Experience on the use of Relationship Matrix in the ground nut project
Relationship with service providers, traders creates an opportunity for rural producers to increase production, improve quality and reduce cost of production. However, if the relationship is not well managed, it can lead to confusion, frustration and ruin the opportunity to reach the economy of scale. Taking this into consideration, Practical Action Bangladesh adopted Relationship Matrix developed by SDCAsia in its pilot project on ground nut market system development to assure a good working relationship between ground nut producers and seed input sellers, traders and processing companies; establish effective communication for improving performance and ensure sustained supply/sell relationship. The relationship matrix was used by a 9 member market working group (MOG) comprised of 3 producers 2 small trader, 2 large traders, 1 processor, and 1 Govt. agriculture extension officer. The market working group was formed after market mapping workshop. The stages of methodologies and parameter of relationship considered in relation to trader selection, information sharing, quality control, price fixation, value addition and trust building and the MOG was responsible for deciding these parameters.
Summary of activities and relationship change:
Stages of methodologies/ Parameter of Relationship Traders selection Baselines of relationship Activities for improving relationship Relationship changes
Relationship between traders and farmers were invisible No or limited information sharing among market actors.
Rapid market survey Value chain tour
Relationship changed in terms understanding each others need. Traders, producers and other market actors developed positive attitudes towards sharing information because they realized that it would benefit them in terms of earning income.
Between traders and Farmers:
Between farmers BADC and BARI
Working group meeting after each 2 months Dialogues between traders and producer to exchange information on price and quality. Weekly market price monitoring and sharing this with farmers through group meeting. BARI training on seed drill operation and maintenance for local rental service provider.
Farmers were not involved in quality control activities as such due to gap between farmers and traders and GO-private service providers
Skill training to farmers for production of quality ground nut. Training to (40) farmers on seed production, preservation maintenance of quality with the assistance of resource person from the Oilseed Research Centre, BARI, Joydebpur. Farm visits by seed input suppliers, traders and project staff. Price negotiation meeting between farmers and traders.
Quality issue was a major constraint in developing trust among farmers and traders. Increased quality improved relationship between them. GOPrivate collaboration was also brought meaningful change in relationship.
Price fixation was unilateral. Traders determined the price.
Traders accepted that higher price will increase farmers’ motivation to work with them in next season or beyond. Traders shared this responsibility with farmers due to improved relationship. It ultimately reduced their grading, cleaning, etc. cost and time. Trust expanded to more than to 2 businesses. Working group members realized the importance relationship from the supply chain perspective.
Trades were doing this on their own as required.
Orientation on grading, cleaning, drying, preservation and packaging to farmers by traders for value addition.
Trust was case specific, dependent on business to business relationship
Joint action plan development and implementation by the market working group
The ground nut market working group wanted to ensure that the traders play an important role in developing market system. Therefore they gave emphasis on identification of traders willing to buy ground nut from farmers living in the char land. This enabled the group to know the demand of ground nut seed based on which they provided advice to the farmers on production and quality control. It also helped the project allocating resources necessary for its successful implementation. The group arranged dialogues between farmers and traders where traders informed the farmers about their requirement of ground nut and the price they can offer. During the dialogues the traders gave information
to farmers about grading and drying of ground nut. The market working group members reviewed weekly market price of ground nut in 4 markets and shared the information with farmers so that can farmers could decide which market go for selling ground nut. This price monitoring also helped the farmers to know when or in which month they can get prime price of ground nut. The market working group arranged value chain tour for the representative producers, small traders and whole sellers who visited four ground markets including Dhaka in a tracer study mode which enabled them to know the variation of market price, volume of ground nut traded in each markets and scope they can utilize. At the end of the tour the participants especially traders became very confident of selling ground nut as they found markets where large volume of ground nut traded. They also came to know about ground nut shelling machine that they can introduce in their area. One trader has already purchased one machine from Bhairab (a place famous for ground nut whole selling and processing). The group in collaboration with Bangladesh Agricultural Research Institutes arranged demonstration on the use of seed drill. Farmers learnt about line sowing and cost-efficient use of seed. The BARI representative explained and demonstrated that farmers can save 40 to 42 percent of seed cost for cultivation in 33 decimals of land if they use seed drill and practice line sowing. The group and the project staff contacted Bangladesh Agricultural Development Corporation (BADC) for providing certified seeds to local traders at govt. rate of Tk. 40 which they sold at the rate of Tk. 45 to farmers. Major impacts In 2008, 200 farmers bought 1000 kg HYV seed from Meherpur BADC office with help of seed traders. This enabled 40 framers to preserve 3.6MT HYV groundnut seed and earn Tk. 1,44,0000.00. 17 traders are now directly buying groundnut from the farmers of 8 project villages. Farmers are producing 75% more than before. For example; now the production is 9.3 MT groundnut on 49 hectors of land whereas previously the production was 5.3 MT nut on same land. 11 groups sold their groundnut jointly to the working group members. For example: In 2007, they sold-out 3.2 MT groundnut jointly and they got extra benefit of Tk.1580 (each farmer). They also established other benefits like; bargaining for high price, verification of real weight, reduction of transportation cost etc. Within the project area 1500 farmers developed clear idea on HYV seed and cultivation technique and are selling their product from char area to 4 nearest weekly market (haat) Lessons learnt Suitable selection of members is the key to proper functioning of the working group. Commitment by the working group members increases the results of activities.
Benefits of activities reaching all i.e. producers, traders and seed input service providers participating in the project because of systemic approach. The relationship matrix is a powerful tool for deciding participatory working methodologies, parameters of changed relationship and appropriate follow-up activities for developing relationship. Initially matrix members need better understanding about the change relationship and justification of spending time in participating different activities of the working group. Future aspiration The traders specially seed inputs sellers now understand that they can increase their benefit and the benefit of farmers by establishing linkage with BARI, BADC and large seed companies. Practical Action is now assessing the business model of small, medium and large seed enterprise to design new ground nut project in Bangladesh serving large number of seed traders and who can serve several hundred thousands of farmers. In this regard, Practical Action is trying to facilitate relationship between local seed traders and Bengal Agro-Limited Company which wants to enter into HYV paddy, potato and ground nut seed market in wider scale.
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