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Costs, Margins and Price Spread of Rice Marketing in Some Selected Areas of Bangladesh

M A B Siddique
SSO
Agricultural Economics Division, Bangladesh Rice Research Institute

M S Alam
CSO
Agricultural Economics Division, Bangladesh Rice Research Institute

Abstract/ Executive Summary:

The study was conducted in the Northwestern and Southern regions of Bangladesh with the objectives of to examine the cost and margin of different functionaries of rice marketing channel and to evaluate the farm-retail price spread of the system. Primary data were collected during July/2008 to June/2009 from the selected farmers, and traders. The farm-retail price spread was 25-28% of consumers price, which is not so bulky in perspective of one country like Bangladesh where the middlemen perform varieties of functions like weighing, bagging, loading and unloading, transportation, processing or milling, cleaning and winnowing etc. In addition, more than half of the spread was accounted for the cost of marketing and the rest was due to middlemen’s net profit, which appeared to be reasonable despite unorganized market structure of agriculture in our country. So, rice marketing system of Bangladesh may be considered as an efficient one in terms of margin and price spread.

Keywords: Costs, Margins , Price spread , Rice marketing

Location: Northern and Southern regions of Bangladesh

Start Date: 01-07-2008

End Date: 30-06-2009

Program Area: Socio-economic and Policy

Non-commodity: Rice, Cost of production

Objectives:

To examine the cost and margin of different functionaries of rice marketing channel
To evaluate the farm-retail price spread of the system.

Methodology:

The study was based on primary data collected during July/2008 to June/2009 from the selected farmers, and traders of Northwestern and Southern region of Bangladesh. Sixty farmers were interviewed taking thirty from each of the region. Related information pertaining on rice trading was collected from different 30 (fifteen traders from each region) traders from both the regions. For data analysis ‘concurrent’ method was employed, which measures cost, margin comparing prices at successive level of marketing system by-deducting ascertainable costs from the margin at different stages.

Source of Information: Proceedings of BRRI Annual Internal Review for 2008-2009

Article Link (Online Journal):

Funding Source:

1. Government

Budget:

Total Budget (Tk.) :

Achievement/Findings:

The farm-retail price spread was 25-28% of consumers price, which is not so bulky in perspective of one country like Bangladesh where the middlemen perform varieties of functions like weighing, bagging, loading and unloading, transportation, processing or milling, cleaning and winnowing etc. In addition, more than half of the spread was accounted for the cost of marketing and the rest was due to middlemen’s net profit, which appeared to be reasonable despite unorganized market structure of agriculture in our country. So, rice marketing system of Bangladesh may be considered as an efficient one in terms of margin and price spread.

Knowledge Management: Report/Proceedings