ROUNDTABLE

DIALOGUE
Present Challenges and Opportunities
12th August, 2014
ON CHILI MARKET IN BANGLADESH
Venue: Auditorium, BRAC Inn
Mohakhali, Dhaka
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OXFAM
House 4, Road 3, Block I, Banani,
Dhaka-1213, Bangladesh
Phone: +880 2 88136-7-9, 8824440, Fax:
+880 2 8817402
www.oxfam.org/bangladesh,
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ROUNDTABLE
DIALOGUE
Present Challenges and Opportunities
12th August, 2014
ON CHILI MARKET IN BANGLADESH
On the 12th of August 2014, Oxfam organized a roundtable dialogue titled
Roundtable Dialogue on Chili Market in Bangladesh: Present Challenges and
Opportunities at the BRAC Centre Inn. This roundtable dialogue provided a
national platform bringing together all the key stakeholders in the dry chili value
chain to discuss the existing barriers to the production and growth of local dry
chili sector and explore solutions to address the challenges. Participants of the
dialogue included chili and seed producers, processors, policy makers as well as
businessmen, researchers and academicians, among others. Chili producers
were able to voice their difficulties and experts engaged in analytical review of
the market trend of dry chili, national and regional trade policy and
understanding the demand of product quality and inputs.
Panelists at the dialogue and key discussants included, among others, Mr.
Snehal V. Soneji, Country Director, Oxfam; Mr. Nurul Amin, Economic and Private
Sector Coordinator, Oxfam; Professor Shankar Kumar Raha, Dean, Faculty of
Agricultural University, Mymensingh; Chief Guest, Md. Fazle Rabbi Miah,
Honourable Deputy Speaker, Bangladesh Parliament; and Special Guest Mr. Monoj
Kumar Roy, Additional Secretary, Ministry of Commerce. The event was hosted by
Oxfam with the help of research organization GMark, and was moderated by Mr.
M.B. Akhter, Progam Manager, Oxfam.
Professor Shankar Kumar Raha, Dean, Faculty of Agricultural University,
Mymensingh, provided the Key Note presentation which was followed by
discussion of the study findings by experts. The floor was then opened to all the
participants to speak on various issues and propose possible solutions to
address the challenges.
INTRODUCTION
Mr. M.B. Akhter, Program Manager, Oxfam, opened the dialogue with a
warm welcome to all the participants and by introducing the panelists
and key discussants. Referring particularly to the Chief Guest, Mr. Md.
Fazle Rabbi Miah, Honourable Deputy Speaker, Bangladesh Parliament
and Special Guest, Mr. Monoj Kumar Roy, Additional Secretary, Ministry of
Commerce, as well as different processing companies such as Pran,
Square and seed companies, and farmers representatives, he expressed
hope that the discussion would be fruitful. He encouraged all the
participants to explore solutions to the challenges in the local dry chili
market and proposing recommendations to address the issues. He then
welcomed Mr. Snehal V. Soneji, Country Director, Oxfam, to take the floor
and address the participants.
Mr. M.B. Akhter
Program Manager, Oxfam in Bangladesh
Opening by
Moderator
Opening by Moderator
TABLE OF CONTENTS
WELCOME SPEECH
Keynote Presentation by
8
10
13
21
22
23
24
26
27
28
29
29
Speech by chief guest
Remarks by
Farmers Representatives
Question/
Answer Session
Address
Answer to
All Questions
Speech by
Special Guest
Closing Remarks
Chief Guest
Concluding
Remarks
Summary of Key
Challenges &
Recommendations
Summary of Key
Challenges &
Recommendations
8
Welcome Speech
Mr. Snehal V. Soneji, Country Director, Oxfam extended a warm welcome to
everyone present at the roundtable discussion including Honourable
Deputy Speaker, Mr. Fazle Rabbi Miah, Mr. Manoj Kumar Roy, Additional
Secretary [Foreign Trade Agreeement], Ministry of Commerce, Mr. Shankar
Kumar Raha, Dean, Faculty of Agricultural Economics, Bangladesh
Agricultural University and other distinguished guests. Mr. Soneji spoke
briefly about Oxfams work in Bangladesh which goes back to the time of
the countrys liberation. He mentioned that Oxfam was one of the only
iNGOs which had received the prestigious award titled Friends of
Liberation War by the Prime Ministers Office in 2011. He expressed pride
on behalf of the organization to have partnered with Bangladesh in its
progress towards becoming a middle income country. Though the
process was not an easy one, he pointed out that the organization had
worked as equal partners with multiple stakeholders, including the
government, academicians, NGOs, CBOs, and most importantly the poor
people themselves.
Raising the question, Why is Oxfam talking about the chili market? Mr.
Soneji explained that Oxfam had moved away from an organization
delivering services, to one that was working with local partners and
trying to influence policy at various levels. Discussing Oxfams role in
developing local NGOs to bring about change at a larger scale, he gave
the example of BRAC, which received one of its very first grants from
Oxfam. He described Oxfams model of change being one that tried to
innovate, demonstrate the innovation, advocated the innovation and
hoped that it would be replicated by others successfully. In this process,
he pointed out, one of the key aspects of fighting poverty in Bangladesh
has been the idea of value chains.
Snehal V. Soneji
Country Director, Oxfam in Bangladesh
WELCOME SPEECH
Oxfam has been in Bangladesh
since the liberation war. We
were one of the only iNGO who
were awarded by the Prime
Ministers Office with the award
titled Friends of Liberation
War honour in 2011. We take
great pride in having partnered
with Bangladesh as it moves to
becoming a middle-income
country.
9
Welcome Speech
Mr. Soneji explained that the poor people, especially in rural areas, are
mostly involved in production work of some sort, a lot of which circulates
agricultural goods such as rice, chili and others. He informed that chili is
one of the five value chains that Oxfam is working with by placing
womens rights at the heart of all its operations. Since most of the work
in chili production is done by women, this approach not only fights
poverty, but also empowers them with a tool to renegotiate their position
in a social sphere, at the family level, community level and even the
national level.
Emphasizing the need for collective action, Mr. Soneji stated that this
was the reason Oxfam partnered with people who are producing,
aggregating, processing, seed companies, government members and
others. He informed that the roundtable discussion was Oxfams attempt
to bring the various stakeholders from different layers together in one
platform to facilitate the process of finding solutions. Stressing on the
need for a collective approach to finding the solutions, Mr. Soneji
concluded with the hope that everyone would participate fully in the
discussion and ensure the success of the event.
How can our trade policies
protect our local farmers
and how can we develop the
varieties of products
available in our
country so that they can
compete with foreign
products?
10
Key Presentation
Dr. Shankor Kumar Raha, Dean, Faculty of Agricultural Economics,
Bangladesh Agricultural University, Mymensingh began by emphasizing
that identifying the challenges faced by chili producers in Gaibandha
was the primary focus of the roundtable discussion. He observed that the
first challenge they faced was in getting fair prices at the market for the
chilis that they produced. Furthermore, many claimed that they were
unable to compete with the imported chili from India as a result of which
local chili farmers experienced grave sufferings. Mr. Raha elaborated that
institutional buyers are also opting for imported chili from India, instead
of going for locally grown dry, red chili. The impact of this falls not only on
the farmers, but the economy as a whole which is adversely affected. He
raised the question: How can our trade policies protect our local farmers
and how can we develop the varieties of products available in our
country so that they can compete with foreign products?
Dr. Shankor Kumar Raha
Professor, Department of Agribusiness and Marketing
Bangladesh Agricultural University, Mymensigh
Keynote
Presentation by
Objectives of the study:
Observation at the primary level of the production of chili, market
conditions, demand, supply
Current import-export policies and whether they are harming our
local farmers
Local varieties and how to develop these
Local market and identifying the obstacles faced in this market to
development
Methodology: Mr. Raha explained that information had been collected
through field work based on the Fuljhori open market which was taken as
a model for a local market; the Bogra market which was taken as a
regional market and finally the Dhaka market as a terminal market. A
convenient or purpose sampling has been used. Information was also
collected from literature review, research, interviews, observation, data
collection form past work other publications on the topic and similar
internal and external sources. He referred to farmers/producers, market
actors, traders, processors, retailers of chili as well as seed companies,
BRRI, Bangladesh Spices Research Centre, tariff commission, NBR and
Agriculture Officials as sources from which information had also been
collected.
11
The area of production of red chili, according to data from 2012, is reducing by 7%.
Growth of production was negative/reduced.
Positive result: Production yield increased by 6% or more.
Demand for red chili was 2,92,000 metric tons.
Production was 1, 72,000 metric tons.
There was a deficit of 1,20,000 metric tons.
Import was needed to meet the shortage.
Between 2011-2012 and 2013-2014, it has been observed that imports have increased substantially,
by 33%, compared to the deficit.
Bangladesh does not just import chili, but also exports chili. The amount exported is less but
fluctuates over the years. In 2012-2013 we exported 1,59 metric tons which is almost three times
less than what was exported in 2009-2010.
The seed market is not developed. Farmers are either buying seeds or using seeds from what they
have already produced. In Bangladesh 200 companies are involved in seed business. There it is seen
that compared to other seeds very few companies deal with chili seeds.
In Fuljhuri haat it was seen that the amount of imported chili was high. In Bogura nearly 60% of chili
were found to be imported, in Dhaka market, 70% of total chili is imported.
Companies who are processing chilis are importing nearly 60% of their chilis. Possibly because of
quality consciousness.
Bogura production 12,000 metric tons. But 50-60% being imported.
Demand less for local chilis.
Key Presentation
Desegregation of data.
Study limitations
Study Findings
12
Reflections by Project Stakholders Key Presentation
12
Between may to sept imports are more.
Though there is demand, but the cultivation area is reducing.
Import is rising.
Less attention being paid to the regulations regarding chili.
Data has shown that Indian chili presence over the years 2010 : 8% imprted, 2011-15%, 2012:40%,
2013: 60%. In 2014: 70% being imported.
In the domestic market chili demand is rising, but production is decreasing and imported chili is
increasing.
Even though the price of foreign product is high, demand is still high.
Why are we importing chili? Because of shortage. Also possibly due to government trade
policies/regulations. Additionally through the black market (informal market).
Quality comparison : colour, flavor taste, size shape.
Impact : by importing more, farmers are discouraged to produce. Farmers will stop producing chilis
and start producing something else. Other products will not bring in enough profits and they will earn
less. There will be unemployment among many farmers in chili production areas of the country.
If chili is imported, we will face great losses in fertilizer business, pesticide business for chilis, and also
the chili transport business. The markets leased by the government to get income, that income will also
decrease.
Challenges
The chars and coastal belts can be used as well as mainland for production.
Upgradation of production, post harvest, processing, marketing.
Companies involved in seed business should be welcomed to bring in chili seeds.
Request government to explore the export of chili.
Promotion of chili by encouraging Bangladeshis to buy local chilis.
Opportunities
13
Speech by Chief Guest
Md. Fazle Rabbi Miah, MP and Honourable Deputy Speaker, Bangladesh
Parliament, greeted all the participants and pointed out that while the Keynote
speaker had worked hard on the study, there were some gaps in his research.
He stated that he regularly frequented the study area which was under his
constituency and ten years ago there used to be huge traffic caused hundreds
of bicycles carrying sacks containing nearly 3 tons of chili which people brought
from the char areas to Gaibandha. However this early morning transport of chili
had stopped. There were now big sheds that had been created by Pran, Oxfam
and others where chili is dried, packeted and bought by city buyers. He
mentioned that the people there had expressed concern to him about rumors
that this would shut down and upon visiting he had felt a conspiracy brewing.
He felt the conspiracy was that those involved in the processing wanted to
make higher profits even if that meant robbing the farmers of their fair share
and livelihood.
The Honourable Deputy Speaker expressed his strong disagreement with the
notion that the quality of Indian chili was superior. He stressed that Bangladeshi
chili was far better regardless of what the research found. Drawing the
attention of the Commerce Minister through the Additional Secretary, Ministry of
Commerce present at the event he stated that there is no need to import so
much chili. Instead, if a business was created around buying local chili involving
the processors, then dependency on imports would decrease. Chili production
would increase because Bangladeshi people are used to buying local products.
The Deputy Speaker pointed out that the fact was that the price of Indian chili
was far less than that of local chili which was the reason businesses were going
for Indian chili. He informed that as per information from the Additional
Secretary, 22 billion dollars of agricultural goods had been exported last year of
which the highest share was that of chili.
Md. Fazle Rabbi Miah, MP
Honourable Deputy Speaker
Bangladesh National Parliament
Speech by
chief guest
There is no need to import
so much chili. Instead, if a
business is created around
buying local chili involving
the processors, then
dependency on imports will
decrease.
14
Speech by Chief Guest
The Deputy Speaker remarked that if farmers could be encouraged to produce
chili with incentives, then they would do it. In terms of diversification of crops,
he mentioned that in his area there was corn and jute cultivation but they
were yet to provide fair price of jute. He had bought chili for Tk. 200 per kg but
even then the farmers were harmed. The price hike had created a huge hue
and cry, but the people did not realize that by paying more for Chili, we were
helping the farmers.
Referring to the media, the Deputy Speaker observed that the countrys media
tends to focus only on the negative with little mention of the positive. How
many times did we see the Twin Tower disaster on the news? And yet, when we
had our Rana Plaza disaster, the news was telecast constantly from dawn till
dusk, he stated. He believed this was a conspiracy by other countries to
destroy the countrys thriving garments industry. Even though the current
government was able to withstand this damage, he admitted that the event
had affected the country badly.
In conclusion, the Honourable Deputy Speaker invited the government and all
stakeholders to promote and protect the countrys chili cultivators with trade
policies and other incentives. He stated that district level chamber of
commerce officials should work with farmers and study the market to address
the problem before it comes to a stage where the country is entirely
dependent on imported chili. He thanked Oxfam for creating an opportunity to
get enriched through knowledge-sharing. He extended his respect to Oxfam
for standing by Bangladesh since its liberation and for its assistance through
all times of distress. He urged everyone to give due attention to the matter of
chili production.
15
Dr. Bhagay Rani Banik , Director, Spice Research Center informed that the Centre
worked with about 30 types of spices of which the main ones included ginger,
garlic, onions, chili etc. Referring to the type of chilis she mentioned that there
are three varieties of chili : one is the winter variety from where the dry red chili
is obtained; others are of different specialty varieties. She mentioned that the
studies conducted by the centre had found that 2% of the total agricultural land
is now allocated for spices. These are not all in the main land, but in the marginal
land such as the chars.
Dr. Bhagay Rani Banik stated that to focus on production it was important to
know about the land which can have high yield. She stressed on the importance
of providing information to the farmers who needed seeds, technology,
information and trainings. She discussed the importance of showing them how
to increase yield. She spoke of the hybrid chili and how our farmers are not
aware of how to produce pure line chilis. people sometimes came looking for
specific breeds of chili and stated the need for scientists and researchers to
help in this regard. Research should also include exploring and enhancing the
quality of chili. Indian climatic conditions are also different and the
opportunities that India derives from these conditions are missing in case of
Bangladesh. As long as there is demand, we and our scientists and researchers
will work to address it.
Referring to the famous Naga chili, Dr. Bhagay Rani Banik pointed out, that this
is originally a Bangladeshi chili which is patented. She stated that even
Bangladesh could work with this variety of chili, if need be. Dr. Bhagay Rani Banik
mentioned that attention to red chili is indeed very important. However, she
informed, that it must be acknowledged that to further improve production of
crops, greater variability of crops is also necessary. She gave the example of
onions where only two varieties are available. Speaking of cardamoms, she
stated that while we think we dont have the environment to produce it, the fact
is, with the germ plasm we can produce this also.
She urged the respected government to consider providing the necessary
inputs with which the centre could advance much further in terms of increasing
yield, quality, colour etc. through cross cultivation.
Dr. Bhagay Rani Banik
Director, Spice Research Center
Speech by Dr. Bhagay Rani Banik
Our farmers have to know
how to increase yield and
produce pure line chilis. I
urge the government to
consider providing
necessary inputs so that we
can enhance the quality of
our chili through cross
fertilization.
16
Speech by Dr. Selim Raihan
Dr. Selim Raihan, Professor, Dhaka University, Department of Economics, stated
that he believed that Indian import was not the main issue. Referring to Dr.
Bhagay Rani Banik, he proposed that the real issue lay in the requirements and
lacking she had mentioned. As a student of economics, he did not believe it was
possible to stop import simply through tariffs. It was instead important to
address the domestic issues. He acknowledged that the paper had increased
his knowledge significantly and the government had to pay attention to this
industry. He observed the following gaps in the keynote paper presented which
are as follows:
Dr. Selim Raihan
Professor, Department of Economics, Dhaka University
What is the connection between consumption habits and demand for chili?
We need to estimate the demand properly.
Informal trade, or illegal supply, must be estimated as well.
Existing rate of tariff on dry chili should be mentioned.
There is currently no BD-India bilateral FTA. It is still in the pipeline.
The entire discussion should be on how to increase domestic productivity
of chili in the country, seeing that we are land-scarce country.
Opportunity costs must be considered. On the same land, what kind of
different products can be produced?
Subsidies and loans for the industry should be explored and introduced.
Farmers, those on the chars, are the ones mostly involved in dry chili
production. All the conditions of the char have to be considered to explore
ways to help the farmer produce more chili.
It is not possible to stop everything with tariffs.
Ministry of Commerce can work on quality control.
If processors import dry chili, process and export it and capture that
market share, there is no harm in it.
Rural expansion needs to increase overall.
Processing industry needs to maintain quality.
I dont believe it is
possible to simply stop
imports through tariffs.
Instead, it is important to
address the domestic
problems.
Speech by Eleash Mridah
17
Mr Eleash Mridah, Director, Pran explained how Pran as a responsible
corporation had taken up its own company policy to benefit the local chili
market by using only locally produced chili since 2010 in all their products. He
explained that they made the choice because of the high quality, smell and
capsaicin content of chili grown in Bangladesh, and pointed out that the only
flaw in local chili was its colour. He gave examples of the Bindu species of chili,
commonly grown in Bogra and Gaibanda regions which was comparatively more
expensive than other types of chili, but it still received priority because of its
features. He brought attention to the issue of grabbing the international market
of dry chili.
Eleash Mridah
Director, PRAN
Bangladesh is a nation where more than eighty five lakh people are
non-resident Bangladeshis who are working outisde the country, and 60%
of these individuals work in the middle east, and most of these people
consume chili
Non-Bangladeshis like Indians, Pakistanis and other South Asians living
abroad also consume chili and products that require chili.
Indian chili may be lower in cost of production and therefore cheaper to
buy, but there is still scope to grab this consumer market with the
Bangladeshi branding. Expatriates will always be willing to spend the extra
dollar to buy something that was grown in their homeland and will benefit
their home country.
Indian chili has been banned in Italy because of a substance called Sudan
dye which was used in the processing. Such markets present
opportunities for Bangladesh to take advantage and penetrate foreign
markets.
Shift to modern techniques of harvesting chili, e.g. drying on cement floor
or polythene sheets to avoid dust particles settling on product. Makes it
easier for processing plants to clean it as well.
Opportunities
There is scope for
Bangladesh to export chili if
it can meet the guidelines
of the international market.
Indian chili is now banned in
Italy because of sudan
dye found in its
processing.
18
Can supply to the foreign markets if quality is strictly improved and maintained.
Farmers can be provided loans at low or no interest so they can directly sell to the market and
earn a bigger chunk of the profits.
Product diversification, instead of crop diversification. Using the same chili, just by processing
and marketing it differently, many different products can be brought into the market.
Branding and promoting it properly: The naga chili makes is used to make naga pickle, and is
the best selling pickle in London. Just like till now Tabasco was branded as the hottest chili in the
world, we can brand naga chili in a similar manner.
Yield of locally grown chili per acre can be increased through research.
Ignorance of Bangladeshi farmers to not undergo qualitative improvement, as nobody has helped
them with new technology and techniques of farming.
Poor drying techniques, e.g. sand dying which add dust particles to the chili, and processing
plants cannot clean chili with water, as moisture stimulates microbial growth.
The sector required more media attention, government training programs, NGOs, etc to guide and
train the farmers.
Prevent the pre-fixing of prices and middle man profits (approximately 50-60%) which take away
profits that would otherwise have trickled down to the producers and farmers.
Cannot totally eliminate the middlemen, as it is not feasible for farmers to produce in bulk and
transport truckloads of chili, as individual farmers transporting chili from their individual lands
would increase the transportation costs.
Challenges
Speech by Eleash Mridah
19
Fouzia Nasreen, General Manager of Swiss Contact spoke about the M4C Project
that she worked on, which focused on the markets in the char area. We have a
similar program as them, said Fouzia indicating Oxfams work with chili value
chains, and chili is also one of the core areas of our program. It is very
important to look at the domestic situation, said Fouzia, a value chain has to be
of value addition to every stakeholder in the chain. This isnt happening in the
case of the local market. In a practical situation, everyone has a very important
role to play in the value chain. She mentioned a few aspects of the Bangladeshi
Chili market where work needed to be done:
Ms. Fouzia Nasreen
GM, Swiss Contact (M4C Project)
Bariboli, Mithiboli they are great strains, but they are ultimately not
reaching or not surviving in the market. So improvement in quality to
satiate market demand is a must.
Information is that is of absolute necessity in famring esp in the chor area.
Like, when to and when not to use urea, alternating crops, storage, how to
increase yield, etc.
A lot of things are happening in the research center, but arent reaching
the field workers and farmers.
Information isnt going to the women whore picking and drying, unless
some NGOs like us are going door-to-door, since male farmers are
attending the trainings, not the women who are also working in this
industry, etc.
1. Quality
2. Supply Chain & Information
Quality
Supply Chain & Information
Speech by Ms. Fouzia Nasreen
Information isnt reaching
the women who are picking
and drying since male
farmers are attending the
trainings, not the women
who are also working in this
industry.
20
Speech by Ms. Fouzia Nasreen
Supply and distribution to market buyers and processors is another
hindrance.
The chars are a vulnerable region and natural calamities such as floods,
cold waves, etc are things that farmers need to be taught to defend their
crops against. The vegetative growth of the chili reduces during very cold
weather, and research is finding out these things but it isnt reaching the
farmers.
Access to finance is a hindrance as well. Representatives of farming loans
often dont reach the farmers in char areas.
Cash incentives are missing. Seasonal loans and microfinance institutions
Other Challenges
21
Remarks by Farmers Representatives
Remarks by
Farmers Representatives
Yarun Begum, Chairperson of Chili Farmers Committee, from Fulchori, Gaibandha spoke on
behalf of farmers on the difficulties they face in her union, particularly the women farmers.
She spoke about how they had been working in the chili cultivation area for years, and
harvesting, and selling it to make a livelihood for a long time. It has been five to seven years
since Oxfam helped them to set up the union and plan ahead to get a better yield and better
value of their goods. Starting from how to sow and which seeds to sow, and the processes
of cultivation and harvesting, Oxfam supported them in every way. However, they havent
been getting the fair value of their goods in the market when they go to sell their product.
It is becoming very difficult to sell our products and make a living, said Ms. Yarun. She
requested everyone present there to help protect the local chili farmers and their chili to
survive in the market, by reducing the cheaper alternative being imported from surrounding
countries.
Tushar Ali, a farmer from Rangpur shared his story about the struggles of a chili farmer.
When we farm chili, we sow the seeds and wait for the plants to grow big, whe wait for the
flowers to bloom, for them to become fruits, and after all that we get chili, said Tushar. At
times when the winter cold hits hard, crops die or barely survive but the yield and size of
chili isnt as expected and they are in more trouble. He spoke about how he and members
of his farming union received training from Oxfam to combat the common problems.
However, in recent times, he and his fellow farmers were not being able to sell the chili in
the market. He requested the policy makers to ensure that foreign chili doesnt continue to
strain the market and further reduce the incomes of the local chili famers.
From the char areas, Abdul Mondol spoke on behalf of a committee of twenty farmers, who
have taken up the combined responsibility of gathering the chili from each of the farmers
and selling it to the market without the need for a middle man. With nine women and eleven
men, this group functions to reduce transportation costs of supplying and distributing chili
by bringing many producers under one umbrella. He explained the value that their united
efforts have brought in contrast to scattered farmers trying to make a living individually but
falling victims of the system. He mentioned how his union had worked with Pran in the past
as well, by communicating with buyers directly. Speaking from personal experience he
mentioned how his visit to marketplaces in Chittagong, kurabari, Rajshahi, Ponchogorh,
and other places had shown him the tough competition in prices of chili because of the
cheap varieties being imported from neighbouring countries. We need more cooperation
from both the government and non-governmental organizations, he said. I speak both as
a farmer, a farmers son, and a respresentative of our farmers union, and request you all to
look into the difficulties we are facing because of the imported chili.
Yarun Begum
Gaibandha
Tushar Ali
Farmer, Rangpur
Abdur Rouf Mondol
Member of Chili traders Enterprise
22
Question/Answer Session
Where will you find the information? From the internet, BBS or elsewhere? What will be the demand?
Different sources show different information. There is a lot of error in information. It is a big
challenge for us to survive if we dont think about quality. Why are organizations importing chili
this is a matter of flavor also.
Senior Scientific Officer
There are some common problems like pro-harvesting issues, seed quality etc. which keep coming
up. It is high time we step forward and come up with solutions to these problems. In this case, Oxfam
has arranged a forum for discussion about chili production. Since women are the producers of chili
in many cases, are they aware of the seed quality, post harvest technique and other information?
- Tanzila Tazreen, Programme Coordinator, Market Development Forum
The price of green chili fluctuates a lot. But the price of red chili does not fluctuate much. The chili
being exported is mainly from Bogra. If we compare our chili with Indian chili, in terms of color, flavor,
taste, size and shape, there will of course be some differences. The chili when being cultivated by
farmers are crossbred and thus lose their original characteristics. We have to think about bringing
out the purity of the chili. When we get pure chili, we will get pure seed. Farmers dont know about
production techniques. Seed companies import green chili seeds, not dry red chili seeds. If we can
show the farmers proper seed collection techniques and harvesting techniques, and provide them
training on drying etc. they will prosper.
Md. Mahmudul Hassan, Spice Research Centre
We are all chili consumers. How many of us try to buy local chili at high prices to save our local chili
producers? Very few. If we really talk about a value chain, ultimately the consumer determines price
and demand. If consumers doesnt want to pay that additional price and opts for Indian products,
there is no way you can help the farmers. So we need to look at holistic opportunity for value chain.
Look at aggregate demand and supply. If market systems show that lower price products are coming
in and consumers are interested in that, farmers should be given the opportunity to produce other
products that will give the farmers better value and returns rather than being fixed on products that
are not worth it.
Parveen Huda, Renesaa
In my opinion, this is not just the issue of chili production but also the future of chili producers.
Gaibandha was once known for Monga. This is no longer the case. This is because of the work of
various NGOs. It is unimaginable how much the people in these areas have developed through
production of corn. Like madam said, consumers go for the cheaper product. We have to produce
with right seeds, give the farmers information. If corn can be a success, chili can also be a success.
At least give us help regarding seeds. If the government helps and trade ministry helps a great deal.
- Gaibhanda District Chairman
I believe since we are talking about the market, we should speak more about the challenges at the
level of all stakeholders in the chili market. If we were able to identify these, we could better map
out a way forward. The issue of imports will remain regardless, but we have to figure out where we
need to intervene to develop our own market.
Event guest
Question/
Answer Session
23
Address by Shahidul Islam
Mr. Shahidul Islam, Vice President, Dhaka Chamber of Commerce and Industry
started by commending Mr. Abdul Mondol for forming a committee. He stated
that he been campaigning for this for a long time. The country has a strong role
to play and it cannot survive if its farmers dont survive. He highlighted the issue
that when the price of chili increased in the country, it started coming in from
neighbouring countries. He opined that to address this, VAT and tax should be
reduced for those importing chili seeds so that the local people can buy the
seeds at low prices and cultivate them. Secondly, he strongly supported the
formation of committees to help farmers get fair prices and also producers
producing for the export market. He observed that neighbouring countries are
producing all sorts of fruits and vegetables throughout the year since they have
the mechanism, machinery and system operating to ensure this.
Mr. Islam further stated that it was important to note that India does not
produce the quality of chili that Bangladesh does. The same is true, he stated,
in case of onions. When the prices of onions and potatoes fall, where do these
products go? he questioned. He explained that Bangladesh has borders on
every side and our products often leave the country and this should be
considered in the interest of the farmers.
With regards to solutions to the problems identified and the role that can be
played by the Dhaka Chamber of Commerce, Mr. Islam suggested: reducing
prices of seeds through reduction of taxes and allocation of space by the
government for poor farmers for their produce. He further stated that the Dhaka
Chamber of Commerce has a huge research centre which will offer all
assistance if required.
Mr. Islam concluded by mentioning that the Dhaka Chamber of Commerce had
already taken the initiative to identity 2,000 entrepreneurs. In this regard, 3,200
fresh graduates had been identified who would not work, but engage in
business.
Shahidul Islam
Vice President, Dhaka Chamber of Commerce and Industry
Address by
VAT and tax should be
reduced for those importing
chili seeds so that the local
people can buy the seeds at
low price
24
Address by Md. Mustafizur Rahman
Mustafizur Rahman, Marketing Manager from ACI group, shed light on how ACI
worked with input, output, and market development as a whole. He mentioned
how for the first time in Bangladesh, ACI has introduced many things for the
agricultural center. Brand forum has recognized us in that area and awarded us
the title of best brand he said. He spoke about hybrid rice introduced into the
local market by ACI, and the challenges they faced in the process. He mentioned
that ACI had worked successfully with both IRRI and BRRI (International and
Bangladesh Rice Research Institute respectively) as well as the local rice
research institute where ACI collaborated to work on germ seed development
for different rice strains. He suggested for the creation of research
opportunities, admitting that the private sector does very limited work in this
regard and considerable government support is needed. He said that although
high quality chili is produced, its quality is compromised due to improper post
harvest management. Its true that there hasnt been much work in the chili
sector and we are very interested to work in this sector and optimistic about
this. We are ready to work on the post-harvesting project on chili, said Mr.
Mustafizur.
Expressing grief over the unfortunate reality that farmers were unable to sell
their produce in the market, he stated that it was important to create market
linkages to address this. Giving the example of vegetables where ACI had helped
create market linkages for farmers, he expressed willingness to do the same in
case of chili, if Oxfam provided a specific proposal.
Being the processors of chili, Mr. Mustafizur also emphasized that it is a fact
that 60% of chili is imported and that the data that was provided was very
realistic, whether it was accepted or not. Instead of discussing the data, he
suggested looking for solutions. He further stressed the amount being
produced was good and certainly worthy of being marketed and all efforts
should be directed to ensure this.
Md. Mustafizur Rahman
Marketing Manager from ACI group
Its true for chili sector we
havent worked at all yet,
but we are very interested
and optimistic about this.
We are ready to work on the
post-harvesting project on
chili.
25
Answer Section
Dr. Shankar Kumar Raha mentioned in the research paper was not the result of
one individual but a whole team. He mentioned how the research was not done
based on the quality, but rather the information collected from the field in the
form of survey-based responses regarding chili market and related issues. He
mentioned how it was a matter of pride for Bangladeshis that Naga chili was an
internationally recognized export product of the country. For more accurate
data regarding the chili market, he spoke about the need for demand
determination and estimation within the Bangladeshi market using tools of
economics. The research presented was supported by Oxfam and gmask and as
well reputed companies they would determine if the presented data was
correct or not. He also mentioned how scientific publications were different
from commercial publications and that the presented paper still had a lot to
bring forth regarding the reality of the dry chili trade within and outside
Bangladesh.
Mr. Raha applauded Pran for their initiative to only use locally grown chili in their
products, and thus protecting the domestic market and producers of chili. He
urged other local companies to follow in Prans footsteps as well. As for the
ways to reduce imports of dry chili to the local market, he mentioned the need
to use both tariff and non-tariff methods, like India did with a lot of their
products in the Indian economy.
Mr. Raha spoke about the policies that Bangladesh bank has for many products
like chili have, through which they provide loans for only 2.5% interest. He
emphasized on the need for farmers to be informed of such existing policies, so
they no longer had to go through informal procedures of taking loans which put
them at risk of losing their land and other assets in the event of not being able
to pay back within a short period of time. The importance of information
dissemination, backward linkage for the inputs, and holistic support from all
stakeholders were mentioned by Mr. Raha. If you want to develop the country,
no matter what you do with cheaper cost alternatives, the fact is that we cant
get out of this vicious cycle, unless our patriotism takes part in the dynamics of
the situation, he said. In the end, he hinted at the need for a patriotic branding
campaign to be launched nationwide, which could urge Bangladeshis to prove
their love for their country through their consumption choices, thus helping to
develop their economy.
Dr. Shankar Kumar Raha
Professor, Department of Agribusiness and Marketing
Bangladesh Agricultural University, Mymensigh
Answer to
All Questions BY
For more accurate data
regarding the chili market,
there is a need for demand
determination and
estimation within the
Bangladeshi market using
tools of economics.
26
Speech by Special Guest
Special Guest, Mr. Monoj Kumar Roy, Additional Secretary, Ministry of Commerce,
affirmed that the Government is inclusive and takes all matters into consideration.
He informed since the 90s when there was a market crisis, the government had
shifted focus to its domestic market. The basic principle of the government and
businessmen, he noted, is to provide quality products at competitive prices to
consumers, whether this is nationally, or internationally. He went on to say that the
government had taken a regulatory role with policies and had proffered substantial
power on the private sector. All the stakeholders, including the market, the
producers, the private sector as well as the civil society, had to be involved, he
asserted.
Mr. Roy spoke on the pressure that the government constantly dealt with. In case of
a deficit it had to be met with imports. In the case of those processing the chili for
export they presented a clear opportunity for economic advantage which had to
be protected as well. He gave the example where if the export of vegetables in the
market was stopped, the market would have more of those vegetables but the
farmers would not get their fair price. In terms of duty, he stated that while there is
about 54% duty on green chili, the total duty on red chili was 10.5%. This was
decreased when price of red chili went up so that the market price would go down.
He pointed out that red chili was not just produced for consumption but also for
export and as raw material for processors.
Further elaborating on the governments role and position, Mr. Roy pointed out the
challenge of dealing with fluctuating market prices. He stated that if overnight the
prices of onions went up, the media and consumers would ask questions. However,
it is important to take into account the market conditions as well as the external
environment. He explained that if barriers to import were created, there would be
immediate repercussions on export as well. So the government would have to
accept those conditions and compromise with everyone researchers, processors,
consumers all stakeholders. He asserted that the government needed resources
and revenue as well.
Referring to ACIs eagerness to work on this sector, he welcomed other actors in the
market to step forward with support. He expressed his respect for the Dhaka
Chamber of Commerce, stating that they had a strong research base. He spoke of
how salt import had been stopped to help the salt producers in the country who
produced refined salt as well. Even after high tariff, customs hassles, importing
costs and transport, salt importers still wanted to import to Bangladesh, indicating
the profitability of the business. He concluded by reasserting that the market is the
focus of the trade industry and imports cannot be simply stopped and there was no
guarantee that prices of chili wont remain high even if imports are stopped.
Mr. Monoj Kumar Roy
Additional Secretary (Foreign Trade Agreement)
Ministry of Commerce
Speech by
Special Guest
The government has taken
a regulatory role with
policies and has proffered
substantial power to the
private sector. All the
stakeholders, including the
market, the producers, the
private sector as well as the
civil society, must be
involved.
27
Closing Remarks Chief Guest
In his closing remarks, the Chief Guest, Honourable Deputy Speaker, Md. Fazle
Rabbi Miah, stated that in the market under his constituency, while both local
and Indian chili is present, the percentage of Indian chili is less. A lot of local chili
is also sold in the market as Indian chili, he stated. Offering due respect to all
participants, he stated that the unfortunate reality was the business community
was too profit oriented and should operate with a conscience. He urged them to
remember that they could play a strong role in helping their fellow countrymen.
Regarding the tariff on green chili and red chili, he mentioned that it was an
important learning that there was 54% tariff on green chili and only 10% tariff on
red chili. As such, he suggested raising the tariff on red chili.
Referring to the matter of Indian chili becoming adulterated and banned in
certain European countries, he suggested seizing this opportunity to grab this
market. He spoke of Pran and Square which have become well known names and
urged them to work with the farming chili community in mind. He welcomed them
to work in the char areas and offered assistance in coordinating with the local
regions and training local communities. He also welcomed buyers to get in touch
with him. He ended his speech by thanking Oxfam for continuing to work for the
well being of Bangladesh.
Md. Fazle Rabbi Miah, MP
Honourable Deputy Speaker
Bangladesh National Parliament
Closing Remarks
Chief Guest
As mentioned here, the
tariff on green chili is 54%
while on red chili it is 10%.
In this case the tariff on red
chili should be increased.
This will have a significant
effect.
28
Concluding Remarks
Mr. Nurul Amin, Economic and Private Sector Officer, Oxfam, thanked all the
participants for their inputs, and the distinguished guests including the Chief
Guest, Md. Fazle Rabbi Miah, Honourable Deputy Speaker, Bangladesh
Parliament and Special Guest, Mr. Monoj Kumar Roy, Additional Secretary,
Ministry of Commerce. He stated that the objective was to accommodate a
debate which would facilitate an exchange of views, opinions, solutions and
suggestions to address the serious issue of the dying cultivation of chili
where over 60% of the market was becoming dependant on imports. Mr. Amin
stressed that Oxfam is not a research organization. He spoke about Oxfams
work in the char areas where Oxfam investigates the existing conditions and
uses data collection to design programs and interventions. He discussed the
various struggles faced in data collection where collecting accurate data
was a challenge. Seeking forgiveness for the limitations, he stated that
though the original intent was to publish the report, they had decided against
it even before the workshop. Instead, the focus was placed on collecting the
opinions and insights from the various sectors through the dialogue,
compiling it and then publishing it. He closed the session by thanking
everyone for their valuable time, opinion and feedback on the important issue
and with the hope that the members of the parliament present would take
steps based on the discussion.
Nurul Amin
Economic and Private Sector Coordinator
Oxfam in Bangladesh
Concluding
Remarks
29
Summaries
There is a steady reduction in the production area of chili. The production is also unable to meet the demand for dry red
chili, thus resulting in a deficit. This is creating the opportunity and demand for imported dry red chili in the market to meet
the shortage.
Farmers do not get fair prices for chili and are unable to compete with imported chili from India since the price of Indian chili
is far less than that of local chili.
Farmers do not have adequate information about methods of chili production, particularly post-harvest techniques. They
also dont have access to seeds. The seed market for dry red chili is not developed. Farmers either buy seeds or use seeds
from what they have already produced.
Women, comprising majority of chili farmers are particularly deprived from information and opportunity due to
discrimination.
Imports have been increasing substantially to from 8% imported in 2010 to 60% imported in 2014.
Chili processing companies are importing nearly 60% of their chilis.
Less demand for local chilis creating vulnerability and hardships among chili farmers.
Government trade policies are not favourable for dry red chili production. While there is a 54% duty on green chilis, the duty
on red chili is 10.5%.
Farmers suffer from lack of access to finance and cash incentives. Farming loans often dont reach farmers in remote
locations.
Summary of Key Challenges
Chars and coastal belts as well as the mainland should be used for chili production.
Farmers must be given access to information, technology, seeds and training. They must be educated on how to increase
yield and ways to produce pure line chilis to meet the demand.
Greater variability of chili is required and necessary inputs to this end so that yield and quality can be enhanced through
cross fertilization and demand for local chili can be increased.
Subsidies and loans for the industry should be explored and introduced. Banking systems, loans and micro credit must be
made accessible to farmers in remote char areas.
Bangladesh should explore greater opportunities to export chili in foreign markets. Indian chili has been banned in Italy
because of a substance called sudan dye which was used in the processing. Bangladesh can strive to capture this
market with its local red chili.
Farmers can be provided loans at low or no interest so they can directly sell to the market and earn greater profits.
Farmers must organize and form unions or committees to collectively address the problems they face, get fair prices and
present their demands.
Summary of Recommendations
There is only one type of dry chili in the country, while neighbouring countries harvest more varieties.
It is recommended that more tariff should be impose on dry chili.
More research initiative should be taken to improve dry chili variety
It needs impose to less tariff on chili seed as new variety of chili seed can be introduced.
Import of dry chili through illegal way should be stopped
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