The document reports on a study of the price chain of fresh vegetables from farmers in different parts of Bangladesh to kitchen markets in Dhaka City. It describes the various individuals and organizations involved at each stage of the chain, from farmers to intermediaries to retailers. The study examines factors that influence prices received by farmers and paid by consumers, such as financing arrangements, supply and demand, transportation costs, and government policies.

1. Study of ‘Price Chain’ of Fresh Vegetables
from Growers in Different Parts of
the Country to Different Kitchen Markets
in Dhaka City`
A Preliminary Report
By collation and compilation of information from spot
interviews of farmers and persons involved at different
stages of the chain building
May 5, 2012

2. Principal Investigators
Mr. Md. Benjamin Haider, MBA, LLB, BCS (Retd.) and
Adv. Khandoker Abul Kalam Azad, M.A., LLM.
(This Report is a property of the Committee of Action for Research,
Extension and Services- CARES)

3. Methodology: Location visit, reconnaissance, social conversation,
secondary/subsidiary data collection, structured and free-style interviews
Investigators and their team crisscrossing the country; visited
about two dozen country- sites in the period form 26 February
to11March 2012. They visited farms in important growing markets,
petty markets, hats and major collection-dispatch centers of fresh
vegetables in different parts/ region of the country. They
interviewed farmers and all major actors in the chain including
retailers in 14 Kitchen market in different parts in Dhaka City.
The visits covered most regions of the country- East and South
East. (Chittagong - Noakhali); Central :( Comilla, Dhaka- Manikganj,
Munshiganj, Narshingdi, Savar, Rajbari, Faridpur). North Bengal
(Bogura and Rangpur), South and South- West: (Jessor, Jhanidah,
Magura and Kustia). On distant travel the Investigators and their
team members also had had night halts
Slide # 3

4. A. Persons Involved in Structuring the Price Chain
Farmers: The producers of seasonal vegetables and other crops
in a period of three/months.
Farias or Paikers: The first tier intermediary small traders dealing
with farm products in 3-4 local markets to sell to Beparis and also
to local consumers. They operate with small capital, within small
area and on a part-time basis.
Beparis: They are professional traders. They purchase
agricultural product directly from farmers or from Farias and
Paikers. They sell to Aratders of the locality or to different
neighboring markets.
Slide # 4

5. A. Persons Involved in Structuring the Price Chain
Contd…
Aratders: They are essentially stockiest and store keepers. They
primarily are commission agents as having fixed centers. They
also purchase products directly from farmers.
Retailers: They are the intermittent links between farmers and
consumers. The retailers through varied other agents provided
some 85% trade to the consumers. Of the remaining 15%,
according to estimates, Farias cover some 6% and Paikers, 4%
percent; and the remaining 5% directly by growers.
Slide # 5

6. B. The Financial: Institutions and Persons Involved
Banks: The present government under its policy of ‘economic
inclusion’ has broadly extended low interest bank loan facilities to
farmers together with opportunities to open bank account with a
nominal deposit of Taka 10 plus. These schemes are under
constant monitoring and reviews and corresponding data and
reports are frequently published through the media for public
information. However, even after 3 years reported progress has
been less than 50% in one and less than 30% in respect of farmers
opening bank account.
In this study conducted with vegetable growing farmers, the
investigators did not find any direct reference of these persons as
having had any successful dealing with either the public or
private, local/foreign commercial banks.
Slide # 6

7. B. The Financial: Institutions and Persons Involved
Contd…
Investigators have gathered some oblique references about these
suggesting of different procedural problems including cash deals
of different values, etc. to obtain a loan.
 Farmers think that low interest loans are more easily available
to rich people for other purposes than agriculture
 It was learned that most of the farmers interviewed were
nearly illiterate
 They didn’t own any mobile phone
 Most of them were uninformed about the prices of the
products in near or distant markets.
Slide # 7

8. B. The Financial: Institutions and Persons Involved
Contd…
Mahajan and Dadander: As of the past, these controversial actors
are still prominent in rural communities visited by our
investigators. As opposed to banks, these people are a part of
farmers social ‘in group’.
 Mahajans lend money at higher rates of interest, and their
co-laterals are the crops the farmers expected to produce.
 They realize their money at post harvesting or, against
standing crops.
Slide # 8

9. B. The Financial: Institutions and Persons Involved
Contd…
 Dadonders also lend money in similar manner; but their
realization strategy is more on the products they had
financed. In these cases the farmers may be obliged to sell
standing crop and,
 In addition some of them may be required to deliver the
produce to their stores.
Slide # 9

10. C. Factors that Determine/Influence the Setting of
Vegetable Price at the Growers’ End
Farmers i.e. the growers usually are aware of the prices at which
they sold their products in the previous season or even of an
earlier time. The prices of products still in the field or just
harvested are not so much under their command. Those are
dependent on:
1. Their advance knowledge about the market principally the
demand and the supply
2. Nature of their contract with Mahajans and the Dadanders; and
3. A post harvest rush to market their product while they are
fresh.
Slide # 10

11. C. Factors that Determine/Influence the Setting of
Vegetable Price at the Growers’ End Contd…
As regards 1 above, in spite of different types of agents working
for the government and non-government organizations as
reportedly working closely with farmers and providing them all
‘useful’ information, this study suggests that the farmers know
very little about the market. None interviewed in study reported as
having a mobile phone!
As for the factor 2. the growers’ price is largely determined in the
negotiation of terms between the Mahajans or Dadanders, where
farmers for their desperate necessity of staying in the profession,
must agree to terms set by the dadonder:
Slide # 11

12. C. Factors that Determine/Influence the Setting of
Vegetable Price at the Growers’ End Contd…
Illustration
One Abdul Malek of Shoboarchar village of Munshiganj has taken
dadan of Tk. 20,000 from Karim Bepari to cultivate Potatoes on
one bigha land (33 decimal), to purchase seed, fertilizer, pesticide
and other ingredients. Karim Bepari advanced the money for the
crop with the condition to hand over the product at his arat
(stores). With that money Abdul Malek in 70 days time produced
80 monds of potatoes. In this scheme, the price of per kilo
potatoes including some carrying cost was prorated to Taka 6.25.
However, if Abdul Malek was paid his daily wages at the usual rate
of Taka 250 per day for 70 days that he worked on potato field, the
per kilo value of his product would come down 78 paisas! (One
investigator found three such cases in the same village)
Slide # 12

13. C. Factors that Determine/Influence the Setting of
Vegetable Price at the Growers’ End Contd…
One general factors that chocks or inhibit the prices at the
growers end is that vegetables harvested from the field are not
washed, nor sorted or graded for sizes for quality before handing
the staff over to Farias, Paikers or Beparis. However, where the
farmers have to sell his crop on the field and obliged to deliver
that to the Arat (godown) of the Dadander or Mahajan these cares
would not add any value to the product.
Slide # 13

14. C. Factors that Determine/Influence the Setting of
Vegetable Price at the Growers’ End Contd…
Other intermediary influence in setting the prices at the farmers’
end:
a) As stated earlier, Dadonders who often require the products to
be carried to his store with an additional cost had actually
foreclosed the option of pricing by the farmers.
b) Where farmers are free to sell their products themselves i.e. in
persons as head load or on a van/rickshaw to hats or bazar
some 4 to 6 KM away, there they meet the Farias, Paikers and
Beparis who ‘compel’ the farmers to sell at their bidding. The
alternatives are that they have to bring back the load or just
leave goods behind. Village hat-bazars usally close by sun-set
or early evening.
Slide # 14

15. D. Other Major Factors that Affect the Consumers’
Price
a) Bribes and graft paid by truck drivers at different points of the
journey to reach Dhaka
b) Non priority or privilege for trucks carrying perishables on
Ferry crossing
c) Government policy like holidays etc.
d) All other unseen or unanticipated like hartals/aborodh and
accident; and lastly
e) Unforeseen
Slide # 15

16. E. The Construction of Retail Prices by the Owners
of Different Kitchen Markets in Dhaka City
Slide # 16