The Marketing System of Agricultural Products in Bangladesh: A Case Study from Sylhet District

The monotonous demand for rice in Bangladesh is shifting rapidly. Positive economic growth and urbanization are the key factors behind this change. The agricultural marketing system is traditional and not properly functional. A group of intermediaries controls the market and supply chain of agricultural products. A proper functional market is vital for food producers, processors, traders, and consumers. Bangladesh has become self-sufficient in cereal crop production, but the production of horticultural crops is not sufficient yet. This situation has led to severe bottlenecks in the processes of marketing. The study aimed at assessing the present marketing system of agricultural products in Sylhet and at determining the marketing constraints and potentialities of farm products in this area. It was found that the net marketing margin was the highest in the case of the retailer and the lowest in case of Aratdar. But Return on operating capital was the highest for the Aratdar because they did not need to purchase the product they handle. The farmers identified the high price of seed as the topmost constraint in production and marketing systems. Re-structuring of Market Management System and updating regulatory and institutional set up are highly essential for the proper functioning of the market system.


INTRODUCTION
Agricultural sector plays a vital role in the overall economic performance of Bangladesh in terms of its contribution to GDP, employment generation, and food security (Alam 2011). Moreover, the livelihoods of the majority of the population in Bangladesh are dependent on agriculture. Thus, the economic development planning of this country is determined by the productivity, growth, and efficiency of the agricultural sector. Any damages in this sector broadly impact the wellbeing of most of the people of this country (Islam 2010). The production of rice in terms of cropped area and stock contributes to the lion share of the agricultural output in Bangladesh. About 74.4 % of the total cropped area is used for rice production, where about 3 % for wheat.
On the contrary, cultivation of horticultural products takes up only about 7.3% of this total cultivable land, but it generates more than 18 % of its agricultural GDP (BBS 2007).
Horticultural production is not well documented in Bangladesh like cereals. In the past, the emphasis was given to rice production to achieve domestic self-sufficiency in food grains as Bangladesh was a food deficit country for a long time (Hossain et al. 2005, Alam 2011). Therefore, the production of some horticultural crops declined.
The demand for food in Bangladesh is changing rapidly. Economic growth and urbanization are combining to shift food demand away from traditional staples to high-value foods (Begum & Haese 2010), which represents an enormous opportunity for food producers, processors, and sellers. Because the production of many high-value agricultural commodities tends to be labour intensive. It also represents an opportunity to generate rural employment and raise rural incomes. This changing domestic demand is increased by growing global demand for high value agricultural products-global demand that provides additional opportunities for producers and exporters in Bangladesh The development of agricultural marketing depends on market intelligence and proper enforcement with relevant rules and regulations. Therefore, marketing resource is interlinked with costs and profitability. The export of horticultural crops from Bangladesh is still very insignificant. Practical feasibility studies should be undertaken to ascertain if Bangladesh can compete favourably with other exporting countries for fresh vegetables and fruits in the supermarkets of the developed countries in respect of quality products and regularly in supply. High cost and shortage of available air-cargo space are also impeding export. The high-end market for a perishable item has not yet fully developed (Singha &Maezawa 2019, Alam 2010, Hossain & Hossain 2013, Islam & Ahsan 2009). It is still in a growing stage in Bangladesh, mainly because the demand is still minimal. If the overall marketing is improved, it will serve the interests of the supermarkets and the customers. There are a lot of challenges in capitalizing these opportunities. High-value agricultural food products are highly perishable than traditional cereals. They require more advanced post-harvest technologies, quicker controlled transportation facilities, and efficient marketing systems (Singha & Maezawa 2019). For competing in the international market, quality control is inevitable. Feasibility studies are essential for enhancing the export of agricultural products.
The agents of marketing operation are 'Farias' or collectors, 'Beparis' or assemblers,' aratdars' or wholesalers and retailers (Fazlur 2008, Hossain & Arangzeb 2009, Islam et al. 2019, Parvez et al. 2016, Parvez et al. 2019. Farmers are involved in the production and primary processing where, the intermediaries are involved in aggregation, processing, distribution and marketing ( Figure 1).
The quality of agricultural products, especially vegetables and fruits marketed in Bangladesh, is not highly satisfactory. This is the result of unscientific post-harvest handlings, such as grading, washing, trimming, cooling, packaging, and transport (Hossain 2016, Islam & Ahsan 2009, Siddique 2018. Post-harvest loss is also very high due to the same reasons. Bangladesh has become self-sufficient in cereal crop production but horticultural crops like fruits, vegetables, and spices, which supply the essential nutrients like vitamin and minerals, the production is not yet sufficient. The low consumption of fruits and vegetables is due to small production. To bridge this gap, the development of improved verities and production technologies of fruits and vegetables is the utmost requirement. The seasonality of production further complicates the marketing of horticultural products. Some items are produced around the year but the volume is abundant in some months, and even some are produced only during a short period. Moreover, during the seasonal glut, farmers are compelled to sell their produce at a throwaway price due to the lack of proper preservation facilities and cash need. Different marketing approaches, like group marketing and contract marketing, maybe the interventions to establish linkages with various market actors for better value chain management. Afterward, the marketing procedure is highly imperfect in Bangladesh, as supply does not correlate with the actual demand. This situation has led to severe bottlenecks in the processes of marketing (Hoque et al. 2008). The study aimed at assessing the present marketing system of agricultural products in Sylhet and at finding out the marketing constraints and potentialities of agricultural products in this area.

METHODOLOGY
This study followed both qualitative and quantitative method. The samples included all categories of stakeholders involved in the marketing system of agricultural commodities. Data were collected following a semi-structured sampling method. The sample size was 100, including 60 farmers, 10 Bepari (Collector), 10 Aratdar (Assembler), 05 Paiker (wholesaler) and 15 retailers. The intermediaries were selected through purposive sampling from different market places where they were doing business. A semi-structured questionnaire was developed for collecting the data based on the objectives of the study. The questionnaires contain both open and closed form of questions. The questions in the schedule were simple, direct, and easily understandable by farmers and other target stakeholders. The questionnaire was prepared in English as well as Bengali also. The following indices were calculated using the collected data.

Calculation of Indices
C h = Number of responses indicating high constraint C m = Number of responses indicating medium constraint C l = Number of responses indicating low The total cost of production was calculated by using the following formula: Total cost of production (Tk./acre) = Labour cost (Tk./ acre) + Material Cost (Tk./ acre) + Machinery cost (Tk./ acre) + Interest on operating capital (Tk./ acre) + Land use cost (Tk./ acre). The Benefit Cost Ratio was calculated by using the following formula: Benefit cost ratio Gross return (Tk./acre) Total cost (Tk./acre) Net returns of farmers were estimated by using following formula: i. Gross return (Tk./ acre)= Yield (quantity/ acre) × Sales price (Tk./ acre) Total cost (Tk./ acre)= Total production cost (Tk./ acre)+ Marketing cost (Tk./ acre) Net return= Gross return (Tk./ acre) -Total cost (Tk./ acre). The marketing margins and net margins of intermediaries were estimated by using the following formula: i) Gross marketing margin (Tk./quantity) = Sale price (Tk./quantity) -Purchase price (Tk./quantity). ii) Net marketing margin (Tk./quantity) = Gross marketing margin (Tk./quantity) -Marketing cost (Tk./quantity) iii) Return on operating capital Where total operating capital = Purchase price + Marketing cost (for the intermediaries). Interest on operating capital=AO ✕ i ✕ t Where, AO = (Total operating capital)/2; i = Rate of interest; t = Length of crop period (Miah 1987).

Land Use Cost
Land use cost varied from village to village depending upon the soil type, topography, location, and security of the particular crop field. Land use cost was calculated using one of the following concepts: i) Interest on the value of land ii) Valuation of land at its cash lease price per year and iii) Forgoing income from alternative use. Here, the costs of land use were calculated as the lease value of the land.

Market chain analysis
Market chain analysis allows the user to understand the forces driving change in the commodity sector. Technological change can be analyzed at the result of the market, i.e., working one's way back from consumer demand for specific products and qualities to earlier stages in the chain. Market demand has implications for transport and processing, the technology of primary production and ultimately, the inputs used. It makes it easier to identify the policies which can be implemented to enable individual producers and countries to increase their share of these gains. Table 1 depicts that the majority of the Bepari, Aratdar, and Paiker completed the secondary level of education. In the case of retailers, most of them (40%) attended a primary level of education. Overall, 45% of intermediaries completed the secondary level of education. Only 2.5% of traders earned a higher secondary and above level of education. None of the Aratdars was illiterate while 20% of Bepari, 30% of Paiker, and 26.6% of retailers were found illiterate.  (Table 2). Near about 30% of the intermediaries had more than ten years long working experience. Marketing system of rice

Demographic Profiles of the Intermediaries
In between farmers and consumers, there a group of intermediaries in the market chain. Bepari and Aratdar directly purchase rice from the farmers. They send the rice to rice miller for husking processes. The rice miller sometimes sends back to aratdar, while Aratdar sells to the wholesaler. In some cases, the rice miller directly transmits to the wholesaler. The retailer collects from the wholesaler. In this chain, the consumer is the ending point ( Figure 2).

Rice Miller
Wholesaler Aratdar
The Paiker spends about 46% of total marketing cost in for transportation, loading, and unloading (Table 3). No intermediary class spends any money on grading. Secondly, the personal expenses varied from one group to another. Wastage was another essential cost item for all the traders. Low-security cost indicated an excellent business environment. It is evident that the net marketing margin of Aus rice traders is highest for the retailer (Tk. 203.24 per 100 kg), where the lowest for the Bepari (Tk. 54.25 per 100 kg). But ROO was the highest for Aratdar(77.82%) because they did not need to purchase the product they handle (Table 5).  Table 5 showed that the net marketing margin of Aman rice traders was the highest for the retailer (Tk. 125.24 per 100 kg) and lowest for the Bepari (Tk. 44.25 per 100 kg). But ROO was the highest for Aratdar (77.82%) because they did not need to purchase the product they handle. It was found that the net marketing margin of Boro rice traders was the highest for the retailer (Tk. 95.24 per 100 kg) and the lowest for the Arathder (Tk. 55.58/100 kg). But ROO was the highest for Aratdar (77.82%) because they did not need to purchase the product they handle (Table 6). The marketing costs incurred by the various traders for Aus, Aman, and Boro rice were different. The net marketing margin was the highest in all the cases for the retailers in case of Aus, Aman, and Boro.

Figure 3: Market Chain of Vegetables and Fruits
The market chain of vegetables and fruits is almost similar to rice, but there is no miller in the chain (Figure 3). The highest portion of vegetables was handled by Aratdar, followed by Bepari, Paiker, and retailers (Table 7).  It is found that 100% of Bepari collected market information, whereas 82% of Aratdar, 87% of Paiker and 75% of the retailers were informed about market information. The Aratdar also acted as the primary source of market information compared to other vegetable traders (Table 9).  The net marketing margin was the highest for Bepari (Tk. 121.8/ 100 kg) and lowest in case of Retailer (Tk. 119.50/ 100 kg). But ROO was the highest for the Aratdar (283.4%) because they did not need to purchase the product they handle (Table 11). It was revealed that the net marketing margin was the highest for the retailer (Tk. 227.10/100 kg) and the lowest for the Aratdar (Tk. 86.56/100 kg). But ROO was the highest for the Aratdar (278.87 %) because they did not need to purchase the product they handle (Table  12).  Table 12 showed that the net marketing margin was the highest for the retailer (Tk. 167.00/ 100 kg) and the lowest for the Aratdar(Tk. 77.46/100 kg). But ROO was the highest for the Aratdar(249.55 %) because they did not need to purchase the product they handle. It is evident that the net marketing margin was the highest in case of retailer (Tk. 282.00 /100 kg) and the lowest in case of Aratdar (Tk. 128.63/ 100 kg). But ROO was the highest for the Aratdar (414.40 %) because they did not need to purchase the product they handle (Table  14).

Marketing system of fruits
It was found that the highest portion of fruits was handled by the Aratdar (659553kg) which was followed by Bepari (297146 kg), Paiker (283460 kg) and Retailers (50526 kg).  Table 16 showed that total cost of Bepari, Aratdar,Paiker,and Retailer was Tk. 49.85,Tk. 14.31,Tk. 54.77 and Tk. 82.22 per 100 pieces, respectively. Bepari, Paiker, and retailers incurred the highest cost of transportation. It is also found that Aratdar incurred the highest cost in wastage (Table 16).

Constraints in Production and Marketing
The reasons that impede the achievement of expected output are defined as problems or constraints. This section deals with the problems faced by the respondents in the research areas in the production and marketing of agricultural commodities. Based on their discernment about the constraints they met, a constraint facing index (CFI) was calculated in mathematical form according to the extent or severity of the constraints. This mathematical demonstration can help the policymakers for further investigation.

Constraint items
The level of the constraints Rank High (3) Constraint facing index (CFI) is a mathematical problem ranking index. It is defined by a set of objects whose state satisfies some problems or shortcomings. It represents the entities of a constraint in a homogeneous collection of finite limitations over variables. The respondents of the research areas were requested to provide their feedback on 16 selected problems. After computing the CFI scores, the constraints were ranked in descending order. The computed CFI score of the 16 problems ranged from 371 to 504 for group farmers and 339 to 481 for non-group farmers (against a possible range from 0 to 720) which were arranged in rank order according to their CFI scores as shown in Tables 24 and 25.

Constraint items
The level of the constraints Rank High ( 3) Agricultural marketing covers the services involved in moving an agricultural product from the farm to the consumer. Numerous interconnected activities are included in doing this, such as planning production, growing and harvesting, grading, packing, transport, storage, agro-and food processing, distribution, and sale. The limited infrastructure for perishable of fruits and vegetables is the significant constraints in consumption. Storage facilities are particularly necessary for fruits and vegetables (Ali & Tsou 1997). Rahman et al. (2016) revealed that infrastructure developments helped farmers to get better prices for their production. This study conducted to give the importance of growing interest in agricultural marketing. Agricultural marketing activities include market information development, marketing extension, training in marketing, and infrastructure development. It also involves understanding customer needs and effectively positioning and selling products and services in the marketplace.

CONCLUSION
Despite the current opportunity for upgrading the marketing systems of crops, no effective strategies have been taken yet to develop this sector. This study analyzed the present situation, opportunities, and constraints of market chain and marketing systems of Sylhet district. The market of food grain, vegetables, fruits, and spices are inadequate as compared with the demand according to the Food and Agriculture Organization (FAO)/World Health Organization's (WHO) standard. The vegetables were not able to store their products in the peak season for future use and marketing that could be helpful to the uniform distribution of horticultural crops throughout the year and the reason. The respondents identified the lack of proper storage facilities as the topmost constraint in the marketing system. Therefore, cross-national research on crop production, marketing, and processing is essential, including different collaborators from Government, Non-Government Organizations, and Public Universities. The horticulture based agro-industrial sector cannot meet the demand of the whole population all the year round. Moreover, due to the lack of quality inputs, high price, and the uncertainty of returns from sells, farmers are not interested in producing more vegetables on a full scale. It is essential to establish horticultural crop-based industries to encourage farmers. Cost-benefit analysis indicates that production of horticultural crops is economically viable for the country.

RECOMMENDATIONS
 Re-structuring of Market Management System and updating regulatory and institutional setup  Reduction of postharvest loss at harvesting stage, transportation, storage, and marketing stages  Low cost and user-friendly techniques of post-harvest management such as pre-cooling method, curing, blanching, drying and preservation  Developing low-cost storage techniques especially for horticultural  Increasing investment for the development of market infrastructure  Linking growers to super shops should be officially encouraged and facilitated to reduce the costs of intermediation  Modern packaging system for perishable products should be adopted.  The feasibility of direct farm-to-market programs should also be analyzed and justified by research organizations, extension services, and universities.