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Value Chain Analysis of Closed Drum Thresher

M. S. Kabir
Assistant Professor
Dept. of Agricultural and Industrial Engineering, HSTU, Dinajpur.

S. Hossen
USI Extension Officer
Micronutrient Initiative (MI), Bangladesh.

M. M. Islam
Assistant Professor
Dept. of Agricultural and Industrial Engineering, HSTU, Dinajpur

M. M. Alam
Professor
Dept. of Farm power and Machinery, BAU, Mymensingh, Bangladesh,

M. R. A. Mamun
Assistant Professor
Dept of Farm power and Machinery, SAU, Sylhet

Abstract/ Executive Summary:

The purpose of the study was to identify and analyze the value chain of closed drum thresher, its constraints and priority interventions for dynamic growth of the sub-sector. The manufacturers of Netrakona, Kishoreganj and Jamalpur districts were considered as the population of the study along with input suppliers. The farmers of Mymensingh district were also involved as the beneficiaries of the sub-sector. Four sets of interview schedules were developed for manufacturers, service providers, service receivers and farmers for collection of information from the relevant stakeholders. Three major channels are identified in the value chain of closed drum thresher. The channels are imported engine and spare parts channel, closed drum thresher production channel and engine spare parts production and maintenance channel. The import channel of engine and spare parts consists of importer, wholesalers and retailers. The value chain analysis of closed drum thresher suggests that thresher manufacturing and wholesaling (69%), raw material trading (19%) and retailing (6%) constitute the major value additions. The value addition at manufacturing level consists of operation of lathe, welding, drilling, grinding, spraying, assembling and profit margin. The profit margin at manufacturer's level is found about Tk. 1223. The total estimated annual production of closed drum thresher in the country is about 30000 units worth Tk. 470 million. Engine and spare parts market size of closed drum thresher is also estimated as Tk. 335 million. The major constraints of closed drum thresher manufacturing are identified as, lack of skill related to fabrication, machining, repair & maintenance of closed drum thresher; management of custom hiring business and accounting; lack of supply and high price of raw materials; lack of appropriate modern technology; lack of ability to collectively safeguard the interest of the manufacturers; lack of purchase ability of farmers; and lack of market information on market size and clusters. The study has also identified and recommended the service provisions to remove these constraints.

Keywords: Closed Drum Thresher, Pedal threshing, Power tiller treading

Location: Netrakona, Kishoreganj and Jamalpur

Start Date:

End Date:

Program Area: Postharvest and Agro-processing

Commodity: Thresher

Objectives:

1. To identify and analyze the value chain of closed drum thresher;

2. To identify the constraints of manufacturing of this machine, and

3. To identify and recommend priority areas of intervention.

Methodology:

The study areas were selected based on the cluster of thresher manufacturing workshops. The study areas consisted of Netrokona, Jamalpur and Kishoreganj districts. The key sampling units of value chain of thresher manufacturing included actors of value chain, farmers and service providers. Draft interview schedules for the actors of the value chain, the service providers and the demand side of the services were prepared according to the objectives of the study with active consultation with the key informants. expert from the relevant fields and secondary information. The draft schedules were pre-tested and necessary corrections, modifications and alterations were made accordingly and printed for field data collection. Data were collected through personal interview. Before taking interview, the purpose of the study was clearly explained to the respondent. Seven major aspects of closed drum thresher manufacturing were taken into consideration. The major aspects of investigation were management and organization, input supply, market access, technology/product development, finance, policy & business environment and trade associations along with priority constraints. The business service providers of this sub-sector were also identified and their roles were assessed. Data were also collected from service acquirers, service providers and farmers with appropriate instruments. The manufacturing cost estimation of the closed drum thresher was done considering the fixed and variable costs involved in the manufacturing process. The following fixed cost items were taken into account for estimating the fixed cost involved in manufacturing the closed drum thresher: a) Annual depreciation cost of machinery b) Yearly interest on investment for machinery c) Tax on machinery d) Yearly insurance cost of machinery e) Yearly fixed cost for land use f) Annual depreciation cost of buildings/ infrastructure g) Yearly interest on investment for buildings infrastructure.

Source of Information: Journal of Agricultural Engineering, The Institution of Engineers, Bangladesh, Vol.38/AE(2), December. 2010

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

Three major channels are identified in the value chain of the closed drum thresher. They are imported engine and spare parts channel, closed drum thresher production channel and engine spare parts production channel. The import channel of engine and spare parts consists of importer, wholesalers and retailers. In the process of manufacturing closed drum threshers, the manufacturing workshops procure raw materials such as, angle bar, rod, sheet metal, timber, hard ware components from the local market and some cast components such as, gear and pinion, bearing cover, thresher frame etc. from local foundry shops. Fabrication, machining and assembling of thresher is done at the manufacturing workshop level. The total estimated closed drum thresher production in the country is about 30000 units per year, worth Tk. 470 million and satisfying the demand in the country. The value chain analysis confirms that the highest value addition (69%) takes place at manufacturers level and the profit margin is found about 25% of total value addition. Moreover, the local production is not facing any competition from imported machines. Thus, the closed drum thresher- manufacturing sub-sector has gained sustainability and good growth potential. The major constraints that retarded the growth potential of closed drum thresher manufacturing are identified as, lack of skill related to fabrication, machining, repair & maintenance of closed drum thresher; management of custom hiring business and accounting; lack of supply and high price of raw materials; lack of appropriate modern technology; lack of ability to collectively safeguard the interest of the manufacturers; lack of purchase ability of farmers; and lack of market information on market size and clusters.

Knowledge Management: Journal