The Transformation of Rice Value Chains in Bangladesh and India: Implications for Food Security

30 Pages Posted: 11 Sep 2013

See all articles by Thomas Reardon

Thomas Reardon

Michigan State University - Department of Agricultural Economics

Bart Minten

International Food Policy Research Institute (IFPRI) - CGIAR Consortium

Kevin Chen

International Food Policy Research Institute (IFPRI)

Lourdes Adriano

Asian Development Bank - Economic Research

Date Written: September 2013

Abstract

This paper reports the survey findings that rice value chains are transforming in Bangladesh and India. The main elements of the transformation are as follows: First, rice value chains in both countries have begun to “geographically lengthen” and “intermediationally shorten.” Second, farmers capture about 60% of the final urban retail price of rice; this can be compared to about 23% in 1998 and 37% in 1980 in the United States. Third, the corollary is that about 40% of the value chain is formed by the post-harvest segments of the rice value chain — in milling, trading, and retailing. Fourth, while much policy debate centers on direct government operations in food value chains, such operations were, in general, quite small in the rice value chain, except for the Government of India’s purchases from mills. Fifth, the indirect roles of governments have been important in enabling change and at times in providing incentives for transformation. Sixth, government subsidies had important effects, but the evidence of accessibility to subsidies and the impact of the services were mixed. Seventh, the study points to the importance of farm input supply chains upstream from farmers and of midstream and downstream post-harvest activities such as logistics and wholesale, milling, and retailing. Policy implications are drawn in the final section of the paper.

Keywords: agriculture in Bangladesh, agriculture in India, rice value chain, stacked survey method

JEL Classification: Q12, Q13, O13

Suggested Citation

Reardon, Thomas A. and Minten, Bart and Chen, Kevin and Adriano, Lourdes, The Transformation of Rice Value Chains in Bangladesh and India: Implications for Food Security (September 2013). Asian Development Bank Economics Working Paper Series No. 375, Available at SSRN: https://ssrn.com/abstract=2323166 or http://dx.doi.org/10.2139/ssrn.2323166

Thomas A. Reardon (Contact Author)

Michigan State University - Department of Agricultural Economics ( email )

East Lansing, MI 48824
United States
517-355-1521 (Phone)
517-432-1800 (Fax)

Bart Minten

International Food Policy Research Institute (IFPRI) - CGIAR Consortium ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

Kevin Chen

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

Lourdes Adriano

Asian Development Bank - Economic Research ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

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