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Performance and Potential of Rice Processing Industry in Some Selected Areas of Bangladesh

M A B Sddique
Senior scientific officer
Agricultural Economics Division, BRRI, Gazipur

S K Raha
Professor
Department of Cooperation and Marketing, BAU, Mymensingh

M R Mandal
PPRD, BRRI, Gazipur.

Abstract/ Executive Summary:

The study was undertaken to evaluate the nature of organization, market behavior and performance of rice milling sector of Bangladesh. The rice milling industry of Bangladesh was running within a competitive environment and was more or less "atomistic", where no single firm or seller was able to lead the market individually. There were no sales and promotional expenditures as product differentiation was absent and, the re was no barrier for new entrants in this industry. Any type of agreement or 'collusion' was not found to determine the sell r's price. Independent price setting was not also possible or not was effective because of the smaller market share by the miller and the product had no differential characteristics. Therefore, millers have to adjust their prices with the current market conditions, although they desire long run profit along with a fair profit. Performances of the sector were not so good, because, unutilization of large and automatic mills to their full capacity. Most of the rice mills are running with decade old furnished machinery, creating different problems frequently. However, rice milling is the largest industry in the economy. A large number of skilled and non-skilled workers including a significant number of women are employed in this sector.

Keywords: Performance and Potential, Rice Processing Industry, Bangladesh

Location: Bogra, Rangpur and Dinajpur and Mymensingh, Sherpur and Kishoregonj

Start Date: 00-00-2003

End Date: 00-00-0000

Program Area: Farm Mechanization

Non-commodity: Performance

Objectives:

To evaluate and determine the organization of the industry, examine the pattern of pricing behavior of the industry and assess the overall performances of the industry.

Methodology:

Bogra, Rangpur and Dinajpur (North-western Bangladesh-NWB) and Mymensingh, Sherpur and Kishoregonj (Greater Mymcnsingh-GM) were selected for the study conducted in 2003. A total of I04 different types of rice mills (60 from NWB, including 5 automatic, 25 major and 30 husking, and 40 from GM region including 4 automatic, 12 major and 24 husking) were chosen for the study. Each of the single unit was considered as a respondent. A set of pre-tested structured questionnaire was used to collect necessary information on market structure, market conduct and market performances.

Source of Information: Bangladesh Rice J. 13 (1): 91-97, 2008

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

The organizational structure of rice milling industry was more or less "atomistic", where no single firm or seller was able to control or lead the market individually. Traders of both the regions sold major portion of their product to 'Dhaka market'. So, the buyers of Dhaka market' controlled the rice trading of the study area largely. Product differentiation was completely absent in rice marketing system. There was no formal barrier for the new entrants in the industry; although capital and technical know-how were seemed to be factors of consideration for the new entrants. Like all other agricultural product-processors/sellers, rice is "price taker" not "price maker". So, the millers are forced to adjust their prices with the current market condition for long run profit along with a fair profit. Performances of the industry were not as good as it could not run efficiently through out the year for the shortage of paddy supply and other problems. Over and above this, a large number of skilled and non-skilled workers arc employed in this sector including female. If government takes necessary care of this sector, it could be a vital source of manpower absorption.

Knowledge Management: Journal