The leading vegetable producing districts of Bangladesh are Comilla, Jessore, Bogra, greater Dhaka (Manikgonj, Savar and Norshingdi), Rangpur, Dinajpur, and so on. These districts produce almost similar varieties, but the land productivity differs considerably among them. The two primary reasons for this discrepancy are – quality in farm management and usage of modern inputs. Currently Jessore is the leader in Bangladesh, both in terms of total production and land productivity.
However, proximity with Dhaka ensures greater return for Comilla, Manikgonj, Savar and Norshingdi. Vegetable traders source most of their vegetables from these four regions since these areas are close to Dhaka and the businessmen find these areas comfortable to source their products. But they are operating their businesses inefficiently. As has been mentioned earlier, that Jessore is the leader in terms of total production and local productivity. Therefore, Jessore offers the best price to traders. In order to understand this phenomenon the research team collected data regarding a few vegetables such as parwal, bottle gourd, flat bean and eggplant from Jessore, Manikganj, Savar and Gazipur. The prices in Jessore were compared with the average prices from other areas and results show that, on average, Jessore offers 30% lower prices for the same product in other areas.
Jessore is the leader in terms of total production and local productivity.
If products are available at lower price in Jessore, then why is it that traders still prefer to source vegetables from other areas? One of the primary reason all traders have mentioned is the transport hassle.
In the next step the research team from regarding transport cost of procuring goods from Jessore and the same for Manikganj. The whole analysis is provided in Figure no: 5.
The initial analysis shows that even though cost of transport and wastage is high in transporting goods from Jessore, it still has a 10% cost advantage over that of Manikganj and this should have been one of the primary motivations for traders to source goods from Jessore. However, a closer look reveals that the duration of travel from Dhaka to Jessore makes it an unpopular destination for sourcing vegetables in Dhaka. The 10% cost advantage can only be realized when the truck can reach Dhaka from Jessore in 10-12 hours. If not, then wastage goes up and the procurement is no longer profitable for the trader.
Cost of Freight
• Double Charge: At present the practice among transport service providers are to charge shipper for both up and down journey and the reason they use is that they will not get any booking of freight on their way back. Thus the cost of procurement for shippers at both ends becomes double the actual cost and hence either the price increases for consumers or traders have to give up their profits.
• Customer Service Quality: Current transport service providers lack the understanding of customer service. They believe their only job is to just transfer the goods without being concerned about time of delivery. In most cases, drivers and helpers take long breaks during journeys so the travel time goes up and if travel time goes above 12 hours then wastage level also increases and the traders incur losses.
• No Route Flexibility: Shippers have no control over the route that will be taken by the trucks. So if there are some issues at the ferry and the driver decides to wait for the ferry then the transporter/shipper has no control over changing the route of the car to save travel time.
• Traceability of Goods: Once goods have been loaded on trucks then the shipper remains uncertain about the whereabouts of the goods until delivery. So in the midway if the driver decides to tamper with goods, the shipper will have no clue.
If products are available at lower prices in Jessore, then why is it that traders still prefer to source vegetables from other areas?
Safety & Security
• Vehicular Issues: The shipper cannot ensure whether the truck which is being used to transport the goods have all his papers updated according to traffic/BRTA rules.
• Driver Issues: The shipper has next to no idea whether the drivers that are being used by transport agencies have adequate knowledge regarding traffic rules. Also the drivers may not be experienced enough to drive on highways.
• Capacity Issues: Most shippers have no idea about the documented capacity of the vehicle/truck. Thus, if the transport agencies overload the truck then according to law necessary actions could be taken against the shipper.
Types of Market
In this study markets explored by various market intermediaries have been identified and defined. The researchers used distance from vegetable producer to the market as the parameter to define the characteristics of the market.
Local Market: These are the markets which are usually 5-10 km away from vegetable producers. Small and marginal producers carry their goods to local markets either to sell them to local retailers or to sell to paikars.
Low cost Mode: Vegetable producers usually transport goods to Local Markets using cycles or by carrying it on their shoulders. Therefore, the cost of transport for vegetable producers are very minimal.
Once products arrive at the local market, they are graded and sorted according to their size and appearance. High grade products move on to the next market and the lower grade products are kept for local consumption.
Vans and Nosimons: Paikars usually sell their products to other retailers or to Aratdars. Aratdars and medium to large farmers take their products to Upazila Markets using Nosimon where they sell their products to Bepari’s. The Bepari’s transfer the products to national markets which are usually growth centers at a distance of 200-300 km. At present the current business model is working to connect growth centers in Upazila to the Growth centers in National level markets.
Beparis collect goods at Upazila Markets. They aggregate products and transport it to National Markets using trucks.
Truck capacity: 4 MT/10MT
Cost: Cost of trucks fluctuates according to market demand and supply.
In order to minimize wastage, the following parameters are crucial:
– Packaging: If the products are properly packed then products stay fresh for a longer time and wastage is reduced.
– Efficient Transport: Efficient and standard transport services can help reduce wastage by ensuring on time delivery of products
– Cold Chain: There is no intermediate step to preserve vegetables, not even with vans with freezer. The current practice is to transfer goods at dusk in open trucks so that there is good air flow.
Bangladesh has increased its efficiency of producing agro products but with this success comes the next challenge and that is to develop the forward market linkages so that the crops of farmers can be efficiently delivered to the consumers at the right price within a reasonable amount of time. Thus, this efficient value chain development will benefit all the stakeholders: farmers, wholesalers, traders, consumers.