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Analysis of Rice Value Chains for Improving Food Security in Bangladesh

Dr.Mustafa K. Mujeri
Bangladesh Institute of Development Studies (BIDS)E-17, Agargaon, Sher-e-Bangla Nagar Dhaka-1207

Dr.Nazneen Ahmed
Bangladesh Institute of Development Studies (BIDS)E-17, Agargaon, Sher-e-Bangla Nagar Dhaka-1207

Mohammad Iqbal Hossain
Bangladesh Institute of Development Studies (BIDS)E-17, Agargaon, Sher-e-Bangla Nagar Dhaka-1207

Abstract/ Executive Summary:

The study links the concepts of value chain and food security, a linkage that has received little research attention particularly in the context of the rice sector in Bangladesh. The broad objective of the research is to analyze whether improving the value chain could enhance the competitive advantage of Bangladesh’s rice sector, and if so, how this could be achieved in practice. It is expected that the results of the study would contribute to food security policy because of the intricate links between more competitive rice value chains and improved food security. For enhancing and sustaining the benefits of the supply chain approach, rice productivity needs to be continuously increased through adoption of improved technology and other measures. The failure to provide fair prices to the farmers, low innovations and productivity, and market imperfections are the outcomes of unfair dependency relationships across the chain members and lack of their collective collaboration. The implementation of a value chain focus for the rice sector will improve the conditions of the chain participants as well as deliver rice having better quality and higher value to the rice consumers.

Keywords: Rice,Value chains,Food security,Bangladesh

Location: Bogra, Brahmanbaria, Dhaka, Dinajpur, Kushtia, Naogaon, and Sherpur

Start Date: 00-03-2012

End Date: 00-04-2012

Program Area: Socio-economic and Policy

Non-commodity: Management

Objectives:

To analyze whether improving the value chain could enhance the competitive advantage of Bangladesh’s rice sector,

Methodology:

The study is guided by a social constructionist paradigm with a focus on qualitative analysis. Both qualitative and quantitative data collected from primary and secondary sources have been used in the analysis. The primary data have been collected through fieldwork using separate semi-structured questionnaires for different participants in the rice supply chain. The data were collected during the months of March-April 2012 from seven purposively selected districts (Bogra, Brahmanbaria, Dhaka, Dinajpur, Kushtia, Naogaon, and Sherpur) of the country. The study adopted a mixed method incorporating case studies, inductive analysis, and marketing margin analysis. For capturing the differential impact of typical rice supply chains, three different chains have been studied: (i) traditional (bulk) rice supply chain; (ii) modern (supermarket) rice supply chain; and (iii) imported private and public procurement/PFDS rice supply chain.

Source of Information: Biennial Report-2011-2012, BIDS

Article Link (Online Journal):

Funding Source:

1.

Budget:

Total Budget (Tk.) :

Achievement/Findings:

The three rice value chains (studied in the present study) in operation in Bangladesh show that the farmers get very similar prices under alternative chains and the end product quality variation does not bring much benefit to the farmers. The major beneficiaries of such differentiation are the millers and other participants in the downstream chain e.g. wholesalers, retailers, and the supermarkets. The marketing margin analysis shows the disadvantaged situation of the farmers who receive the least returns in relative terms along with bearing a higher share of risks. The study suggests that the largest amount of the value in the chain is created and retained by the millers and the highest net margin is also received by the rice millers. The large rice millers, by virtue of their big volume of business, can exert significant influence on the value chain, especially at the upstream level, and create pressure on the chain participants to act in favor of the interest of the large millers. The production of quality-differentiated rice under the supermarket value chain is found to be more profitable, especially for the rice millers.

Knowledge Management: Report/Proceedings