and also conduce to greater productivity as (a) additional lands are available and (b) loss of land is prevented. Investment in FCD and FCDI projects similarly help in either preventing crop losses and/or contributing to higher productivity through irrigation.

Bangladesh has a long history of investment in land and water, primarily led by public sector organizations, dating back to 1959. Policy shifts in management approach for land and water development projects and programmes have occurred since then. The major policy shift has been in respect of minor irrigation centring on the use of pumps (1989), which allowed greater opportunities for investment by the private sector, primarily farmers themselves.

While investment and management in minor irrigation is now exclusively privatized, major irrigation (FCD and FCDI projects) continues in the public domain primarily due to the level of investment and technical expertise required for its operation and management. The policy framework adopted through the NWP nonetheless provides opportunities for private and local government institutions to own and operate water development programmes not exceeding 5 000 ha command area. For those exceeding 5 000 ha, NWP permits private sector investment in operating and managing such programmes under lease and management contract. The proposed diversification of products by IDCOL is expected to further expand and strengthen opportunities for such investment provided necessary resources are made available to it.

Impact of soil and water development on poverty alleviation, employment generation, income augmentation and food security has been positive in more ways than those herein discussed. In Bangladesh, it is all the more so because of the nature and size of farms, 80 percent of total rural farms do not exceed one hectare. Due to continued investment on land and water, food availability on a per capita basis increased from 433 grams in 1995 - 1996 to 534 grams in 1999 - 2000.

The recent policy changes as reflected in the NWP providing for greater opportunities for the private sector is firmly rooted in the experiences gained in the past in respect of operation and maintenance of successful and unsuccessful projects. The lessons learnt from successful and unsuccessful projects have led the government to adopt a holistic approach to land and water development in order to provide much greater benefit to the society as a whole than was possible in the past with fragmented approach in these sectors.

The holistic approach with long term development plan as reflected in the NWMP is expected to minimize social, environmental and other associated risks in land and water development programmes. The provision of review of the plan every five years has been consciously made for keeping the implementation process under close and constant review and providing scope for appropriate adjustments in the greater interests of all stakeholders.

Two major areas of concern remain to be addressed. First, in Bangladesh context the continued decimation of arable land through rapid urbanization, development of infrastructures in both urban and rural areas call for much higher level of investment on land and water than is available. The investment programme delineated in NWMP will remain meaningless unless it is backed by appropriate level of funding. The second concern, which is linked to the first, is the declining level of official development assistance (ODA) to developing countries in agriculture sector. The incremental requirement of investment in the sector of such countries are estimated at about US$31 billion per annum of which approximately one - third is required for investment in irrigation. Investment in land and water has long lasting effects in terms of ensuring food security: making opportunities for the poor to have access to better standard of living, preventing environmental degradation, reversing the declining trend of ODA for these sectors will be a step towards achieving the objectives agreed at the WFS in 1996 by world leaders and will be a step away from a hungry and malnourished world.


Brammer, H. 1997. Agricultural Development Possibilities in Bangladesh, University Press Limited, Dhaka.

Bangladesh Water Development Board, 1994. Systems Rehabilitation Project, In Proceedings of National Seminar on Implementation of Pilot Cost Recovery Programme in KIP, Dhaka.

Department of Agricultural Extension, undated. National Minor Irrigation Development Project, National Minor Irrigation Census, 1999 - 2000. Dhaka.

FAO. 1998. The state of food and agriculture 1996, Rome.

Ministry of Finance. 2001. Bangladesh Economic Survey 2001. Dhaka.

Planning Commission, undated. Fifth Five - Year Plan (1997 - 2002). Dhaka.

Planning Commission, undated. Mid - term Review of the Fifth Five - Year Plan. Dhaka.

UNDP. 1989. Agriculture Sector Review, Bangladesh Agriculture Performance and Policies, Compendium Volume III: Land, Water and Irrigation. Dhaka.

Water Resources Planning Organization. 2001. National Water Policy (Draft). Dhaka.

World Bank and Government of Bangladesh. 1992. Proceedings of the Second Flood Action Plan Conference. Dhaka.

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