The gap between the price the growers receive and the price consumers pay ranges between 300% to 500%, which is atrociously high by any standard. The situation, therefore, warrants a closer examination of the causes, which are:

• The progressively diminishing per capita land available for cultivation of agricultural produce.
• High level (estimated at 40 percent) of wastage and spoilage of fruits and vegetables between harvesting and marketing.
• Very high charges by the middlemen involved in the process of maintaining the distribution chain.
• Inadequate physical infrastructure.

Naturally, the question arises as to whether this price gap could be narrowed down to a more tolerable and reasonable level. Prior to looking into the remedies, a closer look at the current scenario needs to be taken.

Current status
As the price disparity as well as the inadequacy of the physical infrastructure are well-established and well-documented facts, there is no need to go into the specifics. The reasons for this excessive price difference between grower and consumer can be attributed to the following factors:

• Poor handling of produce after harvesting resulting in wastage and spoilage.
• Poor physical infrastructure, e.g. roads, bridges, port facilities, wholesale markets etc.
• Inadequate and costly transportation facilities.
• High toll charges and extortion.
• High charges of the middlemen.
• Inadequate cold storage facilities.
• Insufficient sales outlets.
• Inadequate refrigerated transports.
• Inadequate abattoirs and automated meat processing plants, fish freezing plants etc.

However, there are some positive aspects as well. Firstly, the distances between source and supply of the agricultural produce are relatively short. Moreover, if goods could be transported by mechanised boats, cost may be further reduced.

With the phenomenal growth of mobile telephones, unlike earlier years, the growers are not in the dark about the price their produce fetches in the urban centres, although at the moment they cannot do much about the situation.

Additionally, the number of middle class and affluent consumers who prefer shopping in air conditioned supermarkets to shopping in kitchen markets is growing. This trend is likely to result in faster growth of supermarkets.

Need of an agro-marketing chain
The compelling need for enhancing the efficiency of the food supply chain to keep on leash the spiralling cost of food items, particularly perishable items, is universally understood.

In the global scene, this has already taken root, exemplified by the mushrooming growth of supermarket chains operated by the likes of Wal-Mart, Carrefour, Tesco, Safeway etc. Right next door in India, the Reliance group is in the process of launching an ambitious agro-marketing project of humongous scale.

Hence, from the marketing point of view, the timing appears to be right for the entry of large-scale agro-marketing chain(s) in Bangladesh. Such chain(s) should significantly cut down wastage and spoilage of fruits and vegetables sent to urban markets.

The consequent bridging of the price gap will result in a win-win-win situation. Consumers would get fresher produce at cheaper price, the growers could bypass an inefficient and often corrupt distribution chain and sell directly to supermarket chains at better and stable prices that would help them grow better quality produce.

Finally, whichever enterprises are able to reduce the price gap between growers' and consumers' end by efficient means would earn a decent return on their investment and effort.

In the case of agro-marketing, however, activities other than collection and delivery would be involved. These are cleaning, grading, weighing and packaging; processing; and storing and transporting under controlled environment. Some of the specific activities involved are:

• Establishing a few hubs with storage and mechanical handling facilities.
• Creating bulk breaking and packaging facilities.
• Building abattoirs and processing plants; fish freezing plants.
• Building transport depots and repair facilities.
• Mobilizing a fleet of trucks, boats and containers.

Government's role
The government has an essential role in the fight to bridge the price gap. It can generally help through:

• Changes in tariff/taxes, and
• Periodic market intervention through supply of essentials through TCB and other mechanisms, like the current laudable initiative by the BDR.
• In the short term the government can take some of the following specific steps:
• Reducing toll collected by government agencies.
• Rooting out extortion and illegal toll charges.
• Eliminating transport bottlenecks.
• Collecting and recording data pertaining to prices of a number of produce on a particular day, which will enable establishment of a database (albeit a crude one) on price differential between growers' and consumers' ends.

The medium and long-term government measures may include:

• Development/improvement of basic infrastructure, e.g. roads, port facilities, wholesale markets etc.
• Building silos, fish freezing plants, specialized cold storages and abattoirs, which may be leased or eventually sold to private enterprises.
• Development of a few strategic hubs providing storage and mechanical handling facilities; and of transport depots and repair facilities. Some of the possible locations for such hubs are Chandpur, Sirajganj, Aricha, Baghabari etc.

An efficient agro-marketing chain would procure agricultural produce from the growers at better price, and deliver to the consumers at cheaper price through better procurement management, efficient transportation and delivery system and elimination of the pernicious role of the middlemen. Essentially, it would create a social business benefiting growers, consumers, the enterprise, and the economy of the nation as a whole.

There is a negative aspect to this development of supply chains, though that would provide supermarkets with better quality produce than small mom-and-pop shops. In this process, thousands of small shopkeepers may be eliminated, particularly in the urban areas.

Consequently, many activists in some countries are trying to block the spread of these companies. However, in the Bangladesh context, the overwhelming benefits dwarf the negatives.

The author is a freelance contributor to the Daily Star.