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Rice and Diversified Crops (RDC) Activity in Bangladesh, AID-388-A-16-00002
OUTPUT MARKET ASSESSMENTS: DIVERSIFIED CROPS
December 1st, 2016
Rice and Diversified Crops (RDC) Activity in Bangladesh
Output Market Assessments: Diversified Crops
Final Report
December 1, 2016
RDC Activity: Output Market Assessments Report – Diversified Crops Page ii
Table of Contents
List of Acronyms ........................................................................................................................... iii
Executive Summary ....................................................................................................................... iv
I. Introduction ............................................................................................................................... 1
II. Short-Listing and Prioritization of Diversified Crops ................................................................ 2
III. Abbreviated Assessments of Short-Listed Diversified Crops .................................................. 5 3.1 Vegetables ..................................................................................................................... 5 3.2 Maize............................................................................................................................. 7 3.3 Oilseeds ......................................................................................................................... 8 3.4 Pulses .......................................................................................................................... 11 3.5 Onions ......................................................................................................................... 14 3.6 Jute .............................................................................................................................. 15
IV. Key Smallholder Constraints and Possible Market-Based Solutions ..................................... 17
V. Illustrative Lead Firm Buyer Initiatives and Next Steps.......................................................... 19
APPENDICES:
(1) Scope of Work (2) Calendar of Activities (3) Interview Guides (4) List of Persons Interviewed (5) Summary of Related Donor Projects in the FtF Zone (6) Bibliography
RDC Activity: Output Market Assessments Report – Diversified Crops Page iii
List of Acronyms
ADB Asia Development Bank
AFE Action for Enterprise
A/V ACDI/VOCA
AVC Agricultural Value Chains Program (implementation led by DAI)
BAU Bangladesh Agricultural University
BARI Bangladesh Agricultural Research Institute
BBS Bangladesh Bureau of Statistics
BD Bangladesh
BDT Bangladesh Taka
BEOL Bangladesh Edible Oil Ltd.
BJMC Bangladesh Jute Mills Corporation (public sector company)
DAE Department of Agricultural Extension
FAO Food and Agriculture Organization
FtF Feed the Future
GOB Government of Bangladesh
IRRI International Rice Research Institute
JDP jute diversified products
kg kilogram
MSME micro, small, and medium-scale enterprises
NGO non-governmental organization
RDC Rice and Diversified Crops Activity (implementation led by ACDI/VOCA)
RVC Rice Value Chain (implementation led by IRRI)
SAFAL Sustainable Ag., Food Security and Linkages (implementation led by
Solidaridad)
SME small- and medium-sized enterprises
USAID United States Agency for International Development
USD U.S. Dollar
Conversion:
1 USD = 81 BDT (as of Oct 2016)
1 maund = 37.5 kgs. approximately (may differ by location)
1 decimal = 435.6 square feet
1 Bigha = ⅓ acre
Acknowledgements The principal author would like to extend his appreciation for all the assistance provided by
the RDC team. Special thanks and acknowledgement goes to the dedicated private sector
buyers, processors, and various value chain actors visited throughout this assignment. Their
warm hospitality and willingness to openly share and discuss their activities was greatly
appreciated by the output markets assessment team.
RDC Activity: Output Market Assessments Report – Diversified Crops Page iv
EXECUTIVE SUMMARY
This report presents the results and findings of a short-listing and output market assessments
consultancy for the Rice and Diversified Crops (RDC) Activity. As part of its strategy to
increase incomes and improve food security and nutrition, RDC will support private sector
initiatives to expand purchases of diversified crops, grown in rotation or conjunction with
rice, from smallholder farmers in the 19 FtF designated districts in Khulna, Barisal, and
southern Dhaka divisions (the “FtF zone”). The specific objectives of this consultancy were
to: (i) identify diversified crops with unmet market demand and ability to impact large
numbers of smallholder farmers in the FtF zone, and (ii) conduct abbreviated output market
assessments of the short-listed diversified crops. Overall, the Team interviewed over 53
private sector value chains actors and key informants across eight districts in the Khulna and
southern Dhaka Divisions. Given the time constraints for this assignment, the Team was not
able to travel to Barisal Division
A broad list of 14 diversified crop candidates was developed using secondary information
from existing reports/notes and preliminary interviews with buyers and key informants. With
the participation of RDC staff, the Team narrowed this list down using a short-listing matrix.
The six diversified crops short-listed for the output markets assessment are maize, vegetables,
pulses, oilseeds, onions, and jute. Most rice farmers choose to grow other crops during rabi
season using residual monsoon water, so the diversified crops the Team short-listed are either
winter or summer season crops. It should be noted that jute was one of the six value chains
short-listed for further assessment but as the Team collected primary data in the field, it
became apparent that few opportunities exist to increase smallholder incomes and access to
jute output markets. Therefore, an abbreviated assessment of jute is included to reflect the
data compiled by the Team but is not recommended for further RDC consideration or action.
Section III contains abbreviated output market assessments of the six short-listed crops and
includes a description of: (i) end markets; (ii) supply and demand from the FtF zone; (iii)
value actors and relationships; and (iv) other issues including the enabling environment,
finance, storage, other donor programs, etc. General crosscutting and crop specific constraints
of smallholders in the FtF, as well as possible market-based solutions, are presented
subsequently in Section IV, while Section V presents illustrative examples of Lead Firm
buyer initiatives to improve the market access and services/support they provide to
smallholder farmers, and proposed next steps for RDC consideration.
Based on the findings and analysis of the primary and secondary data collected during this
output markets assessment, the Team identified a number of key constraints to increasing
smallholder sales and income from diversified crops. Possible market-based solutions,
corresponding to the smallholder constraints, are also presented and purposely kept general to
allow for further analysis of its economic, technical, and developmental feasibility.
Most of the major smallholders constraints identified by the Team were crosscutting and
applicable to multiple crops.
It is expected that the first “Invitations for Applications” (IFA) for the output markets will
provide an opportunity for Lead Firm buyers and other private sector actors to propose
initiatives that can develop or expand one or many of the market-based solutions. In the
future, specific IFAs could be developed to address specific market-based solutions listed (or
additional solutions that will be identified).
RDC Activity: Output Market Assessments Report – Diversified Crops Page v
Given the diverse cropping pattern of smallholders and the variety of prioritized crops, RDC
does not need to develop an exclusive strategy for each crop. As the abbreviated output
market assessments show, market channels for the short-listed crops included the following:
(i) conventional price-based market which is the primary channel for the majority of crops
from the FtF zone, (ii) growing domestic market for high-value, quality-based crops and
products, and (iii) a small but emerging export market for niche crops/products. Value chain
governance describes the commercial relationships between end market buyers,
intermediaries and producers and is a useful framework for exploring the relative risks and
incentives for Lead Firms and smallholders within those market systems.
Several private sector/Lead Firms were identified/self-selected during the output markets
assessment who expressed a willingness to explore collaboration with RDC. In response to
the Invitation for Application (IFA) for output markets being prepared by RDC, Lead Firms
will propose their own initiatives to address the challenges they face to increase their
competitiveness and improve the market access, services and support they provide to
smallholders in the FtF zone. Through this process RDC can support the private sector to
pilot-test, assess, and promote new and improved business models and innovative market-
based solutions..
As RDC begins to develop its overall implementation strategy, it is important to keep in mind
the overall risks and challenges to market system development for diversified crops sourced
from the FtF zone – ensuring that the market-based solutions and Lead Firm initiatives
supported by RDC are somehow addressing or mitigating these risks.
As stated above, jute was originally short-listed but subsequently dropped by the Team. RDC
could conduct further output market assessments of other crops – and it is suggested that
RDC not limit itself to only the crops identified in this assessment. Two additional crops that
showed promise are groundnuts (especially in the Chars lands where soil conditions are ideal)
and fruits such as watermelon in the Barisal Division. The Team was not able to travel to the
Barisal Division so a follow-up assessment and validation visit to the area by RDC would be
advisable.
While there will be some overlap in the FtF zone with existing donor/NGO projects engaged
in similar crops or private sector partners, there is still a need for RDC’s private sector focus
and market systems development implementation strategy.
RDC Activity: Output Market Assessments Report – Diversified Crops Page 1
I. INTRODUCTION
This report presents the results and findings of a short-listing and output market assessments
consultancy conducted for the Rice and Diversified Crops (RDC) Activity. RDC is a three-
year activity funded by USAID Feed the Future (FtF) in Bangladesh and implemented by
ACDI/VOCA to catalyze market system changes and promote intensified rice production and
higher-value, nutrient-rich crops. As part of its strategy to increase incomes and improve food
security and nutrition, RDC will support private sector initiatives to expand purchases of
diversified crops, grown in rotation or conjunction with rice, from smallholder farmers in the
19 FtF designated districts in Khulna, Barisal, and southern Dhaka divisions (the “FtF zone”).
The specific objectives of this consultancy were to: (i) identify diversified crops with unmet
market demand and ability to impact large numbers of smallholder farmers in the FtF zone,
and (ii) conduct abbreviated output market assessments of the short-listed diversified crops.
See Appendix 1 for the detailed scope of work.
This report is divided into four main sections. Specific activities carried out and
methodologies used are described in Section I. The overall process and results of the short-
listing and prioritization of diversified crops are shown in Section II, and Section III contains
the abbreviated output market assessments of the shortlisted crops. Key smallholder
constraints and possible market-based solutions are described in Section IV, while Section V
presents illustrative examples of Lead Firm1 buyer initiatives to improve the market access
and services/support they provide to smallholder farmers, and proposed next steps for RDC
consideration.
Description of Activities and Methodology: Preparatory work began with desktop research
on various crops and agricultural development projects in Bangladesh and a review of
secondary reports of other relevant USAID FtF activities, especially DAI’s Agricultural
Value Chains (AVC) and IRRI’s Rice Value Chains (RVC) projects. In-country fieldwork
took place from October 15 to November 6, 2016 and was scheduled to provide timely input
to the RDC implementation team on potential support and facilitation activities for
diversified crops. See Appendix 2 for the Calendar of Activities conducted. The Assessment
Team consisted of the Team Leader from AFE (Henry Panlibuton) and local consultants
Mominul Haque, Basudeb Chakrabortty and Touhidur Rahman.
Using AFE’s training materials for value chain/market system program design and
implementation, the Team Leader conducted orientation/planning sessions for key RDC staff
and assessment team members to ensure a common understanding of the framework and
concepts for market systems and value chain development. As per the scope of work, the main
issues for the output markets of each prioritized crop included: general market demand and end
market analysis, supply and demand issues in the FtF zone, enabling environment factors, key
constraints for smallholders in the FtF zone and possible “market-based solutions”, and
challenges that buyers face in selling or sourcing from smallholders in the FtF zone. The specific
research questions for this assignment were reviewed by the assessment team to confirm that
they were adequately addressed in the data collection tools and interview guides (see Appendix
1 A Lead Firm is a firm that has forward/backward commercial linkages with a significant number of MSMEs
(including farmers). Also known as “Inclusive Businesses,” they include processors, exporters, traders, input
companies, service providers, etc. that play a critical role in moving their industry, and other value chain
participants forward. [AFE, 2014]
RDC Activity: Output Market Assessments Report – Diversified Crops Page 2
3). Before travelling to the FtF zone, the Team completed a preliminary round of interviews in
Greater Dhaka with a few major buyers of potential crops and key informants.
Overall, the Team interviewed over 53 private sector value chains actors and key informants
across eight districts in the Khulna and southern Dhaka Divisions. Given the time constraints
for this assignment, the Team was not able to travel to Barisal Division (see Figure 1).
Throughout the process, the Team
often split into separate sub-groups
to increase the breadth of
interviews but always reconvened
to share and discuss on-going
findings. Upon return to Dhaka,
additional follow-up interviews
were completed. Since the
assessment was focused on output
markets, the Team concentrated its
primary data collection on actors
engaged in post-production
functions especially: local and
wholesale-level trading,
processing, retailing, and
exporting where relevant. See
Appendix 4 for a list of people
interviewed.
For the purposes of this
assessment, smallholders are
considered to be farmers with less
than 2.5 acres in total area under
crop cultivation. Also as stated above, “diversified crops” are defined as agricultural products
grown anywhere in the FtF zone either in rotation or conjunction with rice. Upon conclusion
of the in-country fieldwork, the Team prepared and conducted a final de-briefing for the RDC
implementation team, including representatives from ACDI/VOCA and AFE.
II. SHORT-LISTING AND PRIORITIZATION OF DIVERSIFIED CROPS
2.1 Short-listing Process: A broad list of 14 diversified crop candidates was developed
using secondary information from existing reports/notes and preliminary interviews with
buyers and key informants. With the participation of RDC staff, the Team narrowed this list
down using a short-listing matrix with the two principle selection criteria: (i) unmet market
demand, and the (ii) potential number of smallholders in the FTF zone that could produce or
sell the crop and benefit. Each potential crop was placed in the matrix based on its relative
rating (i.e., high, medium, low) against the two criteria. Any crops falling within the medium-
to high- ranges, especially for unmet market demand, were given greater priority and targeted
for further assessment.
Figure 1. Districts Visited during Output Markets Assessment
RDC Activity: Output Market Assessments Report – Diversified Crops Page 3
The six diversified crops short-listed for the output markets assessment are shown, colored in
blue, in Figure 2: maize, vegetables, pulses, oilseeds, onions, and jute. The Team was focused
on these six short-listed crops during its primary data collection.
A few recurring issues were raised and considered during this short-listing process. Where
possible, the use of crop categories (such as vegetables, oilseeds, pulses, etc.) rather than
specific individual crops will enable RDC to have more programmatic flexibility. Unmet
market demand is difficult to accurately quantify and the Team was cautious of using existing
smallholder crop sales as a proxy indicator. This is particularly important in a context where
annual smallholder sales may be increasing, but in fact only meet a small percentage of total
domestic demand due to the predominance of cheaper and more widely available imports.
Figure 2. Short-listing of Potential Diversified Crops in the FtF Zone
2.2 Ranking and Prioritizing Process: While in the field and based on compiled data to
date, the Team also completed a ranking exercise of the short-listed crops in order to confirm
and quantify their relative
importance. The ranking table
includes the two short-listing
criteria as well as the other
proposed selection filters:
presence of private sector
Lead Firm buyers with
commercial incentives and
interest to expand sourcing
the crop from the FTF zone;
agronomic/ environmental
benefits of the crop with rice;
nutritional impact; and gender
and women’s economic
impact. A total weighted
score is calculated for each
crop with the more important
criteria worth more points.
Number of Smallholders (that could benefit) in FTF Zone
Un
met
Ma
rket
Dem
an
d
Low Medium High
Lo
w
Me
diu
m
Hig
h
• vegetables
• tomato
• maize
• pulses
• potato
• onion
• watermelon [Barisal Div.]
• oilseeds
• mangos
• spices
• groundnut [Chars]
• jute
• sugarcane
• guava
CRITERIA
Unmetmarketdemand
NumberofproducersinFTF
zonethatcouldbenefit
PresenceofLeadFirmbuyers
withincentivesinFTFzone
Agronomic/environmental
benefitstogrowingwithrice
Nutritionalimpact
Women’seconomicimpact
Ma
x.
Sc
or
e
15
10
10
5
5
5
Ma
ize
15
8
10
1
1
3
Ve
ge
tab
les
9
10
8
2
5
4
Pu
lse
s
9
8
6
5
5
4
Oil
se
ed
s
9
8
6
4
4
3
On
ion
9
6
6
2
2
2
Jute
6
8
4
3
0
2
Wa
ter
me
lon
6
4
4
1
2
2
Gr
ou
nd
nu
t
9
2
6
4
2
1
TotalScore 50 38 38 37 34 27 23 19 24
Table 1. Ranking and Prioritization of Short-listed Diversified Crops
RDC Activity: Output Market Assessments Report – Diversified Crops Page 4
The ranking scores of the short-listed crops (see Table 1 in green) confirm their significance
for smallholders in the FtF zone. But the Team had serious concerns about the output, and
input, markets for jute and its reliance on public sector or government engagement and
subsidies to remain competitive. Thus, an abbreviated assessment of jute is included in
Section III below but is not recommended as a priority diversified crop. Two additional crops
that RDC could consider for further assessment and validation are groundnuts, especially in
the Chars areas, and watermelon and other fruits from Barisal Division.
2.3 Agro-ecology and Cropping in the FtF Zone: As shown in Figure 3, the agro-
ecological regions in the FtF zone are varied and range from high- [11], mid- [14], and
lowlands [12] in the north and central, to tidal
[13] and estuarine [18] floodplains in the south
and east.
During the monsoon and winter seasons, the
southern part of the FtF zone is particularly
vulnerable to tidal surges and flooding. As a
result of the elevated water table and excessive
inundation in the area, salinity levels in the
water and soil are high which affects potential
crop diversification options and productivity of
smallholder rice farmers. It was also reported
that some shrimp producers were unilaterally
expanding the inlet of seawater into their farms,
thereby exacerbating the salinity problem for
smallholder agricultural crop farmers.
The three primary agricultural seasons in
Bangladesh are rabi (winter), Kharif 1
(summer), and Kharif 2 (monsoon). Throughout the FtF zone, Aman rice is the main crop
grown during the monsoon season and harvested in early winter. In Bangladesh, smallholders
do not practice fixed mono crop production so a secondary boro rice crop could also be
produced in late winter. Most rice farmers choose to grow other crops during rabi season
Figure 3. Agro-ecological Areas in the FtF Zone
Rabi: Winter (mid-Oct – mid-Mar)
Boro
Kharif-1: “Summer” (mid-Mar – mid-Jul)
Aus
Kharif-2: Monsoon (mid-Jul – mid-Oct)
Aman
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
<--------------- HIGH SOIL & WATER SALINITY ----------->
MUSTARD
ONION
MAIZE
LENTILS MUNGBEAN
VEGETABLES (brinjal, cucumber, etc.)
GROUNDNUT
<----------- TIDAL SURGE ---------->
GOURDS (bitter, bottle, etc.)
AMAN RICE BORO RICE AMAN RICE
Figure 4. Cropping Calendar for Prioritized Diversified Crops in the FtF Zone
RDC Activity: Output Market Assessments Report – Diversified Crops Page 5
using residual monsoon water, so the diversified crops the Team short-listed are either winter
or summer season crops (see Figure 4).
III. ABBREVIATED ASSESSMENTS OF SHORT-LISTED DIVERSIFIED CROPS
This Section contains abbreviated output market assessments of the six short-listed crops and
includes a description of: (i) end markets; (ii) supply and demand from the FtF zone; (iii)
value actors and relationships; and (iv) other issues including the enabling environment,
finance, storage, other donor programs, etc. General crosscutting and crop specific constraints
of smallholders in the FtF, as well as possible market-based solutions, are presented
subsequently in Section IV.
It should be noted that jute was one of the six value chains short-listed for further assessment
but as the Team collected primary data in the field, it became apparent that few opportunities
exist to increase smallholder incomes and access to jute output markets. Therefore, an
abbreviated assessment of jute is included in this section to reflect the data compiled by the
Team but is not recommended for further RDC consideration or action. There is scope,
however, for the RDC staff to explore prospects for meaningful interventions with other
potential diversified crops (see Section V below).
3.1 Vegetables
3.1.1 End Market Analysis: The two end market channels for vegetables from the FTF
zone are the predominant price-based “conventional” (wet) market channel, and a small but
growing “quality-based” channel. Most Bangladeshis regularly buy fresh produce and
vegetables through open-air local retailers in the district, sub-district or village-level markets
or bazaars. Processed foods are not widely produced or consumed, especially in the rural
areas, so fresh vegetables are usually prepared or cooked at home. Approximately 70% of
total food purchases in Bangladesh are made via local open-air retailers or small roadside
shops and only 2% of food is bought in supermarkets or large organized retailers2.
However, there is an emerging market for higher quality fresh vegetables to meet a nascent
consumer segment in Bangladesh that is increasingly concerned about health and food safety.
The volume of vegetables sold through quality-based food retailers such as supermarkets is
expected to grow as the economy and urbanization expands. The total annual turnover for
supermarkets in Bangladesh is BDT 15 billion (approx. USD 192 million) with 15% annual
sales growth. By 2021, supermarket sales are expected to grow by 30% annually due to
changing demographics and buying habits of the country’s middle and upper classes3.
Supermarkets and large organized retailers seek to strengthen and manage their own supply
chains for fresh, quality produce direct from farmers.
3.1.2 Supply and Demand in FtF Zone: Approximately 15% of total vegetable
production in Bangladesh comes from the FTF zone, primarily during winter season. Among
the vegetable crops most widely produced in the FtF zone are bitter gourd, pointed gourd,
bottle gourd, sweet gourd/pumpkin, brinjal (eggplant), cucumber, cabbage, cauliflower, green
beans, okra, leafy greens, tomatoes, etc.
2 Hussain, Sayed Sarwer & Leishman, David (July 2013). The Food Retail Sector in Bangladesh. 3 Ibid.
RDC Activity: Output Market Assessments Report – Diversified Crops Page 6
Depending on the production area and local access to water resources and inputs in the FtF
zone, some vegetables can be grown year-round. Vegetable prices can be very volatile,
especially during the peak winter season, but prices for off-season summer vegetables are
generally higher and more stable. The AVC program is promoting local production and
marketing of a variety of summer vegetables, particularly planted on raised ridges
surrounding rice farms.
3.1.3 Description of Value Chain Actors and Inter-relationships (see Figure 5): For
many smallholders in the FtF zone, local traders or collectors (foria) will buy produce at
farmgate or along the roadside. Local foria may purchase the production of entire plots based
on appearance and site inspection of a farmer’s field before harvest. Local traders purchase
from farmers and sell to other large traders or retailers in the sub-district or district markets.
Traders do not normally provide any advances to farmers; their relationship is purely price-
based with various payment terms (i.e., down payment amount, payment time, etc.).
Vegetables are sorted, aggregated, and loaded onto trucks bound for other districts, divisions,
or Greater Dhaka markets.
The three major supermarket chains are Shwapno (59 outlets in 16 District towns including
Dhaka), Agora (13 outlets), and Meena Bazar (18 outlets). These supermarkets and large
retailers usually buy directly from a network of approved and listed suppliers, who source
from contracted traders or farmers groups. The larger stores have centralized procurement
systems and preferred supplier agreements.
Figure 5. Vegetables from the FtF Zone – Value Chain Map
3.1.4 Other Issues: As a perishable crop with no cool chain system, transportation to major
markets in Dhaka can be a problem for buyers and traders. The post-harvest loss for fresh
produce in Bangladesh due to spoilage, transportation, etc. is estimated to be 20-35%.
Wholesale Markets
(Bazaar, etc.)
Supermarkets/
Large Retailers
Production
Wholesale
and Retail
Trading
Smallholder Contract
Farmers
(<2.5 acres)
Large Traders/
Aratdars
Listed Suppliers
[Bashar, RAF, etc.]
Local Hawkers/
Retailers
Local Traders /
Foria
Smallholder Farmers
(<2.5 acres)
Large Traders
(contractors)
Local Bazaar /
Haat (sub-dist)
Retail
[Quality-based Channel] [Conventional Market Channel] Input
Supply
Local Bazaar /
Haat (Dist)
Small Retail
Shops
Farmers Group
Collection Ctrs
Key: Formal Agreements
Med/Large
Farmers
(2.5> acres)
RDC Activity: Output Market Assessments Report – Diversified Crops Page 7
3.2 Maize
3.2.1 End Market Analysis: Of total animal feed demand in Bangladesh, maize constitutes
50-60% or approximately 2.7 million MT of maize per year. The largest segments of the
animal feed industry for maize are poultry (60%), fish/aquaculture (30%), and cattle (10%).
Poultry feed requires higher quality maize than feed for fish or cattle. Local maize production
is estimated to be 1.5 million MT so domestic demand is met with imports, especially during
the lean Kharif season4. Feed mills procure maize from large local traders and stockists (who
store grains year-round) or directly import when local production is not available or stored
maize can no longer meet their quality and price specifications.
Total domestic demand for maize has been growing rapidly, from 1.5 million MT in 2012-13
to 2.3 million MT by 2014-15. Currently, the largest maize trader/listed supplier in
Chuadanga District alone buys 70-80 MT per year to supply animal feed mills throughout
Bangladesh.
Feed mills are the key drivers in the industry and set domestic maize prices through purchase
orders with their listed suppliers or traders. Seasonality and local availability also affect
pricing, but many other value chains actors base their maize prices on prices set by the feed
mills. Moisture content is the main quality parameter with an acceptable standard range of
13.5 to 14%. Prices for maize with higher moisture content will be discounted, while
premiums of BDT 0.5 to 1.5/kg are reportedly paid for quality maize (i.e., mature kernels,
standard moisture level, unbroken, etc.).
3.2.2 Supply and Demand in FtF Zone: Farmers mainly grow imported industrial
varieties of maize for the animal feed market. Most production is in northern Bangladesh but
maize cultivation has been increasing in districts in the FtF zone such as Chuadanga,
Jhenaidah, Meherpur. Higher elevation regions with loamy soils are good for maize but chars
lands in Faridpur and Rajbari are also becoming large maize production areas. Fish
cultivation areas can also provide an opportunity to expand maize production since fish feed
processors often buy and use lower quality grains.
3.2.3 Description of Value Chain Actors and Inter-relationships (see Figure 6): In the
FtF zone, farmers harvest maize mainly in the Rabi Season but do not generally store. Wet
grain is sold since smallholders cannot dry due to rain, although some have access to
mechanical dryers or similar technologies. Smallholders sell directly to local traders or
forias who purchase maize at farmgate and sell on to large traders. Smallholders may also
sell directly to large traders at nearby haat/bazar markets. Large traders then sell to listed
suppliers who are authorized to supply to large feed processors (e.g. Nourish, CP, Kazi,
Quality, Aftab, Paragoan etc.) and may procure maize through contract farming. Support for
smallholders through contract farming includes access to inputs, technical training, etc. on an
embedded basis. Local traders or forias also extend limited support to smallholders. Large
industrial processors have multiple plants across the country, especially where maize
production is prevalent. For example, CP has a processing plant in Chuadanga among the
highest maize cultivation areas in the FtF zone. Small local feed users (backyard poultry, etc.)
source directly from farmers or local traders.
4 Based on primary data collected by Team
RDC Activity: Output Market Assessments Report – Diversified Crops Page 8
In the value chain map, bolder thick line represents greater trade volume and red colored
boxes show importers.
Figure 6. Maize from the FtF Zone – Value Chain Map
3.2.4 Other Issues: As stated above, most maize farmers sell after harvesting and drying in
order to meet their daily needs or agricultural inputs for the following seasons. Storage is
limited to those who have appropriate space or facilities including large traders or major feed
processors. Selling stored maize is very risky as subsequent prices may not be enough to
offset related costs – especially as imported maize has increased during the off-season.
Although maize prices are not as volatile as some other crops, losses on maize speculation by
traders and stockists have been significant this year.
Finance is available through numerous financial institutions but smallholders are reluctant to
access these facilities due to institutional fear or unfavorable credit terms. The Katalyst
Project had a few maize interventions in the FtF zone but all have ended. CIMMYT and
BRAC have few on-going project activities with maize.
3.3 Oilseeds
3.3.1 End Market Analysis: Rising income and population in Bangladesh has increased
local per capita consumption of edible oils to 11 liters per year (from 8 liters/yr.). Total
demand in 2016-16 for edible is approximately 2.3 million MT and growing at 8-11%
annually. Domestic production of various oilseeds, especially mustard, has increased to
approximately 934,000 MT (2014-15) but is still not sufficient to meet total demand. As a
result, Bangladesh must import over 2 million MT per year, especially crude palm and
soybean oil, to satisfy 75-85% of the domestic market.5
Oilseed cake is a processing by-product used for protein animal feed and has greater unmet
demand than the oil itself. For most local oilseed processors, the returns for oilseed cake far
5 Sources: Parvez, Sohel (Aug 26, 2016) and USDA/FAS GAIN report
Production
Wholesale
and Retail
Trading/
Processing
Local Traders/
Forias
Med/Large
Farmers
(>2.5 acres)
Large Traders /
Aratdars
Large Feed Mills
(Nourish, Aftab, etc.)
Imported
Maize
Smallholder Farmers
(<2.5 acres)
Listed Suppliers/
Traders
Poultry
Feed
Aquaculture
Feed
Livestock
Feed
RDC Activity: Output Market Assessments Report – Diversified Crops Page 9
exceed those for oil and often provide the best profit margins. Growth of the animal feed
market in Bangladesh is fueled by the rise of the poultry industry, which must rely on imports
of cake from soybean and other oilseeds to meet its increasing demand for sources of protein
feed.
Mustard oil is a traditional product used widely throughout Bangladesh and South Asia for its
pungent flavor and taste as well as externally for medicinal applications. According to a
leading edible oil company, Bangladesh Edible Oil Ltd. (BEOL), domestic demand for
mustard oil is increasing at 15% per year. Mustard oil is not generally used for cooking or
frying and has some comparative advantages over crude palm and soybean oil.
Consumption of sunflower oil is growing as purchase power and heath consciousness
increase in Bangladesh. Yet a study by BEOL concluded that the current market for
sunflower oil in Bangladesh is not sufficient to justify investment in a local sunflower oil
extraction and refining plant. Sunflower oil is a high priced niche product (BDT 200-
225/liter) sold in large retailers and supermarkets and imported by BEOL and others.
As summarized in Figure 7, there are distinct health advantages for consumers of higher
value and locally grown oilseeds in Bangladesh (specifically mustard, sunflower, and
sesame) compared to the unhealthy but cheaper popularity of imported palm and soybean oil.
While domestic demand for edible oil has grown overall, increasing incomes, consumer
awareness of health and food safety, and other demographic trends in Bangladesh will
expand end market opportunities for local oilseeds over time.
Although sesame is an oilseed crop, the unmet regional and global demand for certain
varieties of sesame seed itself, as well as oil, is driving local investment in Bangladesh.
Sesame is mostly an export-oriented crop, with leading exporters such as ACI and Global
Agro, but domestic markets for confectionary/snack food products also exist.
Figure 7. Comparison of Edible Oils – Health Benefits and Retail Price (Bangladesh) 6
6 Sources: Tsang, Gloria (2012) and primary data collected during assessment.
130 Tk ($1.65)/lit
85 Tk ($1.00)/lit
95 Tk ($1.20)/lit
230 Tk ($2.90)/lit
RDC Activity: Output Market Assessments Report – Diversified Crops Page 10
3.3.2 Supply and Demand in FtF Zone: An estimated 15% of total mustard seed
production is in the FtF zone but the majority of mustard in Bangladesh comes from the
northern areas and Manikganj-Tangail- Jamalpur region7. On the other hand, approximately
39% of total sesame seeds cultivation in the country is in the FtF zone though in smaller
volume than mustard seed. Smallholder support from traders or buyers is limited, with no
contract farming of oilseeds.
Sunflower is a suitable crop for coastal areas given its salt/high saline tolerance. BRAC is
promoting sunflower in southern areas of the FtF zone through its buyback program. Most
sunflower farmers process or sell locally for household oil consumption; commercial scale
sunflower seed cultivation or processing is limited.
3.3.3 Description of Value Chain Actors and Interrelationships (see Figure 8): Oilseed
production in the FtF zone is predominantly by smallholders. Mustard is a Rabi/winter crop
and grown in different pocket areas than sesame, which is a summer crop. Most seed for the
next oilseed crop are retained saved seed. Bangladesh Agricultural Research Institute (BARI)
has been conducting research to develop improved short duration mustard seed varieties For
example, “BARI shorisha-14” has 50% better yields and 20% higher oil content than the
local “Tori 7” variety.
Smallholders sell to local traders or farias in local haats/markets, while larger-scale farmers
can sell directly to local processors or large traders and aratdars. Traders can collect oilseeds
from the local market up to 2-3 months after harvesting. In some cases, large traders/aratdars
will also store oilseeds for a few months in anticipation of higher prices during the lean
season.
Most smallholders sell immediately after harvesting to repay any outstanding loans or credit
used during production. Therefore, local traders and buyers procure most of their oilseeds
during the short peak season and need a lot of working capital at that time. Bangladesh Bank
offers specific credit facilities for pulse and oilseed crop production at 4% interest but large
processors do not provide advances to their listed suppliers.
Local and regional oil processors produce oil for sale in local markets as well as regional
markets. Some local mills may also offer processing services on a toll-processing basis.
Domestic mustard seed production is not sufficient to meet demand from large-scale
commercial oil processors (i.e., City Group, PRAN, BEOL, etc.) who import raw materials,
including rapeseed to produce mustard oil. Unlike other edible oils, mustard oil is not refined,
bleached, nor deodorized to retain its distinctive taste and smell.
In the value chain map, bolder thick line represents greater trade volume, dotted blue lines
depict the flow of oilseed cake, and red colored boxes show importers.
3.3.4 Other Issues: There are no specific GOB restrictions on importing edible oils so
inexpensive bulk crude oil can be imported, mixed with various oils, and packaged and sold
as “pure” oil throughout the country.
GOB is promoting pulses and oilseed production during the boro rice season to conserve the
groundwater level. GOB also distributes mustard seeds to farmers during post flood
7 Year Book of Agricultural Statistics (2014)
RDC Activity: Output Market Assessments Report – Diversified Crops Page 11
rehabilitation programs because mustard can provide quick returns to farmers when aman
rice has been damaged due to natural calamities. GOB also provides incentives for processors
and exporters, helping to access new export markets and low cost processing technologies.
Figure 8. Oilseeds from the FtF Zone – Value Chain Map
3.4 Pulses
3.4.1 End Market Analysis: Bangladesh is the third largest importer of pulses in the
world, with approximately 800,000 MT from Canada, Australia, Russia, Turkey and Nepal
that meets over 80% of domestic demand. According to Bangladesh Bureau of Statistics
(BBS), local production of pulses is 375,000 MT primarily after the winter season.
Approximately half of total national pulse production is in the FTF zone, making pulses a
significant food and cash crop for many smallholders. There are a variety of pulse crops
grown in Bangladesh but the ones most widely grown in the FtF zone are lentils and
mungbean.
The largest local market segment for fresh (i.e., unprocessed) pulses, primarily lentils, is for
use in dhal and other popular staple food dishes. Total domestic consumption of fresh pulses
far exceeds local supply, so Bangladesh must rely on imports to meet 70% of total demand.
There is a smaller but rapidly growing domestic market for processed pulses to make ready-
made snacks including dal vaaja (fried pulse), chanachur, etc.
Similar to the market for edible oils, demographic changes in Bangladesh are driving demand
for more convenience (prepared) food and “premium” quality pulses marketed to health
conscious consumers. Local consumers also prefer the taste of local pulses to imports.
Although local mungbean is small in size with low yields, compared to the larger more
productive varieties preferred by agro-food processors, market prices are higher than imports.
Production
Wholesale
and Retail
Trading/
Processing
Local Oil
Processors
(sub-dist)
Supermarkets/
Large Retailers
Small Retail
Shops
Local Traders/
Forias
Retail
Smallholder Farmers
(<2.5 acres)
Large Traders /
Aratdars
Large Feed
Mills
Large Oil
Processors
(CityGroup, etc)
Local Feed
Market
Local Bazaar /
Haat (sub-dist)
Local Bazaar /
Haat (Dist)
Wholesale Markets
(Bazaar, etc.)
Local Oil
Processors
(Dist.)
Imported Crude
Oil and Oilseeds
(>75%)
Key: Oilseed cake
Imported
Oilseed
Cake
RDC Activity: Output Market Assessments Report – Diversified Crops Page 12
3.4.2 Supply and Demand in FtF Zone: Lentil production is primarily in the winter
season and longer in duration, while mungbean is a shorter cycle crop that can be grown in
multiple seasons. Based on BBS data for lentils and mungbean from 2009 to 2014 (see Table
2), both cultivated area and production volume grew by 63% and 84% respectively in the FtF
zone. Similar acreage and production increases were also found nationally. Jessore District is
the largest producer of lentils and Barisal District is the major production area for
mungbeans. According to AVC project estimates, 575,000 farmers across the FTF zone, both
smallholders and medium/large-scale, grow pulses. Smallholders are mostly household
subsistence farmers with any excess sold on an ad hoc basis.
Improved pulse seeds and varieties are available but most farmers use retained seeds for their
next pulse crop. In fact, smallholders are attracted to growing pulses because they require few
inputs and less maintenance than other crops.
Much of the land in the FtF zone suitable for pulse cultivation remains fallow after harvesting
of Rabi/winter crops. With short duration pulses, farmers can expand to a three-crop
production cycle that could increase household income and improve dietary diversity. Pulses
will also enhance soil fertility by fixing nitrogen in the soil, especially in rotation with grain
crops that deplete soil fertility.
Table 2. Lentil and Mungbean Production: from 2009/10 to 2013/14
3.4.3 Description of Value Chain Actors and Inter-relationships (see Figure 9): In the
FTF zone, the two major wholesale markets for pulse trading are Kaliganj (Jhenaidah
District) and Takerhatin (Gopalganj District). There are also over 25 large-scale millers and
25 commercial pulse processors in Southern Bangladesh. Like oilseeds, contract growing of
pulses is not done due to fragmented supply channels and low levels of trust and cooperation
among smallholders and traders.
The value actors and market channels for pulses from the FtF zone are very similar to those
for oilseeds. Smallholders sell to local traders or farias in local markets, which is then sold to
dhal mills/local processors or large traders and aratdars. An initial level of grading, drying,
and packaging is done by large traders that supply commercial pulse processors in Greater
Dhaka or other cities. In the value chain map, bolder thick line represents the greater trade
volume, colored lines depict the flow of unprocessed (black) and processed (blue) pulses, and
red colored box show importers.
Area
(acres)
Prod.
(MT)
Area
(acres)
Prod.
(MT)
Area
(acres)
Prod.
(MT)
Area
(acres)
Prod.
(MT)
Area
(acres)
Prod.
(MT)
Lentils(BD) 190,982 71,100 205,024 80,442 213,035 80,125 222,305 93,098 307,637 157,422
Lentils(FtFZone) 108,825 39,073 112,588 44,979 112,996 40,586 113,635 42,852 174,520 78,796
Avg.LentilYield(BD) 37% 39% 38% 42% 51%
Avg.LentilYield(FtFZone) 36% 40% 36% 38% 45%
Munbgean(BD) 57,462 20,177 67,779 19,445 90,825 26,240 87,223 24,764 97,078 31,610
Mungbean(FTFZone) 32,278 9,270 32,383 8,715 51,941 12,816 51,779 13,335 53,632 15,344
Avg.MungbeanYield(BD) 35% 29% 29% 28% 33%
Avg.MungbeanYield(FtFZone) 29% 27% 25% 26% 29%
Crop/Location
2009-10 2010-11 2011-12 2012-13 2013-14
RDC Activity: Output Market Assessments Report – Diversified Crops Page 13
As stated above, imported lentils meet approximately 70% of total domestic demand. Local
small- and large-scale mills crush pulses/lentils into dhal for sale to wholesalers, retailers, or
agro-food processing companies. The husk of milled pulses is another processing by-product
that can be used as animal feed but is not as highly valued as protein oilseed cake.
Figure 9. Pulses from the FtF Zone – Value Chain Map
3.4.4 Other Issues: As part of the GOB’s effort to promote pulses and oilseeds in rotation
with boro rice, local DAE offices are promoting the importance of quality inputs and
balanced fertilizer usage. Yet, rudimentary farming practices including the use of
increasingly unproductive retained seed still prevail and smallholder access to information on
new farming practices remains limited. Farmers in the FTF target zone acquire most of their
technical information from input providers and local lead farmers. DAE lacks the manpower
and infrastructure necessary to deliver demand-driven services to farmers in a timely manner.
In Agricultural Research Priority: Vision 2030, the GOB pledged to expand pulse production
over the next 15 years: increase the cultivation areas of mungbean (by 9.7%) and lentil (by
42%), and improve productivity to 2 MT per hectare for mungbeans (from 970 kg/ha in
2010) and 2.3 MT/ha for lentils (from 988 kg/ha in 2010). GoB currently allows the private
sector to import pulses (lentil, dried peas, chickpea, etc.) into Bangladesh without major
restrictions. While India, on the other hand, has effectively banned the export of raw lentils to
encourage and protect its domestic production.
The most popular mode of credit in the rural areas is value chain financing provided by input
suppliers or merchants (mahajan). At the farmers’ level, however, loans from MFIs are the
most popular despite the relatively high interest rates.
Production
Wholesale
and Retail
Trading/
Processing
Local Pulse
Processors
(sub-dist)
Supermarkets/
Large Retailers
Small Retail
Shops
Local Traders/
Forias
Retail
Smallholder Farmers
(<2.5 acres)
Large Traders /
Aratdars
Large Pulse
Processors
(Naranganj)
Local Bazaar /
Haat (sub-dist)
Local Bazaar /
Haat (Dist)
Wholesale Markets
(Bazaar, etc.)
Local Pulse
Processors
(Dist.)
Lentil
Importers
(Unisun)
Key: Processed Pulses
Large Pulse
Processors
(Savar)
Large Traders /
Aratdars
Agro-food
Processors
RDC Activity: Output Market Assessments Report – Diversified Crops Page 14
3.5 Onions
3.5.1 End Market Analysis: Onion is traditionally a Rabi/winter crops but there are new
early- and late- varieties in the north that enable cultivation during the lean season when
prices are higher. Onion prices can be very volatile throughout the year.
Local onion production is insufficient so imports from India, China, Myanmar, Thailand,
Australia, etc. meet approximately 60% of total national demand. Domestic production has
increased slightly from 2011-2015 but import values jumped significantly over the same
period8. According to traders and aratders interviewed, most imported onions are entering
Bangladesh via informal cross border trade.
Local varieties of onions are smaller but more pungent and preferred by Bangladeshi
consumers who pay premiums compared to the larger, imported onions.
3.5.2 Supply and Demand in FtF Zone: In the FtF zone, onions are normally planted from
October to December and harvested in late April to mid June. Farmers cultivate onion for
both bulb and seeds. The most popular onion seed varieties with unmet local demand by
onion farmers are the “Faridpuri” and “Taherpuri” due to their longer shelf life and higher
pungency. These varieties are produced exclusively in the Faridpur and Rajbari Districts of
the FtF zone.
According to BBS data, 78,000 acres (or ¼ of total farmland) are currently under onion
cultivation in Faridpur District9 and 50,000 acres (or ⅓ of total farmland) in Rajbari District.
Other districts in the FtF zone, such as Jhenaidah, Magura, Sahriatpur etc. also have
significant onion cultivation.
3.5.3 Description of Value Chain Actors and Inter-relationships (see Figure 10):
Smallholder onion farmers sell to local traders or forias who supply larger traders or
wholesale buyers. For imported onions, importers sell to large traders and
wholesalers/aratders who buy in large bulk volumes. Ultimately, onions are sold to
consumers in local markets/haats, small retail shops, large supermarkets, etc.
Supermarkets procure onions via formal purchase orders from listed suppliers who in turn
buy from local traders, farmers, or importers. The bulk of onion trade, however, is sold via
the informal conventional/wet market channel.
In the value chain map, bolder thick line represents the major channels in terms of volume,
dotted lines depict formal agreements, and red colored boxes show importers.
3.5.4 Other Issues: On-farm onion storage of bulbs by smallholders is rare but for those
producing higher-value Taherpuri or Faridpuri onion seeds, storage is a necessity. Traders or
collectors will store onions but the capacity and skills to maintain quality are often lacking.
The volatility of onion prices makes it even riskier to store as a strategy to gain speculative
margins.
8 Statistical Yearbook (2015) and Agricultural Statistics (2015). BBS. 9 District Statistic 2011, Faridpur District, page 27, Table 4.01, Statistics and Informatics Division, GoV.
RDC Activity: Output Market Assessments Report – Diversified Crops Page 15
Figure 10. Onions from the FtF Zone – Value Chain Map
3.6 Jute
3.6.1 End Market Analysis: Banglesh is a major exporter of unprocessed raw and
manufactured jute products. For the domestic market, jute traders sell to small- and medium-
scale enterprise (SME) jute manufacturers. To enhance the growth potential for domestic jute
sales, GOB has instituted policies mandating the use of jute diversified products (JDP),
subsidizing production, and promoting exports. Restrictions on the use of plastic bags in
various countries could offer new market opportunities to export JDP from Bangladesh.
Only 25% of total jute production is consumed locally, the bulk is exported. For exports from
Bangladesh, India is the major market with jute exports also sold to China, Turkey, Vietnam
and Russia. India is planning to impose an anti-dumping tariff of US $100/MT on
manufactured jute products, which may severely affected Bangladeshi exporters. Although
this tariff is initially borne my importers it will be reflected in lower prices paid to exporters.
The cost of producing quality jute yarn is 40% higher in Bangladesh than India because of
technological and organizational disadvantages. Although there are 250 jute mills in
Bangladesh, for example, dyeing and lamination facilities are still missing.
3.6.2 Supply and Demand in FtF Zone: Within the FtF zone, major jute production areas
are in Jessore, Faridpur, Magura, and Gopalgonj Districts but small- and medium-scale jute
farmers can be found extensively throughout the FtF zone. Still, the main jute cultivation
regions are in northern Bangladesh where soil and water conditions are better for production.
Specific quality grades and standards must be met for producers to earn premium prices. It
was reported that the price for quality jute was 44% higher than lower grades (approximately
USD 0.76/kg compared to USD 0.53/kg.). Since lean season (December to January) prices
are generally higher, farmers able to store and maintain jute quality can benfit from this
market window. Jute is non-perishable and considered an insurance crop for cash.
Wholesale Markets
(Bazaar, etc.)
Supermarkets/
Large Retailers
Production
Wholesale
and Retail
Trading
Med/Large Farmers
(>2.5 acres)
Large Traders
Regional
Seed Traders
Local Hawkers/
Retailers
Local Traders/
Foria
Smallholder Farmers
(<2.5 acres)
Local Seed
Traders Local Bazaar /
Haat (sub-dist)
Retail
[Onion Seed Channel] [Conventional Market Channel]
Small Retail
Shops
Seed
Companies
Key: Formal Agreements
Imported
Onions (India)
65% Seed Retailers
(formal/informal)
Listed
Suppliers
Aratdars
/Brokers
RDC Activity: Output Market Assessments Report – Diversified Crops Page 16
Through contract farming arrangements, buyers can arrange training for smallholders on
improved cultivation technology and safe use of pesticides, and provide quality seeds. But the
limited volume and scale of smallholders restricts their ability to directly sell to jute mills as a
contract farmer. Smallholder yields on 2.5 acres of jute can average 1,950 kgs.
3.6.3 Description of Value Chain Actors and Inter-relationships (see Figure 11): Jute is
sold through similar conventional price-based market channels as maize, oilseeds, and other
cash crops from the FtF zone. Smallholders sell jute to local traders/forias who supply larger
traders or aratdars that market to large jute traders or listed suppliers of large private and
public sector jute mills such as the Bangladesh Jute Mills Corporation (BJMC). Existing
equipment and machineries of jute mills in Bangladesh are old and most of the plants lack the
facilities to produce modern, value-added JDP.
Figure 11. Jute from the FtF Zone – Value Chain Map
In the value chain map, bolder thick line represents the major channels in terms of volume.
3.6.4 Other Issues: As per GOB policy, benefits are allowed for all direct exporters but in
practice the allocation and distributions of cash subsidies are reportedly inconsistent.
Other donor programs in the FtF zone working with jute include AVC, Switch Asia Jute
Value Chain Project (an EU-funded project implemented by CARE Bangladesh), and the
Agriculture Extension Support Activity.
Raw Jute
Exports
Production/
Semi-
processing
Trading/
Processing Local Jute
Processors
Listed
Suppliers
Manufactured
Jute Exports
Local
Traders/
(Forias)
Local Markets
(Sub-Dist)
Large
Traders
Export/
Smallholder Farmers
(<2.5 acres)
Local Traders
(Aratdars)
Local Markets
(District)
BJMC
(govt.) Large Jute
Mills (private)
SME Jute
Manufacturers
RDC Activity: Output Market Assessments Report – Diversified Crops Page 17
IV. KEY SMALLHOLDER CONSTRAINTS AND POSSIBLE MARKET-BASED
SOLUTIONS
Based on the findings and analysis of the primary and secondary data collected during this
output markets assessment, the Team identified a number of key constraints to increasing
smallholder sales and income from diversified crops. Possible market-based solutions,
corresponding to the smallholder constraints, are also presented and purposely kept general to
allow for further analysis of its economic, technical, and developmental feasibility.
Crosscutting Smallholder Constraints and Possible Market-based solutions: Most of the
major smallholders constraints identified by the Team were crosscutting and applicable to
multiple crops. Where possible, the related crops were noted in the description of the
smallholder constraints in Table 3.
Table 3. General Crosscutting Smallholder Constraints and Possible Market-based Solutions
Crosscutting - Smallholder Constraints Possible Market-based Solutions
Smallholders lack access to markets/buyers due to
a lack of collection points
information on specifications required by buyers
unreliable and high cost of transportation from the
FtF zone to distant markets
Access to new markets for diversified crops
Access to information on buyer specifications
and standards
Provision of collection points to aggregate and
improve efficiency of procurement from
smallholders (vegetables, maize, oilseeds)
Smallholders are not able to get access to high-yield
varieties and consistent improved quality seeds
(vegetables, onions, pulses, and oilseeds), which
reduces crop income and productivity.
Many smallholders are also not aware of the availability
of improved seed and related farming practices needed
to achieve the crop yield potential.
Access to improved quality seeds that increase
yields and lowers production costs for
smallholders in the FTF zone
Training smallholders in best farming practice
and recommended techniques related to the crop
and improved seed used.
Many smallholder farmers lack access to proper
technologies and information on improved storage
(maize, onions, pulses), resulting in loss of their
produce
Poor on-farm storage facility for smallholders reduces
quality and farm-gate price
Access to storage technologies and techniques for
smallholders (maize, onion, pulses)
Provision of information about proper storage for
smallholders
Smallholders lack access to finance for inputs resulting
in lower yields and income. Due to the outstanding
credit smallholders have with other value chain actors
(input suppliers, local foria, etc,), they often sell
immediately after harvest to repay these loans.
Provision of tripartite financing arrangements
between buyers, banks, and smallholders
Provision of agricultural input loans for
smallholders using non-traditional sources of
collateral
Water stagnation during Monsoon season reduces
crop diversification options for smallholders Training in, and promotion of, dyke or ridge
farming practices to increase crop cultivation
area for smallholders
Competition from imports at lower prices (and
sometimes subsidized by export country) reduces
competitiveness of local production from FTF zone
Access to lobbying services to advocate with the
GOB to:
discourage imports during local harvesting
periods
combat unfair subsidies from exporting
RDC Activity: Output Market Assessments Report – Diversified Crops Page 18
Crosscutting - Smallholder Constraints Possible Market-based Solutions
countries
Lack of on-farm labor available for cultivation,
harvesting, and post-harvest handling among
smallholders. Increasing migration of youth and others
from rural areas to urban centers reduces the availability
of agricultural labor and increases smallholder costs.
Access to appropriate and affordable harvest and
post-harvest mechanization for smallholders
Lack of infrastructure (e.g. collection centers,
reliable transportation, etc.) to distant markets
reduces market access for smallholders from the FtF
zone.
Provision of collection points to aggregate and
improve efficiency of procurement from
smallholders
Parts of the FtF zone are high-risk areas for natural
disasters of high winds, monsoon tidal surges,
flooding, drought, etc. Smallholders are exposed to
possible crop failure or loss and may decide to harvest
early (reducing yield and quality) or take other risk
reduction actions.
Availability of crop insurance or other weather-
based mechanisms to reduce risk and exposure of
smallholders to natural calamities.
Availability of stress-tolerant crop varieties that
are less susceptible to drought, etc.
Price volatility (vegetables, onions) especially during
peak harvest periods, reduces smallholder income and
incentives to invest in expanding production
Access to contract farming or outgrowing
schemes for producers.
Many smallholder producers lack of access to, and
information about, latest seeds, crop protection
products, tools, and machinery for diversified crops
Availability and access to crop specific inputs
and extension advice for smallholders that is
relevant for their particular production areas.
Crop-specific Smallholder Constraints and Possible Market-based solutions: The few
crop specific constraints were related to vegetables and pulses.
Table 4. Crop-specific Smallholder Constraints and Possible Market-based Solutions
Vegetables - Smallholder Constraints Possible Market-based Solutions
Inconsistent quality of vegetable seeds, especially
imported varieties, reduces smallholder yields and
income. Smallholders are also unable to read the labels
(printed in foreign languages) and lack knowledge on
proper application of seed.
Access to and availability of improved vegetable
seed (with packaging in Bangla) for
smallholders.
Training for smallholders in proper crop
management and improved farming techniques.
High losses during post-harvest handling and
transportation of vegetables reduce quality and price
for smallholders and traders.
Training in appropriate post-harvest handling
and packing of vegetables for smallholders and
traders
Pulses - Smallholder Constraints Possible Market-based Solutions
Smallholders consider pulses to be low input, low
output crops so may not invest in the inputs needed to
improve yield.
Training for smallholders in crop management
and production techniques for pulses, relevant to
their production area in the FtF zone.
Existing local pulse seed varieties are susceptible to
diseases and pest, which can reduce smallholder yields
and income.
Availability of improved, stress tolerant varieties
of pulse seeds, and access to low cost seed
treatment technologies for smallholders.
Availability of industrial varieties of pulses
(mungbean, etc.) that meet large agro-food
processor specifications
It is expected that the first “Invitations for Applications” (IFA) for the output markets will
provide an opportunity for Lead Firm buyers and other private sector actors to propose
RDC Activity: Output Market Assessments Report – Diversified Crops Page 19
initiatives that can develop or expand one or many of the market-based solutions listed above
(see Section 5.2). In the future, specific IFAs could be developed to address specific market-
based solutions listed above (or additional solutions that will be identified).
V. ILLUSTRATIVE LEAD FIRM BUYER INITIATIVES AND NEXT STEPS
5.1 Strategies for Smallholder Output Markets and Lead Firms Incentives: Given the
diverse cropping pattern of smallholders and the variety of prioritized crops, RDC does not
need to develop an exclusive strategy for each crop. As the abbreviated output market
assessments show, market channels for the short-listed crops included the following: (i)
conventional price-based market which is the primary channel for the majority of crops from
the FtF zone, (ii) growing domestic market for high-value, quality-based crops and products,
and (iii) a small but emerging export market for niche crops/products. In accordance with
these end market opportunities, RDC’s overall implementation strategy to strengthen
smallholder output markets could include the following broad themes*
Expand participation of smallholders in existing local conventional market channels by
facilitating linkages with private sector providers of improved inputs (especially seeds)
and technical extension advice.
Explore new market linkages between smallholders in the FtF zone and higher-value,
quality-based markets, including export buyers, food processors, supermarkets, etc.
through more directed procurement models (contract farming, collection points, etc.)
Encourage innovation, investment, and scale of existing or new market channels.
*All of these themes can be promoted through the Market Accelerator Fund by providing
private sector market actors the opportunity to upgrade smallholder suppliers, reduce the
risk of adopting improved methods, inputs, and technologies, forming innovative business
models and relationships, etc.
Value Chain Governance and Incentives of
Lead Firms and Smallholders: Value chain
governance describes the commercial
relationships between end market buyers,
intermediaries and producers and is a useful
framework for exploring the relative risks and
incentives for Lead Firms and smallholders
within those market systems. See Error!
Reference source not found. for the
governance models most relevant in the FtF
zone.
The majority of raw unprocessed crops from
the FtF zone are sold through a “market”
governance structure. Relationships between
buyers are sellers are strictly transactional and
based on price, and there are few incentives
Price
Smallholders
Buyers
“Market”
(Conventional Market)
No Incentive/Higher Risk
“Directed”
Buyers with Contract
Producers
(e.g. Pran,
ACI, Agora,
etc.)
Smallholders
(Quality-based Market)
More Incentive/Lower Risk
Figure 12. Value Chain Governance Models
RDC Activity: Output Market Assessments Report – Diversified Crops Page 20
for LF buyers to invest in or upgrade smallholder producers.
Smallholder farmers and buyers of differentiated quality-based crops or products tend to have
a more directed governance relationship with technical and/or financial support provided by
buyers to ensure that farmers are producing what can be sold. In this context, buyers have
greater incentives for upgrading and investing in the producers they source from on order to
gain price premiums and/or improved productivity.
5.2 Process for Soliciting and Reviewing Lead Firm Initiatives and Structuring
Collaboration: Suggested criteria for selection Lead Firms to collaborate with include the
following:
Have existing commercial procurement activities with at least 500 farmers/ producers
with land holdings less than 5 hectares) either directly or through their intermediaries).
Have been in operation for at least the past two years.
Have commercial interest and incentives to invest in the producers in the FtF zone that
they currently (or expect to) purchase from through the provision of inputs, technical
support, procurement systems, etc.
Be buying and selling products of acceptable quality to end market consumers.
Make an investment of at least 30% of the cost of the initiative (not including their staff
costs which if included would bring the cost share to at least 1:1)
Propose initiatives that support one or more of the following: i) new and innovative
business models, ii) new and innovative technologies, iii) expansion into new geographic
markets, iv) expansion to new suppliers in rural areas, such as women, youth or small-
scale producers, and iv) solutions to systemic market system constraints.
Several private sector/Lead Firms were identified/self-selected during the output markets
assessment who expressed a willingness to explore collaboration with RDC. These are
presented below in Table 5.
Table 5. Lead Firm Buyers with Expressed Interest in Possible RDC Collaboration
Examples of Lead Firm Buyers Diversified Crops (expressed interest in expanding procurement/investment
in supply chains in the FtF zone)
ACI (input supplier, agro-processor) oilseeds and pulses
Pran (agro-processor) oilseeds, pulses, and fruit
City Group (oil mill) oilseeds and pulses
M&J/Northern Group (start-up oil mill) oilseeds (sunflower)
Global Agro (start-up oil mill) oilseeds (sesame)
Organix (exporter/trader) vegetables
Collaboration with Global Agro Resources is a possible opportunity for RDC to support a
Lead Firm to develop and pilot-test an outgrower scheme for high-value white sesame in the
FtF Zone. Global Agro is an innovative local agribusiness company with oilseed processing
facilities in Bangladesh for cleaning, grading, and packing of various types of sesame seed
for export markets around the world. In 2017, Global Agro will also establish an oil
extraction and refinery plant in Khulna to produce crude and refined sesame oil. The
company has potential annual sesame seed demand for: brown seed (10,000 MT), white seed
RDC Activity: Output Market Assessments Report – Diversified Crops Page 21
(10,000 MT), black seed (3,000 MT), yellow seed (3,000 MT), and sesame seed for oil
crushing (7,500 MT). In order to meet its unmet demand for high-value white sesame seed,
Global Agro is seeking to develop and support a white sesame outgrowing system for up to
5,000 acres and engage 2,000 farmers across 7-10 districts in the FtF zone.10
5.3 Lead Firm Buyer Challenges and Illustrative Initiatives of Lead Firms: Lead
Firm buyers face a variety of challenges in expanding their procurement in the FtF zone and
in providing the market-based solutions listed earlier. Some of these:
Competition from imports at lower prices, reduces competitiveness of local
production from FTF zone
Buyers’ inability to source consistent quality and quantities of local production in
FTF zone, forces them to source elsewhere (domestic or imports) to meet demand
Transportation from FTF Zone to Dhaka is limited and relatively high cost
Price fluctuation and volatility reduces net margin for buyers
Some seed is adulterated which reduces germination and yield for smallholders
Smallholder farmers produce products in small quantities and are widely scattered.
Poor infrastructure and long distances to remote markets hinders procurement in those
areas
Lack of quality inputs (and knowledge to use them properly) at the producers’ level
reduces yield and quality.
Extensive time and expense required to procure products from remote areas.
Producers lack financing for adopting new technologies (plastic culture, drip
irrigation etc.).
Traders face difficulties in creating economies of scale for cost effective procurement
and transportation of vegetables to end markets.
Traders involved in "informal trust contracting" (contract farming, etc.) and who
provide inputs on credit to contracted farmers face difficulties when farmers break
agreements and sell to other buyers.
Some vegetable traders are unable to access sufficient fertilizer (at affordable prices)
and are compelled to pay high prices in order to procure and deliver fertilizer to their
contract growers.
Traders are confronted with road blockades and other impediments during
transportation which results in the loss of perishable vegetables.
Improper harvesting and post-harvest handling by producers results in low quality
products that are difficult to sell.
Poor road infrastructure and high cost of transportation reduces ability of buyers to
purchase from farmers and deliver to end markets.
In response to the Invitation for Application (IFA) for output markets being prepared by
RDC, Lead Firms will propose their own initiatives to address the challenges they face to
increase their competitiveness and improve the market access, services and support they
provide to smallholders in the FtF zone. Through this process RDC can support the private
sector to pilot-test, assess, and promote new and improved business models and innovative
market-based solutions. See Table 6 for illustrative examples of Lead Firm (buyer)
initiatives.
10 From Global Agro Resources Incorporation (2016), Sesame Presentation.
RDC Activity: Output Market Assessments Report – Diversified Crops Page 22
Table 6. Illustrative Lead Firm Buyer Initiatives
Procurement
Development of new / innovative aggregation/procurement models in rural areas
Development, improvement, or expansion of outgrowing (contract farming) operations
Investigation into new areas where products can be produced and sourced from farmers
Develop seed multiplication programs to provide/sell higher yielding varieties to growers Lead Firm is
sourcing from
Develop quality control / quality assurance / traceability systems to increase efficiencies and meet market
demands
Technology
Introduction of new or improved tools/equipment for producers company is sourcing from
Technical support in developing post harvesting techniques to benefit producers company is sourcing from
Technical support for company to develop or improve its final products (quality, packaging, labeling,
product diversification, etc.)
Introduction of new methods for post-harvest storage, and/or methods to preserve product freshness/value.
Exposure Visits / Business to Business meetings (domestic or international)
Exposure/ learning/ B to B visits for buyers to identify:
o sources of tools or equipment
o sources of raw materials
o new production technologies
o innovative ways of organizing procurement between producers and buyers
o new techniques for achieving high productivity/quality/lower costs from farm gate through to retail
o techniques to identify and eliminate plant diseases, etc.
Market access
Technical support to meet requirements of new markets
“Buyer-Seller Meets” (meetings in Bangladesh or another country where companies meet with potential
buyers in person)
Gain certifications (organic, ISO, HACCP, Global gap, etc.) to increase sales/exports (and subsequent
procurement from farmers)
Company conducts meetings to inform producers about the products they are interested in buying from
them
Development of promotional materials, catalogues, web pages, etc.
Trade show participation
Finance
Develop business plans for new products/ equipment
Identify sources of finance for new equipment that will enhance sales
Develop tripartite financing arrangements between Lead Firm, banks and producers the Lead Firms source
from
Develop crop insurance schemes with insurance companies
The RDC team will be able to build the capacity of, and support Lead Firm’s in the
implementation of their initiatives – as well as to organize “cross company” activities that
bring together similar firms for events and activities that will help them address common
needs. Typical facilitation mistakes to avoid include trying to orchestrate relationships or
getting involved as an intermediary between buyers, intermediaries, and producers, imposing
or strongly suggesting a particular business model or organizational structure, or insisting on
a production package that may not be commercially viable or feasible for smallholders.
Instead, RDC should provide opportunities for the private sector to propose the business
models and practices that make the most sense for them, that will build their competitiveness
and that will improve/expand the products, services, market access and support they provide
(either directly or indirectly) to producers in the FtF zone they source from.
As RDC begins to develop its overall implementation strategy, it is important to keep in mind
the overall risks and challenges to market system development for diversified crops sourced
RDC Activity: Output Market Assessments Report – Diversified Crops Page 23
from the FtF zone (see Table 7) – ensuring that the market-based solutions and Lead Firm
initiatives supported by RDC are somehow addressing or mitigating these risks.
Table 7. Key Risks and Challenges in FtF Zone for Market System Development
Displacing Imports majority of domestic demand for many crops is met by imports;
local production from the FtF zone is seasonal and predominantly sold through
conventional price-based (wet) market channels
Low Technical Skills limited access of smallholders to technical training and horticultural crop advice
limited use of improved inputs by smallholders in the FtF zone
limited access to appropriate technology for smallholders, processors, and other
value chain actors
Fragmented
Trading and
Aggregation
low trading volumes passing through multiple collectors, traders wholesalers,
and retailers increases cost and reduces quality;
very little vertical integration and lack of incentives for wholesalers, traders,
and local collectors to invest in local production in the FtF zone
very little processing or value added of crops; most produce sold raw and
unprocessed
Poor Soil Quality
and Limited land limited access and improper application of inputs to improve soil management
and crop health
limited availability of land to expand production in the FtF zone; will require
more intensive and integrated farming systems
Poor Infrastructure high cost of electricity and poor infrastructure compared to other regions
relatively high cost of transportation from the FtF zone to major wholesale
markets in Greater Dhaka and elsewhere
High Labor Cost
from Migration growing rural migration, especially of women and youth, to other areas in or
outside of Bangladesh for full-time/seasonal labor
increases cost of local production
Vulnerability to
Climate Change FtF zone is vulnerable to severe climatic events (floods, drought, tidal surges,
erratic rainfall, etc.)
limited adoption of climate-smart inputs and improved farming techniques
5.5 Final Comments: As stated above, jute was originally short-listed but subsequently
dropped by the Team. RDC could conduct further output market assessments of other crops –
and it is suggested that RDC not limit itself to only the crops identified in this assessment.
Two additional crops that showed promise are groundnuts (especially in the Chars lands
where soil conditions are ideal) and fruits such as watermelon in the Barisal Division. The
Team was not able to travel to the Barisal Division so a follow-up assessment and validation
visit to the area by RDC would be advisable.
While there will be some overlap in the FtF zone with existing donor/NGO projects engaged
in similar crops or private sector partners, there is still a need for RDC’s private sector focus
and market systems development implementation strategy. A brief description of related
donor projects in the FtF Zone can be found in Appendix 5.
Finally, the “pre-application meeting” with private sector buyers being planned by RDC will
provide an important opportunity to share and validate the results of this output market
assessment, present information regarding RDC project and explain the modalities of
collaboration through the IFA process.
APPENDIX 1
Scope of Work
Scope of Work for International Consultant
(Assessment of Diversified Crops) Background:
The Feed the Future Rice and Diversified Crops (RDC) activity is a USAID-funded project designed to
catalyze market system changes that promote a diversified farm management approach oriented to
intensified rice production and higher-value, nutrient-rich crops to increase incomes and improve food
security and nutrition in the Khulna, Barisal, and southern Dhaka divisions of Bangladesh (FtF zone).
RDC’s goal is to increase rural incomes by catalyzing a process that leads to competitive and inclusive
rice based market systems. This includes supporting the private sector to expand purchases of
diversified crops (grown in rotation with rice) from small-scale agricultural producers in target areas.
The purpose of this assessment is therefore to identify diversified crops with unmet market demand
and ability to impact large numbers of producers in the FTF zone. This will support the project in the
identification and implementation of its market systems facilitation activities. Orientation/Planning Session with Assessment Team Consultant will begin in-country activities with a two-day orientation/planning session with key project staff/ consultants who will participate in the assessment. This session will assure that all members of the team understand and share similar concepts and tools of market systems program design and the proposed methodology for this specific assignment. Consultant will use AFE’s training materials on market systems development. The themes of the orientation session will be further re-enforced during regular debriefing and planning sessions throughout the activity. The consultant will be paired with 3-4 RDC staff/consultants. OBJECTIVES The objective of this assessment is to: a) select high priority diversified crops and; b) answer specific questions related to those crops that will support the next steps in RDC’s market facilitation activities. This is described below. 1. Create Short List of Rotational Crops
Using secondary information from existing reports/notes and interviews with several key informants to develop a broad list of diversified crop “candidates” (potentially 10-15) that can be grown in rotation with rice.
Narrow this down (using ranking matrix) to a list of 6 crops based on: Unmet market demand Number of producers in FTF zone that could produce/sell the crop and benefit
“Filters” will be applied to the high ranking crops to ensure that the following exist:
o Nutritional impact o Gender and women’s economic impact o Presence of Lead Firm (LF)11 buyers with incentives/ interest to expand sourcing
[priority diversified crop] from FTF zone o Agronomic/environmental benefits to growing [priority diversified crop] with rice
2. Carry Out Abbreviated Market Assessment of the Short-Listed (Prioritized) Diversified
Crops
Carry out an “abbreviated market assessment” of these short-listed 6 crops (4-5 pages per crop). This would build on secondary information and include a limited number of interviews with buyers, producers and other key informants. These abbreviated assessments will answer the following questions (for each prioritized diversified crop):
11 Small, medium, or large firms that have forward or backward commercial linkages with a significant number of
producers. Also known as an “Inclusive Businesses” they include processors, exporters, traders, input companies, service providers, etc. that play a critical role in moving their industry, and other value chain participants forward.
Research questions (1) General market demand (end market analysis)
a. What do the marketing channels for [priority diversified crop] look like? (i.e. the chain of market actors from producer to consumer)
b. Who are the major end market buyers (firms that purchase the largest quantities) that drive demand in the market system?
c. What are the market trends and opportunities? d. What is the growth potential for [priority diversified crop] sales (from RDC target
area)? e. From what regions in the RDC area are [priority diversified crop] sourced? f. What are the total [priority diversified crop] imports and exports over the last five
years and projections for the future (for Bangladesh as a whole)? During what seasons do shortages exist?
g. Where is [priority diversified crop] that is exported sourced from in Bangladesh?
(2) Supply and demand for [priority diversified crop] in the RDC target area h. Are end market buyers (the largest buyers in the marketing chain) purchasing from
the FtF zone able to procure all they need? Is there unmet demand for [priority diversified crop]? If so what is holding back producers from producing and selling?
i. Do [priority diversified crop] buyers pay a premium (higher price) for [priority diversified crop] that meets specific grades or standards??
j. What opportunities exist for buyers to have more direct relationships with the producers of [priority diversified crop] in order to control the quality of the product and build loyalty?
k. What opportunities exist for [priority diversified crop] growers in the RDC target area to increase their sales? Are there seasonal market windows where producers can generate greater profits?
(3) Develop a summary value chain map for [priority diversified crop] and briefly describe the operations, inter-firm relationships, and buying/ selling arrangements of each of the market actors involved in purchasing and selling [priority diversified crop].
(4) Describe the role of the following entities in the output market for [priority diversified crop]: Government agencies, professional associations, projects/NGOs/other development organizations
(5) Describe the enabling environment (policies and regulations) that influence the [priority diversified crop] output market? Are there any opportunities to influence the enabling environment to be more supportive of the [priority diversified crop] output market?
(6) What are the most significant constraints that smallholder farmers in the RDC target area face in selling their [priority diversified crop]?
(7) What are “market-based solutions” needed to address these constraints (market-based solutions refers to products, services, market access or support that market actors can provide in a commercially viable and sustainable manner). What private sector buyers have incentives/interest to provide these in a commercially viable/ sustainable manner?
(8) What are the key challenges that buyers face in sourcing [priority diversified crop] from smallholder farmers in the FtF zone?
(9) What are the key challenges that buyers face in selling [priority diversified crop] that they source from the FtF zone?
(10) What are illustrative initiatives and strategies that [priority diversified crop] buyers could implement (with RDC technical/ cost share support) that would help them to improve/ expand their sourcing of [priority diversified crop] from producers in the FtF zone?
(11) Other areas of investigation should also include (but not be limited to):
l. Is access to finance or working capital a constraint for buyers? Do large-scale buyers provide finance to smaller-scale buyers? What is the potential to expand the use of mobile money payments within the [priority diversified crop] market system?
m. Is storage a constraint to producers and other market actors within the [priority diversified crop] market system? What opportunities are there to expand storage services?
n. What other donor programs are working in these value chains? What are possible opportunities for collaboration?
Specific Activities To perform the work, the Consultant will lead the RDC team of staff/consultants to carry out the following:
- U.S. based preparatory work o Inception meeting to clarify the scope of work o Review secondary reports and deliver a desk research report o Adapt question guides to research questions o Prepare PPT for orientation/planning session o Prepare and populate Dropbox account to use during the assessment
- Orientation/planning session with assessment team staff - Identify key informants to interview for the: a) shortlisting exercise, and; b) abbreviated
assessments (once shortlisting exercise is complete) - Conduct field interviews in Dhaka and FtF zone (emphasis on RDC targeted Dhaka and
Jessore areas but also in Barisal and Khulna if possible) using interview guide (that is adapted to research questions) in the appendix.
- Write up interview notes according to interview write-up forms in appendix. - Create a list of interviews conducted (using format in appendix) - Develop and present a PPT summary of results to RDC management - Prepare and submit a draft report (that integrates feedback on PPT presentation from RDC) - Prepare and submit final report (based on agreed-upon outline) that documents the activities
described above. Deliverables Desk Research Report - A brief report of the secondary resource documents that were identified and reviewed (should be submitted prior to conducting field interviews). Report will include general documents consulted for the short-listing exercise as well as documents specific to short-listed diversified crops. Work Plan – The plan should present a timeline for fieldwork, sampling plan (number of each type of market actor / key informant to be interviewed), and draft of interview guide to be used (an example is provided in the appendix that will be adapted as needed). Interviews should focus on collecting information that have NOT already been answered by the desk research report. Debrief Presentation – A debrief PowerPoint presentation that summarizes the findings will be made to the RDC after field research and prior to writing the final report. An initial presentation will be made following the short-listing exercise before proceeding to the abbreviated assessments. Final Report - A final report will be produced that includes the findings, interview notes, desk research report, list of interviewees, interview guides used, and calendar of activities. The outline for this report will be approved by RDC prior to writing the report. * All reports and other written deliverables must be written entirely in English and submitted electronically in Microsoft Word, Excel or PowerPoint format. Qualifications of the Consultant The Consultant will have the following qualifications:
- Experience working in market development and agricultural market systems - Experience assessing agricultural value chains - Proven experience in similar assignments. - Superior writing and communication skills.
TIMELINE
The assessment will be completed according to the timeline below. The Consultant will lead a team composed of 3-4 local RDC staff/consultants.
Activity Dates* LOE
Planning meetings in the US with AFE and ACDI/VOCA market systems specialists / finalization of work plan, interview guides, PPT for orientation/planning session, etc.
Oct.4th to 12th
3 days
Identification of/ coordination with local staff/ consultants
Review of secondary reports and completion of summary desk research report for short-listing exercise.
Travel to Dhaka Oct 13th to 14th 2 days
Orientation / planning meetings with assessment team (RDC local staff/consultants)
Oct.16th to 17th 19 days (based on
six-day workweek)
Key informant interviews for short-listing exercise Oct.18th to 19th
Short-listing exercise Oct. 20th
Review of secondary reports for short-listed products. Planning meeting to identify market actors/buyers and key informants to interview (for each priority diversified crop).
Oct. 21st
Field interviews with market actors/buyers and key informants Regular de-brief sessions with team (to develop summary VC maps, producer constraints, market-based solutions, LFs with incentives to provide MBS, LF challenges, and illustrative LF initiatives summary results)
Oct 23rd to Nov. 2nd
Preparation of summary results on PPT Nov. 3rd to 4th
Presentation of PPT (summary results) to RDC management Nov. 6th
Return travel to US Nov. 7th 1 day
Preparation of draft final report (based on RDC feedback to PPT) By Nov. 30th 4 days
Feedback from RDC on final report By Dec 10th
Finalization and submission of final report By Dec. 20th 1 days
Total 30 days
*dates can be modified upon agreement between AFE and the consultant
APPENDIX 2
Calendar of Activities
RDC Diversified Crops Assessment - Schedule of Activities Conducted
DATE ACTIVITIES
Oct 15, Sat arrival in Dhaka and review materials for training/orientation
Oct 16, Sun briefing and training/orientation with RDC/assessment team
Oct 17, Mon team review interview guides and data collection tools; key informant interview
Oct 18, Tue major buyer interviews; short-listing of diversified crops
Oct 19, Wed major buyer and key informant interviews
Oct 20, Thu major buyer interviews
Oct 21, Fri travel Dhaka to Jessore
Oct 22, Sat data compilation and team ranking of priority crops
Oct 23, Sun Jessore District interviews
Oct 24, Mon Chuadanga District interviews
Oct 25, Tue Jhinaidaha District interviews
Oct 26, Wed Narail District and Magura District Interviews
Oct 27, Thu Jessore/ShaBDTira District Interviews
Oct 28, Fri travel to Khulna; compile data and interview notes
Oct 29, Sat Khulna District interviews
Oct 30, Sun Khulna District interviews
Oct 31, Mon travel from Khulna to Faridpur; Faridpur District Interviews
Nov 1, Tue Faridpur District and Greater Dhaka interviews; travel from Faridpur to Dhaka
Nov 2, Wed Greater Dhaka interviews
Nov 3, Thu Greater Dhaka interviews; team data review
Nov 4, Fri compile data/interview notes
Nov 5, Sat team review and preparation for de-briefing
Nov 6, Sun conduct de-briefing of RDC team
Nov 7, Mon depart Dhaka for Washington DC
APPENDIX 3
Interview Guides
Interview Guide for Private Sector Buyers (Short-listed diversified crops)
Introduction: Presentation of RDC activity / consulting assignment:
RDC is a new USAID-funded activity that is promoting rice and other diversified crops grown by rice farmers in the Khulna, Barisal, and southern Dhaka divisions (Southern Bangladesh).
RDC includes components that will support private sector to expand purchases of Diversified Crops from rice farmers in Southern Bangladesh.
We are gathering information about the challenges private sector actors such as yourself face in growing your businesses and expanding your purchases and supply chain from farmers in Southern Bangladesh.
We are also interested in any initiatives you would like to do to overcome those challenges - and how our activity might support those initiatives
We would like to begin with questions about your company and the commercial market for the Diversified Crops.
Question Guide for Private Sector Buyers
A. Business Background (1) When was your business created? What is the size of your operations? (2) What agricultural products do you sell and to whom? (3) Please describe how the market for [priority diversified crop] is segmented? (4) How strong have your [priority diversified crop] sales been? (5) What are the market trends and opportunities for [priority diversified crop]?
B. Buying Operations: (1) How much [priority diversified crop] do you purchase per year? (2) Which months do you purchase [priority diversified crop]? (3) Who supplies you with [priority diversified crop] and where are they located? Please estimate the number
of suppliers. (4) How much of these products do you purchase (either directly or indirectly) from small-scale farmers?
Estimate number of small-scale farmers you source from either directly/indirectly. How many of these are women?
(5) What percentage of your total purchases of [priority diversified crop] are from farmers in Southern Bangladesh? Are you able to source all of [priority diversified crop] that you need in Southern Bangladesh?
(6) What interest or opportunities do you have to expand your purchases (either directly or indirectly) from small-scale farmers in Southern Bangladesh?
Buying Process (7) Please describe how your procurement network operates (can show diagram) (8) Are there opportunities for you (buyer) to have more direct relationships with farmers of [priority diversified
crop] in order to control the quality of the product and build loyalty? (9) Do you offer price premiums to farmers or intermediaries for [priority diversified crop] that meets specific
grades or quality standards? (10) Do you provide any credit, information or technical support to your [priority diversified crop] suppliers
(farmers or intermediaries)? (11) What opportunities exist for [priority diversified crop] farmers in Southern Bangladesh to increase their
sales? Are there seasonal market windows where farmers can generate greater profits? (12) Is access to finance or working capital a constraint for you? Do you provide finance to your suppliers? (13) What is the potential to use mobile money payments to facilitate sales of [priority diversified crop]? (14) Is storage a constraint to farmers and other market actors selling [priority diversified crop]? What
opportunities are there to expand storage services?
Date of interview: ________________ Interviewer: __________________________ Firm Name: _________________________ Address: ____________________________ Type of Market Actor: ________________ Principal Products / Services: __________ Interviewee(s): ______________________ Designation: ________________________
No. of employees: _______ Phone: _______________ Email: ___________________
Question Guide for Private Sector Buyers
C. Constraints For Farmers and Challenges You Face (1) What are the greatest problems that small-scale agricultural producers in RDC target area face in
producing and selling [priority diversified crop] (market access, cost of production, policy and regulations, etc.)?
(2) What are the key challenges that you face in sourcing [priority diversified crop] from smallholder farmers in the FtF zone?
(3) What are the key challenges that you face in selling [priority diversified crop] that you source from the FtF zone?
E. Initiatives and Needed Support (1) What types of investments or initiatives have you made to improve and/or expand your [priority diversified
crop] purchases from small-scale farmers and/or intermediaries (in Southern Bangladesh)? (2) What initiatives would you like to undertake to expand your purchases of [priority diversified crop] from
small-scale farmers (in Southern Bangladesh) in the next two years if you could? (3) What kind of support does your business need to carry out these initiatives?
F. Existing Collaboration and Recommended Additional Interviews (1) Have you ever (or do you currently) work with government or donor-funded agricultural programs? If so,
how? (2) Do you know of any large buyers of [priority diversified crop] who source from (directly or indirectly) small-
scale farmers in Southern Bangladesh that you’d recommend we speak with?
Question Guide for Key Informants
Key Informant Questions (Macro-Level): (1) What do the marketing channels for [priority diversified crop] look like? (i.e. the chain of market actors from
producer to consumer) (2) Who are the major end market buyers (firms that purchase the largest quantities) that drive demand in the
market system? (3) What are the market trends and opportunities? (4) What is the growth potential for [priority diversified crop] sales (from RDC target area)? (5) From what regions in the RDC area are [priority diversified crop] sourced? (6) What are the total [priority diversified crop] imports and exports over the last five years and projections for
the future (for Bangladesh as a whole)? During what seasons do shortages exist? (7) Where is [priority diversified crop] that is exported sourced from in Bangladesh? (8) What is the role of the following entities in the sale of [priority diversified crop]: Government agencies,
professional associations, projects/NGOs/other development organizations (9) Describe the enabling environment (policies and regulations) foe the sale of [priority diversified crop]? Are
there any opportunities to influence the enabling environment to be more supportive of [priority diversified crop] sales?
Other Diversified Crops: (1) What crops that can be grown in rotation with rice have the most potential for growth with small-scale
agricultural producers in RDC target area? What are the trends? (2) Which of these are most profitable for producers? (3) Which [priority diversified crop] offer sales opportunities for women?
Interview Guide for Farmers Selling [priority diversified crop] Introduction Presentation of RDC Activity (see introduction from Interview Guide for Private Sector Buyers)
Questions: Production
1. What is your cropping pattern for rice and [priority DC]?
2. Why have you chosen to produce/sell priority DC] compared to other crops? 3. What are the risks/constraints you face in producing/selling [priority DC]? 4. What could be done to solve these problems?
Sales and Marketing
1. Have you sold [priority DC]? If yes, to who? 2. How often? Have your sales of [priority DC] been increasing? 3. Describe how you sell [priority DC]. Explain the nature of the business relation with
the buyer. 4. What could the buyers of [priority DC] do to improve the support they provide? How
much [priority DC] have you sold over the past twelve months? 5. How did you learn about the buyer you sell to and why did you choose this buyer? 6. Who else do you know who buys [priority DC]? (Ask them to describe these buyers
and provide their contact information)
Date of interview: ______________ Interviewer: ________________________________ Firm Name: ____________________________ Address: __________________________________ Type of Market Actor: ___________________ Principal Product / Service: __________________ Interviewee(s): _________________________ Designation: _______________________________
No. of employees: _______ Phone: __________________ Email: ________________________
APPENDIX 4
List of Persons Interviewed
Interview Contact Information Type of Market Actor Entity Interviewee/
Contact Person
Designation Address Location/District
Processor and Exporter Pran Agro Business
Ltd
Md. Mahatab Uddin
Borun Chakraborty
Chief Operating
Officer
Asst, Mgr/ Liaison
for Fund PABL
Gulshan, Dhaka
Supermarket Rahimafrooz (Agora)
Khandaker Nur-E-Burhan
Abu Sayeed Mahmud
Abdul Malek
Head of Food
Category Mgr.
Exec. Category
5, Mohakhali C/A,
Dhaka
Large Trader and Listed
Supplier
Bashar Agro Food
Products Md. Abdul Basher Proprietor Gulshan 1, Dhaka
Listed Supplier (pulses),
Large Trader MAK Corporation Md. Abu-Al Kaiyum Proprietor Mirpur, Dhaka
Animal Feed Mill Spectra Hexa Farms Ranjit Debnath
Sherajur Rahman
AGM Marketing
Sr. Asst. GM
Procurement
Dhaka
Processor CP Feed Mill Enamel Karim Haque North of Savar
Processor (start-up oil mill) M&J Group (Northern
Flour Mills) Mahbub-ul-Alam National Sales Mgr Dhaka
Agro-food Processor City Group Md. Shahidul Alam AGM Sales Dhaka
Importer, Trader Ajay Traders Mr. Ajit Saha Co-owner Nadir Paar, Lal Kuthi,
Shambazar, Dhaka
Aratder (onion) Rajib Banijjo Bhandar Shwadesh Podder owner 8, Forsashgonj Road,
Shambazar, Dhaka
Importer (maize, lentils, etc) Unisun Mosarraf Hossain
Sania Alam
Chief Exec
Deputy GM Dhaka
Input Supplier, Processor,
Exporter ACI Ltd. M. Saifullah
Chief Strategy
Officer Dhaka
Large Trader partner (Bashar Agro
Food) Mr. Eunes
Bachachara Bazaar,
Jessore District
Local Processor Satata Daal Mills Mill Manager Sharsha, Jessore
Local Processor Mahbub pulses and
Oil mills Owner
Collage road,
Mobarakpur,
Jhikargacha, Jessore
Trader, Processor Hazi Ali Mills
Business Store Mohammad Mostak owner
Mills at Jessore BSCIC;
Trading office at Jessore Sadar
Type of Market Actor Entity Interviewee/
Contact Person
Designation Address Location/District
Kaporia Potti
Large Trader, Listed
Supplier (maize) Rezaul Islam Rezaul Islam Chuadanga Town
Large Trader AzizulHaque Agro
Business Mr. Azizul Haque Owner
School Rd, Sorojganj
Bazar, Chuadanga Dist.
Trader, Listed Supplier Latif Traders Md. Abdul Latif owner Andulbaria, Jibonnagar,
Chuadanga
Large Trader Nipa and Shyamoli
Enterprise Delip Saha Co-owner
Modhuganj Bazar,
Kaliganj Upazila,
Jhenaidha District
Trader, Processor (mustard
oil)
Datta Traders &
Ujjal Traders Mr. Adhir Kumar Datta owner
Local Trader Jute Trader Jhenaidha District
Local Trader Anup Kumar Saha
Birendra Nath Bose
Anup Kumar Saha
Birendra Nath Bose Owner
Rupganj Bazar, Mosque
market Narail District
Local Processor Moyen Uddin Moyen Uddin Owner Uzirpur, Narail District
Retailer Bhupen Saha Traders Bhobotosh Saha son of Late
Bhupen Saha)
Magura Old Bazar,
Magura Sadar
Processor Magura Town, Magura
District
Jute Trader Magura Town, Magura
District
Trader and Oil Processor Tala Upazilla, Satkhira
District
Trader/Exporter; NGO Organix Islam Mukto Proprietor Khulna
Baig Oil and Dal Mills Sabbir Baig
Krishno Bhodro Roy
Co-Owner
Manager
Old Market Road,
Kalibari, Khulna Gollamari, Khulna
Processor Jute Textile Mills Ltd. Md. Mosharraf Hossain
Khan Executive Director
Deara, DIghalia,
Khulna
Trader and Exporter (jute) Mondal & Co.
Uttara Pat Sangstha Md. Nazrul Islam Manager
Mohsin School Moor,
Daulatpur, Khulna
Local Processor / Oil Mill
(pulse) Faridpur Dist.
Local processor Zakir Hossain son of owner Kanaipur Bazar,
Faridpur
Type of Market Actor Entity Interviewee/
Contact Person
Designation Address Location/District
Aratdar A Rob traders Mehedi Hasan Balia bazar, Saltha,
Faridpur district
Local Trader Faridpur District
Producer Md. Jahangir Jessore District
Producer Niamat Ali Sardar Uzirpur, Narail
Producer Abdul Motaleb Uzirpur, Narail
Veg. producer Utpal Boiragi and group
farmers Dumuria, Khulna
Key Informant Ag. Value Chain
(AVC) project Mike Field Chief of Party Gulshan, Dhaka
Key Informant DAE Upazilla Office Hirak Sarker Upazilla DAE Ag.
Officer
Sharsha Upazila,
Jessore
Key Informant DAE District Office Mr. Khalid
Asst. Dir. and
Upazila Ag.
Officer
Jessore Town
Key Informant IRRI/RVC Project Tim Russell RVC COP Jessore Town
Key Informant DAE Kasipur DAE Ag. Officer Kasipur Upazilla,
Jessore District
Key Informant RVC Satellite Office Satkhira Town,
Satkhira District
Key Informant DAE Office District Training
Officer
Satkhira Town,
Satkhira District
Key Informant
Department of
Agricultural
Marketing
Abdus Salam Tarofdar District Marketing
Officer Khulna
Key Informant DAE Pankaj Kanti Mojumdar District Training
Officer Khulna
Key Informant Solidaridad Md. Atikuzzaman Sonadanga R/A,
Khulna
Key Informant DAE Sandar Upazilla District Ag.
Officer
Sandar Upazilla,
Faridur Dist.
APPENDIX 5
Summary of Related Donor Projects in the FtF Zone
DONOR
PROJECT
SUMMARY
Agricultural Value
Chains (AVC) The Agricultural Value Chains (AVC) is a five-year project funded by USAID
under its Feed the Future initiative to improve the food security scenario in
Bangladesh by strengthening agricultural value chains.
AVC aims to achieve broad-based economic growth and enhance long-term food
security in 20 districts of the Southern Delta of Bangladesh by applying a market
systems approach. This will result in increased access to and availability of
diverse and nutritious fruits, vegetables, and pulses in local, regional, and national
markets and will contribute to improving food security in targeted areas.
active in 20 Districts of the Southern Delta of Bangladesh
ACI Ltd.: working to help develop a branding and marketing strategy for
chemical-free veg. for sale in local market.
Bombay Sweets & Co.: in Feb 2015, AVC project signed MoU with Bombay
Sweets & Co. to enable them to procure industrial variety potatoes from AVC
project farmers in FTF zone, to benefit 600 rural households
SNS Agro Tech Ltd.: in Nov 2014, AVC signed MoU with SNS Agro Tech Ltd., a
local agro-based trading company to develop a viable value chain for industrial
potatoes in JessoreSadar and ChowgachaUpazilla.
Ispahani Agro Limited: AVC signed MOU to disseminate knowledge on good
orchard management for improving overall productivity in the South. Increased
yields from orchards under cultivation will also enhance incomes.
Sustainable
Agriculture, Food
security and
Linkages (SAFAL)
project started in November 01, 2012 with the funding of the Embassy of the
Kingdom of Netherland. The objective of the project is to enhance food and
nutrition security of small farmers and landless workers in Southwest Bangladesh
with a focus on developing resilient livelihoods through Promoting sustainable
agricultural production and market chain development.
Objectives:
o organization and capacity building of producer groups
o efficient farm management
o strengthening of business and market linkages
o development of village market chains
o development of gender-equitable and socially inclusive business relationships
between suppliers and producer groups
o improving nutrition
o improving coordination between agencies
Active in Jessore, Narail, Khulna, Satkhira, Bagerhat
SAFAL working with ACI, LalTeer, Syngenta, Rahim Agro, and suppliers to
Agora
International Maize
and Wheat
Improvement Center
(CIMMYT)
one of the leading centers of the CGIAR …working in Bangladesh since the early
70s…initiating multi-dimensional work for varietal improvement, improved crop
management, conservation of natural resources, and human resource development.
The center’s contributions to the development of high-yielding maize and wheat
varieties, wheat-rice and maize-rice systems, whole-family training, small-scale
farm mechanization for conservation agriculture, and triticale (a wheat-rye hybrid)
for fodder. “CIMMYT’s contributions to agricultural research and development in
Bangladesh are highly recognized.”
Work by CIMMYT with researchers, extension workers, policymakers, and
farmers in Bangladesh for nearly four decades has helped establish wheat and
maize among the country’s major cereal crops, made farming systems more
productive and sustainable, improved food security and livelihoods, and won
ringing praise from national decision makers in agriculture.
active in Southern Districts of Bangladesh
1
DONOR
PROJECT
SUMMARY
Switch Asia Jute
Value Chain Project
• project started in March 2013 with the funding of European Union (EU). Goals to:
o increase income levels of targeted jute growers, producers of organic
fertilizer and JDP workers;
o increase the market share by selected SMEs of green and environment
friendly JDPs;
o improve social and gender positions of female producers and JDP workers;
o increase purchase orders of eco-friendly JDPs from international buyers;
o increase production of JDPs by the SMEs;
o adopt action plans and regulatory instruments in favour of eco-friendly JDP
production
• Active in Satkhira, Jessore, Khulna
USAID Agriculture
Extension Support
Activity
Ag Extension Project is implemented by Dhaka Ahsania Mission (DAM) in
consortium with CARE Bangladesh and mPower implementing this project. The
5-year project began on October 23, 2012 and scheduled to end October 22, 2017.
project aims to enhance access to and utilization of agricultural (ag) extension
services by smallholder farmers – both men and women. It is working for building
capacities and creating supports to a farmer demand-driven agricultural extension
system, synergized by the use of information communication technology (ICT). It
helps to foster a farmer demand-driven extension service system and also helps
improving access to quality ag inputs and markets along with access to finance.
The six value chain of the project are: Jute, Chilli, Mung Bean, Beef Fattening,
Dairy & Fish.
working in 12 districts in the southwest and central areas of Bangladesh Jessore,
Magura, Faridpur, Rajbari, Khulna, Satkhira, Narail, Barisal, Bhola, Pirojpur,
Barguna, Patuakhali.
Technical partners: CARE Bangladesh and mPower
2
APPENDIX 6
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Bangladesh Bureau of Statistics (2015). Statistical Yearbook 2015, p140 (Table 4.29) and
Agricultural Statistics 2015, page 548 (Table 11.2).
The Bangladesh Chronicle (2016, August 26). Rising consumption fuels cooking oil imports.
From: http://bangladeshchronicle.net/2016/08/rising-consumption-fuels-cooking-oil-
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