Revised DRAFT 05.08.09 WEST BENGAL COASTAL ...

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West Bengal: Coastal Areas Development Project IFAD FORMULATION MISSION– WORKING PAPER # 6

Revised DRAFT 05.08.09



West Bengal: Coastal Areas Development Project IFAD FORMULATION MISSION– WORKING PAPER # 6


Area Development Committee Community Mobiliser Project Year 1 Project Year 4 Project Year 5 Below poverty line District Implementation Unit Scheduled castes Scheduled tribes Business Process Outsourcing Bay of Bengal Programme, FAO Monsoon season crop Winter season crop Research & Development Resource Non Govt. Organization Government of West Bengal Higher Secondary (12th) standard School Leaving 10th Standard Indian Institute of Foreign Trade International Fund for Agricultural Development Indian Institute of Management South 24 Parganas Self Help Groups North 24 Parganas National Bank for Agriculture and Rural Development Non Govt. Organization Marine Product Export Development Authority, Govt. Of India Micro Finance Institution Outsourcing Agency Participatory Market Chain Analysis Project Management Unit Project Implementation Committees Ramakrishna Mission Lokashiksha Parisad Working Paper


West Bengal: Coastal Areas Development Project IFAD FORMULATION MISSION– WORKING PAPER # 6






PRESENT SITUATION Marketing & value chain in the Project Area Employment Generation for Rural Youth RATIONALE FOR PROJECT ACTIVITIES STRATEGIES FOR PROJECT ACTIVITIES PROJECT COMPONENT Strengthening of existing marketing and Value Chain

4-9 4 9 9 11 12-17

Support to outsourcing enterprises Establishment of Common Facility Unit Skill upgradation and Employment Promotion Advisory Services and necessary studies

12 13 13 14 14






MONITORING BENEFITS RISKS Appendix # 1 Price Mark-Up at Various Stages in the Supply Chain

18 18 18


List of Persons Met




West Bengal: Coastal Areas Development Project IFAD FORMULATION MISSION– WORKING PAPER # 6


Present Situation:

A. Marketing and Value Chain In the Project Area: 1. Overview of the Project Area: While considering the project area few blocks have been identified on the basis of certain criteria under the 3 districts i.e. South and North 24 Parganas and Purba Medinipur. These blocks are considered to be designated as coastal blocks because of their agro geographical nature. The Department of Fisheries, GoWB has put a rationality of designating certain blocks as marine blocks as: a) either those are ecologically situated by the sea side and sharing the coast line, or, b) those are getting natural resources like backwater saline river system, or c) a considerable chunk of community population are involved in fishing activities as a major livelihood. 2. 19 blocks under the 2 districts of South 24 Parganas and North 24 Parganas forms the “Sundarbans” area . Sundarbans region is located in the estuarine section of the GangaBrhamaputra river system at the mouth of Bay of Bengal. This is a unique delta system with dynamic ecosystem. In the “Sundarbans” region the community is facing additional burdens because of poor communications resulting from the innumerable creeks, canals and tidal rivers, which separate the islands from each other and from the mainland. The extremely poor transportation infrastructure (roads, bridges, and jettys) and inland waterways transport has meant that often even basic social services and marketing linkage are lacking. In the rainy season villages can remain isolated for days and sometimes weeks. This also reduces access to markets: ironically the Sundarbans are located within a couple of hours from the city of Kolkata (or Calcutta). 3. Majority of the population in Sundarbans are dependant on agriculture and fisheries. The community in this area is constituted with small agricultural landholder, landless labourers and full time or part time fisherman and fisherwomen. 4. As per the Marine census 2005 a fisher population of 2, 69,565 are existing in West Bengal. Out them 50,924 are full time fisher where as others are part-time and occasional. It is also revealed from the study that only 49% families are having craft and gear or only gears and the rest 51% they act as wage earner or hired crew members in the trawlers(mechanized boats)(source: BOBP Newsletter Sept,2006). 5. The selected 10 developmental blocks where the project is going to be implemented can be categorized as mainland system and island system. Sandehkhali-I & II, Hingalgunge in North 24 Parganas and Kultali, Gosaba in South 24 Pgs are intersected with rivers and rivulets. There are few islands present in these blocks where river transport is the main communication system, obviously this has a major implication in marketing system of the agricultural, and livestock product and fishery produce grown in these areas. In this context it is to mentioned that there are 102 islands exists in sundarbans out of which 54 islands are having inhabitation and the rest 48 are forests without any habitation. Other selected blocks are connected with roads , but the condition of the roads are not adequate to develop a speedy marketing to the nearest urban /city areas.


West Bengal: Coastal Areas Development Project IFAD FORMULATION MISSION– WORKING PAPER # 6

6. West Bengal has a coastline of 64 km, and the districts of Purba Medinipur and South 24 Parganas. North 24 Parganas as a coastal district, is hardly any direct coastal interface to this district. However, saline water flows well into the district from the Bay of Bengal through the numerous rivers and channels, and brackish water aquaculture is practiced widely in certain blocks. 7. Consumer preference in the state is also strongly inclined towards inland water fish, with marine fish traditionally consumed in coastal and tribal hilly areas. A failure of the supply of inland fish to increase in line with demand has caused prices to rise steeply over the years, leading to consumption of fresh marine fish spreading in the state. Existing Marketing System: Agriculture Marketing System: 8. The marketing chain for agriculture farm products in the coastal 3 districts is highly fragmented. Many actors control the existing market system they are local traders, local market aratders and their agents, urban wholesalers and their commission agents, rural and urban retailers. Many of these operate on a very small scale. 9. Marketing chains is decided on the basis of different commodity groups. Crops such as paddy, red chili are collected by ‘farias’ / commission agents from the farm gate, and producers take their vegetables(Tomato, Okra, Cucurbits, winter vegetables) to sell directly in nearby “local hats”. Wholesalers purchase from “Hats” (rural markets) through local agents and send the produce to the commission agents in the primary urban wholesale markets (like Baruipur (south 24 Pgs), Malancha (North 24 Pgs), Ramnagar (East Midnapur) etc). It is also observed that the agriculture produce from the island is brought by the producers directly to the nearest mainland hats (Dhakir Mukh in Kultali, South 24 Pgs) and there auction takes place. 10. Rural Hat: this market is owned by private individuals and operated twice/thrice in a week by the farmers and small retail traders, and has only few permanent shops. The infrastructure facilities in these hats are very limited or poor usually unpaved and exposed to the weather, resulting in high produce but their proximity to local populations makes them an important outlet for the farmers. 11. Primary markets at urban periphery: This market operates on three or more working days of the week/sometimes daily – and they may operate daily for retail sales, and periodically for assembly. Many concentrate on grain marketing, traders and commission agents (beparies/farias) from distant places gather in these markets with a view to collecting marketable surplus which is bought in by village level traders (or commission agents). A significant number of permanent shops are found in these markets. 12. Key Marketing Agents- Farias: These traders buy directly from the growers and sell to other traders or to the local markets. They are mostly small-scale seasonal floating traders, and some combine farming with trading. Paikars: Are small scale wholesalers who collect products from small markets and send them to big markets, or sell to near-by aratdars (big wholesalers). Beparies: These are rural assemblers who collect from growers or local markets and export to wholesale-cum-retail markets or distant urban wholesale markets.


West Bengal: Coastal Areas Development Project IFAD FORMULATION MISSION– WORKING PAPER # 6

13. Some agricultural produce like fruits (sapota, mango, lichi guava etc) and beetle leaves has a special market. Generally it doesn’t pass through local hat. Either commission agents directly collect from the farm gate or producer carry their product up to primary market. A supply chain for sapota is existing where grading packing is done by the group of producers at their orchard and buyers from Kolkata collects form their orchard. 14. Farmers are not very much aware of sorting and grading their product , in some cases some crops grown almost organically doesn’t marked by the producers as the rural hat doesn’t have facility to distinguish the difference between the two. Fish Marketing System: 15. The entire supply chain of fishery product in coastal districts is overwhelmingly geared towards supplying the fish to one distinct destination (that is Kolkata). Among these, a smaller portion of catch goes for exports. Prawn, pomfret, crab, and certain other sea-fish (catfish, ribbon fish, etc.) belong to this category. A portion of the sea-caught fish – mostly consisting of smaller size of above-mentioned varieties and like prawn consumers (and processors) in Kolkata and adjoining areas (Ghosh et al 2008: Background Paper on Market and Value Chain Analysis). 16. Two types of product comes in the market i) Freshwater cultured fish, ii) brackish water cultured fish and prawn and iii) Catch from the capture fisheries either from river, sea. 17. In South and North 24 Pgs the produce from brackish water aquaculture ponds goes to nearby auction markets. A significant portion of the catch goes to distant places within the state via Kolkata. Fresh water fish cultured in ponds goes to the urban marketing centers in districts surrounding Kolkata and Howrah (Barasat, Basirhat, Hasnabad, Hooghly, etc.), and in distant districts like Murshidabad, and districts in North Bengal (most important center is Siliguri 18. Produce from capture fisheries, small portion of the total catch goes for local consumption. Such fish travel from auction market to retail centers without ice and goes to places that can be covered within 2 hours in whatever means of transport engaged. 19. After reaching the retailing point (which is usually a nearby town, where price and availability of ice is better than at the auction center like Digha Mohana), ice is applied to the fish to preserve the fish for the period until which the stock is not sold out. For example, from Digha Mohana auction center, such fish are carried by head-load on foot (15% by number), tricycle van or bicycle (80% by number), Tata Ace 2-toner vehicle (5% or 1 by number – used by five retailers jointly – going to Ramnagar, a place around 12 km away) to nearby retail markets in Ramnagar, Digha (a major center of tourism), Choddo Mile, Kanthi, etc. 20. The fish is auctioned for the second time in these urban centers before reaching the retailers. Such fish are carried in vehicles like 107 (2-toner vehicle), 207(2 toner pick-up truck), 407(4-toner truck), after proper packing with ice 21. Of the total landing in Digha Mohana, less than 1% by weight travels this route. This is not surprising, because the purchasing power of the consumers is very low in the surrounding area (except perhaps in Digha, which receives tourist inflow round the year).


West Bengal: Coastal Areas Development Project IFAD FORMULATION MISSION– WORKING PAPER # 6

22. The type of fish involved is primarily low-value sea fish (for domestic consumption), some quantities of high-value sea fish like pomfret (for premium consumers in Kolkata, Howrah and N24PGS), aquaculture fish like Parshe, Bhetki, prawn (usually smaller ones than are exported) and pond fish like carps (Rui, Katla), etc. 23. The following diagrame shows the market chain of fish ( Ghosh et al, 2008)


Local Retail (2) (