ROUNDTABLE DIALOGUEPresent Challenges and Opportunities12th August, 2014

ON CHILI MARKET IN BANGLADESH

Venue: Auditorium, BRAC InnMohakhali, Dhaka

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ROUNDTABLE DIALOGUEPresent Challenges and Opportunities12th 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. AkhterProgram 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. SonejiCountry 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 ourcountry 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 RahaProfessor, Department of Agribusiness and MarketingBangladesh 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 StakholdersKey Presentation12

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

13Speech 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, MPHonourable Deputy SpeakerBangladesh National Parliament

Speech bychief 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 RaihanProfessor, 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 NasreenGM, 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

21Remarks 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 BegumGaibandha

Tushar AliFarmer, Rangpur

Abdur Rouf MondolMember 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 IslamVice 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 RahmanMarketing 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.

25Answer 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 RahaProfessor, Department of Agribusiness and MarketingBangladesh 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 RoyAdditional 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.

27Closing 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, MPHonourable Deputy SpeakerBangladesh 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 AminEconomic and Private Sector CoordinatorOxfam in Bangladesh

Concluding Remarks

29Summaries

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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