The Problems of Agricultural Marketing in Bangladesh
The system of agricultural marketing in Bangladesh is not very sound. The major problems confronting agricultural marketing are discussed below:
(1) Cleaning and Drying: Proper cleaning and drying of agricultural produce is absolutely necessary for getting fair returns to the producers. But in most of the cases farmers do not have the facilities to do this and they bring their produce to the markets as it is assembled from the fields. Thus cultivators are placed at a disadvantage while selling their produce because uncleaned and undried products are valued at a lower rate.
(2) Lack of Transport Facilities: A well-developed transportation system is a pre-requisite to the efficient marketing of agricultural produce. Lack of adequate means of transportation hinders the movement of farm products and thereby makes primary marketing costly. It also leads to multiplicity of small dealers and middlemen. In Bangladesh the transportation facilities for the movement of agricultural products from the farmers to the users are not satisfactory.
In our country goods are mainly moved by land water ways. Movement of farm products is therefore, considerably dependent upon country boats driven by manual labours. Since the transportation of goods by water is time consuming it is responsible for the deterioration of perishable products like potatoes, tomatoes, pine apples, fruits, fish and the like. About 75% of the total cargo shipment in Bangladesh is through the inland waterways. It is estimated that 70% of the jute is transported by inland water ways. Though the water ways are the most important means of communication and transportation, they are not yet sufficiently developed.
Similar is the position with the road and railway transport. The metaled road mileage is small and the unmetalled roads are not suitable for vehicular traffic. In the rural areas bullock carts and rickshaws are mostly used for the carrying of agricultural commodities. The use of trucks and motor vehicles is not common. The use of railway for the transportation of agricultural produce is also small. Because, the services available in the railways are not adequate to the needs for agricultural marketing. In the absence of the transport agency the agricultural producers in the remote villages sell their produce in the village markets at a throw away price.
(3) Absence of Organized storage: There is not much organized storage for agricultural produce and what is available is not within the reach of the average farmer. Thus the methods used by most of the farmers are of indigenous type ( such as, storage in woven-split bamboos, bamboo baskets, jars and pitchers, mud-walled ‘golas’ and ‘golas’ made of bamboo and wood, etc. and they have to suffer a huge loss during storage.
To avoid such losses the producers usually sell their produce at a low price at the harvest time when there is a glut in the market. Need for organised warehouses on scientific lines, providing facilities for storage, as well as credit facilities at village level can not be over emphasised.
(4) Multiplicity of Intermediaries: A large number of intermediaries operate in the agricultural marketing of our country. The middlemen take a large share of the consumer’s expenditures. It has been found that about seven categories of middlemen are engaged in the movement of agricultural produce between the producer and the consumer. They are Faria, Bepari, Aratdar, Dalal or Broker, Stockist, wholesaler and retailer. This multiplicity of intermediaries affect the efficiency of agricultural marketing of Bangladesh.
(5) Financial Difficulties: The farmers have to meet many financial commitments at harvest time. These expenses can be met either by selling the produce or by borrowing money from some private sources as there are no adequate arrangements for such credit by the Government. Private sources of finance are too costly and to avoid taking loans from sources, growers sell their produce immediately after harvest at a very cheap rate. Such difficulties can be minimized by providing adequate credit facilities by the Government banks to the needy persons against the security of their produce.
(6) Lack of Grading and Standardization : Grading and standardization are important for the marketing of farm products. But our farmers do not usually grade their produce. Certain products such as jute, tea, hide and skin have standard grades. In case where the producer undertakes the sorting and grading, experience has shown that it is seldom profitable to him. When his product reaches the market, it is purchased at the ordinary market rate.
Not until the buyers as a whole recognize certain grades as being better than others, it is possible to obtain for high quality produce, a premium over low quality. There is in fact a constant tendency for low quality to drag down the price of high quality. In the absence of grading, the quality of the produce is also often underestimated by the Farias and other middlemen buyers. In the interest of the producer and the trade alike, it is necessary that the grading should be introduced on uniform standards over the country.
(7) Processing and Preservation : Seasonal gluts of various agricultural commodities are not uncommon in the markets. As a result of such gluts farmers sometimes fetch such a low price as is not even sufficient to cover the cost of cultivation. One way to avoid such gluts is the storage of agricultural produce.
But there are certain commodities, especially fruits and vegetables which can not be stored for long. In their cases the other alternatives to avoid such gluts is that commodities be processed and preserved for sale through longer period. Besides, getting good returns to the farmers, processing shall stimulate production by furnishing continuous outlet for farmers and enabling them to produce over a longer period of time.
(8) Fraudulent Practices : Various kinds of fraudulent practices are prevalent in our agricultural marketing. Important ones are ‘use of false weights and measures’ and ‘levying of a variety of charges.’ Multiplicity of weights and measures used in the sale of agricultural products is still a source of concern to all For example, one seer varies from 60 tolas to 120 tolas although it is officially equivalent to 80 tolas. Similarly a maund may be of 30 to 60 seers depending on the local custom of the different areas.
The traders also sidely use bricks, stones etc. as weights and thus they deceive the consumers. Besides, the aratdars, dalals and wholesalers levy a number of special charges, such as Chalta (an allowance in kind deducted in order to compensate the buyer for loss in weight resulting from assorting, bailing and transporting jute),
Kayali (a cash allowance to cover weighing expenses), Kabari (a deduction made for the benefit of the buyer’s staff). brittee elahi (a cash market allowance deducted by the jute buyers at secondary markets and said to be intended for charity). Iswar Brittee (deduction made in secondary market for religious and charitable institutions) etc.
Since these fraudulent practices badly hamper the agricultural marketing, effective measures should be taken by the government to standardise the weights and measures and to eliminate the levy of charges by the middlemen.
(9) Market Information : Dissemination of information on daily prices and their fluctuations, stocks, despatches of agricultural commodities, market sentiments, etc., has been considered very essential to help producers to decide where and when to market. In Bangladesh, the farmers are ignorant of the current prices and their trends, demand and supply at house and abroad, etc. Because there is no organised means to provide them information necessary for the effective marketing of their produce.
The Pakistan Agricultural Enquiry Committee in 1952 observed that virtually the only source of information available to agriculturists in respect to prices was a local dealer in the commodities concerned. The Government broadcasts daily market prices prevailing in the Dhaka city through Dhaka radio station.
A weekly bulletin is also issued by the Directorate of Agricultural Marketing. But these are not at all sufficient to meet the requirement of the agricultural producers. The scope of the market intelligence programme needs to be extended to more markets and more commodities.
(10) Prices: Prices are the crux of the whole problems for the farmers and it is this factor in the chain of processes of marketing which can make or mar their economic position. There are three types of prices—farm prices (or harvest prices), wholesale prices and retail prices. The farmer is mainly concerned with the farm and wholesale prices to dispose of his produce in the retail market when the quantity of the produce is very small.
Hence, a careful watch of the farm prices and wholesale prices can benefit the farmer to a great extent. Unfortunately the farmers get a low price due to seasonal fluctuations on account of large supplies after the harvest season and poor holding capacity of most of the farmers. The suggestions like growing of early and late crops, provision of storage and warehousing, adequate credit facilities, etc, can go a long way to help the farmers to get good price for their produce.
(11) Lack of Co-operative Marketing: In our country where the units of production are small and the growers have a little amount for this, the importance of co-operative marketing can not be ignored. But our farmers carry on their activities on individual basis.
The number of farmers’ Co-operatives in the country is very insignificant in comparison with other countries like Japan, U.S.A. etc,. For example, in Japan, about 70% of the farmer’s sales is made through co-operatives and in the U.S.A. it is 23% while in Netherlands it is 100 % for vegetables and 70% for fruits.’ Lack of co-operatives weakens the bargaining position of our producers.
In our country especially, where most of the growers are even unable to pay the land revenue after harvest of the crop, it is impossible to bring any substantial improvement in the system of marketing by individual efforts. Hence, co-operative action of the growers is necessary to remove some of the defects prevailing in the present system.