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Foodgrain Storage and Credit Facilities Essential for Farmers

by Karar Mahamudul Hassan
Bangladesh is predomi nantly an agricultural country, about 80 per cent of its total population directly and indirectly depend on agriculture and agriculture-related activities for livelihood. Though the country has rich fertile lands covering major part of its territory, the pressure of population is acute (growth rate estimated at 2.7% as In 1986 and 2.3% in 1993) and traditional modes of cultivation with limited irrigation facilities can hardly help yield enough food for the people. Yet with the country's limited industrial base and weak management capabilities, it is agricultural productivity that holds the key to its overall economic growth and welfare of people.
Thus agriculture is the mainstay of economic and social life of Bangladesh. Rice is the principal foodcrop followed by wheat. Other crops include jute, sugarcane, potatoes. tdbacco. oilseeds and pulses. Various kinds of vegetables and spices are also grown. There is persistent effort to overcome food deficit by increasing agricultural production through enhanced use of modern Irrigation facilities and other agricultural inputs. At present there are more than 3.5 lakh irrigation equipment of 62 different makes and models in use in the fields.
But crop production Is affected adversely by one or a combination of the following problems: 1) Lack of actual statistics in respect of cultivable land (union, thana and district wise); ii) Lack/non availability of the required quantity of institutionalised agricultural credit at appropriate time; iil) Lack of optimum irrigation facilities through shallow and deep tubewells due to less availability of ground water on the one hand and lack of surface water for low lift pumps due to silting up of rivers and canals etc on the other; iv) Intrusion of saline water from sea on agricultural lands in coastal districts: v) Absence of an inte
grated agricultural price policy — a policy which ensures higher oiftput prices for agriculture with greater emphasis on guaranteed prices fixed early for internal procurement and reasonable input prices so that high yielding varieties and other new technological packages are available to small farmers: vi) Lack of storage-cum-credit facility.
In recent times, yearly rice production is being estimated at 17.5m to 18.5m tons. In addition. one million (or a little more) metric tons of wheat is being produced In the country. A section of press quoting a recent UN report, states that though Bangladesh at present is almost self sufficient in food production, "millions still go hungry as a sizeable segment of the country's workforce is either under-employed or unemployed". The report further says that rice production increased steadily over the recent decades, between 1960 and 1992. doubling from 9.7 million to .18.5 million metric tons. But with lower prices particularly at the time of harvesting. the market price of rice/paddy and other grains is at the lowest. The small and middle class farmers, are very often under pressure to sell their produced rice/paddy at the time of harvesting or even before, mainly for two reasons: first, to pay back the non-instl-tutionalized loans taken from the money lenders (at an interest rate of about 10 per cent a month or even 1 per cent a day): secondly, maximum of them have no adequate arrangements of their own for crops storage and at the same time need cash to meet their immediate and daily expenses. The fact is that, by the time the market price for food-. grains has recovered, (which repeats almost every year invariably) the small and marginal farmers in particular, become buyers and have no option but to borrow money again from the money lenders including rich farmers, businessmen. primary school teachers and at times, from union parlshod chairman.
members etc, al extremely high rates of interest to buy grain for consumption and
The pressure for the distressed sale of grain at harvest Ing time due to Inadequate storage and credit facilities thus increases dependency upon local money lending systems. In mosl of the cases, the result is: a large number of small farmers every year end up having to give up their small land holdings, household goods and personal savings (If any) of their family and eventually swell the ranks of the landless and deprived.
Accesses to storage and credit facilities is thus essential in the small farmer's struggle to get a fair price of his crops and to overcome dependency on unfavorable credit terms. Better prices, in turn, also provide an incentive for more intensive production efforts.
Land-Man Ratio
L The land-man ratio has Been shrinking gradually due to heavy pressure of population on land and the predominance of subsistence family farming. The ratio was. says a BADC report (1985), 0.40 acre in 1961 and it gradually decreased to 0.33 acre in 1970, 0.28 acre in 1975 and 0.25 acre in 1981. In 1994. the'ratio might have further been reduced to approximately 0.15 acre. Because of the complicated land holding pattern, about half the land is. not accessible to modern technology either because plots are too small to enable the farmer to grow a surplus crop or because, large land-lords/farmers farm through share croppers or contract labour and are not interested in modern technology.
Credit Facility: Present Scenario
According to informed and reliable sources, less than 20 per cent of the farmers have access to 'Institutionalized Agricultural' Credit' facilities. At the same time, the loan dis-
bursement every year in the name Of Agriculture Credit' through different banks does not fully benefit the real farm-1 ers in the true sense. Just about half of the disbursed agricultural credit is meant for the farmers and that. too. crossing through so many visible and non-visible procedural hurdles. When most of them get the loan-money, they generally find that almost half of the sowing season is over, and the loan money in so many cases cannot be utilized (of the appropriate purposes.
Storage Facility. BASWAP
Experience
Bangladesh-Swiss Agricultural Project (BASWAP) was a bilateral project based on an agreement between ’ Bangladesh and Swiss Governments (Ministry of Agriculture and Swiss Devt. Corporation). The Project has developed and tested a storage-cum-credlt system to help the small and marginal farmers and share croppers to obtain much needed cash at harvest time. Instead of selling his crop pt the usually prevailing depressed prices, the farmer can opt for the following measures; and in so doing, let’s see what he does:
a) He becomes a member of village godown-group. After harvest, he brings grain to the godown which is managed by a godown committee' elected by the group members. The individual farmer member dries and cleans his grains thoroughly before it is stored individually. He is given 90% of the government procurement price of his stored grains by. the designated bank official either on the spot or at the nearby concerned bankbranch. b) Later, when after a few months or so. the market recovers sufficiently to allow a profitable sale, his grain is released for sale through which he repays his bank loan plus Interest and godown storage fee. etc. c) The storage fee covers the costs of godown operation by a trained store
keeper as well as the expenses for pesticides, fumigation and maintenance of the godown.
Throughout the storage period the ownership of the stored crops remains with the farmer. He also takes up the responsibility for the marketing of his grains As the consignment of grains is released after repayment of the loan, the participating banks can rely on a 100% recovery of the loans.
The BASWAP (project) which was initiated in 1979 was completed on 30.06.90. Initially the area of operation was limited, to Boda and Satnala of greater Dinajpur dis-Jri$it and gradually it had been expanded to Some more areas Iff Nllphamari and Manlkganj districts. Thana Supervisory Committee was formed with TNO as chairman and concerned bank manager as mem her-secretary. It was observed that though the individual profits varied due to market fluctuations, the actual profit per maund was Tk 30 to 40 and the same on paddy seed, was-at times Tk 100.00 or more.
Other benefits accrued out of the BASWAP activities were as follows as per a report of the Ministry of Agriculture: By using storage facilities the member-farmers have good quality seed at the time they need it at low harvest time prices; throughout the storage period, the farmer has grain available for consumption at low harvest, time prices: careful storage and insects control measures ensure good quality grain; losses through theft, rodent and insect Infestation sire minimized: the small and marginal farmers gain experience in using banking facility and have access to loan at reasonable interest rate. This reduces their dependency on indigenous credit sources: the farmers gain experience in understanding and utilizing the marketing mechanism as well as the nature of price fluctuations of grain.
SHOGORIP
It is of worth noting that
the BASWAP was though a small project (with 24 godowns and 12000 farmer members). It provided the background and confidence as well to plan for a larger expansion with a new project known as "Shoissa Godam Rin Prakalpa (SHOGORIP) which started operating since last July. 1992 and will continue its operation for 5 years. In addition to the 24 godowns established/organised by BASWAP. 62 additional godowns each having 3000 to 4000 MT capacity will be brought under use. thus increasing the additional storage capacity to 7000 metric tons and adding another 45.000 enrolled target farmers by the end of project jJerlcxkn^-
Under this .project (SHOGORIP) there is provision for training facilities for 17.500 farmers. 4350 godown committee members/project staff/local staff: study tours: workshops; seminars, and purchase of 62 godown equipment sets, moisture meters. dunnage etc. There is also provision for the survey of approximately 1.20.000 rural households around godown and bank branches including setting up. install and developing a sustainable institutional structure to be registered as a 'Trust.'
Though Uris project (SHOGORIP) Is still a humble endeavour to help the small and marginal farmers including share croppers to overcome the pressure for the distressed sale of their produced grain at the time of harvesting, the government as well as the Bangladesh Bank should come forward to implement similar project in every Thana/Union/Ward out of GOB'S own finance, if necessary. which will help millions of farmers to get access to storage and credit facilities including having better price for their agricultural products (grains), and this will in turn, create employment facilities for thousands of rural educated-unemployed youths of respective areas.