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Rangpur and Dinajpur Subsector Analysis and Market Assessment AGRICULTURAL MACHINERY, TOOL AND EQUIPMENT SUBSECTOR Jessore, Dinajpur, and Bogra Prepared by: International Development Enterprises (IDE) Bangladesh House 15, Road 7, Dhanmondi, Dhaka 1205 Phone 880-2 8614485, 8619258 • Fax 880-2 8613506 www.ideorg.org & M. A. Tim Canedo Management Services 1401 Calvert St NW#403 Washington, DC 20008 USA April 2003 This DRAFT report, prepared by IDE for the DFID/REFPI project with a view to feeding into the design of BDS market development interventions in the agro-tool and machinery sector, provides an overview of the sector and points to interesting avenues for further investigation into issues, e.g., sector dynamics, competitiveness, productivity, and strategic services, etc. and intervention design by projects like KATALYST or other agencies. The report does not reflect KATALYST’s current methodology and final conclusions on the sub-sector. REFPI SS-MA “Agricultural Machinery, Tool and Equipment Subsector” 2 ACKNOWLEDGEMENTS International Development Enterprises – Bangladesh (IDE-B) gratefully acknowledges the trust and confidence placed by REFPI/DFID in conducting this study. IDE also gratefully recognizes the cooperation and effort put in by the various members of the SMEs who were interviewed. Despite their busy schedules, they facilitated the study team in the collection of information, which was confirmed by them in the validation workshops. The valuable contributions of SWISSCONTACT were of great assistance to the team in conducting the study. We are also extremely indebted to our study team that comprised of the faculty members of Bangladesh Agriculture University - Professor Akhtaruzzaman, Dr. Aktaruzzaman and Dr. Joynal Abedin. They served as useful resource persons who contributed in terms of field-level data collection and aided us in the clarification of any pertinent queries that emerged during discussions. The team further consisted of young researchers from CERBET – East West University. These were Engineers Rasel Mahamud and Mohammad Khairul Islam of BUET, and Taiful Islam and Harunur Rashid Khan who are Business graduates of East West University. We also take this opportunity to acknowledge the assistance of IDE-B staff members, viz., Rashendra Chowdhury and Seuty Sabur - Assistant Manager and Research Officer respectively in the PME Department and Shahjahan Siraj - Senior Officer in the Marketing Department. The input of IDE-B support staff members cannot be overlooked: these include the administrative and clerical staff. What is particularly worthy of mention is the contribution made by M. A. Tim Canedo, consultant and Mr Mrinal Sircar (National Program Director) who skillfully oversaw and supervised operations from the inception of the project right to its very conclusion. Mentioned below are only a few names of institutions and individuals, which, each in their own way provided valuable input in terms of technical know-how and other relevant skills. Their collective contributions helped IDE-B to collate and compile the information provided in this report: Bangladesh Agriculture University Bangladesh Agricultural Machinery Merchants Association Bangladesh Engineering Industries Owners Association Chittagong Builders Mr M.A. Motalib – Deputy General Manager of the Bangladesh Small & Cottage Industries Cooperation (BSCIC) Mr Md Muzzammel Hoque – Deputy Director of Water Management & Agriculture in the Department of Agricultural Extension (DAE) Professor Nurul Islam – Researcher and former Director in the Institute of Appropriate Technology – BUET. Syed Tamjid ur Rahman, Team Leader Subsector Analysis and Market Assessment Agricultural Machinery, Tool, and Equipment Subsector Jessore, Dinajpur, and Bogra August 24, 2003 REFPI SS-MA “Agricultural Machinery, Tool and Equipment Subsector” 3 Table of Contents LIST OF ABBREVIATIONS AND ACRONYMS ________________________________________ 5 GLOSSARY ________________________________________________________________________ 6 INTRODUCTION ____________________________________________________________________ 9 BACKGROUND OF STUDY _____________________________________________________________ 9 METHODOLOGY____________________________________________________________________ 10 Subsector Market Assessment Approach ______________________________________________ 10 Step 1: Subsector Selection/Product Selection ___________________________________________ 10 Step 2: Initial Subsector Information Gathering and the Subsector map________________________ 11 Step 3: Identification of Constraints and Opportunities ____________________________________ 11 Step 4: Identification of Business Services and Providers that Address Constraints and Opportunities 11 Step 5: Market Assessment of Identified Business Services _________________________________ 11 Step 6: Design of Interventions to Develop Business Services in the Subsector__________________ 11 SCOPE AND ACTIVITIES OF THE STUDY:__________________________________________________ 12 1. Orientation and Training _____________________________________________________ 12 2. Information Gathering _______________________________________________________ 12 a. Secondary Data __________________________________________________________________ 12 b. Narrowing Down Product __________________________________________________________ 12 c. Key Informant Interviews __________________________________________________________ 13 e) Validation Workshop of Subsector Representatives ______________________________________ 14 OVERVIEW OF ON-FARM MACHINERY AND TOOLS PRODUCTION AND USE: _________ 15 AGRICULTURAL MACHINERY AND TOOLS PRODUCTION IN BANGLADESH _______________________ 16 AGRICULTURAL MACHINERY AND TOOLS PRODUCTION ENVIRONMENT_________________________ 17 PRODUCTION OPPORTUNITIES _________________________________________________________ 18 SUBSECTOR ANALYSIS AND MARKET ASSESSMENT:________________________________ 20 RELATED SUBSECTOR CONSTRAINTS: ___________________________________________________ 20 Subsector Map __________________________________________________________________ 20 Subsector Constraints ____________________________________________________________ 20 DESCRIPTION OF THE BDS NECESSARY FOR THE GROWTH OF THE SUBSECTOR ___________________ 24 BDS MARKET INFORMATION _________________________________________________________ 27 CONSTRAINTS IN THE MARKET FOR BDS (DEMAND SIDE AND SUPPLY SIDE)_____________________ 28 SATISFACTION WITH THE SERVICE______________________________________________________ 29 AWARENESS OF BDS________________________________________________________________ 30 PROPOSED PROVIDERS TO TARGET FOR INTERVENTIONS ____________________________________ 31 FINANCIAL SUSTAINABILITY OF SERVICE PROVISION _______________________________________ 31 POTENTIAL IMPACT ON FARM EQUIPMENT SUBSECTOR _____________________________________ 32 CONCLUSIONS ____________________________________________________________________ 33 TECHNOLOGY AND GENDER ISSUES ____________________________________________________ 33 RECOMMENDATIONS/INTERVENTION DESIGN _____________________________________ 35 IMPLEMENTATION PROGRAM GUIDELINES _______________________________________________ 35 APPENDICES ______________________________________________________________________ 41 BIBLIOGRAPHY ___________________________________________________________________ 42 REFPI SS-MA “Agricultural Machinery, Tool and Equipment Subsector” 4 List of Abbreviations and Acronyms BADC : Bangladesh Agriculture Development Corporation BAMMA : Bangladesh Agriculture Machinery Merchant Association BARC : Bangladesh Agricultural Research Council BARI : Bangladesh Agriculture Research Institute BASC : Business Advisory Services Center BAU : Bangladesh Agricultural University BBS : Bangladesh Bureau of Statistic BDS : Business Development Services BEIOW : Bangladesh Engineering Industry Owner’s Association BMEDP : Bogra Metal Enterprises Development Program BRAC : Bangladesh Rural Advancement Committee BRDB : Bangladesh Rural Development Board BRRI : Bangladesh Rice Research Institute BS : Business Services BSCIC : Bangladesh Small and Cottage Industries Corporation BUET : Bangladesh University of Engineering and Technology BYDC : Bangladesh Youth Development Center CARE : Cooperative for Assistance & Relief Everywhere CYMMIT : International Maize & Wheat Improvement Center DAE : Department of Agricultural Extension DFID : Department for International Development GDP : Gross Domestic Product GNP : Gross National Product GOB : Government of Bangladesh GTZ : German Technical Aid HYV : High Yielding Variety IDE : International Development Enterprises ITDG : Intermediate Technology Development Group KB : Krishak Bandhu MAWTS : Mirpur Agriculture Workshop and Training MIDP : Minor Irrigation Development Program NCDP : Northwest Crop Diversification Project NGO : Non-Government Organization PETRRA : Poverty Elimination through Rice Research and Assistance RDA : Rural Development Academy RDRS : Rangpur Dinajpur Rural Services REFPI : Research And Extension in Farm Power Issues SE : Small Enterprises SME : Small & Micro Enterprises SS : Subsector SS-MA : Subsector Market Assessment STW : Shallow Tube Wells ToR : Terms of Reference REFPI SS-MA “Agricultural Machinery, Tool and Equipment Subsector” 5 Glossary • Business Development Services (BDS): any non-financial service provided to businesses on either a formal or informal basis. Also known as Business Services (BS) • Demand: the quantity and type of goods or services
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