Improvement of Marketing Systemof Fruits and Vegetables in Bangladesh

Department of HorticultureBangladesh Agricultural University

Professor Dr. Md. Kamrul Hassan

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Saudia ArabiaAustralia

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SudanThailandSri Lanka

IndonesiaCambodia

PakistanBangladesh

Research Background

FruitsVegetables

Rice RequirementsFruits & vegetables: 400 g day-1capita-1

AvailabilityFruits & vegetables: 211 g day-1capita-1

Rice: 416 g day-1capita-1

Postharvest loss 24-44% in Bangladesh

Selected commodities: Potato, brinjal, okra, mango and banana Selected Commodities and Objectives

Potato65%

Brinjal7%

Radish4%

Arum4%

Cabbage2%

Pumpkin2%

Cauliflower2%

Tomato4%

Watergourd1%Beans

2%

Pointed gourd

2%Snake gourd

1%

Cucumber1%

Ribbed goud1%

Okra2%

Mango14%

Jackfruit 46%

Banana 24%

Coconut1%

Watermelon6%

Pineapple

7%Citrus

1%

Papaya0%

Ber0%

Litchi1%

Vegetable area (2010) Fruit area (2010)

1

2

3

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 MethodPrimary 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

Methodology (Data Collection)

y = 0.1746x2 - 2.6774x + 107.95R² = 0.6674

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Seas

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-09

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-10

2010

-11

Pric

e (T

k/kg

)Retail medium (nominal)Retail medium (deflated)

GLOBAL RANKING

PRICE VARIATION

SEASONALITY

Results: Rice (Secondary Data)

RICE

CV: 2.96%

y = 0.5968x2 - 3.2717x + 88.942R² = 0.5049

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Production (000 MT)Nominal retail price (Tk/kg)Real retail price (Tk/kg)

GLOBAL RANKING

PRODUCTION & PRICE

SEASONALITY

Results: Potato (Secondary Data)

CV: 24.75%

Pakhri, Cardinal, Granula Wash Long channel (Faria) Early harvest

Pakhri, Cardinal, Granula Wash Long channel (Faria) Early harvest

Farmer (early crop, net income 1.99 Tk/kg)

Faria Net margin: 12.15%

Farmer (conventional storage) Feb-May

Farmer (cold store) August-Jan (net income: 8.76 Tk/kg)

Aratdar Net margin: 29.50%

Wholesalers Net margin: 23.16%

Retailers Net margin: 31.10%

Consumers

Processing unit

BepariNet margin: 29.50%

Potato marketing channel (Bogra-Dhaka)Results: Potato (Primary Survey)

Marketing cost and margins of potato intermediariesMarketing cost and margins of potato intermediaries

0.6

1.1

1.0

0.9

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1.2

1.5

0.9

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0.4

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0.6

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0.2

0.8

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0.8

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0.0 0.5 1.0 1.5 2.0 2.5 3.0

Faria (Shibgonj, Bogra)

Bepari (Shibgonj, Bogra)

Bepari (Munshigon Sadar)

Aratdar (Karwan Bazar, Dhaka)

Aratdar (Jatrabari Bazar, Dhaka)

Wholesaler (Karwan Bazar, Dhaka)

Wholesaler (Jatrabari Bazar, Dhaka)

Retailer (Karwan Bazar, Dhaka)

Retailer (Mahakhali Kancha Bazar, Dhaka)

Retrailer (Gulshan D.C.C. Market, Dhaka)

Retailer (Mahasthan Bazar, Bogra)

Retailer (Munshigonj Sadar)

Marketing cost (Tk/kg) Net marketing margin (Tk/kg)

Faria, N=25; Bepari, N=25; Aratdar, N=25, Wholesalers, N=25; Retailers , N=5

Faria, N=25; Bepari, N=25; Aratdar, N=25, Wholesalers, N=25; Retailers , N=5

Results: Potato (Primary Survey)

Channels Marketing Efficiency (Acharya)

Price Spread (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%)

Performance of potato markets (Bogra & Munshigonj-Dhaka City)Performance of potato markets (Bogra & Munshigonj-Dhaka City)

Price 2012

Results: Potato (Primary Survey)

Sequential steps of storing of potatoes in commercial cold storageSequential 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)

Pre-heating (48 h at 10-12oC for 24-48 h before delivery; Aug-Jan)

Normal (For table purposes (Aug-January)

Sorting shade (8 h drying under fan at normal condition before delivery; June-January)

Marketing(Table potato: Aug-Jan & Seed potato: October)

Growers(Field cured potato tubers)

Results: Potato (Primary Survey)

Private cold store

BADC Cold store

Traditional Cold store

y = 61.496e0.0663x

R² = 0.4878

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Months (2004-2009)

CV = 35.75

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Harvest (nominal) price (TK/kg)Harvest (real) price (Tk/kg)Retail (nominal) price (TK/kg)Retail (real) price (Tk/kg)

SEASONALITY

PRICE VARIATION

CV: 35.75%

Results: Brinjal (Primary Survey)

Norshingdi-DhakaNorshingdi-Dhaka

Farmer

BepariNet margin: 16.77%

Faria Net margin: 10.07%

Aratdar Net margin: 14.73%

Wholesalers Net margin: 8.50%

RetailersNet margin: 49.64%

Consumers

Farmer

Bepari

Faria

Aratdar (Dhaka)

Wholesalers

Retailers

Consumers

Aratdar (Jessore)

Jessore (Chougacha)-DhakaJessore (Chougacha)-Dhaka

Results: Brinjal (Primary Survey)

0.4

1.1

1.3

1.8

1.2

1.1

1.3

1.7

0.9

0.7

1.2

1.1

0.6

1.6

3.6

3.7

2.7

1.4

0.0 1.0 2.0 3.0 4.0 5.0 6.0

Faria

Bepari (Norshingdi)

Aratdar (Karwan Bazar)

Wholesaler (Karwan Bazar)

Wholesaler (Jatrabari Bazar)

Retailer (Karwan Bazar)

Retailer (Mahakhali Kancha Bazar)

Retailer (Gulshan DCC Market)

Retailer (Badda Kancha Bazar)

Marketing cost (Tk/kg) Net marketing margin (Tk/kg)

Marketing cost and margins of brinjal intermediariesMarketing cost and margins of brinjal intermediaries

Results: Brinjal (Primary Survey)

CV = 19.90

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320

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Area (000 ha)Production (000 MT)

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Harvest (nominal) price (Tk/kg)Harvest (real) price (Tk/kg)Retail (nominal) price (Tk/kg)Retail (real) price (Tk/kg)

CV: 35.75%

Results: Okra (Primary Survey)

0.3

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1.6

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Faria (Comilla)

Bepari (Nimshar, Comilla)

Aratdar (Karwan Bazar)

Aratdar (Jatrabari Bazar)

Wholesaler (Karwan Bazar)

Wholesaler (Jatrabari Bazar)

Retailer (Karwan Bazar)

Retailer (Mahakhali Kancha …

Retailer (Gulshan DCC Market)

Retailer (Badda Kancha Bazar)

Marketing cost (Tk/kg) Net marketing margin (Tk/kg)

Channel (Comilla-Dhaka)Channel (Comilla-Dhaka)

Farmer

Bepari Net margin: 12.75%

Faria Net margin 8.97%

AratdarNet margin: 7.21%

Wholesalers Net margin: 31.28%

Retailers Net margin: 39.80%

Consumers

Marketing costs and marginsMarketing costs and margins

Results: Okra (Primary Survey)

Processing Processing

Owners

Bepari (25.13%)

Faria (18.95%)

Consumers

Retailer (37.61)

Wholesaler (11.86)

Aratdar (6.45%)

Producers (leased orchard)

May Jun Jul Aug Sep May Jun Jul Aug SepFarmers' price Retail price

Khirshapat 35 45 45 50Gopalbhog 35 40 40 45Himsagar 35 40 50 60Langra 40 45 75 80Fazli 55 60 90 70 80 150Bombai 35 30 60 55Ashwini 30 60 90 50 100 150

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Results: Okra (Primary Survey)

Channels Marketing Efficiency (Acharya)

Price Spread (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%)

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

Previous packaging

Present packaging

Farmers

Tk 19.09/bunch

Bepari (32.85%)

Aratdar (6.26%)

Faria (9.38%)

Wholesalers (12.38%)

Retailers (38.69)

Consumers (Dhaka)

Mdahupur-Dhaka ChannelMdahupur-Dhaka Channel

Costs and margins of intermediariesCosts and margins of intermediaries

Results: Banana (Primary Survey)

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 chainMONITORING 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 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

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

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.

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.

Policy Implications and Recommendations

THANK YOU FOR PATIENT HEARING