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Marketing and Price Structure of Potato in Selected Areas of Bangladesh

M.A. Matin
Senior Scientific Officer
Agricultural Economics Division, BARI Joydebpur, Gazipur-1701

Shadat Hossain
Chief Scientific Officer
Agricultural Economics Division, BARI Joydebpur, Gazipur-1701

Abstract/ Executive Summary:

The performance indicators revealed that the marketing chain I, Farmer –Paiker-Retailer- Consumer was the most efficient chain in the selected areas. Chain III and chain IV were not relatively efficient in the agricultural marketing sector in potato producing regions. It was due to low price received by the farmers in the chain III and IV as compared to other chains. For the country as whole the lagged area and real prices played a dominant role in determining current year area allocation under potato. The district result showed that last year real prices were an important for determining variable in area response function, particularly for Dinajpur district. Yield risk was found significant with positive sign in Comilla, Dhaka and Dinajpur. Only the farmers of these districts appeared to be yield risk lover and would allocate more area to potato. Analysis of market integration shows that potato market in Bangladesh was well integrated. About 80% farmers stated that low price of harvest period and inadequate cold storage facilities were the major problems in the study areas. In order to ensure better price and assured market to the potato growers, cold storage facilities should be increased with lower preservation cost in the areas.

Keywords: Marketing, Price spread, Potato

Location: Bogra, Comilla, Dhaka and Dinajpur

Start Date: 00-00-2008

End Date: 00-00-2009

Program Area: Socio-economic and Policy

Non-commodity: Price behavior, Market analysis

Objectives:

i. To analyse the level of marketing efficiency of different chains through selected indicators

. ii To examine the storage system at farm level as well as traders level

iii To estimate the growth rate, instabilities and fluctuation of price, area, production and yield of potato

iv To analysis factors responsible for determining the area under potato cultivation

v. To determine the price flexibility and see the role of supply of output in influence current prices of potato

vi. To recommend relevant policy implications for increasing potato supply in Bangladesh based on the findings of the study.

Methodology:

Four major potato growing districts of Bangladesh, namely Bogra, Comilla, Dinajpur and Munishigonj, were selected for this study. Both primary and secondary data used for this study. One upazila of each district were selected where the cultivation of potato was concentrated.Secondary data were collected from various published sources. Harvest prices of potato have been deflated by agricultural raw material price index to get the prices in real terms. The study considered the time periods of 1990/91 to 2004/05 for time series analysis. Marketing related data were collected from selected 120 (30 for each selected area) potato growers. For intermediaries, 8 Farias, 20 beparies, 12 Aratdhars, 16 paikers, 8 cold storage owners and 20 retailers were selected from the above selected areas including major consuming area Dhaka and Gazipur. Two sets of survey schedules were prepared after pretesting. Primary data were collected by face-to-face interview during 2008-09. Collected data were edited, compiled, summarized and analyzed to attain desired objectives of the study.

Source of Information: Annual Research Report, Agricultural Economics Division, BARI

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

Average marketing cost were calculated as Tk. 69.52 for Faria, Tk. 146.17 for Bepari,Tk. Paiker (Rural)77.23 ,Tk.91.27 for Paiker (Urban), Tk 36.25 for Retailer (Rural), Tk. 43.81 for Retailer (Urban) and Tk25.08Aratdar( Dhaka& Gazipur) per quintal of potato. Farmers’ net share for the four chains 68.64, 64.51, 59.83 and 60.77 %respectively were computed from the ratio of farmers’ net price and the retail price. Paiker had the maximum losses of potato 46% followed by beparis (36%). The lowest loss at retail level was due to the end point of marketing chain and small amount purchase for sell. Farmers sell their potato at Tk.13.88/kg. Highest value added in retail level which was (Tk. 3.37/kg) followed by bepari (Tk.2.63/kg) and paiker(Tk2.52/kg). On an average storage charge was Tk.208.62. The major portion of potato preserved are in the month of March (69%) and major portion of potato released in the month of November (33%). Generally potato released from the cold storage started from May. In traditional storage method, about 3-5 kg of potatoes was damaged per quintal. The preservation cost of potato was estimated at Tk.136.21 per quintal in traditional storage. In cold storage, storage cost per quintal of potato was estimated to be Tk 157.00. Depreciation cost was the highest cost component, accounted for 22 % of total fixed cost. The next cost components power and fuel / electricity which together accounted for 32% of total cost. The growth rate of real price of potato was estimated as 0.09 % per annum during the study period. The price flexibility was estimated to be .0.2134 for Bangladesh as whole indicating that if supply of potato is increased by one percent, price will decrease by 0.2134 percent in the same season.

Knowledge Management: Report/Proceedings