USAID/DAI AGRICULTURAL VALUE CHAINS (AVC) PROJECT: BANGLADESH AND

(VALUE CHAIN REPORT, END MARKETS AND VALUE CHAIN ANALYSIS)

By

Dr. Esendugue Greg Fonsah, PhD Professor and Extension Economist Fruits and Vegetables Department of and Applied Economics University of Georgia Tifton, GA 31793

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Table of Contents

Acknowledgement 7 1. Introduction 8 2 Current Banana Production Trends, Situations and Outlook in Bangladesh 8 2.1 Planting Period 9 2.2 Planting Pattern 10 2.3 Harvesting 10 2.4 Planted Banana 10 2.5 Irrigation System 10 2.6 Pests and Diseases 11 2.7 Peel-feeding caterpillar 11 3 Sustainable Banana Production in Bangladesh (Supply) 11 4 Sustainable Marketing and Trade of in Bangladesh (Demand) 12 5. Cost of Production Analysis 13 5.1 Demand for Bananas 14 5.2 Gate Prices 14 5.3 Wholesale Prices 15 5.4 Retail Prices 16 6 Agricultural Value Chain (AVC) Survey Methodology 17 6.1 Sampling Plan 17 6.2 Data Collection 18 6.3 Data Analysis 18 7 Agricultural Value Chain (AVC) Survey Results 18 7.1 Production Survey Results and Analysis 18 7.2 Intermediaries Survey Results 29 7.3 Consumer Survey Results 34 8 Market and Distribution Channels 37 8.1 Existing Market Channels 37 8.2 One-Level-Channel 37 8.3 Two-Level-Channels 37 8.4 Four- Level-Channels 38 9 Domestic Market Structure 38 9.1 Wholesalers/Distributors in Dhaka 38 9.2 Post-Harvest Treatment 38 9.3 Transportation Services 39 9.4 Ripening Chambers 39 9.5 Packing Shed/House 40 10 International Trade 40 10.1 Export Market 40 10.2 Export Certificate 41 10.3 MEGA International Trading Company 41 10.4 Bangladesh Horticultural Export Development Foundation (Hortex Foundation) 41 10.5 Bangladesh Fruit, Vegetables & Allied Products Exporter’s Association 42 (BFVAPEA)

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11 Conclusion 42 11.1 Recommendation 43 11.2 Field/ Management 43 11.3 Harvesting Management 44 11.4 Packing shed/House and Post-Harvest Management 44 11.5 Rural Distribution Center and Ripening Chamber 45 12 Agricultural Value Chain (AVC), India 46 12.1 Purpose 46 12.2 Keventer Agro Limited 46 13 Banana Supply VC Model 47 13.1 Market share and profit margins 47 13.2 Import/Export 48 13.3 Business model 48 14 Market and Distribution Channels 49 14.1 Existing Market-Level-Channels 49 14.2 Success Stories 49 14.3 Banana Production 50 14.4 Production Costs 50 14.5 Good Agricultural Practices (GAP) and Quality 50 14.6 Disease problems 51 15 Super Market, Kolkata 51 15.1 Banana Retail Prices 51 16 World Banana Production Outlook 52 16.1 World banana suppliers 52 16.2 World banana export countries 53 16.3 World banana import countries 54 16.4 World banana export by regions 54 17 Conclusion 55 17.1 Recommendation 55 References and Recommended Reading 57

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Table of Figures

2.1a Plant infested by BBTV 11 2.1b Sigatoka infestation 11 2.1c Peel-feeding damage 11 5.1 Projected Bangladesh Population, 1950-2100 14 5.2 Grower Average Price for Shabri-Kola, 2005-2015 15 5.3a Grower Average Prices for Shagor-Kola, 2005-2015 15 5.3b Growers Average Prices for Champa-Kola, 2005-2015 15 5.4a Ordinary-Shagor-Kola Ave. Wholesale Prices, 1986-2015 16 5.4b Shagor-High Quality Average Wholesale Price, 2006-2015 16 5.5a Shabri-Kola Average Wholesale Prices, 1986-2015 16 5.5b Champa-Kola Average Wholesale Prices, 1986-2015 16 5.6a Shagor-Kola Ordinary Average Retail Prices, 2005-2015 17 5.6b Shagor-Kola High Quality Average Retail Prices, 2005-2015 17 5.7a Champa-Kola Average Retail Prices, 2005-2015 17 5.7b Shabri-Kola Average Retail Prices, 2005-2015 17 7.1 What is your profession? 18 7.2 What is the size of your farm? 19 7.3 What else do you cultivate besides bananas? 19 7.4 How many years have you been producing bananas? 20 7.5 How often do you produce and/or cultivate bananas? 20 7.6 What variety of bananas do you cultivate? 21 7.7 Why do you prefer the selected variety? 21 7.8 Is banana production increasing or decreasing? 22 7.9 Why do you think banana production is increasing or decreasing? 22 7.10 How much do you sell a bunch of bananas on the average? 23 7.11 Is the quality of any kind of bananas important to you? 23 7.12 Do your buyers complain about quality? 24 7.13 Do you use 24 7.14 Do you do soil and tissue analysis before, during and after planting? 25 7.15 What fertilizers do you use? 25 7.16 Have you ever seen bananas packaged in boxes before? 26 7.17 If your customers want packed bananas, would you accept to adopt the changes? 26 7.18 What would your packaging preferences be? 27 7.19 What is your monthly household income? 27 7.20 How old are you? 28 7.21 Where do you belong in the banana VC? 29 7.22 Where is your business location? 29 7.23 What are the varieties of bananas you buy? 30 7.24 How do you buy your bananas? 30 7.25 How much are you willing to pay for a good quality bunch of any variety of 31 bananas? 7.26 Would you pay premium price for any quality bananas? 32 7.27 What are the quality attributes that influence your purchasing decisions? 32

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7.28 How much will you be willing to pay for one bunch of good quality Local and 33 variety 7.29 Which of the locally grown bananas do you prefer to buy? 34 7.30 How often do you eat bananas? 34 7.31 Why do you prefer the selected local variety? 35 7.32 How much are you willing to pay for 1 Kg of bananas? 35 7.33 What is your monthly household income? 36 8.1 Existing banana market channels in rural and urban areas 37 8.2a Jatrabari Kalapatti urban wholesale market, Dhaka City 38 8.2b Pobahati urban wholesale market 38 8.3a Hortex Foundation reefer truck exterior 39 8.3b Interior of reefer container 39 8.3c Bangladesh Airfreight at the International Airport, Dhaka 39 10.1 Bangladesh banana export, 2014 40 11.1a Farmer’s demarcation zones 44 11.1b Reefer container’s interior 44 11.2a Mr. Rahman – A Local Mango Entrepreneur, wholesaler and distributor 45 11.2b Cold storage warehouse, Hazrat Shahjalal International Airport, Dhaka. 45 12.1 Keventer Office, conference room and team of experts 46 12.2 Mr. Choudhuri on the left, display of quality bananas in middle and delivery 47 extreme right 12.3 Color crates on the left, ripening chambers (middle) and interior of ripening 47 chamber (extreme right) 13.1 Keventer Agro Ltd Business Model 48 14.1 Existing Market Channels in Kolkata, India, West Bengal Region 49 14.2 Newly harvested bunches of bananas 50 14.3 Field conditions that contribute to quality and post-harvest defects 51 14.4 Visit of banana in Karimpor, Nadia district, Kolkata, India 51 15.1 Prices of different banana varieties in Super Market in Kolkata, India 52 15.2 Fresh banana blossom sold in supermarket, Kolkata, India 52 16.1 Top 10 banana producing countries compared to the 53 16.2 Top banana exporting countries 53 16.3 World banana importing countries 54 16.4 Banana export by regions 55

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List of Tables

2.1 Acreage, Production and Yield Rate of Bananas, 2003-2012 8 5.1 Economic Risk-Rated Returns Over Total Cost of Producing Bananas for Two 13 Cycles in Alompur Village of Meherpur District, 2015 5.2 Risk-Rated Sensitivity Returns Over Total Costs of Producing Bananas for Two- 13 Cycles in Alompur village of Meherpur District, 2015. 10.1 Bangladesh Banana Export, 2014 40

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Acknowledgements

This study was funded by USAID/DAI for which the author is truly indebted. The author wish to expressed gratitude to the following individuals with USAID/DAI Bangladesh who assisted in one way or the other in making this research a success: Dr. William (Bill) Levine (Chief of Party), Bani Amin (Deputy Chief of Party), Anup (Tutul) Toy, Arshad Hussain, Mahbuh Khan, Masud Ahmed, Mohammad Saiful Islam, Mohammad Soeb Iftekhar, Sadequl Amin, Somashree (Soma) Chattapadhya, Tanvir Manower, Shamia Chowdhury, Serajul Isam, Rekha Lal, Bithika Das Hazra, Md. Sazzad Hossain, Rashed Reza Chowdhury and Abdul Mannan Sarkar. More-so, my gratitude goes to the following private sector individuals who provided valuable information that strengthened the depth of this research: Mr. Mitul K. Saha (Assistant General Manager - Supply & Value Chain, Marketing, R&D) and Md. Rafiqul Islam (Assistant General Manager - Production) at Hortex Foundation; Mr. Kbd. Md. Hafizur Rahman (Deputy Director), and Mr. Abdul Aziz (Sub-Assist. Agriculture Officer), Plant Quarantine Station, Hazrat Shahjalal International Airport, Dhaka, Mr. Monjurul Islam (Adviser, Bangladesh Fruits Vegetables & Allied Products Exporters Association), Mr. Md. Moshin (Manager, Dhali Super Store) and Syed Salim Uddin Ahamed (Floor Manager, Lavender Super Store Ltd.) My special thanks goes to Mr. Aniruddha Hom Roy (Private Sector Advisor, Economic Growth office, US Embassy Bangladesh) for taking the time off his busy schedule to attend my debriefing presentation, Meg Karchner and her team for effectively using her soft diplomacy to provide further assistance that contributed to the success of the assignment and providing the logistics to facilitate travel and documentation. My appreciation also goes to Messrs Sarada Prasad Choudhuri (Deputy General Manager - F&V Division) and Balaram Nandi (Sr. Executive - F&V Division), Keventer Agro Limited, Bazar Kolkata, India, Bandhab Kalar Arat (Wholesaler in Tehatta), Nadia, India. Finally, thanks to Messrs Sourabh Sen (Global Affairs Advisor), and Gaurav Bansal (Consul for Political and Economic Affairs), Consulate General of the United States of America, Kolkata, West Bengal, India.

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1. Introduction

Agriculture is very important to Bangladeshis economy as it contributes 17% of its total GDP. According to Bangladesh Statistics, banana is the only fruit crop available year round with the highest per capita consumption compared to the over 118 different fruits crops produced in the country. Banana is considered “one of the finest fruits and the most important in terms of food value, food security, food availability and above all, it is a crop that has a positive impact due to its profitability margins aimed at increasing household income and alleviating poverty. Most importantly, the “super fruit” crop is not only economically important but has the best nutritional value as well - all in one.

It is important to note here that the popularity of banana is partially due to its “low price and multiple uses, i.e., as vegetable and as a dessert fruit. It is a rich source of carbohydrate and having plenty of vitamins particularly vitamin B. It is also a good source of potassium, phosphorus, calcium and magnesium (Fonsah et Chidebulu, 1995; 2012; Fonsah et al. 2007). Ripe banana mixed with rice and milk is the traditional dish for the Bangladeshis. is used as the first baby food. It helps in reducing risk of heart disease when used regularly and is recommended for patients suffering from high blood pressure, arthritis, ulcer, gastroenteritis and kidney disorders” (Bangladesh Statistics, 2015; Fonsah and Chidebelu, 1995; 2012).

2. Current Banana Production Trend, Situation and Outlook in Bangladesh

Banana alone represents 20% of all the over 118 fruits crops produced in Bangladesh with a market share of 36%. From 2003 to 2006, harvested acreage, production and yields experienced steady increased and reached its peak in 2007 with a total of 145,300 acres, producing 1,004,500 MT and obtaining an optimum yield of 6.9 MT/Acre (BBS Yearbook, 2015).

Table 2.1: Acreage, Production and Yield rate of Banana during the year 2003-04 to 2011-12

Year Acreage (in ‘000’) Production (in ‘000’ MT) Yield Rate (MT) 2003-04 121.7 706.6 5.8 2004-05 133.0 898.7 6.8 2005-06 138.4 909.1 6.6 2006-07 145.3 1004.5 6.9 2007-08 131.6 877.1 6.7 2008-09 132.4 836.2 6.3 2009-10 133.3 818.3 6.1 2010-11 130.6 779.4 6.0 2011-12 121.7 745.9 6.1 Source: Yearbook of Agricultural Statistics of Bangladesh-2008, 2011 & 2012) BBS.

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This was quite significant although lower than the world’s average. However, since then all the three economic indicators, i.e. acreage, production and yields have maintained a nosedive downward sloping trend. For instance, in 2012, 121,700 acres were harvested and 745,900 MT produced with a yield of 6.1 MT was reported. This translates to 16%, 26 % and 11% decrease in planted acreage, production and yields respectively in almost a decade.

The reasons for these declines were:

1. The cyclone that devastated all the from 2007-2008 2. Population explosion that is converting farm land to residential properties 3. Pests and diseases 4. Adopted outdated agricultural practices 5. Increased Pre and Post-harvest losses 6. Quality 7. Lack of general farm management skills 8. Lack of post-harvest management skills 9. Lack of improved planting materials 10. Lack of cold storage and ripening facilities.

That explains why the government found it necessary to subsidize and lend support to the industry with inputs such as fertilizers, irrigation, pest and disease controls respectively.

2.1 Planting Period

In Bangladesh, banana is planted year round but there are three major periods namely:

1. Mid-September to Mid-October 2. Mid-January to Mid-March, and 3. Mid-March to Mid-May. 4. December to February – Best planting time for premium prices

According to discoverybangladesh.com, “Bangladesh has a subtropical monsoon climate characterized by wide seasonal variations in rainfall, high temperatures and humidity. There are three distinct seasons in Bangladesh: a hot, humid summer from March to June; a cool, rainy monsoon season from June to October; and a cool, dry winter from October to March” (Bangladesh Weather Online, 2015).

We were told that March – May was a longer planting period. It is not a good or recommended time and harvesting is done 10 – 12 months but according to google search, March to May supposed to be “humid summer”. I am tempted to think that it is because this period runs into the rainy monsoon season (June-October) that makes it difficult for the young banana plants to establish. The ratoon for the March-May planting is 8-9 months. The second ratoon (F2) is the same 8 – 9 months. After the 3rd, the plantation is fallowed or rotated with other crop, i.e.

9 vegetables like cauliflower, cabbage etc. Also intercropping is done in the first year of planting with potatoes. After 90 days, the potatoes are harvested. The potatoes are fertilized so the banana partially benefits from that. After 90 days, the potatoes are harvested and production continues with banana. Sometime the rotation is onion, cauliflower, cabbage. If intercropping is potatoes, January to February is the preferred planting time.

2.2 Planting Pattern

The planting pattern observed was the single line technique to accommodate the intercropping. The planting density varied from 350 – 400 plants /Bigha or 1,050 – 1,200 plants/acre or 2,594- 2,964 plants/ hectare.

2.3 Harvesting

Heavy harvesting is carried out from June – July so as to target the Ramadan Holy month/season. It is believed but not scientifically proven that Bangladeshis eat more bananas in the Holy month. However, banana is a perennial crop, and harvesting supposed to be on a daily basis after the plant crop stage/harvest. Harvesting standard operations procedures (SOP) such as calibration, eye technics and specific target market were not known and harvesting operation was need based. Quality specifications and handling procedures were not respected or known. All these can be easily taught at the appropriate time, i.e. when customers continue to complain about quality or when the industry is ready for a revolutionary change.

2.4 Planted Banana Cultivar

The banana that existed 50 years ago were: “Sabri”, “Champa”, “Kabri”, “Amirta- Sagar”. Other varieties were: “Jahagir” (Singapori); “Mesagir”, “Aati-Kola/Bichi” (seed banana). We were told that “Shabri” used to the favorite banana, then “Champa” but production of Shabri was believed to be decreasing while “Champa” is increasing. However, this theory has to be proven. Other local varieties were: i.e. BARI-Kola-1; BARI Koli-2 and BARI Kola-3 (BARI stands for Bangladesh Agricultural Research Institute). Empirically, farmers who grow BARI Kola -1, 2 or 3 are not aware of what they are growing. They already have local names for them which might be quiet confusing. This is an area where the presence of Extension could be quite useful in educating the farmers.

2.5 Irrigation System:

The only prominent water supply system observed was flood irrigation system. In all regions visited, there were no other irrigation systems except flooding. However, there were no signs of water stress in any of the farms visited.

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2.6 Pest and Disease

The presence of both yellow and black Sigatoka was eminent. Yellow Sigatoka is caused by Mycosphaerella Musicola while black Sigatoka is caused by Mycosphaerella fijiensis (Fonsah and Chidebelu, 1995; 2012). In some fields, banana bunchy top virus (BBTV) was observed (fig. 2.1a). When questioned, the farmers reported several incidence of BBTV but did not know what it was (Fig. 2.1b).

Fig. 2.1a: Plant infested by BBTV Fig. 2.1b: Sigatoka infestation Fig. 2.1c: Peel-feeding damage

2.7 Peel-feeding caterpillar

The most common pest that has posed major problems in most banana growing countries in the world was also present in Bangladesh. The peel-feeding caterpillar (fig. 2.1c) was a major threat to Bangladesh . The solution for this pest is absolutely necessary especially if the medium and long-term goal is to transitioning from traditional production system to semi- modern or modern system for sustainability (Fonsah and Chidebelu, 1995; 2012). There are many species of peel-feeding caterpillar such as Platynota rostrana found in and or Ecpanteria spp (Arctiid (Bullock and Robert, 1961; Fonsah and Chidebelu, 1995; 2012).

3. Sustainable Banana Production in Bangladesh

In order to resolve the declining trend, improve yield, productivity and profitability, there is need to adopt sustainable agricultural practices. Sustainable banana production in Bangladesh is a function of:

SPBgl = f (Bmgt, Smgt, Fmgt, Pmgt, Imgt, Rmgt, Hmgt …, Zn)

Where:

SPBgl = Sustainable Production of Bangladesh Bananas (Supply)

Bmgt = Improved Breeding Program & Management

Smgt = Soil Management

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Fmgt = Fertility management;

Pmgt = Pest, disease and weed management;

Imgt = Water or irrigation management;

Rmgt = Continuous Research;

Hmgt = Human Resource and Incentives;

Zn = Other factors (Climate change, weather, GAP, New Technology Adoption etc.)

In order to be sustainable, all the conditions above must be met at least to a certain level. Empirically, current production practices in all the district and FtF areas show that there is great need to meet some or all of these conditions.

4. Sustainable Marketing and Trade of Bananas in Bangladesh (Demand)

The most important factor a farmer must consider is how to market their produce. Most farmers, including subsistent farmers, must find ways to get rid of their excess production. They can either share with neighbors or find ways to preserve them for a rainy day. However, banana is a perishable fruit crop with a limited shelf life. So it is vitally important that farmers first secure a market for their produce, locally or overseas. The demand for Bangladesh banana is a function of the following:

M&TBgl = h (Pd, Pf, Pg, Qb, Pp, Yf, Ex, … Xn)

Where:

M&TBgl = Quantity of Bangladesh Bananas demanded by importing country (Demand)

Pd, = Domestic Price of bananas

Pf, = Foreign Price of bananas

Pg, = Prices of other fruits in the domestic and importing country

Qb, = Quality of Bangladesh bananas

Pp, = Foreign Population and per capita consumption of bananas

Yf, = Foreign Income level (disposable incomes)

Ex = Exchange rate parity

Xn = External shocks (price fluctuation, hurricanes wind damage etc.)

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Take for instance the external shock in our marketing equation, Xn. The cyclone that devastated all the farms from 2007-2008 is partially blamed for the decline trend because farmers were not trained and prepared to handle/revamp a banana orchard/plantation after a hurricane or cyclone. As a result, the effect is still being felt today as most of the farmers switched to other crops like jute plants cultivation.

5. Cost of Production Analysis

Although banana production is showing signs of increase after almost a decade of decreasing trend, it is important to determine the profitability margin. Basic economic theory tells us that a decrease in production equals increase in price. That alone did not satisfy our curiosity so we decided to gather a dozen or so farmers in the Moharajpur of Jhednaidah district and Alompur village of Meherpur district, sat down with them and developed a risk rated enterprise budget based on their actual agricultural practices (Table 1).

Table 5.1: Economic Risk-Rated Returns Over Total Costs Of Producing Banana for Two Cycles in Alompur Village of Meherpur District, 2015

Description Best Optimistic Expected Pessimistic Worst Returns (BDT) 82,631 78,725 74,819 60,555 65,311 59,709 54,107 Chances (%) 2% 16% 32% 50% 0.76 0.84 1 Chances (%) 95% 84% 57% 32% 16% 2% Chances for Profit = 99% Base Budgeted Net Revenue = 67,430 + Sucker Sales (BDT) 8,000 Total Net Returns (BDT) = 75,431

A risk rated return adopts five different scenarios, thus: Expected, pessimistic, worst, optimistic and best. The best case scenario can occur once in ten years while the worst case scenario can occur any time but in the analysis we use 2% of the time to avoid zero.

Table 5.2: Risk Rated Sensitivity Returns Over Total Costs of Producing Banana for Two Cycles in Alompur Village of Meherpur District, 2015

Description Best Optimistic Expected Pessimistic Worst Net Revenue 2% 16% 32% 50% 32% 16% 2% (BDT) Yields (Bunches) 550 % Change in Sales Price BASE 225 -10% 80,725 75,537 70,537 47,493 60,620 55,797 50,975 61,680 238 -5% 81,646 77,193 72,740 54,285 63,125 57,962 52,799 68,830 250 BASE 82,631 78,725 74,819 60,555 65,311 59,709 54,107 75,430 263 5% 83,877 80,504 77,131 67,348 67,576 61,393 55,211 82,580 275 10% 85,330 82,348 79,366 73,618 69,586 62,788 55,989 89,180

In this area, banana is produced only in two cycle and/or harvest, which is pretty smart since there is disease pressure which the farmers don’t know how to control and even if they did, it would not be

13 economical given their farm size and weak financial strength. Our analysis depicted a net profit of 75,431 BDT/33 decimal with a 99% chance of obtaining profit for banana production. This also explains why farmers are beginning to switch from jute plant cultivation to bananas and why there are several new farms and several new entrants farmers (Table 5.2).

A risk-rated sensitivity analysis over total costs of cultivating two cycles of bananas in the Alompur village of Meherpur district also showed positive net returns. For instance, with a 10% decrease in price and an expected production of 550 bunches, the farmer can still earn a net profit of 61,680 BDT/33 Decimal or a net profit of 50,975 BDT/Decimal in the worst case scenario (Table 5.2).

5.1 Demand for Banana

Although the banana production has been downward slopping in the past decade due to several reasons already mentioned, the local demand is still higher than other fruits crops. More-so, the 2015 Bangladeshis population of 169.6 million people is experiencing a 1.6% growth rate per annum. This is an eminent threat to the country’s future food security. Therefore, it is a national priority for the government to get involve as soon as possible and provide austerity measures aimed at alleviating the current state of affairs which threatens future national food security.

Fig. 5.1: Projected Bangladesh population, 1950-2100 Source: http://populationpyramid.net/bangladesh/2025/ Accessed July 22, 2015

In 2025, the population is estimated to attain 185.1 million that must be fed with bananas and other fruit crops. Therefore, even if the per capita consumed remains the same as today, the demand for bananas will continue to increase due to population growth (fig 5.1).

5.2 Farm Gate Prices

Since 2007, the prices farmers receive for all types of bananas and in all the districts including the FtF regions are increasing. The average price received by Shabri-Kola banana growers in Barisal, Chittagong, Dhaka, Khulna, Rajshahi and Rangpur are all on the rise (fig.5.2).

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Fig. 5.2: Grower average price for Shabri-Kola, 2005-2015. Source: Bangladesh Bureau of Statistics and Information and Informatics Division Ministry of Planning: Report on the productivity Survey of the Bananas Crop, 2013.

The same rising trend can be observed for other cultivars such as Shagor-kola in all the districts. It is worth mentioning here that the farm gate prices for Shagor-kola rose exponentially from 2013 to 2015 compared to the earlier years where prices were consistently constant. A logical and partial explanation is that consumer’s behaviors towards Shagor have changed dramatically probably due to its longer and bigger size.

Fig. 5.3a: Grower average prices for Shagor-Kola from 2005-2015. Fig. 5.3b: Growers Average Prices for Champa-Kola, 2005-2015 Source: Bangladesh Bureau of Statistics and Information and Informatics Division Ministry of Planning: Report on the productivity Survey of the Bananas Crop, 2013.

On the other hand, although grower’s price for Champa-Kola is also increasing, the upward trend started only from 2014-2015.

5.3 Wholesale Prices

A similar trend was observed for wholesale prices in all the regions. Apparently there is a huge demand for bananas due to the shortages caused by a decrease in production. Wholesale prices for the regular Shagor-kola are all increasing in all the districts. However, there’s not clear and consistent wholesale price trend for high quality Shagor-kola. The reason is clear and simple.

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Fig. 5.4a: Ordinary-Shagar-kola Ave. Wholesale prices, 1986-2015 Fig. 5.4b: Shagar –High quality Ave Wholesale price Source: Bangladesh Bureau of Statistics and Information and Informatics Division Ministry of Planning: Report on the productivity Survey of the Bananas Crop, 2013.

There is no high quality Shagor-kola especially that this cultivar is already becoming the “new kid in town” for banana lovers and consumers. Consumers have acquired new banana taste and have started showing increasing interest.

Fig.5.5a: Shabri-kola Ave wholesale prices, 1986-2015 Fig.5.5b: Champa-Kola: Ave. Wholesale prices, 1986-2015

Another interesting phenomenon is that the wholesale price for Shabri-kola is not only increasing but it is increasing at a steeper slope in all the districts in the study compared to all the other cultivars, i.e., Champa-kola and Shagor-kola respectively (Fig. 5.5a & b). That also means the consumers have stronger preference for Shabri-kola compared to its competitors (Fig. 5.5a).

5.4 Retail Prices

Retail prices for ordinary Shagor-kola have been increasing from 2006 in all the regions with a slight decline in Chittagong, Dhaka and Sylhet. The retail prices for high quality Shagor, if available are significantly higher than the ordinary quality (Fig. 5.6a; 5.6b).

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Fig. 5.6 a: Shagor-kola Ordinary Ave Retail Price, 2005-2015 Fig. 5.6b: Shagor-Kola – High Quality Ave Retail Prices, 2005-2015

The retail price for Champa-kola increased from 5 Tk in 2005 to about Tk 20 in 2015 (fig. 5.7a). The lowest retail price in 2014 was 10 Tk, recorded in Khulna while the highest price in 2015 was recorded in Dhaka. On the other hand, although the retail price for Shabri-kola have been increasing also, there was a significant decrease in price in Rangpur in 2013 while Barisal

Fig. 5.7a: Champa-kola Ave Retail Prices, 2005-2015 Fig. 5.7b: Shabri-kola Average Retail Prices, 2005-2015

experienced a steep price increase (fig. 5.7b). Although it was difficult to differentiate the price for Dhaka and Chittagong district, both district maintained a consistent retail price increase. It is equally important to note that prices in the entire banana VC, i.e. farm-gate prices, wholesaler prices and retail prices have all been increasing for the past decade.

6. Agricultural Value Chain (AVC) Survey Methodology

6.1. Sampling Plan

One of the major objectives was to develop questionnaire for value chain actors, conduct key informants interviews and focus group discussions, targeting geographic areas. Three different sets of questionnaires were developed and tested several times in Dhaka, Jessore, Faridpur, and Barisal.

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Thereafter, the questionnaires were modified based on the responses from the field tests. The production questionnaires were designed to find out present agricultural practices, production trends and growers behavior vis-à-vis willingness to adopt new technology. The second questionnaire was for the intermediaries also known as middlemen. This questionnaire was aimed at determining market and distribution level-channels, wholesaler’s price determination, wholesaler’s attitude and perception vis-à- vis willing to pay (WTP) premium price for high quality bananas. The third survey was design for the customers and/or end-users. The survey was aimed at studying consumer behaviors vis-à-vis willing to pay (WTP) for quality bananas, determination of customers preferences for different banana cultivars/varieties and consumer preferences vis-à-vis quality attributes.

6.2 Data Collection

A total of 177 survey questionnaires were distributed amongst the three groups of VC key participants, out of which 130 were usable. Forty-one production survey questionnaires were distributed to farmers in Jessore, Jdeniada, Harinakunda, Jhinaidah Sadar, Sailkupa, Kinshargoni, Narayangoni, Shyllet, Barisal and Faridpur. Only 26 were usable. More-so, 33 questionnaires were distributed to intermediaries/wholesalers and retailers in Khamarmundia, Kaligonji, Jhedaideh, Shinhutola Bazar, Hakimpur, Chaugacha, Jessore and Dhaka. Only 25 were usable. Finally, out of 103 survey sent out to consumers/end-users, 79 were usable. Our consumer survey study areas were Dhaka, Jessore, Barisal, Faridpur, Khamarmundia and Kalingonji.

6.3 Data Analysis

The data collected from the three different segments of the complete Bangladesh banana VC, i.e., production (farmers), intermediaries (wholesalers and retailers) and consumers (end-users) was inputted in an Excel spreadsheet. Basic statistics such as percentages, histograms and graphs were used to analyze the data.

7. Agricultural Value Chain (AVC) Survey Results

7.1 Production Survey Results and Analysis

The respondents were asked what their professions were. The majority (77%) of them were strictly farmers, 19% were farmers and retailers while barely 3.8% of them were farmers/wholesalers (fig. 7.1).

20 15 10 5 0 Farmer Farmer/R Farmer/WS

Fig. 7.1: What is your profession?

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Q. What is the size of your farm?

The respondents were asked what their farm size was. Most of the respondents had farm size range of 26-50 decimals (30.8%). The others (19.2%) had farm size of 51-75 decimals while 23.1% of them had farm sizes of 1 acre. Interestingly a good number (22.3%) of the respondents had farm sizes ranging from 1-13 acres. The number of new farmers and expanded farm size observed was a clear evident and justification that farmers were gradually switching from jute plant cultivation to bananas. Another classic example is that the 3.8% of the respondent who had farms less than 25 decimal were probably the new entrants (fig. 7.2).

8 6 4 2 0

Fig. 7.2: What is the size of your farm?

Q. What else do you cultivate beside bananas?

The respondents were asked what else they cultivate beside bananas. Out of the total respondents, 26.4 % cultivated rice, while 25% grew jute plants. On the other hand, 13.9% of the farmers grew mangos while 11.1% were involved in mixed vegetables. Other important crops were potatoes and sugar cane which depicted 11.1% and 4.2% respectively (Fig 7.3).

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10

5

0

Fig. 7.3: What else do you cultivate beside bananas?

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Q. How many years have you been producing bananas?

The respondents were also asked to state the number of years they have been involved in banana production. The figure below shows that 73.1% of the farmers have been cultivating bananas between 1- 10 years while 26.9% were in the range of 11-20 years (Fig. 7.4).

20

15

10

5

0 1-10 years 11-20 years

Fig. 7.4: How many years have you been producing bananas?

Q. How often do you produce/cultivate bananas?

The respondents were also asked how often they cultivate bananas. They were provided three answers, i.e. very often, occasionally and never. Surprisingly, 92.3 % of them grow bananas very often while barely 7.7% grew the crop occasionally (fig. 7.5).

25

20

15

10

5

0 Very Often Occasionally

Fig. 7.5: How often do you produce/cultivate bananas?

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Q. What variety of bananas do they grow?

The results of our survey also depicted that 30.8% of the respondent cultivated Sabri-kola, compared to 21.2% for Rongin Sagor-kola and 15.4% for Champa-kola. However, it is interesting to also find out that 23.1% were involved in Green / cooking bananas. Other less cultivated varieties were: Thota-kola (3.8%); Bangla-kola; Bitchi-kola and Baishara-kola with 1.9% respectively.

16 14 12 10 8 6 4 2 0

Fig. 7.6: What variety of bananas do you cultivate?

Q. Why do you prefer the selected varieties?

The principal reasons for selecting the preferred cultivars were: Profitability (25.7%); Easy to grow (21.6%); Customers like it (17.6%) and Good prices (18.9%). Being rational farmers as expected with rational expectations, sweetness was the least preferred reason after resistant, and sucker availability.

20 15 10 5 0

Fig. 7.7: Why do you prefer the selected variety?

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Q. Is banana production increasing or decreasing?

The respondents were provided with four choices, i.e., increasing, decreasing, not sure and same. The results showed that as high as 92.3% of the farmers believed that production was increasing compared to 7.7% who were not sure. It was also surprising to note that no one believed that production was either constant or decreasing.

25

20

15

10

5

0 Increasing Not sure Decreasing Same

Fig. 7.8: Is banana production increasing or decreasing?

Q. Why do you think banana production is decreasing or increasing?

There were four reasons expressed to prove that banana production was in fact increasing. For instance, 27.9% of the respondents believed that the increase was due to the fact that there are new farmers entering the business. Others, 23.3% believed that most of the old timers have increased their banana farm size. On the other hand, 25.6% claim that production is increasing due to increased pressure / demand from the buyers while 23.3% thought that the increased in production is being driven by the premium price obtain for their produce.

12 11.5 11 10.5 10 9.5 9

Fig. 7.9: Why do you think banana production is increasing or decreasing?

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Q. How much do you sell a bunch of bananas on the average?

This question was aimed at determining what the growers get compared to what the consumers are willing to pay. More-so it was important for us to determine profitability margin. Out of the total respondents, 38.5% stated that they receive 151-200 BDT/bunch compared to 43.3% who sell their bananas at 201-225 BDT/bunch. Furthermore, the results depicted that 19.2% actually received 226-250 BDT/bunch of bananas. This result also illustrated that 100% of the farmers actually sell their bananas at prices ranging from 151-250 BDT or on an average price of from 193-225 BDT/bunch despite the inferior quality of the produce. Just imagine the price differentials if the quality could be improved?

12 10 8 6 4 2 0 151-200 201-225 226-250 251-275 276 -300 BDT BDT BDT BDT BDT

Fig. 7.10: How much do you sell a bunch of bananas on the average?

Q. Is the quality of any kind of bananas important to you?

This question was design to provide answers as to whether there was any willingness on the part of the farmers to accept and adopt new and good farming techniques and practices. Fortunately, the results illustrated that all the respondents were willing to change, accept and adopt good agricultural practices (GAP) if and only if they had the opportunities.

30 25 20 15 10 5 0 Yes No

Fig. 7.11: Is the quality of any kind of bananas important to you?

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Q. Do your buyers complain about quality?

This question was also very crucial in determining whether or not there was an external force that could put pressure on the farmers to accept and adopt new and improved agricultural practices (GAP). The result confirmed that with 53.8% of the respondent accepting that their customers/buyers complain of the quality of their produce whereas 15.4% complain sometimes. In total, 69.2% of their customers complain of quality. That is a significant number of complains worth of putting enough pressure on the farmers to accept and adopt new technologies if available.

14 12 10 8 6 4 2 0 Yes No Sometimes

Fig. 7.12: Do you buyers complain about quality?

Q. Do you use fertilizers?

This question was aimed at determining whether or not good agricultural practices were being utilized by the farmers. The results depicted that most of the farmers (79.9%) used fertilizers for banana cultivation and 23.3% used them occasionally.

20

15

10

5

0 Very often Occasionally Never

Fig. 7.13: Do you use fertilizers?

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Q. Do you do tissue or soil sample

This is another question designed to determine good agricultural practices. The results show that 19.2% of the respondents do soil and tissue analysis while a significant number of them (73.1%) never tested their soil or plant tissue to determine if the quantity of used is adequate or not. Base on the various groups session we had, I am tempted to think that those who responded “very often” may have not understood the question well. Another reason to hold on to that logic is that 7.7% of the respondents omitted the question.

20

15

10

5

0 Very often Occasionally Never Omit

Fig. 7.14: Do you do soil and tissue analysis before, during or after planting?

Q. Which fertilizers do you use?

All the respondents admitted that they use some form of fertilizers for growing bananas. Banana is a heavy feeder so fertilizer especially N-P-K is absolutely necessary for quality produce. The results show that 20.8% of the farmers used urea (N); 20% used phosphorus and 18.4% used potassium (K). Although fertilizers are used for cultivating bananas, the most important are macro-nutrients.

30 25 20 15 10 5 0

Fig. 7.15: What fertilizers do you use?

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The disturbing results show that the farmers were using micro-nutrients so frequently. For instance 11.2%, 8.8% and 8% of the respondents reported that they used calcium (Ca), Magnesium (Mg) and Sulphur (S) respectively. More so the respondent also indicated that they used gypsum, cow dung, TSP, Zinc and Boron. These micro-elements are only used when absolutely necessary (Fig. 7.15).

Q. Have you ever seen bananas packed in boxes before?

This question was asked to determine producers behavior vis-à-vis their willingness to accept and adopt of new technology if needed and how much they already know. From the results it is pretty clear that they are far behind as far as banana technology is concerned. Out of the total respondents, 88.5% of them have never seen green or ripe bananas in a package form.

25

20

15

10

5

0 Often Occasionally Never Omit

Fig. 7.16: Have you ever seen bananas packaged in boxes before?

Q. If your customers want packed bananas, would you accept to adopt?

This question was a follow up of the previous and also aimed at determining the acceptability level at which growers in the FtF areas of Bangladesh will be willing new technology if necessary. Surprisingly, an outstanding 80.8% of the respondents were willing to adopt new technology if necessary.

25

20

15

10

5

0 Yes No Omit

Fig. 7.17: If your customers want packed bananas, would you accept to adopt?

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Q. What would your packaging preference be?

After showing them photographs of packaged bananas, we asked them what their preferences were. Fifty percent of them preferred hand packing which is basically what they are currently practicing except without thinking of quality first and 30.8% preferred cluster packaging.

15

10

5

0 Hand Cluster Omit

Fig. 7.18: What would your packaging preference be?

Q. What is your monthly household salary?

Out of the total respondents, 23.10% earn between 151 – 175.000 BDT per month while 19.50% and 19.3% and 11.50% earned 101-125,000 BDT while 11.50% earned as high as 276-300,000 per month and 7.7% fell in the category of 176-200,000 BDT. Overall, 92.3% of farmers earned income ranged from 76-100,000 BDT to 301-325,000 BDT per month in FtF region.

6 5 4 3 2 1 0

Fig. 7.19: What is your monthly household income?

The disparity in income could partially be due to farm size and the number of crops being grown. For instance some (most) of the banana farmers were also involved in jute plant farming or vegetables, thus generating additional income from other sources.

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Q. How old are you?

This question was to determine the age group of the farmers. While many of them (11%) were still between 20-30 years of age and 11% of them were in their mid-age (41-50), the majority, an outstanding 63% were still in their prime, i.e. 31-40 years old.

20

15

10

5

0 20-30 31-40 41-50 >61 Omit

Fig. 7.20: How old are you?

This is could partially explain why, the majority of them also 80.80% of them were willing to adopt new technology. Empirically, we observed that the growers were eager to learn new agricultural practices during our visit to their various banana . They asked several pertinent questions about diseases, and general agriculture. 7.2 Intermediaries (VC) Survey Results

In this study intermediary is defined as actors who are involved in the VC after the banana (produce) leaves the farm-gate level and before it gets to the end users. It is those who participate and/or facilitate the process of getting the fresh produce to the consumers.

Q. Where do you belong in the banana AVC?

The result of this question depicted that 60% of the respondents were retailers while 24% were wholesalers. We also discovered that 12% of them were wholesalers and retailers at the same time while 4% were famers/wholesalers /retailer, thus serving in three different categories of the banana VC.

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15 10 5 0

Fig. 7.21: Where do you belong in the banana VC?

Q. Where is your business location?

The results show that at the farm gate level, there were local wholesalers, urban wholesalers and supermarket wholesalers. For instance, 40% of the respondents said their business location was in the cities like Dhaka while 32% reported that their locations were in the rural areas. At the same time 28% of the respondents claimed to be super market wholesalers.

10 8 6 4 2 0 Local WholesalerUrban WholesalersSuper Market W/S Fig. 7.22: Where is your business location

Q. What are the varieties you buy?

This question serves two purposes. First it reveals what the consumers preferences are in terms of cultivars. Secondly, it serves as guidance to policy makers, Ministry of Agriculture, Scientists and County Extension agents when advising the farmers on what cultivars to grow for the market.

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25 20 15 10 5 0

Fig. 7.23: What are the varieties of bananas you buy?

There are several different banana cultivars in Bangladesh and of course a huge market demand because banana is rated number one most important and consumed crop/fruit in the country. The survey results depicted that 29.5% of the intermediaries purchase Shagor variety while 26.9% buy Champa. On the other hand, 25.6% of the respondents buy Sabri, 7.7% Bangla and 6.4% Green or Kacha. Again, these results are extremely important especially in advising the farmers.

Q. How do you buy your bananas?

This question was asked to determine farmers and intermediaries post-harvest behaviors vis-à-vis quality and to provide field practices to policy makers including train-the-trainers, Extension Officers as well. The results indicated that a significant number of farmers still sell and intermediaries still buy banana by bunches (44%).

15

10

5

0 Bunches Hands Cluster Omit

Fig. 7.24: How do you buy your bananas?

These practices have been eliminated by all banana exporting countries. It is not surprising that this practice is still ongoing especially that the largest banana producers in the world such as India, are not major exporters. On the other hand, 36% and 12% of the respondents purchased

30 their bananas by hands and clusters. Empirically, one could comfortably draw a conclusion that those who purchased clusters (12%) are wholesale/retailers and quasi-retailers.

Q. How much are you willing to pay for a good bunch of any variety of bananas?

4 3 2 1 0

Fig. 7.25: How much are you willing to pay for a good quality bunch of any variety of bananas?

The answer to this question was important to determine if the growers still had enough room to increase their profitability. It was welcoming news to find out that 76% of the respondents were willing to pay 200-400 BDT per bunch of good quality bananas and only 12% of them indicated they would pay less than 200 BDT per bunch. Although there were mix price preferences amongst the intermediaries, 16% indicated they would pay 200-225 BDT per bunch of bananas while 12% and 12% indicated they would pay 326-350 BDT and 401-425 BDT respectively. A resounding 36% indicated they would pay from 326-425 BDT for any variety of good quality bananas. This is a clear indication that adopting new technology and good agricultural practices (GAP) would be beneficial to the growers in terms of increasing their household income. It will also be beneficial to the complete banana VC as intermediaries will also benefit while consumers get good quality fruits.

Q. Would you pay premium price for quality bananas?

This question was a follow up of the previous question and a confirmation that quality is important to the intermediaries. The results show that 92% of the respondents would like to pay premium price for quality bananas.

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25 20 15 10 5 0 Yes No

Fig. 7.26: Would you pay premium price for quality bananas?

Q. What are the quality attributes that influence your purchasing decisions?

Most of the respondents (23.6%) ranked the overall cosmetic appearance (OCA) as the most important quality attribute that influence their purchasing decisions. Other important attributes were taste (20.2%); sweetness (19.1%) and finger length (13.5%). Texture, multiple uses and cooking were also indicated but were ranked low.

25 20 15 10 5 0

Fig. 7.27: What are the quality attributes that influence your purchasing decisions?

Q. How much are you willing to pay for a good quality Cavendish and Local variety of bananas?

This question was aimed at determining whether there was a price differential between the Local and Cavendish variety of bananas. The results show that there is apparent differences in the

32 prices intermediaries are willing to pay (WTP). For instance, 15.4% of the respondents said they would pay 200-225 BDT for a bunch of Local bananas compared to 8% willing to pay the same for Cavendish variety. More-so, 20% are willing to pay 226-250 BDT per bunch of Cavendish compared to 12% for the Local variety. Cavendish banana is the long varieties that have a long history for export markets. The results also indicated that 12% of the intermediaries said they would pay 326-350 BDT for the Local banana variety compared to 16% who said they would pay that much for the Cavendish. The largest differences was that 20% the respondents were willing to pay as high as 450-500 BDT for the Cavendish variety compared to 0% for the Local.

5 4 3 2 Local 1 Cavendish 0 Omit <200 BDT 226-250 BAT 276-300 BAT 326-350 BAT 376-400 BAT 401-425 BAT 450-500 BAT 700-750 BAT 200-225 BDT 251-275 BDT 301-325 BDT

Fig. 7.28: How much will you be willing to pay for one bunch of good quality Local and Cavendish banana variety

Another important difference was that 4% of the respondents were still willing to pay as high as 700 – 750 BDT for the Cavendish variety compared to 0% for the Local. Combining these two findings depicts that as high as 24% of the respondents would gladly pay 450-750 BDT for Cavendish bananas compared to the Local varieties. This is a clear indication that there is a growing demand for Cavendish banana cultivars in Bangladesh. 7.3 Consumers (VC) Survey Results

In order to get a better understanding of the consumer behaviors and preferences of banana consumption, it was critically important that survey data be distributed and collected from different FtF and major perceived banana marketing/distribution areas. Three different locations were purposively selected for the study namely: Barisal, Faridpur and Dhaka districts respectively.

Q. Which of the locally grown bananas do you prefer to buy?

It was amazing to find out the differences in consumer behaviors and preferences in the given distribution districts. There was a significant difference in the behaviors and preferences between consumers in urban and local areas respectively. For instance, when asked which locally grown bananas they preferred to buy, 38% in Dhaka city preferred Sabri compared to 0%

33 in Faridpur and 13% in Barisal. On the other hand, 30.4% of the respondents in Barisal preferred Champa variety compared to 19% in Dhaka and 15% in Faridpur. More-so, 85% of the respondents in Faridpur preferred Shagor compared to 34.8% in Barisal and 13% in Dhaka. Other significant differences were in the preferences for the Green/Cooking bananas which were preferred by 21.7% of the respondents in Barisal compared to 0% in Faridpur and 9% in Dhaka. Finally, 12% of the respondents in Dhaka preferred Bangla compared to 0% in Faridpur and 0% in Barisal. It is worth mentioning here that Faridpur and Barisal are both fairly rural areas while Dhaka is urban.

60 50 40 30 20 Barisal 10 Faridpur 0 Dhaka

Fig. 7.29: Which of the locally grown bananas do you prefer to buy?

Q. How often do you eat bananas?

The results show that on all counts, the city of Dhaka is the largest banana market with largest per caput consumption of bananas in the three regions/districts. For instance, the number of people eating bananas daily, once, twice, trice or more than three times per week is higher in Dhaka than in Barisal or Faridpur.

80 60 40 Barisal 20 Faridpur Dhaka 0

Fig. 7:30: How often do you eat bananas?

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Q. Why do you prefer the selected local cultivars?

Taste/flavor stood out in the three districts and reasons for the consumer preference for the selected cultivars. Also the respondents in Dhaka ranked high in all the preference categories such as sweetness, multiple uses, availability, price, cooking and overall cosmetic appearance (OCA). Faridpur district ranked 2nd followed by Barisal.

70 60 50 40 30 Barisal 20 10 Faridpur 0 Dhaka

Fig. 7.31: Why do you prefer the selected local variety?

Q. How much are you willing to pay for one Kg of bananas?

This question was aimed at determining the purchasing power of the consumers in Dhaka, Barisal and Faridpur.

12

10

8 Barisal 6 Faridpur 4 Dhaka 2

0 11-15 16-20 21-25 26-30 31-35 36-40 41-45 46-50 51-55 56-60 Taka Taka Taka Taka Taka Taka Taka Taka Taka Taka

Fig. 7.32: How much are you willing to pay for 1Kg of bananas?

Again Dhaka ranked highest in all the categories followed by Faridpur and lastly by Barisal. For instance, in Faridpur, the respondents were willing to pay (WTP) from 11-25 Taka per Kg of bananas while the respondents in Barisal stretched the range from 11-30 Taka per Kg of bananas.

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However, in Dhaka, the consumers were willing to pay as low as 11 Taka and as high as 60 Taka per Kg. This result depicts a strong demand for bananas and strong purchasing power for this important crop in Dhaka compared to Faridpur and Barisal Districts respectively.

Q. What is your monthly family household income

30 25 20

15 Barisal 10 Faridpur 5 Dhaka 0

Fig. 7.33: What is your monthly household income?

This question was also aimed at determining how the differences in disposable income and purchasing power can influence consumer behaviors and spending decisions. The results shows that consumers in Dhaka have a higher disposable income compared to the counterpart in Faridpur and Barisal respectively, thus a higher propensity to spend on bananas which happen to be Bangladesh’s favorite and most consumed fruit. It could also be that consumers in Dhaka have higher disposable income because they are more educated.

8. Markets and Distribution Channels

8.1 Existing Market Channel

There were three distinct marketing and distribution channels identified in the studied area. The study are we visited were Mehepur, Chuadanga, Jhinaidaha, Jessore, Magura, Faridpur and Dhaka.

8.2 One-level-channel

The one-level-channel marketing and distribution channel was observed mostly in the rural areas. Basically the produce goes from the farm-gate to the retailers and consequently, the consumer or end users. These were also the smallest farmers in terms of farm size who were more attracted to this one-level channel in the production chain.

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Fig. 8.1: Existing Banana Market Channels Rural and Urban Areas

10.3 Two-level-channels

The two-level-channels where the produce leaves the farm-gate to the rural wholesaler, then to the retailers and finally to the consumers was also prominent in the rural FtF areas. For instance during our visit of the wholesale market in Pobahati, Jhenaidah, we noticed that several trucks of fully loaded bananas were being transported to Shyllet, Dhaka, Mymeshing, and Narayangonj markets respectively.

8.4 Four-level-channels

The four-level-channel is the most exciting discovery in the Bangladesh banana agricultural value chain (AVC). It is exciting because little did we know that there is an infinitesimal volume of bananas going to export market and how this was being managed and processed was more like a secret cult. It was also exciting because we discovered that there were good infrastructures in place which could support, facilitate and increase quality bananas for domestic and export markets concomitantly. But the success of this requires good training and management and a little support from the industry, entrepreneurs and of course the government. Another exciting discovery was the fact that there were two levels of wholesalers involved in the VC, i.e. rural wholesalers and urban wholesalers.

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11. Domestic Market Structure

9.1 Wholesalers/Distributors in Dhaka

In Dhaka city alone, there are actually seven wholesalers/distributors names: Jatrabari Kalapatti, Kutub Khali, Narayanganj, Was hard, Badamtali, Tejgaon and Khilgaon. Jatrabari Kalapatti is by far the largest of the seven. Initially Jatrabari Kalapatti market used to receive over 27 truckloads of bananas per day but recently, this quantity has dropped to 2-3 maximum. We believe the reason for the decline in the number of truck-loads of bananas is due to the fierce competition from the other 6 distributors who are new entrants. There are over 79 distributors in the Jatrabari Kalapatti market alone and they all have their own banana warehouses.

Fig. 8.2a: Jatrabari Kalapatti urban Fig. 8.2b: Pobahati rural wholesale market, Dhaka City wholesale market

9.2 Post-harvest Treatment

Bangladesh banana production is ranked between 14-18 in the world; with India being #1while Uganda and are 2nd and 3rd respectively. Despite this ranking, the industry has problems at all level of the supply chain (from production to the end-user), i.e., general farm management, field operations management, harvesting management, packaging management, post-harvest management, transportation management, storage and ripening (cold chain) management, distribution and marketing management respectively. And if the country opts to exploit export markets around the world, there are over 36 different operations they need to know how to implement.

9.3 Transportation Services

Bangladesh already has refrigerated containers which are perfect for transporting and storing bananas from the field to the ripening station or cold storage. Hortex Foundation has 20 ft. and 40 ft. long reefer trucks and containers that can greatly improve cool-chain management and quality of bananas. The trucks have the capacity of 3,000 kg while the containers 18,000 kg with holding temperature of +15oC to as low as -25oC.

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Fig. 8.3a: Hortex Foundation reefer Fig. 8.3b: Interior of reefer Fig. 8.3c: Bangladesh Airfreight, truck - exterior container International Airport, Dhaka

Reefer containers can be leased for as low as Tk. 1,000/day while the refrigerated trucks go for Tk. 5,000/day and priority is given to those involved with horticultural product. Several companies including Hortex Foundation, BFVAPEA and Airfreight International Airport have refrigerated truck and containers available to facilitate cool-chain management of horticultural crops production and management for domestic and local market.

9.4 Ripening Chambers

Bananas are still ripened the old fashion way in Bangladesh. The carbon dioxides and formalin techniques that were banned in India were not practiced in Bangladesh. The use of kerosene stove to ripen their bananas was observed which could be considered carbon dioxide. There was no modern banana ripening chambers. To improve the quality of bananas in the local market, there is need to introduce modern ripening techniques, infrastructure (chambers) and training. Modern ripening technics could be adopted and modified by using traditional and inexpensive materials.

9.5 Packing shed/House

There were no packing shades/houses at the farm level. This is probably because fresh bananas are sold and loaded directly into trucks for distant markets in either bunches or hands. Our survey results indicated that a significant number of farmers would switch to packaging if and only if there was demand for it and if they were trained to do so and paid extra. However, there is a fairly good facility at the international airport in Dhaka which can be transformed to a modern packing station capable of handling and passing quality specifications test/ requirements of most importing countries. This facility is now utilized to pack Bangladesh produce avocado for overseas markets.

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12. International Trade

10.1 Export Market

So far Bangladesh exports an infinitesimal quantity of banana and plantain (cooking bananas) to Kuwait, Bahrain and a few other countries around the world. The highlighted areas on the map are countries where Bangladesh is trying to establish export markets. On the other hand,

Fig. 10.1: Bangladesh Banana Export, 2014

Table 10.1 shows that 81 metric tons of bananas and cooking bananas (plantain) were exported to Kuwait, UK, Bahrain, Malaysia and Italy in 2014. So far, export to Kuwait enjoyed the lion’s share of 87.1% followed by UK and Bahrain (fig. 10.1). Despite the quantity exported, this is already a positive sign. Export activities and volume can significantly increase if the actors involved can start thinking out of the box and taking some degree of risk. More-so, some investment will be needed.

Table 10.1: Bangladesh banana export, 2014

Trade Share of Importer $-Value Balance Export Tons $/Unit ($) (%) (.000) Kuwait 121,000 121,000 87.1 73 1,658 UK 10,000 10,000 7.2 4 2,500 Bahrain 5,000 5,000 3.6 2 2,500 Malaysia 2,000 2,000 1.4 2 1,000 Italy 1,000 1,000 0.7 0 0 Total 139,000 137,000 100 81 1,716

10.2 Export Certificate

Bananas for export including other fruits and vegetables go through the Plant Quarantine Station at the Hazrat Shahjalal International Airport, Dhaka. Phyto-Sanitary Office at the International airport. One or two Plant Quarantine Laboratory Technician and Inspectors from the office are

40 assigned to supervise the quality and packaging process. If the bananas or horticultural produce meet export quality requirements, the inspectors approve the produce and a phyto-sanitary certificate is issued to the exporting company or individual. With the SPS Certificate, the produce is ready for shipment via airfreight.

10.3 MEGA International Trading Company (A subsidiary of Mega Group)

MEGA Group claims to export bananas all over the world but when interviewed on the phone, they told us they were not successful. The company attempted banana export operation but failed. Yet in their website, banana is included http://www.megagroupbd.com/ In fact their banana section of their website is very convincing http://www.megagroupbd.com/banana.html as they have pictures of bananas already packed in boxes and ready for export. However, they did not mention any export destination. To improve banana VC in Bangladesh, it is important to develop partnerships with MEGA and other export oriented organizations such as the Horticultural Development Foundation or simply (HORTEX FOUNDATION) and the Bangladesh Fruits, Vegetables and Allied Products Exporter’s Association (BFVAPEA).

10.4 Bangladesh Horticultural Export Development Foundation (Hortex Foundation)

Hortex Foundation is an NGO founded in 1993. The entity is under the Ministry of Agriculture. Its functions and objectives are to “develop, promote and market Bangladesh’s high value exportable agricultural produce”. The Minister of Agriculture Secretary is the Chairperson of Hortex whereas the Managing Director runs the day-to-day activities of the organization. The Foundation has succeeded to assist farmers and the government to export “about 100 types of fruits and vegetables from Bangladesh to more than 40 countries in the world”. Hortex Foundation also has the monopoly of direct access to the government since the Chair is the Secretary General of the Ministry of Agriculture and direct access to the private sector. The organization will be an important asset to the Bangladesh banana VC if any meaningful improvement and access to export markets are envisaged in the future. More-so Hortex Foundation has well educated, young, bright and dynamic staff and Deputy General Managers of Supply & Value Chain, Marketing Research and Development who is willing to make positive changes and move the fruits and vegetable industry forward.

10.5 Bangladesh Fruit, Vegetables & Allied Products Exporters’s Association (BFVAPEA).

This organization was created in 1984 “under the Ministry of Commerce of Company Act of 1913. The functions of the BFVAPEA amongst others are (in quote):

1. “To ensure quality export of Agricultural Products of the country. 2. To promote and safeguard of the interest of exporters engaged in exporting of fruits, fresh vegetables and allied products. 3. To ensure organized action on any matters relating to the interest of the exporters.

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4. To establish standard principles in exporters trade. 5. To generate rural employment and raise rural incomes of the rural people engaged in agricultural products. 6. To help in finding out new international markets. 7. To solve the problems of exporters. 8. To take necessary steps for promoting supporting or opposing of any other action affecting general interest of exporters. 9. To develop documentation and publicity relating to the organization of exporters trade in fruits, vegetables and allied products of the country, and; 10. To help the exporters in getting incentives for exporting agro products”.

BFVAPEA is one of the pivotal companies in the country that would make an impact in banana VC if entrepreneurs from the private sectors and the government are willing to improve the banana industry as a whole. Most importantly, banana is ranked 1st amongst 118 different fruit crops produced in the country.

11. Conclusion

Bangladesh has the potentials to become producers, marketers and exporters of premium quality bananas. Domestically there is a growing market demand and per capita consumption is more than 4.3 kg per annum. With a population growth rate of 1.6%, the demand for bananas, which is their most favorite fruit crops out of over 118 different fruits will continue to increase especially that the fruit is used for multiple functions including medicinal and health reasons. The problems plaguing the industry are pest and disease and lack of modern agricultural practices in producing quality bananas for both local and export market. Survey results across the complete banana VC indicate a willingness to adopt new technology and willingness to purchase (WTB) any variety of quality bananas at higher prices. A Total Quality Management (TQM) strategy which is an integrated banana management approach is recommended to revamp the whole industry.

11.1 Recommendations

The entire Bangladeshi banana industry including the FtF areas need a complete revamp. A Total Quality Management (TQM) system needs to be put in place. TQM can be defined as the development of a system that utilizes scientific and practical hands-on tools and processes to acquire its ultimate goal. In a layman’s terminology, it is the science of providing simple but revolutionary solutions to problems that are threatening Bangladeshis banana industry and minimizing human and quality related error concomitantly. The adoption of an integrated TQM approach is highly recommended. An integrated approach includes all multifaceted aspects of modern banana production and marketing technics. This includes but not limited to all field operations management, postharvest management, marketing management, processes

42 management, general farm management (GAP), packing shed management, transportation management, ripening and storage/distribution chambers management respectively.

Q. Where is the best place to start TQM?

The 1st is marketing. The 2nd is marketing and the 3rd is marketing. It is vitally important to determine market sector and demand. A determination of grade, price, quality and timing is crucially important. Furthermore, a determination of product suitability and consumer preferences, i.e., which cultivar or variety does the customer/end-user prefer, at what price, and preferred quality attributes. Fortunately, our survey results will be useful as it provides the necessary answers needed to penetrate various domestic and export markets respectively.

11.2 Field Operations Management

To improve the quality of the complete VC for banana production in Bangladesh, all field operations must be reviewed and updated. This include but not limited to land prep, planting and planting materials, pruning, replanting, plant population count, propping, bagging, debuding, dehanding, irrigation, weed control, nematode control, borer control, fertilization, harvesting, plastic removal and deflowering, just to name a few (Fonsah and Chidebelu, 1995; 2012). Note that there are at least 36 different operations if one is considering and/or targeting mature export markets. It is absolutely necessary and important to bring in a production expert to train-the- trainers (Extension Agents) and if time permits, train the farmers or both. The development of a demo plot for training-the-trainers and farmers as well is highly recommended. In this case, the trainer (expert or consultant) will have to make several trips to monitor each production stage, i.e. from planting to harvest and make sure the trainers and farmers understand the complete process and SOPs of each operation.

11.3 Harvesting Management

To maintain quality, it is recommended that each farmer constructs a harvesting stand on each of their farm (for those with two or more farms). Harvested bananas could be hung on the stand awaiting transportation. Inflated tubes technique is easy to implement and padded foams could be used to transport harvested banana bunches to the packing shade to minimize bruises, mechanical damages and other quality defects. The farmers should be taught the V-cut and calibration or eye harvesting techniques as well.

11.4 Packing Shed Management

One of the challenges in dealing with small scale farmers is that their individual banana production volume is not significant enough to have an impact in the market. Collectively, that could work and also reduce cost. For instance, for every FtF region, it would be nice to create cooperative of several hundred banana farmers. Demarcation of each group, i.e., Zone-1, Zone-2 or Zone-3 is advised (see map). Our survey result showed that farm size ranged from 25

43 decimals to 3 or 4 acres per farmer. A small packing shed for each zone or cooperative group of farmers using village level technology is recommended. In this packing house, farmers from the same area could share and take turns. Base on their farm size and volume, a few farmers could be schedule to pack their bananas on the same day but at different time slot.

Fig. 11.1a: Farmer’s cooperative Fig. 11.1b: Reefer Container demarcation zones. interior

The Extension Agent or supervisor will issue a ticket/ receipt showing the number of boxes packed and/or contributed to the pool by each farmer. This arrangement will also facilitate transportation and one reefer truck or container can come to each pack shed and load up packed boxes ready for the distant markets. If banana farmer’s are formed, each farmer will/could be paid based on the number of quality boxes contributed to the pool. Assume the negotiated price is 20 Tk/ 20 Kg box. A farmer who contributes 100 boxes gets 100 x 20 = 1000 Tk whereas a bigger farmer who contributes 250 boxes in the pool gets 250 x 20 = 5,000 Tk. Each farmer could pay a small membership fee and maintenance fee to compensate for the use of the packing shed construction and reefer truck rental. The advantage of adopting this method is that the fruits can be transported directly to larger cities like Dhaka or directly for export market without the need for a ripening and/or cold storage chamber in the rural production areas.

11.5 Rural Distribution Center and Ripening Chamber

Mr. Rehman is a local mango entrepreneur, wholesaler and distributor in the Jessore area. He has been in this business for several decades and his willing to venture into bananas distribution and wholesale. He is well respected and liked as one of the local influential leaders. He showed us a building which he believes he can transform into a banana cold storage warehouse and ripening chamber. This is someone DAI or USAID can work with to provide the necessary missing channel and/or the support system currently missing in the Bangladesh banana VC. If resources are limited, a village level cold storage technology can be adopted and it will serve the purpose. Fig. 11.2b is an example of a simple cold storage built with local material and very efficient. This is located at the Hazrat Shahjalal International Airport and the produces are ready to be airfreighted to other countries.

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Fig. 11.2a: Mr. Rehman – A local mango Fig. 11.2b: Cold storage warehouse, Hazrat entrepreneur, wholesaler and distributer Shahjalal International Airport, Dhaka with fresh produce ready for export, 2015.

There is a crucial need for a ripening and cold storage chamber especially in bigger cities like Dhaka. Bananas coming from the rural wholesalers can be stored there at lower temperature and ripen them for the local high and low end markets. It is not a standard practice to ripen them prior to distance market distribution especially when roads conditions are not favorable for fresh produce such as bananas. If packing sheds are available, there will be no need for storage facilities in the rural areas since with refrigerated or regular containers, the fresh produce could be transported to urban areas the same day. The importance of refrigerated containers or trucks is to maintain optimum quality and lower the temperature that would also prevent post-harvest rots, damages and extend shelf life.

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12. USAID/DAI Value Chain Trip to India Report (July 5-10, 2015)

12.1 Purpose

The overall objective of this short term consulting assignment was to assess the domestic and export demand, supply and market competitiveness of banana and develop a value chain study report. However, one of the specific objective was to “Visit Kolkata based banana ripening facilities to explore the feasibility of exporting different varieties of banana to cater for the demand of this market segment and conduct a study on import policy environment of India with a special focus to that of West Bengal state”, hence, the reason for our trip to India. We flew to India in the evening of July 05, 2015 from Bangladesh.

12.2 Keventer Agro Limited

The next day we visited Keventer Agro Limited, one of the major actors of the banana industry in the Barasat District of Kolkata. We were well received by the Deputy General Manager of F & V Division, Mr. Sarada Prasad Choudhuri and his dynamic team of experts including his Sr. Executive (F & V Division), Mr. Balaram Nandi. A briefing was held in Keventer’s Conference Hall with a PowerPoint presentation by Ms Grace Ihouvum. Participants were: 1. Dr. William Levine – Chief of Party, DAI Bangladesh via skype 2. Mr. Bani Amin, Deputy Chief of Party, DAI Bangladesh 3. Mr. Sarada Prasad Choudhuri, Deputy General Manager of F&V Division, Keventer, Sagar Estate, India 4. Mr. Balaram Nandi, Sr. Executive (F&V Division), Keventer, Sagar Estate, India. 5. Mr. Kishore Majhi 6. Ms Grace Ihouvum, USAID, India 7. Dr. Esendugue Greg Fonsah, Professor & USAID/DAI Banana VC Consultant

Figure 12.1: Keventer Agro Ltd. office, conference briefing and team of experts.

After the briefing, we visited the ripening house facility and learned how the bananas were transported from the field to Keventer’s fresh produce ripening chambers. It was very fascinating and most importantly, we enjoyed the enthusiasm of the management team and pride as they shared their success stories.

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Fig 12.2: Mr. Choudhuri on the left, banana quality in the middle and delivery extreme right.

At the moment, Keventer has 7 ripening chambers with a capacity of 40 MT/day. The fresh bananas are transported from the field to Keventer’s facilities in plastic boxes, each color representing a different grade. There are 30 crates in a pallet. Their ripening cycle is 4 days using ethylene gas since calcium carbide, a traditional ripening agent used by the farmers and distributors is now banned for the entire fresh produce industry in India. Keventer’s successful business model was initiated 6-7 years ago.

Fig. 12. 3: Picture of different color crates on the left, ripening chamber in the middle and interior of the ripening chamber on the extreme right.

Their grading system consists of three different categories thus: 1. Category A = 5 pieces / kg 2. Category B = 7 pieces/kg 3. Category C = 10 pieces/kg

13. Banana Supply Value Chain Model

13.1 Market Share and Profit margins:

We were told that with an operation like that of Keventer, the company needs a supply of 10 MT/day to be sustainable. At the moment, Keventer has exceeded that target four-folds as it produces 40 MT/day with7 ripening chambers. With the lucrativeness of their model, expansion plans are being finalized with the aim of opening two more facilities in a few months, one in Siliguri and other in Ranchi (Jharkaand) with a capacity of 10 MT/per day.

Kolkata consumes around 400 MT of Banana daily, Keventer is supplying approximately 40 MT or barely 10 % market share. Therefore, there is room for expansion. It is also important to mention that, the infrastructural set up cost for a small ripening operation with a capacity of 10

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MT/day which is recommended for any beginner is approximately 7-8 million Indian Rupees (INR). With working capital the required investment is about 20 million INR. In West-Bengal the peak season for Banana is Ramadan Holy Season; since banana has become an important item for Iftar.

13.2 Import/Export

For now the demand for bananas in India is still higher than the supply. As a result, import or export ventures are not appealing to businesses. More-so, Indian import and export policies for fresh produce especially bananas which is also a staple is a major hindrance with too many bottle necks involved. There are also trade barriers between India and Bangladesh that has encouraged smuggling practices and discouraged official import/export trading between the two countries. Many tariffs and non-tariff barriers have been put in place that discourages business especially for perishable goods like bananas.

13.3 Business Model

After studying Keventer’s business model, we concluded that the company represents a classic example of a Contractor/Wholesaler/Ripener/Distributor (CWRD). This is a good business plan especially that Keventer as an individual business entity has straighten its supply chain eliminating unwanted middlemen in their equation thus, no additional broker fees are incurred and profitability is maximized in the process. As shown in the diagram below, Keventer contracts farmers, provide them with technical and extension services including seeds/planting materials and a guarantee to purchase all that the farmers can produce. That is really an incentive to the farmer and a minimizing risks buffer. In addition the farmers are still allowed to sell part of their crops directly or indirectly to others.

Fig. 13.1: Keventer Agro Limited’s Business Model

After harvest, Keventer provides crates and its affiliated vendors transport the fresh green bananas to the ripening facilities at Barasat District at no additional cost to the farmers. After

48 ripening, Keventer carries out direct sales to institutional buyers such as hospitals, restaurants, supermarkets, wholesalers and retailers as well. The consumers or end-users have access to Keventer’s produce through retailing outlets.

14. Market and Distribution Level-Channels

14.1 Existing Market And Distribution Channels in the Kolkata Area, West Bengal, India:

There are three visibly existing market level-channels namely: One-Level-Channel when the produce enters the market through retailers, Two-Level-Channels, when the produce goes from the farmer to the wholesaler, retailer then the consumer. And finally there is the Three-Level- Channel marketing where the produce leaves the farmers and goes through a Contractor/Wholesaler/Distributor/Ripener (CWDR) to the wholesaler, retailer before reaching the consumers. There is also an infinitesimal Zero-Level-Channel.

Fig. 14.1: Existing Market Channels in Kolkata

14.2 Success Stories:

As part of its business model, Keventer has so far trained over 3028 farmers across 7 blocks and provided them with G9 banana planting materials. Out of these, 437 Farmers have adopted the farming practices technique during the life of the project period. In addition, Keventer has developed 6 demonstration sites. and 26,310 G9 suckers(plantlets) and/or additional planting materials have been purchased by the farmers in the project area during the project. Keventer’s operation has encouraged farmers to switch from jute-plant production to bananas and have increased their household income, productivity and profitability by about 50%.

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14.3 Banana Production

Almost all the growers (with exception of few) cultivated G9 “Grand Nain” which is a Cavendish variety that belongs to the acuminate spp. Grand Nain is classified as a AAA genotype and is a triploid, which makes it susceptible to disease pressures. The word “Grand” is actually borrowed from French language and meaning “Big” or “Big Bananas” (Fig. 6). At this stage, production is not a major problem. The growers in India have mastered planting techniques and are successful in producing big and healthy banana bunches and fruits as shown in fig 5 below. Planting distance was 6 x 6 ft. with an overall density of 400/plant/Bigha. Average bunch weight was 40 Kg. This planting distance and density was the same for G9 (Grand Nain) and the Local cultivars. Tissue Culture (TC) was obtained from Kementer. Various forms of N-P-K fertilizers were used but no one had ever done a soil test. A good practice would be to start by testing the soil and

Fig. 14.2: Newly harvested Grand Nain banana bunches

14.4 Production Costs

On an average, a G9(Grand Nain) farmer spends 60000 INR/Bigha in banana farming and makes a net return of 300,000 INR.in a two year farming cycle constituting 3 harvests. On the other hand a traditional farmer spends more than INR 80,000 and makes approximately 200,000 INR in 27 month farming cycle with 3 harvests). Due to the high profitability, farmers were switching from Jute-plant production to Bananas.

14.5 Good Agricultural Practices (GAP) and Quality

Good agricultural practices (GAP) are still lacking. Bananas don’t do well with weeds. Also the quality of the fruits is compromised from the field to postharvest levels respectively. For instance, no de-leafing operations and/or fruit obstacle removal (FOR) were practiced. Fresh fruits were loaded and transported in trucks thus increasing quality defects and increase post- harvest injuries.

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Fig. 14.3: Field conditions that contribute to quality and post-harvest defects and excessive field loss

14.6 Disease Problems

The major problem in the Indian banana production is disease. There are serious yellow Sigatoka disease caused by Mycosphaerella musicola and black Sigatoka caused by Mycosphaerella fijiensis. There is also banana bunchy top virus (BBTV) (Fig. 7) that can spread fast if not well treated. However, due to the production cycle which goes through mother- daughter-granddaughter or plant crop – 1st and 2nd ratoon (F1 & F2) before the crop rotation takes place, it might be easier to economically manage the disease pressures. The three crop cycle takes from 27- 30 months.

Fig. 14.4: Visit of a banana orchards in Karimpor, Nadia District, Kolkata, India

15. Super Market in Kolkata

15.1 Banana Retail Prices

At the supermarket down town Kolkata, there were four kinds of bananas displayed on the shelf. The Cavendish, two local varieties that looked like Champa kola and Shabri kola and surprisingly, they also had a local variety organic bananas. The G9 sold for 30 rupees (INR) per Kg. The organic sold for 35 rupees (INR) for four small fingers and the two local varieties sold for 6 rupees and 5 rupees per finger each respectively (Fig. 15.1).

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Fig. 15.1: Retail prices of different banana varieties in the supermarket in Kolkata, India

Interestingly, banana blossom were also found on the shelf of the supermarket and sold for 27 rupees (INR) each (Fig. 15.1). Banana flower is actually eaten as vegetables in some Asian countries and this could be a readily exploited niche market. Most farmers I spoke to did not know that banana flowers could be eaten. They cut and throw them in the field.

Fig. 15.2: Fresh banana blossom sold in Supermarket, Kolkata, India

16. World Banana Production Outlook

16.1 World Banana Suppliers

Recent report depicts that India is still ranked 1st in terms of banana production in the world (fig. 10), followed by China and the . It is also interesting to note that most of the big producers are not exporters. One could logically argue that, their production is just enough for local consumption, hence the demand = supply or equilibrium. Empirically, the story might have another twist.

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3.00E+07 27,042,000

2.50E+07

2.00E+07

1.50E+07 12,111,752 11,816,619 8,935,874 1.00E+07 6,897,403 6,503,886 5,774,084 Production (tons) Production

5.00E+06 3,133,299 3,043,234 2,601,710 7,263 0.00E+00 India China China, Philippines Angola United United mainland Republic States of of America Tanzania

Fig. 16.1: Top 10 Banana Producing Countries Compared to the United States in 2012 (FAO, 2014; Hernandez, 2015)

16.2 World Exporting Countries

Most of the exporting countries do not appear on the list of top producing countries and those that do are not ranked very high except the Philippines that ranked 3rd. It is questionable why the top ranking producing countries are not necessarily top ranking exporters.

6000000 5,198,703

5000000

4000000

3000000 2,646,380 1,986,761 1,885,909 1,834,936 2000000

Banana Exports (tons) 1000000

0 Ecuador Philippines Guatemala Colombia

Fig. 16.2: Top Banana Export by Countries (FAO 2014; Hernandez, 2015)

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16.3 World Banana Importing Countries – Import Demand

Although China is ranked 2nd world banana producer and based on its population of 1.6 billion people, one could conclude that its local market is large enough to consume all its supplies. Empirically, quality bananas was introduced to the Chinese markets almost two decades ago and today China’s global import share is 4% while Japan is 7%. The major importing countries are the United States and EC-27 with the lion’s share of 27%. However, if we consider individual countries, the United States would be declared the number one net importer of bananas in the World (Fig. 16.2).

Fig. 16.3: World Banana Importing Countries. Source: http://www.fao.org/docrep/019/i3627e/i3627e.pdf Accessed July 21, 2015

16.4 Banana Export by Regions of the World.

Fig. 16.4 shows that banana export has been dominated by Latin American and the countries. In 2012 for instance, 13 million MT were exported compared to 2.8 million MT for Asian countries and barely 0.6 million MT for . Why is it that the Latin American and Caribbean countries have monopolized banana export industry for so long?

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Fig. 16.4: Banana export by Regions of the World (Million tons).

17. Conclusion

Although India has a slight advantage over Bangladesh, they have not yet exploited their full potentials of becoming producers, marketers and exporters of premium quality bananas. Domestically, India just like Bangladesh, have a huge market demand and per capita consumption is sky rocking. Projections show that India will surpass China and become to most populated country in the world in 2028. With such a population growth rate, the demand for bananas, which is one of their most favorite fruit crops will continue to increase. The problems plaguing the industry are pest and disease and lack of modern agricultural practices in producing quality bananas for both local and export market if they decide to venture export opportunities. A Total Quality Management (TQM) strategy which is an integrated banana management approach is recommended to revamp the whole India banana industry. That would render Keventer Agro Limited even more profitable and efficient.

17.1 Recommendations

Although India is slightly ahead of Bangladesh in terms of banana production and marketing the country is still way behind other banana growing countries and especially the exporting countries in Africa, Central and South America and Asia (Philippines). Keventer Agro Limited and other companies that have developed models to improve the entire India banana Value Chain deserve recognition and praises. My only concern here is that their models are still below international norms and standards. They need all the assistance they can get to continuously improve. The 55 good news is there is a high degree of willingness to learn and improve. USAID/DAI can capitalize on that “willingness” and provide necessary assistance in terms of transferred technology, capacity building, training, education etc. etc. Section 11 – 11.5 provide all the recommendation needed.

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References and Recommended Reading

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