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Pesticide Marketing System in Bangladesh

S. A. Sabur
Professor
Professor in the Department of Cooperation & Marketing, Bangladesh Agricultural University, Mymensingh.

Abstract/ Executive Summary:

This study is an attempt to examine marketing system and marketing efficiency of pesticides in Bangladesh. For this study, 81 traders and 22 regional offices of company were interviewed from four greater districts in Bangladesh. Company sells pesticides through their regional office to the appointed distributors who thereby sell to either wholesaler cum retailers or retailers. Finally, wholesalers and retailers dispose of their product directly to the farmers. Distributors enjoy more facilities than other traders. Both cash and credit sale are common at all level of marketing. Generally pesticides are sold at a price lower than maximum retail price (MRP) to the farmers. Government monitoring system is not effective. The seasonal price variation arises mainly due to change in demand and this variation is less for the common used pesticides. There exist significant spatial price variation, which indicates market imperfection at all level. On an average, retailers received the highest margin or profit followed by wholesalers and distributors. The traders obtained lower profit from common pesticides of well established company. Although total profit increases with the increase of volume of trade but it is reverse in case of per unit profit. However, return over investment is more or less same for all types of traders. Traders mentioned various problems in case of pesticides marketing.

Keywords: Pesticide,Efficiency, Marketing,Bangladesh

Location: Comilla from Chittagong division, Mymensingh from Dhaka division, Jessore from Khulna division and Bogra from Rajshahi

Start Date: 00-05-1998

End Date: 00-10-1998

Program Area: Socio-economic and Policy

Commodity: Fungicide

Objectives:

To examine marketing system and marketing efficiency of pesticides in Bangladesh.

Methodology:

On the basis of highest pesticide use per hectare for Boro paddy, four greater districts from four divisions namely Comilla from Chittagong division, Mymensingh from Dhaka division, Jessore from Khulna division and Bogra from Rajshahi division were selected for this study. One or two Upazillas from each district was chosen based on highest pesticide used as well as IPM technology used areas. If an Upazilla where higher pesticide as well as IPM used was not found, two Upazillas, one as higher pesticides use area and another as IPM use area, were selected. Accordingly, Ishwargonj Upazilla from Mymensingh, • Sadar and Jhikargacha Upazillas from Jessore, Sadar and Sariakandi from Bogra and Burirchong and Laksham Upazillas from Comilla were selected. Companies were ranked in descending order on the basis of their market share in the country. From the list of 28 pesticides companies, the first nine companies such as Noverties Limited, Padma Oil Company Limited, Shetu Corporation, Rohne-Poulenc Agrovet Limited, Auto Equipment Limited, McDonald Pvt. Limited, ACI limited, Alpha Agrovet Limited and SEMCO were selected for this study. Data were collected from 22 regional offices of the selected companies taking 7 from Comilla and 5 each from Bogra, Jessore and Mymensingh. It is mentioned that some of the companies in different places could not be interviewed because of their refusal to provide information. Except Jessore, twenty traders were chosen from district town and selected Upazillas of each district. Because of the presence of higher number of trader, twenty-one traders were selected from Jessore. Care was taken so that all types of traders might include into the sample. Accordingly, 17 distributors, 30 wholesaler cum retailers, and 34 retailers were chosen for this study randomly. (Detail sample selection procedure is presented in Sabur & Molla, 2000) Three sets of interview schedules for trader, regional office and head office were prepared after necessary pre-testing. Data related to 1997-98 crop season were collected during May to October 1998.

Source of Information: Bangladesh J. Agric. Econs. XXII, 2(1999): 57-78

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

It is found that in many places the distributors enjoy monopoly power and they do not pay reasonable commission to the other traders. It is also found that different companies appoint the same traders as their distributor. For that reason, each company should appoint different persons as distributor so that competition may increase in the market. Each company should have alternative arrangement to sell pesticides directly to wholesalers -and retailers. Company as well as government may compel the distributors to pay reasonable commission to the wholesalers and retailers. Bank loan at low interest rate should be supplied to the traders. Previously, BADC through Rupali bank supply credit to the traders. Now alternate to this system may be developed. Necessary training facilities should be arranged to the traders and the farmers. The farmers may or may not meet BS/TAO, but they must meet traders at the time of pesticides purchase. Every farmer came to know the doses and application procedure from the traders. That is why, the traders must be trained up by DAE personnel on pesticides use. Government monitoring system should be strengthened so that persons producing and selling adulterated and low quality Indian pesticides may be punished. For that purpose, government vigilance team may make surprise visit at regular interval of time. New pests and diseases must be identified quickly by the concerned government officials so that company may produce new pesticide before severe pest attack. Maximum retail price (MRP) must be fixed by government after assessing the production and marketing cost. Steps to be taken so that no company as well as traders can raise prices of pesticides, particularly during peak period, without any reasonable cause. Finally, Law may be enacted so that traders cannot keep pesticides and food together. Financial help may be extended to the traders so that they can build their own storehouse.

Knowledge Management: Journal