Connecting Maize Farmers to the Markets: Creating Systemic Change
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Date
2013
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Publisher
Badan Penelitian dan Pengembangan Pertanian
Abstract
The maize market in Bangladesh has been lagging behind demand, with the shortfall met by imports.
Consequently, the potential of maize – still a new crop in the country – to contribute to growth and poverty reduction
has not been realized to its full extent. Maize was an important and growing industry. From a low base in 1990,
production nationally had increased15-fold (and by 50% in the 2000-2003 periods). Its growth had been fuelled
entirely by the large rise in the poultry sector since maize is the principal ingredient in poultry feed. Bangladesh
production competes directly with imports for the feed market. Strong domestic demand was manifested in high
prices and relatively high returns for farmers. The essential economic logic of focusing on the sector –were
dominant in Katalyst‘s mind, the wider employment and poverty-reducing impacts were also taken into account.
Katalyst‘s view was that higher returns from maize would reach the poor in a number of ways: a) As agriculture
small-holders – from the relatively high returns to maize growing b) as labourers and employees to others: although
there are no official employment figures, maize is accepted generally to be slightly more employment intensive per
crop than rice and potato (although less so than tobacco and vegetables) and much more employment intensive than
wheat and pulses. Katalyst also believed that improved performance in the maize industry would lead to improved
feedstock and greater competitiveness for the poultry sector. Three to five million people5 were estimated to be
involved in the poultry sector. If continuing low output in response to strong demand conditions was the main
symptom of poor market performance, for Katalyst, the key questions were clear: (1) What were the constraints that
prevented appropriate solutions from emerging through the market system (i.e. why wasn’t the market working?),
and(2) What could be done by Katalyst to address these issues?2Beyond certain generic problems, there were
more specific, inter-related issues that subdued output growth, all related to the “newness” of the crop in Bangladesh.
The immediate causes were a) weak access to markets and input b) adopting maize as a crop in the current cropping
pattern c) access to finance d) knowledge on nutrient management and soil fertility issue.The underlying cause was
the poor private sector involvement in the maize market. And thus questions like why was the market system not
providing a solution to weak knowledge and information? In particular, market players appeared to be especially
slow to learn about new ideas and opportunities in issues like procurement systems such as contract farming: why
was this so?Katalyst assessed that maize contract farming can be a tool to trigger the leverage points which will
feed in to solve some of the underlying issues and also help serve a issues in the other markets like the poultry feed
market.