Abstract
Under the broad outline of the study on rice marketing system in Bangladesh, aimed at evaluating
the overall market performance of the present system, was conducted in two surplus paddy
producing regions of Bangladesh, namely; Northwestern Bangladesh region covering Bogra,
Rangpur and Dinajpur districts, and greater Mymensingh region including Mymensingh,
Sherpur and Kishoregonj districts. The study especially emphasized on farm-retail price spread,
nature of competition and efficiency of the system, pattern of demand for rice and assessed
government food policy. The study revealed that marketable surplus as the percentage of total
production of Boro rice was little higher compared to Aman rice. It was due to that Boro rice was
considered as cash crop to mitigate ready cash requirements by the farmers and Aman rice was
preferred mainly for home consumption. So, Boro rice ascertained more priority for marketable
surplus. Total production and marketable surplus of paddy was positively related to farm size; and
selling paddy directly from farm gate to the larger traders were also positively related to farm sizes.
The coefficient of elasticity of production with respect to sale was positive and greater than unity
implying that production was an outstanding factor in determining the level of marketable surplus.
Distress sale of paddy was an acute problem especially of the small and marginal farmers in the
study area. The availability of labour was easier in NWB region and, therefore wage rate was little
lower compared to GM region in every stage of marketing system. So, the marketing costs were little
lower and consequently, marketing margins and profit were some extent higher in this region
compared to GM. Out of three distribution channel, the channel number III, i.e Farmer→ Miller→
Aratdar/wholesaler→ retailer → consumer, showed the best performances in the context of
efficiency due to the existence of lower number of intermediaries in this channel. Farm-retail price
spread did not vary significantly from region to region. The spread was the highest in AugustOctober and lowest in February-April quarter which is the pre-harvest and post-harvest periods of
Aman crop. Wholesale price at district level was spatially integrated in the long run and degree of
market integration indicated that rice markets in the study area were competitive and efficient.
Market structure was atomistic, for which no individual firm was able to influence rice marketing
system. There was no barrier to entry and no evidence of product differentiation within the same
variety. The dimension of market conduct was more or less competitive as there was large number of
small sellers and buyers. Price of paddy/rice was determined by interaction of supply and demand.
ARIMA model was suitable for short term forecasting, and only the single price information could a
great deal be handy for predicting the future trend of price. Higher percentage of budget share of rice
for both rural and urban areas showed the irresistible supremacy of rice in total household's
expenditure. Increased per capita absolute income could result in a shift in the rice demand curve
upward, leading to an increase in rice price. All estimates of income elasticities of different food
items were statistically significant. Almost, all the food items had positive income elasticity of
demand, implying that they were normal goods. Fish-meat, milk and milk-products were expenditure
(income) elastic for which these were luxury goods while other food items were inelastic meaning
those were necessary. Expenditure elasticity of demand for pulse, oil, fish-meat, milk and milkproducts were higher for rural households compared to urban households, so any policy for
increasing the income of rural people would boost up their diversity in high quality foods. The
compensated and uncompensated own price elasticity indicated that all food items were price
inelastic suggesting that households were very much responsive to price changes of these
commodities. Cross price elasticity also indicated that the substitute effects were not relatively
strong. So, the government price interventions might not lead to considerable price upshot in the
economy. After launching the denationalization and privatization program, government's costs of subsidy issues and commercial participation in food grain distribution is dwindling gradually in one hand; and involvement in social welfare related activities increasing