Cottage, micro, small, and medium enterprises (CMSMEs) play a vital role in advancing economies, alleviating poverty, and promoting sustainability, even as they grapple with resource constraints and innovation challenges. This is particularly crucial in the context of sustainable agriculture, and Bangladesh is no exception. Despite its remarkable achievements in feeding a large population with limited land, the environmental impact of CMSMEs in the Bangladeshi agriculture sector remains understudied. Environmental life cycle assessment (ELCA) can offer valuable insights into the sector's environmental footprint, which is imperative for informed policymaking. The study indicates that certain fresh food items, such as potato, tomato, banana, mango, ruhi fish, silver carp, beef, and mutton, have high environmental footprints, posing risks to human health and ecosystems. These impacts are especially significant in terms of land use, terrestrial eco-toxicity, global warming, human non-carcinogenic toxicity, terrestrial acidification, and human carcinogenic toxicity. This leads to adverse effects on human health (Disability Adjusted Life Years - DALY) and species loss (Species Loss per Year - Species.year), primarily driven by the value chains of these items. The analysis also highlights that animal-based food items have a greater environmental impact compared to plant-based ones. To ensure sustainable agriculture, a pragmatic strategy is needed, including facilitating CMSME involvement. However, challenges like access to finance and technology hinder the adoption of sustainable practices by CMSMEs. In alignment with the National Adaptation Plan (NAP) for 2023-2050, which emphasizes climate-resilient agriculture and private sector engagement, agriculture governance in Bangladesh must prioritize sustainability and strengthen regulatory enforcement, particularly in rural areas. Incentivizing sustainable practices and acknowledging the limitations and needs of small businesses is essential. The establishment of specific environmental targets and regular measurement and analysis of agriculture's environmental footprints are key steps in this pursuit while recognizing the commercial constraints of "going green."