Functioning of Rice Bran Market in Kishoreganj District, Bangladesh: Focused on Market Structure, Conduct and Performance

Abstract

The commercial rice bran industry in Bangladesh has experienced remarkable growth in the last decade and it continues to grow. However, lack of a wellcoordinated marketing system of agriculture products remains a major constraint in further development of the industry. The focus of the study, therefore, was to assess the structure, conduct and performance of the rice bran market in Kishoreganj district in order to elucidate the performance of the marketing system before any interventions are made to change the existing conditions. The data for the study was sourced from both primary and secondary sources. The study employed descriptive statistics and Gini coefficient to determine the degree of rice bran market concentration in the study area. The gross margin, marketing margin and marketing efficiency was used to measure the performance of the rice bran market in Kishoreganj district. The results of the study showed that the Gini coefficient was 0.495 and 0.493 for wholesalers and retailers respectively, indicating a highly concentrated market hence an oligopoly market structure. The conduct of the market participants, which reflects the behavior of the firms or the decision that firms make relating to their pricing and output policy and other competitive practices, revealed that among rice miller, the two forms of terms of sale were contract selling 10 percent and spot market selling 90 percent. Further, the study found that rice miller attained the highest gross margin of TK 191,000 followed by wholesalers and retailers with TK 10,300 and TK 3,100 respectively. The marketing margin revealed that retailers attained the highest marketing margin of 11 percent while wholesalers had 10 percent. In conclusion, rice bran production and trading in Kishoreganj district is profitable but not to a satisfactory state due to lack of collusive behavior among market participants and availability of market information. The study, therefore, recommends that the Government of Bangladesh should integrated agricultural marketing information system which is linked to rice millers, wholesalers, retailers and final farmers in order to avoid exploitation of high prices.