Transcript Improving the performance of the marketing system for

Improvement of Marketing System
of Fruits and Vegetables in Bangladesh
Professor Dr. Md. Kamrul Hassan
Department of Horticulture
Bangladesh Agricultural University
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Bangladesh
Cambodia
Sudan
Sri Lanka
Myanmar
Pakistan
Nepal
India
Malaysia
Vietnam
Japan
China
Indonesia
Thailand
Saudia Arabia
Australia
New Zealand
Philippines
USA
UK
Maldives
Canada
Italy
Research Background
Fruits
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426
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100
200
300
400
500
Sudan
UK
Italy
USA
Canada
New Zealand
Australia
Saudia Arabia
Maldives
Japan
India
Malaysia
-1
China
Nepal
Sri Lanka
Thailand
-1 Indonesia
Philippines
Pakistan
Cambodia
Myanmar
Bangladesh
Vietnam
Requirements
Fruits & vegetables: 400 g day-1capita
Availability
Fruits & vegetables: 211 g day-1capita
Rice: 416 g day-1capita-1
Postharvest loss
 24-44% in Bangladesh
5
15
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23
25
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28
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426
431
Bangladesh
Pakistan
Cambodia
Indonesia
Sri Lanka
Thailand
Sudan
Malaysia
Philippines
India
Myanmar
Nepal
Vietnam
UK
Australia
Saudia Arabia
Japan
Canada
USA
New Zealand
Italy
Maldives
China
Vegetables
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400
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Rice
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452
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1000
Selected Commodities and Objectives
Selected commodities: Potato, brinjal, okra, mango and banana
Cauliflower
2% Watergourd
Cucumber Ribbed
goud
Pointed 1%
1%
Snake
gourd
1%
Beans gourd
Pumpkin
1%
2%
2%
Tomato 2%
4%
Cabbage
2%
Arum
4%
Brinjal
7%
Okra
2%
Potato
65%
Papaya
Waterme
lon Pineappl 0% Ber Litchi
6%
Citrus 0% 1%
e
1%
7%
Coconut
Mango
1%
14%
Banana
24%
Jackfruit
46%
Radish
4%
Vegetable area (2010)
Fruit area (2010)
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To describe actors, commodity flows and price formation in the marketing
chain in Bangladesh, from main producing areas to Dhaka retail markets
2
To evaluate performance of marketing system by calculating gross and net
margins for each of the five foods studied
affecting market performance and to propose policy
3To Assess the critical factorsrecommendations
for enhancing market performance
Methodology (Data Collection)
Secondary data collection
 Secondary data on area, production and prices were collected
 Time Series Analysis was used to examine changes
 Seasonality was calculated using Moving Average Method
Primary data collection
 Primary data were collected from market actors using FGD and
questionnaires. Data were collected by trained enumerators and
Research Fellows
Data collection from growers
 Stratified random sampling were followed
 Leading 1-2 Districts for each commodity selected
 Selected growers (N=100 per commodity) were interviewed using
structured questionnaire
 Data were collected on age, education, land, cultivated varieties,
production and marketing costs, sale price, price formation, net
income and constraints
Methodology (Data Collection)
Data collection from intermediaries
 Main intermediaries are Faria, Bepari, Aratdar, wholesalers, retailers
 Faria and Bepari were interviewed from assemble markets (N=100)
 Aratdar and wholesalers were interviewed from wholesale markets
(N=100)
 Retailers were interviewed from retail markets (N=100)
 Data were collected on trade volume, marketing costs, purchase and
sale prices, price formation, gross and net margins and constraints
 Price spread, growers share, return on investment, marketing
efficiency (Acharya and Agarwal 2004) were investigated
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GLOBAL RANKING
40
20
0
2010-11
2009-10
2008-09
2007-08
2006-07
5
2005-06
30
25
106
104
94
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
80
10
Seasonal price index
100
15
2004-05
120
2003-04
200
2002-03
140
2001-02
160
Price (Tk/kg)
180
China
India
Indonesia
Bangladesh
Viet Nam
Myanmar
Thailand
Philippines
Brazil
USA
Japan
Cambodia
Pakistan
Korea
Madagascar
Egypt
Sri Lanka
Nepal
Nigeria
Laos
Production (million mt)
45
Results: Rice (Secondary Data)
40
35
RICE
20
PRICE VARIATION
Retail medium (nominal)
Retail medium (deflated)
0
108
y = 0.1746x2 - 2.6774x + 107.95
R² = 0.6674
CV: 2.96%
102
100
98
96
SEASONALITY
92
90
8000
80
50
40
6000
5000
4000
3000
2000
1000
0
30
20
10
0
GLOBAL RANKING
China
India
Russia
Ukraine
USA
Germany
Poland
Bangladesh
Belarus
Netherlands
France
UK
Malawi
Turkey
Canada
Iran
Peru
Egypt
Brazil
Belgium
Production (million mt)
60
Production
70
7000
Results: Potato (Secondary Data)
30
25
20
15
SEASONALITY
10
130
5
0
120
110
100
90
80
70
60
50
40
CV: 24.75%
y = 0.5968x2 - 3.2717x + 88.942
R² = 0.5049
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
9000
Production (000 MT)
Nominal retail price (Tk/kg)
Real retail price (Tk/kg)
Seasonal Price Indicies
PRODUCTION & PRICE
Months (2004-09)
Results: Potato (Primary Survey)
Potato marketing channel (Bogra-Dhaka)
Farmer (conventional
storage) Feb-May
Farmer (early crop, net
income 1.99 Tk/kg)
Farmer (cold store) AugustJan (net income: 8.76 Tk/kg)
Faria
Net margin: 12.15%
Bepari
Net margin: 29.50%
 Pakhri, Cardinal, Granula
 Wash
 Long channel (Faria)
 Early harvest
Aratdar
Net margin: 29.50%
Wholesalers
Net margin: 23.16%
Retailers
Net margin: 31.10%
Consumers
Processing unit
Results: Potato (Primary Survey)
Marketing cost and margins of potato intermediaries
Retailer (Munshigonj Sadar)
0.9
Retailer (Mahasthan Bazar, Bogra)
0.9
1.2
0.8
Retrailer (Gulshan D.C.C. Market, Dhaka)
1.5
Retailer (Mahakhali Kancha Bazar, Dhaka)
0.8
1.2
Retailer (Karwan Bazar, Dhaka)
1.2
1.4
Wholesaler (Jatrabari Bazar, Dhaka)
1.2
Wholesaler (Karwan Bazar, Dhaka)
1.3
1.1
0.7
0.8
Aratdar (Jatrabari Bazar, Dhaka)
0.8
0.2
Aratdar (Karwan Bazar, Dhaka)
0.9
0.1
Bepari (Munshigon Sadar)
1.0
Bepari (Shibgonj, Bogra)
1.1
Faria (Shibgonj, Bogra)
0.6
0.0
0.6
1.0
0.4
0.5
Marketing cost (Tk/kg)
1.0
1.5
2.0
2.5
Net marketing margin (Tk/kg)
Faria, N=25; Bepari, N=25; Aratdar, N=25,
Wholesalers, N=25; Retailers , N=5
3.0
Results: Potato (Primary Survey)
Performance of potato markets (Bogra & Munshigonj-Dhaka City)
Channels
Marketing
Price Spread
Efficiency (Acharya) (TK/kg)
Growers’ share (%)
Shibgonj-Karwan Bazar
0.82 (CV: 14.29%)
4.30 (CV: 31.11%)
18.69 (CV: 10.03%)
Shibgonj-Jatrabari
0.85 (CV: 11.72%)
4.10 (CV: 33.41%)
18.72 (CV: 10.34%)
Kahalu-Karwan Bazar
0.83 (CV: 14.50%)
4.30 (CV: 31.68%)
18.72 (CV: 10.21%)
Kahalu-Jatrabari
0.86 (CV: 12.07%)
4.27 (CV: 32.47%)
18.81 (CV: 12.34%)
Munshigonj-Karwan Bazar 1.09 (CV: 6.35%)
3.90 (CV: 54.66%)
24.53 (CV: 21.74%)
Munshigonj -Jatrabari
1.16 (CV: 6.71%)
3.72 (CV: 52.34%)
24.81 (CV: 9.72%)
Tongibari-Karwan Bazar
1.05 (CV 6.03%)
4.07 (CV: 51.24%)
23.74 (CV: 9.74%)
Tongibari-Jatrabari
1.08 (CV: 6.44)
4.02 (CV: 53.98%)
24.02 (CV: 1025%)
Potato price (Tk/mound)
750
Lal Pakhri
Cardinal
Granula
650
550
450
350
250
150
Price 2012
Jan Feb Mar Apr May June Jul Aug
Results: Potato (Primary Survey)
Sequential steps of storing of potatoes in commercial cold storage
Growers
(Field cured potato
tubers)
Private cold store
Pre-cooling
(10-12oC 24-48 h or
no pre-cooling but
held under shade for
24 h and store
Storing
Normal (For table
purposes (AugJanuary)
Pre-heating (48 h
at 10-12oC for 2448 h before
delivery; Aug-Jan)
Marketing
(Table potato: AugJan & Seed potato:
October)
(2.2-2.8oC and 8590% RH; Mar-Jan)
Sorting shade (8 h
drying under fan at
normal condition
before delivery;
June-January)
Traditional Cold store
BADC Cold store
Results: Brinjal (Primary Survey)
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Harvest (nominal) price (TK/kg)
Harvest (real) price (Tk/kg)
Retail (nominal) price (TK/kg)
Retail (real) price (Tk/kg)
30
CV = 35.75
20
15
10
5
PRICE VARIATION
0
Seasonal price indices (Wholesale)
25
200
180
160
140
y = 61.496e0.0663x
R² = 0.4878
CV: 35.75%
120
100
80
60
40
20
SEASONALITY
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Months (2004-2009)
Results: Brinjal (Primary Survey)
Norshingdi-Dhaka
Jessore (Chougacha)-Dhaka
Farmer
Farmer
Faria
Net margin: 10.07%
Faria
Bepari
Net margin: 16.77%
Bepari
Aratdar
Net margin: 14.73%
Aratdar (Dhaka)
Wholesalers
Net margin: 8.50%
Wholesalers
Retailers
Net margin: 49.64%
Consumers
Retailers
Consumers
Aratdar (Jessore)
Results: Brinjal (Primary Survey)
Marketing cost and margins of brinjal intermediaries
Marketing cost (Tk/kg)
Retailer (Badda Kancha Bazar)
Net marketing margin (Tk/kg)
0.9
Retailer (Gulshan DCC Market)
1.4
1.7
Retailer (Mahakhali Kancha Bazar)
2.7
1.3
Retailer (Karwan Bazar)
1.1
Wholesaler (Jatrabari Bazar)
1.2
Wholesaler (Karwan Bazar)
3.7
3.6
1.6
1.8
Aratdar (Karwan Bazar)
1.3
Bepari (Norshingdi)
1.1
0.6
1.1
1.2
Faria 0.4 0.7
0.0
1.0
2.0
3.0
4.0
5.0
6.0
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Results: Okra (Primary Survey)
Area (000 ha)
Production (000 MT)
CV: 35.75%
40
35
30
25
20
CV = 19.90
15
10
0
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
5
35
30
25
20
15
10
5
0
Harvest (nominal) price (Tk/kg)
Harvest (real) price (Tk/kg)
Retail (nominal) price (Tk/kg)
Retail (real) price (Tk/kg)
Results: Okra (Primary Survey)
Channel (Comilla-Dhaka)
Farmer
Marketing costs and margins
Faria
Net margin 8.97%
Retailer (Badda Kancha Bazar)
1.2
Retailer (Gulshan DCC Market)
Bepari
Net margin: 12.75%
Aratdar
Net margin: 7.21%
Wholesalers
Net margin: 31.28%
Retailers
Net margin: 39.80%
1.7
Retailer (Mahakhali Kancha…
Retailer (Karwan Bazar)
3.3
1.3
3.5
1.1
Wholesaler (Jatrabari Bazar)
3.6
1.3
Wholesaler (Karwan Bazar)
2.8
1.6
2.8
Aratdar (Jatrabari Bazar)
1.1
0.7
Aratdar (Karwan Bazar)
1.2
0.6
Bepari (Nimshar, Comilla)
1.3
1.1
Faria (Comilla) 0.3 0.8
0.0
Marketing cost (Tk/kg)
Consumers
2.3
2.0
4.0
Net marketing margin (Tk/kg)
6.0
Results: Okra (Primary Survey)
Producers (leased
orchard)
160
140
120
Faria (18.95%)
Bepari (25.13%)
Aratdar (6.45%)
Processing
Price of mango (Tk/kg)
Owners
100
80
60
40
20
Wholesaler (11.86)
0
Retailer (37.61)
Consumers
May Jun Jul Aug Sep May Jun Jul Aug Sep
Farmers' price
Retail price
Khirshapat 35 45
45 50
Gopalbhog 35 40
40 45
Himsagar 35 40
50 60
Langra
40 45
75 80
Fazli
55 60 90
70 80 150
Bombai
35 30
60 55
Ashwini
30 60 90
50 100 150
Results: Mango (Primary Survey)
Performance of mango markets (Rajshahi and C. Nowabgonj-Dhaka City)
Channels
Marketing
Price Spread
Efficiency (Acharya) (TK/kg)
Growers’ share (%)
Bagha-Karwan Bazar
1.59 (CV: 10.84%)
20.75 (CV: 14.36%)
17.97 (CV: 10.03%)
Bagha-Badamtali
2.18 (CV: 11.72%)
16.14 (CV: 11.51%)
18.70 (CV: 11.47%)
Bagha-Jatrabari
1.48 (CV: 10.31%)
18.71 (CV: 16.34%)
18.28 (CV: 10.21%)
Bholahat-Karwan Bazar
1.56 (CV: 10.73%)
19.75 (CV: 16.31%)
18.51 (CV: 9.74%)
Bholahat-Badamtali
2.09 (CV: 10.77%)
15.14 (CV: 11.87%)
19.35 (CV: 10.34%)
Bholahat-Jatrabari
1.44 (CV: 10.09%)
17.71 (CV: 10.95%)
18.92 (CV: 10.67%)
Present packaging
Previous packaging
Results: Banana (Primary Survey)
Farmers
Mdahupur-Dhaka Channel
Tk 19.09/bunch
Faria (9.38%)
Bepari (32.85%)
Costs and margins of intermediaries
Aratdar (6.26%)
Wholesalers (12.38%)
Retailers (38.69)
Consumers (Dhaka)
Policy Implications and Recommendations
SAFEGURDING GROWERS’ INTEREST
 Conduct farmers training to produce quality products
 Contract farming should be encouraged to reduce costs of
intermediation and integrate producers into supply chain
MONITORING INTERMEDIARIES IN SUPPLY CHAIN
 Net margins of retailers are consistently and unusually higher than
other intermediaries regardless of the crop
 So, monitoring should be strengthened at the retail and also
wholesale levels, especially in Dhaka city
 Public perception is that there exists syndicate in market which
controls prices. Our study revealed that even though there is no
official or visible syndicate but there exists some sort of indirect
price control in supply chain, especially in assemble markets
CREATING STORAGE FACILITIES FOR PERISHABLES
 Specialized storage facilities should be created for high value fruits
and vegetables
Policy Implications and Recommendations
IMPROVING STORAGE FACILITIES FOR POTATOES
 Appreciable number of cold stores (393 cold stores) have been
created for potatoes
 The most important constraint in cold storage is the lack of
uninterrupted supply of electricity during loading period of MarchApril
 Research to produce alternative energy should be given top
priority (conversion organic waste to energy)
 Increasing BADC cold stores for seed purposes. There are 18
BADC cold stores are operating with profitable seed programme
 BADC staff may monitor private cold stores and issue certificates
of good storage practices like adequate turn over (‘Pallat’) and
intake fresh air
 Awareness should be created so that growers use BADC seeds
 Incentives and government policies would be required so that
more private cold firms springs up
Policy Implications and Recommendations
MAINTAINING QUALITY AND SAFETY IN SUPPLY CHAIN
 Bangladesh lacks standardized quality assurance systems for
horticultural produce. Proper arrangement should be made to train,
and ultimately to accredit, growers and traders in major international
certifications such as HACCP, ISO and GAP
STRENTHENING PUBLIC-PRIVATE PARTNERSHIP
 Public private partnership is urgent to introduce technologies like
low temperature storage, refrigerated transport vehicle, ethyleneinduced ripening, plastic packaging value addition. The government
could start one or two in order to encourage the private sectors to
do more (multi-chambered storage and ripening chamber)
DISSEMINATION OF APPROPRIATE TECHNOLOGY
 Government can help disseminate technical information (e.g.
apples, grapes, dates, broccoli, etc. can be stored with potato while
mango cannot be). This is probably more important than providing
improved access to capital
 Traditional storage technology should be refined and disseminated
Policy Implications and Recommendations
IMPROVEMENT OF TRANSPORTATION SYSTEM
 Roads and highways are the most important factors in rapid and
timely transportation of perishables. Quantitative and qualitative
losses are enormous due to delay, impacts and vibration.
 Wastage occurs due to restricted movement of trucks into Dhaka.
The trucks are not allowed to enter into Dhaka after 6:00 AM.
Relocation of wholesale markets at vicinity of Dhaka would be
considered
IMPROVEMENT OF PACKAGING SYSTEM
 Introduction of affordable plastic package is necessary. For longdistance transportation, still voluminous package made of bamboo
baskets and gunny sacks are predominantly used, which result in
high spoilage due to impact, vibration and heat generation
 Recently, mango traders adopted plastic crates in transportation
which has created positive impacts in minimizing loss and maintain
quality.
Policy Implications and Recommendations
ADOPTION OF MODERN MARKETING
 Adoption of modern technology (weighing machine, fork lift) is
important in agricultural marketing. However, there is debate on this
issue whether modernization can curtail jobs.
 But trade-off would be a useful alternative and extra work force can
find better option and contribute to the overall economic development
of the country. The low level of income and lack of awareness are
assigned as the big causes
RAPID ACCESS TO MARKET INFORMATION
 Access to right information on market price is very important. In this
regard, DAM can send price information of important agricultural
commodities to the farmers by SMS.
MINIMIZE MALPRACTICE IN MARKETING
 Though there are government departments to monitor activities in the
markets. But still due to certain compulsions of the farmers and lack of
retention of power, they are being exploited by the middlemen through
their malpractices. Sometimes, the undue deductions are made. In this
regard, taking ‘Dholta’ can be mentioned. Generally, traders take five
kilograms more per mound.
THANK YOU FOR PATIENT
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