Asian Journal of Agricultural Extension, Economics &

Sociology

39(3): 145-157, 2021; Article no.AJAEES.67495

ISSN: 2320-7027

Value Chain Analysis of Brinjal in the Chittagong Hill

Tracts of Bangladesh
Shah Johir Rayhan1, Md. Jahurul Islam2*, Mohammad Mizanul Haque Kazal3
and M. Kamruzzaman4
1
Department of Management and Finance, Sher-e-Bangla Agricultural University, Dhaka-1207,
Bangladesh.
2
Department of Agricultural Economics, Khulna Agricultural University, Khulna-9100, Bangladesh.
3
Department of Development and Poverty Studies, Sher-e-Bangla Agricultural University, Dhaka-
1207, Bangladesh.
4
Department of Agricultural Economics, Bangabandhu Sheikh Mujibur Rahman Agricultural University,
Salna, Gazipur-1706, Bangladesh.

Authors’ contributions

This work was carried out in collaboration among all authors. Author SJR designed the study,
performed the statistical analysis, wrote the protocol and wrote the first draft of the manuscript.
Author MJI’ managed the literature searches and helped in data and statistical analysis.
Authors MMHK and MK managed and supervised the analyses and overall study.
All authors read and approved the final manuscript.

Article Information

DOI: 10.9734/AJAEES/2021/v39i330555
Editor(s):
(1) Dr. Rajesh Kumar, Lala Lajpat Rai University of Veterinary and Animal Sciences (LUVAS), India.
Reviewers:
(1) Muhammad Tahir Akram, PMAS-Arid Agriculture University, Pakistan.
(2) Borgonovo Gigliola, University of Milan, Italy.
Complete Peer review History: http://www.sdiarticle4.com/review-history/67495

Received 20 February 2021

Original Research Article Accepted 24 April 2021
Published 29 April 2021

ABSTRACT

This study examined the value chain and marketing margin of brinjal in Bandarban, Khagrachari and
Chittagong of Bangladesh. It looks at profitability, value addition at different levels and marketing
efficiency for the various market. The simple random sampling technique was followed for collecting
primary data from the vegetable growers in the study area. In this study, total 60 growers and 50
market intermediaries were selected. A primary survey was carried out in January to June 2016.
The benefit-Cost Ratio was used for estimating profitability. Marketing cost and margin were used
for calculating the value addition in every stage of the supply chain. For assessing marketing
_____________________________________________________________________________________________________

*Corresponding author: E-mail: jahurul.bsmrau@gmail.com, jahurul@kau.edu.bd;

 Rayhan et al.; AJAEES, 39(3): 145-157, 2021; Article no.AJAEES.67495

efficiency, price spread, producers share, and Acharya’s methods were employed. The result
revealed that brinjal cultivation was profitable since the Benefit-Cost Ratio (BCR) of brinjal
cultivation was 1.59. The highest net marketing margin for brinjal was found in chain II. The most
efficient marketing chain was found in chain III, which is Farmer → Retailer → Consumer (Local) in
the study area. It appears that, based on the findings of the study, there is considerable scope exists
for developing the value chain through keeping the marketing efficiency at the chain III level.

Keywords: Vegetable crops; marketing; value chain; Chittagong Hill Tracts (CHT); Bangladesh.

JEL: Q13, M31, O13

1. INTRODUCTION conception through the intermediate stages of

development (including a mixture of physical
Based on the projection of population statistics, transformation and the input from different
Bangladesh has a population of approximately supplier services), distribute to final customers
164.62 million, making it one of the world's and post-use final disposal [5,6]. The concept of
heavily populated nations [1]. While Bangladesh the value chain also refers to adding value to
is on track for achieving middle-income country preliminary products by combining them with
status by 2021, agriculture remains by far the other resources (i.e. tools, human resources,
state's largest employer, and 41% of the knowledge and skills, other raw materials or
population is employed directly in agriculture. preliminary products). The product's value gets
Almost 70% depend on agriculture [2]. increased as it moves through the various stages
Agriculture acts as the foundations of food supply of the supply chain [7]. In the typical selling
for human beings through crops, livestock, scheme, farmers produce commodities that are
fisheries, raw materials sources for industry, "pushed" directly into the marketplace. Producers
timber for construction and originator of foreign are segregated from the end-user and have
exchange for the country through the export of minimal power over production-related costs or
raw or processed agricultural commodities. It is of the resources earned for their products. In a
the powerhouse of agro-industrial sector growth, marketing system for the value chain, farmers
including food processing, input production, are closely linked to customers' requirements
marketing and related services. It plays a and work closely with processors and dealers to
fundamental role in reducing poverty, which generate particular products as consumers
remains a predominantly rural phenomenon, as demand. Similarly, consumers are connected to
the primary source of economic linkages in rural the requirements of farmers through flows of
areas. Agriculture also plays an essential role in information and products. Under this approach,
boosting nutritious diets, especially in rural areas the returns can be increased for farmers, and
where production and consumption patterns are livelihoods can be improved by constant
highly interlinked. In rural areas, 26.4% and innovation. Actors at all stages of the value chain
14.9% of the total populations live below upper can have an advantage rather than concentrating
and lower poverty line respectively [3]. However, profits on one or two links. The agricultural
as the country develops, and other sectors supply chain is an integral part of the value chain
expand (such as readymade garments), the and the terms value and supply chain may
share of agriculture in Gross Domestic Product sometimes be used interchangeably in the
(GDP) has naturally deteriorated. The tentative literature or are at least closely related.
figures indicate that the far-reaching agricultural
sector's role in GDP in 2016-17 is 11.12% [4]. Value Chain Development is a tool against
Contributions in GDP from the crop, fishery, poverty. Globalization fills market gaps and
livestock and forestry subsectors were 9.11%, brings producers and consumers closer together.
3.69%, 1.78% and 1.75% respectively. Success The sustainable development of a country
has been accomplished in the latest years owing stresses the need for international cooperation
to the ongoing reform and execution of through catalyzing foreign investment which
agricultural policies. ultimately brings regional and global competition
into local markets [8]. Policymakers are
A value chain describes the full range of activities continuously exploring the potential of agro-
required to produce a product or service from industries with a strong focus on nurturing

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efficient sustainable agricultural value chains as the Hill Tract. The study can be supportive for
a form of further expanding the dominant position new entrepreneurs by establishing a new
of agriculture in poverty alleviation and economic entrepreneurship model by developing value
growth. Value chain analysis is a tool for chain of vegetable crops. Thus, the study is a
policymakers to specify necessary actions, pioneer study in CHT through which both
prioritize investments and development and growers and entrepreneurs will be benefited. The
growth prospects. By identifying the level of study can also be supportive research for
intensity, flaws, and weak points, value chain national policy as well as for further research.
analysis may assist participants build a common
vision of how the chain will work and recognize Considering the above issues in mind, the
mutual partnerships that can contribute to chain current study has been articulated in light of the
performance improvements. specific objectives as follows:

The vegetable growers in the Chittagong Hill 1. To assess the profitability and value
Tracts (CHT's) region will get fair prices of their addition of brinjal at a various stages of
produces if the agro-processing industry and supply chain;
proper marketing channel can be developed. 2. To examine the marketing efficiency at the
Vegetable growers count losses every year in study areas.
CHT's as they often are compelled to trade their
produces at reduced prices compared with 2. MATERIALS AND METHODS
production costs because of the poor
infrastructure, absence of traders, middlemen as 2.1 Study Area Selection
well as a dearth of variation in consumption
patterns. The farmers are losing their interest to The study area selection was done purposively
cultivate vegetables as they are denied fair based on the brinjal production and marketing in
prices and turned into tobacco cultivation. If this the CHT area. The Upazilas selected for the
tradition goes on, it will be very alarming for the study were Khagrachari Sadar, Dighinala,
environment, soil fertility and human health Panchari, Bandarban Sadar,and Chittagong
especially in the hilly area. There is a good scope Sadar. The markets selected for the study were,
to enhance the poor farmers' income across the one wholesale market namely: Riazuddin Bazar
value chain and entrepreneurship development in Chittagong Sadar. The retail markets of
through the appropriate use of product Khagrachari District are Khagrachari sadar
diversification and set of a proper marketing bazar, Panchari bazaar, Dighinala bazar. The
channel for vegetables. Since this sector is retail markets of Bandarban District are
closely aligned with the country's food safety [9], Bandarban sadar, Balaghata bazar.
promotion of appropriate marketing knowledge,
availability of processing materials and setting up
of small processing plant may enhance farmers' 2.2 Selection of Sample and Sampling
and entrepreneur's income in the long run.
Technique
An effective marketing mechanism ensures
higher income for farmers and expands the The target population is characterized as those
markets for the produce by transporting them to engaged in the brinjal production and marketing
isolated parts of the world [10]. Policymakers operation process. It was not possible to
need to find ways of reducing the needless role interview all the farmers and traders of the study
of intermediaries in creating an effective area due to time and resource constraints.
marketing system that benefits farmers and Sampling is an important part of survey work. A
consumers more [11]. sample of farms was chosen which could
represent a reasonably true picture of the entire
The outcome of this research study will help to population. The sample included the growers of
analyze the existing supply chain/value chain brinjal and various market players, such as Faria,
and upgrading the existing chain of selected Bepari, Wholesaler, Aratdar and Retailer. A
products, assessing hill farmer's access to random sampling method was adopted to
market and identifying market opportunity of hill accumulate the data from the farmers and
agricultural product for developing value chain in different market participants.

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Table 1. Distribution of samples

Particulars Bandarban Khagrachari Chittagong Total

Farmer 30 30 0 60
Faria 4 4 0 8
Bepari 4 4 0 8
Aratdar 0 0 10 10
Wholeseller 0 0 10 10
Retailer 5 5 4 14
Total 110
Source: Authors calculation from the Field Survey

Primary data were collected to meet the stated cost of insecticide and pesticide, etc. The fixed
aims of the present study for the brinjal from costs include mainly land use cost, interest on
Khagrachari and Bandarban in January- March running capital and depreciation. The following
2016. Focus Group Discussion was conducted profit equation was employed to assess the
during May-June 2016. profitability of production.

As the population size was not readily available, Net return of producer (Eq. 1)
the brinjal growers and market intermediaries
Π = P . Q − (TVC + TFC) (1)
were selected considering availability at the first
sight and from the Farmers Grower Group (FGG) Where,
as well as Farmers Marketing Group (FMG). The
market actors or intermediaries imply to those Π is Profit of producer per hectare
individuals who function between the farmers PF is Per unit price of Vegetable (Tk/kg)
and consumers. The key market actors were QF is Quantity of brinjal (Qt/ha)
faria, bepari, aratdar, wholesaler and retailer. TVC is Total variable cost of brinjal cultivation
Information was gathered on the amount of
trade, marketing costs (depreciation of TFC is Total fixed cost of brinjal cultivation
investment capital, interest on operating capital, Gross return was calculated by multiplying the
transport costs, office costs, tax, market toll, total volume of output by the per-unit price of the
wastage, etc.), distribution modes, purchase and commodity at the time of harvest. The following
sales price, product and price formation, gross equation was used to estimate gross return (GR)
and net margins and marketing constraints. (Eq. 2).
Similar and comparable methods were followed
for bepari, faria, aratdar, wholesaler and retailers. GR = ΣPb. Qb (2)
2.3 Data Analysis Where

Data collected from questionnaire interviews GR is Gross return from brinjal

were coded where relevant, loaded into a Pb is Per unit price of brinjal
database system through Microsoft EXCEL and Qb is Quantity of brinjal
was analyzed using SPSS-19 Statistical
Software. Descriptive statistics (percentage, The argument for using gross margin analysis is
mean, range, standard deviation, coefficient of that the brinjal growers were more interested to
correlation, variance coefficient, etc.) were used know their return over variable cost.
to define the variables and broad marketing costs
were calculated by following approached defined The following equation was used to assess the
by [12]. gross margin (Eq. 3).

In the current research, the costs and margins of GM = TR – VC (3)

the growers of brinjal, and yard-long beans were Where,
calculated. Production costs include both
variable and fixed costs. The variable costs GM is Gross margin; TR is Total return; VC is
include costs for seed, cost of human labor, cost Variable cost
of cultivation, cost of fertilizer, cost of irrigation,

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Interest on operating capital= Amount of Marketing margin of a channel is measured by

operating capital× Interest rate (%) × Time using the Eq. 8.
required (in years) /2
M
Variable cost of production will be considered as = M + Mm1 + Mm2 + Mm3
operating capital. + … … … … … … … … . + Mmi (8)
2.4 Value Chain Analysis
Analysis of the value chain includes identifying all M is Total margin in a channel
the functions performed in a specific commodity Mf is Return received by the farmer
sector, organizing them into the sequence, and Mmi is Margin received by the ith middlemen
analyzing each function about both the preceding
steps and subsequent ones. Value Addition by Traders and Gross Margins
are expressed by Eq. 9-10.
2.4.1 Marketing cost, marketing margin and
value addition by traders Value Addition =
Gross margin – Marketing cost (9)
The marketing costs mainly include costs for
various market operations like transportation, Gross Margin = Sale price − Purchase price (10)
loading and unloading, market toll, rents, staff
salary, electricity, generator cost, commission, 2.5 Marketing Efficiency
wastage, depreciation, and other miscellaneous
costs. The items of the marketing costs vary with Marketing performance was assessed using
the type of intermediaries. various marketing efficiency measures, as
defined by [13-15]. In this research, marketing
The Total marketing cost incurred by the farmers efficiency was studied by analyzing price spread,
and intermediaries in a channel is estimated by the share of growers, Acharya's methods for
the Eq. 4. estimating marketing efficiency and return on
investment.
C =Cf +Cm1 + Cm2 +Cm3+................................+Cmi
(4) 2.5.1 Acharya marketing efficiency

C is Total cost of vegetable marketing in a Acharya's [15] method of marketing efficiency is

channel an optimum measure of marketing efficiency,
Cf is Cost paid by the producer when commodity especially for judging the efficiency of alternate
moves market/channels. Marketing efficiency was
th
Cmi is Cost incurred by the i middlemen in the estimated by applying Acharya's index, which is
process of buying and selling of vegetable in a defined by Eq. 11.
channel. (i = 1, 2,3, …n)
ME = (11)
The marketing margin and net marketing margin
of different value chain actors were estimated by ME is Marketing efficiency.
the Eq. 5-6. FP is Net price received by farmers
MC is Total marketing cost
Marketing Margin = Sales price − MM is Total net marketing margin of
intermediaries.
Purchase price (5)
A higher value of ME denotes higher level of
Net Marketing margin = efficiency and vice versa.

Marketing margin − Marketing cost ( ) (6) 2.6 Price Spread

Price-spread, and producers' shares in

Value Addition (%) = consumers' price and Net price received by
( ) growers were calculated by Eq. 12-14. (7)
X 100 (7)

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Price spread = Price paid by consumer (Tk/ i. Farmer → Faria → Retailer → Consumer
kg) – Price received by the grower (12) (Local)
ii. Farmer →Faria → Bepari → Aratdar
Producer s share (%) = (Chittagong)→ Retailer → Consumer
(Chittagong)
× 100 (13) iii. Farmer → Retailer → Consumer (Local)
iv. Farmer → Bepari → Aratdar
(Chittagong)→ Retailer → Consumer
Net Price Received by Grower =
(Chittagong)
Gross Price Received (Tk/
v. Farmer → Bepari → Aratdar
kg) – Average cost incurred in marketing (14) (Chittagong)→ Wholesaler → Retailer →
Consumer (Chittagong)
As a measure of marketing efficiency,
Shepherd’s formula [13] was used as the ratio of 3.1 Cost of Production and Profitability of
total value of goods marketed to the total Selected Vegetables
marketing cost. The higher the ratio, higher is the
efficiency and vice-versa. On average, the total cost of brinjal production
was Tk. 220,010.38/ha in which total variable
Four performance indicators were used for cost was Tk. 179,963.97/ha and fixed cost was
measuring efficiency of different marketing Tk. 40,048.92/ha. The Highest cost was found in
chains. These indicators were (i) Producers' Khagrachari district (Tk. 224,369.06/ha) because
share (I1), (ii) Marketing cost (I2), (iii) farmers of Khagrachari district applied fertilizer,
Intermediaries' margin (I3), (iv) Acharya irrigation water and pesticide adequately
Marketing Efficiency (I4) [16]. The cost of (Table 2).
marketing was calculated and the lowest cost
marketing chain was ranked 1 and that which 3.1.1 Profitability of brinjal in the study areas
has highest cost as the last. The same approach
was followed in ranking the margin of middlemen Average yield of brinjal was found to be
in each chain. 26096.06 kg/ha. The higher yield was found in
The final ranking of all the four indicators of all Bandarban district (26166.67 kg/ha). The
chains were computed by using the composite average gross return, gross margin and net
index (Eq. 15.) return were Tk. 350,072.65., Tk. 170,108.68 and
Tk. 130,062.27 per hectare respectively. The
R= (15) BCR of brinjal production was 1.59 in all areas
(Table 3). This result corroborated by the Hoq et
Where: al. [19] where it was found that Benefit-cost ratio
(BCR) of the vegetable (bitter gourd) as more
Ri= Total value of ranks of all indicators (I1-I6) all profitable.
chains
Ni= Number of indicators. 3.2 Marketing Margin of Brinjal for
The lowest mean represents relatively the most Different Chains
efficient channel and vice versa [17].
3. RESULTS AND DISCUSSION The net marketing margin for each intermediary
as well as chain were presented in Table 4. The
Marketing chain is the alternative root of products net marketing margin was highest at chain II and
flow from producers to consumers [18]. Market lowest at chain I. This result has been supported
chain analysis aims to provide information on by Janifa et al. [20] where it was found that the
profitability for the various agents along the retailers earned the highest net marketing
market chain. The market chain starts from the margins. On the contrary, for aiming to assess
farmer or producer and finishes at consumers. the efficiency of marketing of tomato in the
From farmer to consumer, various market actors central markets of Khartoum State at winter
are being involved in this supply chain to reach 2010, Emam [21] conducted a study where it was
the product to the end consumer. These market revealed that wholesalers generally got higher
actors are faria, bepari, aratdar, wholesaler and marketing margins than retailers with exception
the retailer. The following major marketing chain of Khartoum market, where retailers got higher
was found in the study areas: marketing margins than wholesalers.

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Table 2. Cost of brinjal production in the study areas

Sl. No. Cost Items Bandarban (Tk) Khagrachari (Tk) Average (Tk)
1 Human Labour
Land Cleaning and Preparation 9548.33 10235.21 9891.77
Seed Sowing/Planting 15763.33 16120.56 15941.95
Weeding 7410.00 7541.23 7475.62
Fertilizer Application 5715.00 7520.20 6617.60
Insecticide Application 12116.67 13256.01 12686.34
Harvesting and Carrying 11586.67 12346.94 11966.81
2 Land Preparation (Power Tiller) 15526.67 16450.21 15988.44
3 Seedling/Seed 9253.33 10059.56 9656.45
4 Fertilizer Cost
Urea 6224.40 7162.84 6693.62
TSP 22318.00 22743.56 22530.78
MP 3556.33 4125.75 3841.04
Cowdung 4000.00 5000.00 4500.00
5 Insecticide 42973.33 45012.55 43992.94
6 Irrigation 7606.67 8754.56 8180.62
Total Variable Cost 173598.73 186329.20 179963.97
7 Land Use Cost 36850.00 32450.00 34650.00
8 Interest on Operating Capital 5207.96 5589.88 5398.92
Total Fixed Cost 42057.96 38039.88 40048.92
Total 215651.69 224369.06 220010.38
Source: Authors calculation from the Field Survey

Table 3. Yield, gross return, net return of brinjal in the study areas

Particulars Bandarban Khagrachari Average

Yield (Kg) 26166.67 26025.45 26096.06
Price (Tk/Kg) 13.33 13.50 13.42
Gross Return (Tk/hectare) 348801.71 351343.58 350072.65
Total Variable Cost (Tk /hectare) 173598.73 186329.20 179963.97
Total Cost (Tk/hectare) 215651.69 224369.06 220010.38
Gross Margin (Tk/hectare) 175202.98 165014.38 170108.68
Net Return (/hectare) 133150.02 126974.52 130062.27
BCR 1.62 1.56 1.59
Source: Authors calculation from the Field Survey

3.3 Marketing Efficiency of Different share has an inverse relationship with the
Channel of Brinjal number of intermediaries. The net price the
producers receive is relatively higher on the
3.3.1 Price spread channels in which the product is sold directly to
consumers or retailers which is supported by our
Price spreads of different chains of brinjal were study also.
presented in Table 5. The price spread was
3.3.2 Producers' share to consumers' price
highest when brinjal was transferred by channel
V, i.e., Farmer → Bepari → Aratdar (CHT) → The producers' share of different marketing
Wholesaler → Retailer → Consumer chains like I, II, III, IV and V were 58.37, 41.58,
(Chittagong) and the amount is Tk11.20 per Kg. 59.51, 50.96 and 45.37 percent respectively
The lowest price spread was found for channel III which were paid by the consumers as retail
i.e., Farmer → Retailer → Consumer (Local) and prices (Table 6). Farmers' share in different
the amount is Tk5.77 per Kg. marketing chains was the highest in chain III
followed by chain I and chain IV and the lowest in
The study of Murthy et al. [22] revealed that the chain II.It indicates if the farmer would sell their
price spread of vegetables over different brinjal through Farmer → Retailer → Consumer
marketing channels indicates that the producer 's (Local),

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Table 4. Marketing margin and cost of brinjal in different chains (Tk /Kg)

Chain Intermediaries Purchase Price Sales Price Gross Marketing Marketing Cost Net Marketing Return on Business
Margin Margin capital (%)
Chain I Faria 7.88 10.13 2.25 1.14 1.11 12.31
Retailer 10.13 13.50 3.37 1.83 1.54 12.88
Total 5.62 2.97 2.65
Chain II Faria 7.88 9.88 2.00 1.14 0.86 9.53
Bepari 9.88 14.25 4.37 3.30 1.07 8.12
Retailer 14.25 18.95 4.70 1.83 2.87 17.85
Total 11.07 6.27 4.80
Chain III Retailer 8.48 14.25 5.77 1.83 3.94 38.22
Total 5.77 1.83 3.94
Chain IV Bepari 9.30 13.88 4.58 3.30 1.28 10.16
Retailer 13.88 18.25 4.37 1.83 2.54 16.17
Total 8.95 5.13 3.82
Chain V Bepari 9.30 13.88 4.58 3.30 1.28 10.16
Wholesaler 13.88 16.94 3.06 1.70 1.36 8.73
Retailer 16.94 20.50 3.56 1.83 1.73 9.22
Total 11.20 6.83 4.37
Source: Authors calculation from the Field Survey

Table 5. Price spread in different chains of brinjal

Particulars Chain I Chain II Chain III Chain IV Chain V

Tk/kg Percent Tk/kg Percent Tk /kg Percent Tk/kg Percent Tk/kg Percent
A. Gross Price Received by Farmer 7.88 58.37 7.88 41.58 8.48 59.51 9.30 50.96 9.30 45.37
i. Marketing Cost incurred by farmer 2.22 16.44 2.22 11.72 2.22 15.58 2.22 12.16 2.22 10.83
ii. Net price received by Farmer 5.66 41.93 5.66 29.87 6.26 43.93 7.08 38.79 7.08 34.54
B. Gross Margin of Faria 2.25 16.67 2 10.55 0.00 0.00 0.00 0.00 0.00 0.00
ii. Marketing Cost incurred by Faria 1.14 8.44 1.14 6.02 0.00 0.00 0.00 0.00 0.00 0.00
ii. Net price received by Faria 1.11 8.22 0.86 4.54 0.00 0.00 0.00 0.00 0.00 0.00
C. Gross Margin of Bepari 0.00 0.00 4.37 23.06 0.00 0.00 4.58 25.10 4.58 22.34
ii. Marketing Cost incurred by Bepari 0.00 0.00 3.3 17.41 0.00 0.00 3.3 18.08 3.3 16.10
ii. Net price received by Bepari 0.00 0.00 1.07 5.65 0.00 0.00 1.28 7.01 1.28 6.24

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Particulars Chain I Chain II Chain III Chain IV Chain V

Tk/kg Percent Tk/kg Percent Tk /kg Percent Tk/kg Percent Tk/kg Percent
D. Gross Margin of Wholesaler 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.06 14.93
ii. Marketing Cost incurred by 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.7 8.29
Wholesaler
ii. Net price received by Wholesaler 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.36 6.63
E. Gross Margin of Retailer 3.37 24.96 4.7 24.80 5.77 40.49 4.37 23.95 3.56 17.37
ii. Marketing Cost incurred by Retailer 1.83 13.56 1.83 9.66 1.83 12.84 1.83 10.03 1.83 8.93
ii. Net price received by Retailer 1.54 11.41 2.87 15.15 3.94 27.65 2.54 13.92 1.73 8.44
Price Paid by Consumer 13.50 100. 18.95 100. 14.25 100. 18.25 100. 20.50 100.
(A+B+C+D+E)
Price Spread 6.52 11.08 5.77 8.95 11.20
Source: Authors calculation from the Field Survey

Table 6. Producers' share in the final product price in different chains (Tk/Kg)

Particulars Chain I Chain II Chain III Chain IV Chain V

Producer Price (A) 7.88 7.88 8.48 9.30 9.30
Weighted Average price at retail level (B) 13.50 18.95 14.25 18.25 20.50
Percentage of producers' Share(A/B)*100 58.37 41.58 59.51 50.96 45.37
Rank (I1) 2 5 1 3 4
Source: Authors calculation from the Field Survey

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they would be most benefited. It has been There was a noticeable result for all channels
revealed by the study of Xaba and Masuku [23] that when brinjal was supplied through Faria, the
where it is showed that the biggest share of the chain was more efficient than other chain. This is
producer was acquired by direct sale to possibly due to lower marketing cost, lower
customers. The study also recommended that marketing cost corresponding higher marketing
producers ought to develop co-operatives to help efficiency.
negotiate prices within the vegetable supply
chain. 3.3.5 Overall marketing efficiency
measurement
3.3.3 Marketing cost and margin
Different marketing chains were carried out
The size and composition of marketing margin based on different performance indicators in
can be used as a useful measure of efficiency. different chain using composite index formula.
Marketing cost was the lowest for chain III for The result exposed that the marketing chain II, IV
involving fewer numbers of intermediaries and V were not comparatively efficient in the
followed by channel I, IV and II, respectively. It brinjal producing region. This was due to the low
was the highest in chain V for the presence of prices received by farmers in chain I and III
large number of buyers. Marketing margin was compared with other chain. The farmers reply to
lowest for chain I followed by chain III, IV, II and marketing chain III, selling directly to the retailer-
V, respectively. The marketing costs and margins consumer, showed to be most desirable (Table
and net margins for different chains are 9). It may, thus be decided from the forgoing
presented in Table 7. The Table reveals that the analysis that farmers' shares had been very low
marketing margins to the middlemen of the in chain (II, IV and V) while marketing cost and
brinjal marketing system amount to be the intermediary margins in these chains were high.
highest in chain V and the lowest in chain I. The In order to increase the share of farmers, the
highest marketing margin appeared as opposed development of the situation in Chain III should
to other chains given the large number of be prioritised by the government to help with
intermediaries engaged in chain V. more marketing activities in these regions.
3.3.4 Acharya's method for estimating
marketing efficiency It has also been corroborated by the study of
Dastagiri et al. and Gunwant et al. [24,25] where
The performance of marketing was assessed they showed that Producer-Wholesaler-Retailer-
based on the Acharya's formula of marketing Consumer is the most common marketing
efficiency. Results showed that the most efficient channel for majority of the crops. The highest
marketing channel was chain III: Farmer → marketing efficiency are found to be in the
Retailer → Consumer (Local) (1.47) (Table 8). producer to consumer channel.

Table 7. Marketing cost, margin and net margin of the intermediaries under different chains (Tk
/Kg)
Particulars Chain I Chain II Chain III Chain IV Chain V
Purchase price 7.88 7.88 8.48 9.30 9.30
Sale Price 13.50 18.95 14.25 18.25 20.50
Marketing margin 5.62 11.07 5.77 8.95 11.20
Rank (I2) 1 4 2 3 5
Marketing Cost 2.97 6.27 1.83 5.13 6.83
Rank (I3) 2 4 1 3 5
Net marketing Margin 2.65 4.8 3.94 3.82 4.37
Source: Authors calculation from the Field Survey
Table 8. Acharya's marketing efficiency of various channels (Tk/Kg)
Particulars Chain I Chain II Chain III Chain IV Chain V
Price Received by the Farmer (FP) 7.88 7.88 8.48 9.30 9.30
Total Marketing Cost (MC) 2.97 6.27 1.83 5.13 6.83
Total Net Marketing Margin (MM) 2.65 4.80 3.94 3.82 4.37
Marketing efficiency {FP/(MC+MM)} 1.40 0.71 1.47 1.04 0.83
Rank (I4) 2 4 1 3 5
Source: Authors calculation from the Field Survey

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Table 9. Efficiency of different marketing chains

Performance Indicator Chains

Chain I Chain II Chain III Chain IV Chain V
I1 2 5 1 3 4
I2 1 4 2 3 5
I3 2 4 1 3 5
I4 2 4 1 3 5
Composite Index (Ri/Ni) 1.75 4.25 1.25 3.00 4.75
Final Ranking 2 4 1 3 5
Source: Authors calculation from the Field Survey; Notes: Ri = Total value of the ranks of performance indicators; Ni= Total number of performance indicators

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4. CONCLUSION their MS research and the implementation of this

project was carried out by Bangladesh
The study explores the value chain analysis at Agricultural Research Institute (BARI). The
Bandarban, Khagrachari and Chittagong districts research work had been undertaken in the
of Bangladesh. The findings of the study reveal project areas of Chittagong Hill Tracts of
that the production of brinjal cultivation is Bangladesh.
profitable. The highest price spread for brinjal
was found in chain V having Tk. 11.20 per Kg. COMPETING INTERESTS
The highest Producers' Share to Consumers' Authors have declared that no competing
Price for brinjal was 59.51 percent in chain III. interests exist.
The highest Acharya's marketing efficiency of
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