Improvement of Marketing System of Fruits and Vegetables in Bangladesh

1. Improvement of Marketing Systemof Fruits and Vegetables in Bangladesh Professor Dr. Md. Kamrul Hassan Department of Horticulture Bangladesh Agricultural University

2. Research Background Vegetables Fruits • Requirements • Fruits & vegetables: 400 g day-1capita-1 • Availability • Fruits & vegetables: 211 g day-1capita-1 • Rice: 416 g day-1capita-1 • Postharvest loss • 24-44% in Bangladesh Rice

3. Selected Commodities and Objectives Selected commodities: Potato, brinjal, okra, mango and banana Fruit area (2010) Vegetable area (2010) 1 2 3

4. 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

5. 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

6. Results: Rice (Secondary Data) RICE PRICE VARIATION CV: 2.96% GLOBAL RANKING SEASONALITY

7. Results: Potato (Secondary Data) PRODUCTION & PRICE SEASONALITY GLOBAL RANKING CV: 24.75%

8. Results: Potato (Primary Survey) Potato marketing channel (Bogra-Dhaka) Farmer (conventional storage) Feb-May Farmer (cold store) August-Jan (net income: 8.76 Tk/kg) Farmer (early crop, net income 1.99 Tk/kg) Faria Net margin: 12.15% Bepari Net margin: 29.50% Processing unit Aratdar Net margin: 29.50% • Pakhri, Cardinal, Granula • Wash • Long channel (Faria) • Early harvest Wholesalers Net margin: 23.16% Retailers Net margin: 31.10% Consumers

9. Results: Potato (Primary Survey) Marketing cost and margins of potato intermediaries Faria, N=25; Bepari, N=25; Aratdar, N=25, Wholesalers, N=25; Retailers , N=5

10. Results: Potato (Primary Survey) Performance of potato markets (Bogra & Munshigonj-Dhaka City) Price 2012

11. Results: Potato (Primary Survey) Sequential steps of storing of potatoes in commercial cold storage Pre-cooling (10-12oC 24-48 h or no pre-cooling but held under shade for 24 h and store Storing (2.2-2.8oC and 85-90% RH; Mar-Jan) Growers (Field cured potato tubers) Pre-heating (48 h at 10-12oC for 24-48 h before delivery; Aug-Jan) Normal (For table purposes (Aug-January) Private cold store Sorting shade (8 h drying under fan at normal condition before delivery; June-January) Marketing (Table potato: Aug-Jan & Seed potato: October) Traditional Cold store BADC Cold store

12. Results: Brinjal (Primary Survey) CV = 35.75 CV: 35.75% PRICE VARIATION SEASONALITY

13. Results: Brinjal (Primary Survey) Jessore (Chougacha)-Dhaka Norshingdi-Dhaka Farmer Farmer Faria Aratdar (Jessore) Faria Net margin:10.07% Bepari Bepari Net margin: 16.77% Aratdar (Dhaka) Aratdar Net margin: 14.73% Wholesalers Wholesalers Net margin: 8.50% Retailers Retailers Net margin: 49.64% Consumers Consumers

14. Results: Brinjal (Primary Survey) Marketing cost and margins of brinjal intermediaries

15. Results: Okra (Primary Survey) CV: 35.75% CV = 19.90

16. Results: Okra (Primary Survey) Channel (Comilla-Dhaka) Farmer Marketing costs and margins Faria Net margin 8.97% Bepari Net margin: 12.75% Aratdar Net margin: 7.21% Wholesalers Net margin: 31.28% Retailers Net margin: 39.80% Consumers

17. Results: Okra (Primary Survey) Owners Producers (leased orchard) Faria (18.95%) Bepari (25.13%) Processing Aratdar (6.45%) Wholesaler (11.86) Retailer (37.61) Consumers

18. Results: Mango (Primary Survey) Performance of mango markets (Rajshahi and C. Nowabgonj-Dhaka City) Present packaging Previous packaging

19. Results: Banana (Primary Survey) Mdahupur-Dhaka Channel Farmers Tk 19.09/bunch Bepari (32.85%) Faria (9.38%) Costs and margins of intermediaries Aratdar (6.26%) Wholesalers (12.38%) Retailers (38.69) Consumers (Dhaka)

20. 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

21. 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 March-April • 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

22. 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, ethylene-induced 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

23. 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 long-distance 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.

24. 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.

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