CSO Review of GAFSP PrSW investment

in PRAN Group: Bangladesh

2013 2013 Study Report on

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Study on CSO review of GAFSP PrSW Investment in PRAN Group: Bangladesh

DISCLAIMER

April 20, 2013

The study titled CSO review of GAFSP PrSW investment in PRAN Group: Bangladesh was commissioned by ActionAid Bangladesh and conducted by a group of journalists from a reputed media house. The objective of the study was to investigate the efficacy of the GAFSP fund channeled in Bangladesh through PRAN Group under private entrepreneurship that pledges food security of the smallholder farmers along with creating large-scale rural employment opportunity in the country. The information contained in this report has been obtained from the sources we believe to be reliable and authentic. However, the views and analysis shared in the studies does not necessarily belong to that one held by ActionAid Bangladesh. Henceforth, ActionAid Bangladesh will not take any responsibility if the study prompts any sort of discord.

For further clarification, please contact: Amirul Islam Manager, Food Rights and Sustainable Livelihood Priority Program, Policy and Campaign ActionAid Bangladesh Phone: 0088 028837796 Mobile: +8801716152724 Fax: 0088 028815087

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List of Content

Table of content Page

List of Acronym and their expanded forms 4

Executive summery 5

Introduction 6

Study Method 7

Sample Size 7

Project Background 8

About PRAN 8

Fund Utilisation 9

Activities 09

Nature of Involvement 10

Farmers’  Version 11

Case Study 12

Project Impact 13

Missing Link 14

Recommendations 14

Conclusion 15

Annex- 1 Sample of the Contact Paper between Natore Agro Limited and the Contracted Farmers

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Annex-2 List of Reference 17

Annex-3 List of 10 farmers out of 50 interviewed in the study 17

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List of Acronyms

AAB ActionAid Bangladesh

KKM KendrioKrishok Moitree

BADC Bangladesh Agricultural Development Corporation

GAFSP Global Agricultural Food Security Program

CSISA Cereal system initiative for South Asia

CH Centre Heads

CSOs Civil Society Organizations

CLP Char Livelihood program

LFS Small farmer group under IAPP program

FGD Focus Group Discussion

G8 Group of Eight

G20 Group of 20

IFC International Finance Corporation

NGOs Non-Government Organizations

USD United stead dollar

FAO Food and Agriculture Organization

FOs Farmer Organizations

Pos Producer Organizations

PrSW Public Sector window and Private Sector Window

UN United Nation

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Executive Summary

The study was conducted under an agreement signed with actionaid Bangladesh to review how the GAFSP PrSW-PRAN project activities impacting food security, particularly  on  smallholder  farmers’  in  Bangladesh.

The intention of the study was also to provide evidence as to how smallholder farmers are getting benefited from the project being implemented by Natore Agro Limited, a sister concern of PRAN Agro Limited that received agricultural loans from GAFSP project through International Finance Corporation (IFC). As committed to GAFSP, any country or Private Sector Window (PrSW) receiving this loan should utilise the money to secure rural jobs for farmers and ensure fair price for their produces that will eventually improve food security of the farmers, the smallholder ones in particular.

According to PRAN, it has been able to reach out to some 75,000 farmers, including 13,000 in Natore alone. The company is engaged in contract farming of crops like rice, pulses, mango, peanut and tomato. PRAN officials also claimed that the company has been successful in teaming up the farmers and groomed them up with required training to produce quality crops it needs.

The research team got positive reactions from the interviewees (farmers) about the interventions and relation of PRAN with the farming community in the area. There is an assurance from PRAN that the farmers will get quality seeds, interest-free loan, agricultural equipment and support for irrigation. They have also been assured of being given higher prices than the prevailing market ones by PRAN. The company has been able to create jobs for the villagers, particularly for women, removing their livelihood concern and bringing about a marked change in their lifestyle. Those who are not its contracted farmers also get benefits since they are hired as day labourers to help the company when it procures crops direct from the field.

But the important thing which is absent here is monitoring. As there is no concrete outline in the agreement signed between the IFC and PRAN as to how Natore Agro Limited will achieve the targets in line with the GASFP objectives, it is necessary to bring those unwritten goals under the future deal. Prior to embarking on its second phase of the project, Natore Agro Limited should work out an action plan detailing how it will achieve the targets in line with the agreement. To make sure that Natore Agro Limited is always on track while chasing its goals, there should be an IFC team to monitor its activities at the filed level after a reasonable time gap.

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Introduction

Bangladesh is predominantly an agro-based  country.  Almost  70  percent  of  the  country’s  population lives in rural areas, with 54 percent of them employed in agriculture. Poverty is the major factor affecting food security in Bangladesh despite the impressive increases in food grain. Recent food price increases and strains on the global economic market have caused additional destabilisation. The very poor in Bangladesh simply do not have enough money to buy food, much less enough to eat nutritiously.

Besides, the  country’s  future  agricultural  growth  and  food  as  well  as  nutrition  security  are threatened by population growth, shrinking resource base (such as land and water) and the deterioration of their quality and productivity, regular natural disasters induced by climate change and distribution and marketing problems. The supply of food consists of domestic food production, public and private stock and international trade. And household’s   access   to   food  depends   on   household   income,   assets,   remittances,   gifts,  borrowings, transfers and food aid.

In Bangladesh, the Food Security Plan operates under the assumption that by increasing food production and price support policy and public food distribution can meet the food needs of its people. So, each year the government procures rice and wheat from the domestic markets to sustain the public stock of the food grains and provide price support to the producers. More than 80 percent of the food grains under the public Food Distribution System (PFDS) are distributed through targeted distribution programmers. The main objective of the Public Distribution System is to stabilise the market price of food grains through ensuring targeted distribution. But widespread corruption, slow bureaucracy low quality silos in most cases stand in the way of public distribution system, depriving many poor of government support.

These are dangerous portents for the future. Improving agricultural productivity will become a more or a less a challenging task in the decades ahead.

Against this backdrop, Global Agriculture and Food Security Program (GAFSP) has come up to help Bangladesh improve rural livelihoods and ensure food security. The GAFSP, established in April 2010, enables participating developing countries to help raise agricultural productivity; links farmers to markets; strengthens the technical capacity of institutions to plan and develop appropriate agricultural policies; reduces risk and vulnerability of the most vulnerable populations; and improves non-farm rural livelihoods.

Project area

Natore district.

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Study Method

The interview method was followed to gather data for the study in line with its purpose. The method was very useful as the study period was very short. Open-ended questions were used to collect data from the interviewees. This type of questions allowed the respondents to include more information and expressed their true feelings, attitudes and understanding.

A Focus Group Discussion (FGD) was held with a group of 30 farmers of NabinKrishnapur, three PRAN officials and a local journalist on May 22 at NabinKrishnapur, Halsha, Sadarupazila, Natore. Data were collected for this report based on the synergy of the focus group discussion. Data were then sorted out and interpreted according to context, consistency and purpose of the study.

Primary Data: There had been field visits twice to NabinKrishnapur, Halsha, Sadarupazila, Natore – first on May 22, 2013 and then on April 12, 2013.

At least 20 contracted farmers involved in the project were interviewed personally following the above mentioned method and Open-ended questions. Besides, Top PRAN authorities, including its director UzmaChowdhury, general manager ShamsulAlam and chief operating officer MahtabUddin, and some of its officials responsible for implementing the project and an IFC official was also interviewed. The interviewees were picked up following the random sampling method. In addition to, the data were also gathered from the FGD held in line with the purpose of the study.

Secondary Data: Information and documents provided by PRAN and information from relevant websites were used in the study. The websites include wikipedia, www.gafspfund.org/content/private-sector-window; www1.ifc.org; www.thedailystar.net and www.pranfoods.net

The study was conducted under an agreement signed with actionaid Bangladesh.

Sample Size

1. 50 farmers of Natore district

2. 5 PRAN officials

3. Three Centre Heads

4. A local journalist

5. An IFC official

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Project Background

In response to global food crisis in 2008, Global Agriculture and Food Security Program (GAFSP) was created in 2009 by the G8, and the G20.GAFSP is a multilateral financing mechanism that enables the immediate targeting and delivery of additional funding to public and private entities to support national and regional strategic plans for agriculture and food security in poor countries.

The GAFSP has two windows -- Public Sector window (PuSW) and Private Sector Window (PrSW). The Private Sector Window (PrSW) is implemented and managed by International Finance Corporation (IFC), a member of the World Bank Group,

To provide innovative financing aimed at increasing the commercial potential of small and medium-sized agri-businesses and farmers by connecting them with local, national, and global value chains.

IFC gave loan to Natore Agro Limited, a newly-established company with the PRAN Group, for an amount of US$15M, 5M of which came from GAFSP funds under the PrSW. IFC has been providing loans to PRAN since 2009.

The   loan   was   provided   to   expand   the   company’s   food   processing   capacities   for   the  existing  and  new  products.  The  expansion  project  is  located  in  PRAN’s  Industrial  Park  in  Natore, a northern district of the country. The location is about 210km away from Dhaka. Under the project, PRAN is producing spices, sauce, mustered oil and fruit pulping.

About PRAN

PRAN-RFL Group is the largest food and nutrition company of Bangladesh founded in 1981. It has obtained ISO 9001:2000, and being the largest exporter of processed agro products to more than 82 countries from Bangladesh. PRAN, the largest processors of fruits & vegetables in Bangladesh, started its operation in 1981 as a processor of fruits and vegetables in Bangladesh. Over the years, the company has grown in stature and contributed significantly to the overall socio-economic development of the country (Wikipedia).

It is currently producing more than 200 food products under 10 different categories of juice, drinks, mineral water, bakery, carbonated beverages, snacks, culinary, confectionery, biscuits and dairy.

In line with its mission, the group has pioneered contract farming in Bangladesh, providing them with the best quality seeds and technical support to enable them to maximise yields. The company then buys back the produces directly from the farmers at due prices.

Amjad Khan Chowdhury, chief executive officer of Pran-RFL Group, was recognised as the Best Business Person of the Year 2011 as The Daily Star, the country's most-read English newspaper, and DHL Express, the world's leading logistics company, honoured the country's best businesses and the people behind them. Chowdhury, 71, won the much-coveted award for turning a simple idea of producing agro-processed foods in 1991 into a company of 30,000 employees.

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Fund Utilization

The company has invested the money in its Natore Agro Limited project at Ekdala in Natore   for  boosting   its   food  processing   capacity.   It’s a sister concern of PRAN group. Natore Agro Limited is mainly producing spices, sauce, mustered oil and fruit pulping. It procures major items of raw materials like mango, tomato, coriander, chili, turmeric, pulses and rice from the local market. The company has chosen to spend the loan on the Natore Agro Limited, as the district holds good prospect for agriculture. More importantly, the owner of the company hails from Natore and he wants the farmers of his home district to get benefited from the project.

Activities

PRAN, the mother organization of Natore Agro Limited, has got a good network of farmers in the country. According to its officials, the number would be around 75,000 across the country, including 13,000 in Natore alone.

As per the project plan, Natore Agro Limited encourages the farmers mainly to produce peanut, pulses, coriander, rice, tomato, mango and maize.

PRAN official claimed that they provide quality seeds at fair prices, irrigation facility, agricultural equipment and agri-inputs apart from interest-free loan. They provide seeds from their own stocks as loan which they adjust during crop procurement. They sometimes get free seeds from the government (Bangladesh Agricultural Development Corporation or BADC), which they distribute among the farmers free of costs. They make arrangements for irrigation by hiring pump machines for them, the cost of which is shared by both. But they do not construct any irrigation facility. They also provide interest-free loan to procure agri-equipments like power tillers and crushing machines.

It also provides training to farmers on new technologies, new methods of agricultures, new varieties of seeds, fertilizer and water management and information about the weather.

It  monitors   the   farmers’  activities   to  ensure  quality  agricultural produce and procures their crops at due prices (in most cases higher than the prevailing market price) directly from the field keeping the middlemen at bay, as the farmers said during the group discussions.

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Nature of Involvement

Teaming up: Around 75,000 farmers work under 52centres — known as hubs -- led by centre heads (CH) across the country, including 42 in Natore alone. The number of hubs is increasing gradually. Each hub consists of 1,500-3,000 farmers. The centre head supervises the activities of the farmers with the help of 10-12 lead farmers. The CH also works as a mediator between the farmers and the company. The CH keeps in touch with the factory authorities and sets the prices of crops after evaluating the existing market prices. He holds meetings with the farmers from time to time and tries to solve their problems.

The CH also receives equipment and agri-inputs, seed from the company and distributes those among the farmers.

In consultation with the company authorities, the CH also provides loans to the farmers to buy seeds and deducts the money when the crops are sold to the company.

The company selects a CH from among the framers in consultation with them and also selects 10-12 lead farmers. A qualified and acceptable person who has the leadership quality   and   is   relatively   solvent   is   chosen  as   a  CH.  As   the   farmers’   representative,   he  always tries to protect their interests.

Nature of Contract with Farmers

Both the parties – Natore Agro Ltd and farmers -- enter into contracts for a particular period before going for farming of a specific crop/crops as desired by the first party. Though the nature of the deal is conditional in some cases, the deal, in fact, protects the interests of both the parties.

As per the deal, PRAN Agro is supposed to provide quality seed, technical and technological supports and training for quality output.

The conditions laid out in the contract say that the farmers must cultivate the specific crops in the designated croplands, ensure the quality of the crop and sell the whole of it or part of it to the first party. It also says in case of failure by the second party (farmers) to ensure the quality of the crop, the first party will not be bound to buy it. The ultimate production cost is shouldered by the farmers but in case of crop failures PRAN waives its loans. Farmers plant only what the PRAN buys from them.

Marketing

Marketing of agricultural produces in Bangladesh is still a big problem for various reasons,   including   middlemen’s   intervention   and   poor road condition. On top of it, there is a problem of extortion. On many occasions when there is a bountiful production and supply glut, the farmers run into trouble with their produces, particularly the perishable ones. Under the circumstances when the farmers got the opportunity to sell their crops direct from the field that has become a big blessing for them. And that is what is happening in the PRAN project area. Natore Agro Ltd buys the crops right from the field at the market prices, relieving the farmers from their marketing worry and the possibility of any loss under any adverse situation. The company buys the produce of the farmers relatively at higher prices than the prevailing market price.

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Seed Supply

PRAN supplies quality seeds in two ways -- it coordinates the free supply of seeds from the government side and from their own arrangements. The seeds it supplies from its own stock are as loan, which the farmers have to adjust during their sale of their produces to Natore Agro. It supplies seeds like tomato, nut, pulses, wheat, aromatic rice and maize. There was a time when farmers could not go for maize farming due to unfavorable weather condition and lack of weather-friendly seeds. But now things have changed because of quality maize seed supply and other relevant support by Natore Agro. The story of moog pulse is also the same. Now 80 percent farmers inspired by better yields cultivate moog pulse.

As the farmers now can use the high-yielding variety of seeds of various crops, they are also getting greater outputs than in the past. Once they used to get 2400 kg of tomato from one acre of land but now they get 8,000 kg, posting a big boost in their farm output.

Influence on the Market

The direct procurement by Nator Agro Limited influences the local commodity market in two ways -- the prices in the local market go up when the procurement continues and comedown when the procurement ends. When the prices go up, the farmers who are not involved in the PRAN procurement chain are also benefited and get affected when the prices fall.

For example, Ntore Agro Ltd procured some 5,000 mts of tomato this season till March 20 this year at BDT 9/kg. When the procurement was on, the market price was BDT 5. When it stopped the procurement, the market price slumped to BDT 2, showing a sharp fall. It happens in the case of other commodities PRAN procures. When asked many farmer said they get higher prices than the prevailing market prices.

Farmers’  Version

During the visit to Natore, many farmers said they are happy after getting involved with PRAN project as it helped them bring a marked change in their lives. Once they could not buy enough food for their family members, let alone sending their kids to school.

About the marketing of their produces, the farmers said once they had to dump their many crops, particularly tomato, when there is bountiful production because of favorable weather. Now they have got rid of this particular problem as PRAN procures the crops right from the field. They further said the direct procurement has also helped eliminate the middlemen who used to cheat them in many ways.

Referring to the technological and other support provided by Natore Agro, the farmers said now they harvestmore crops from the same acreage than in the past.

According to the farmers, the increased farm activities in their areas have generated huge jobs both for men and women. They said NatoreAgro also employs local people in their marketing process, helping more poor people to earn livelihoods. There was a time when many landless farm workers used to remain engaged only in rice farming and now they remain engaged round the year due to diversification of farming, particularly during winter.

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Case Study

After having trouble finding a decent job to support his family, poor Mohammad Wahab Ali started vending polythene shopping bag in his local market in 2000, a job is undermined by many as odd one. Now this small vendor drives his own bike surprising his fellow-villagers.

“I  was  born  into  a  very  poor  family  having  a  small  shanty which  couldn’t  even  protect  us  from  rainwater…now  we’ve  got  a  one-story well-structured  building,”  says  a  beaming  Wahab,  30,  of  NabinKrishnapur village at Halsha union in SadarUpazila of Natore district.

Wahed   goes   on:   “When   I   started   vending   polythene  shopping bag many had raised eyebrows, but I did well in the business and managed to save some money – it’s  about Tk 10,000. Then I was thinking of opening a small shop and one day I did that. I set up a corner shop near our Haibatpur High School and started selling the food items school kids like. The venture got underway with minimum  investment.”

One day, Wahab recalls, he got a big man as his customer.   “The   elegant   man   who   looked   like   a foreigner,  asked  me,  “You  sell PRAN pickles! Yes sir, it tastes very  good  and  you  may  try  one.  Then  my  big  customer  told  me,  do  you  know  who  I’m  and  I  said  no  sir.  “I’m  Amjad  Khan  Chowdhury”,  the  customer  said.

Wahab,  a  father  of  two  kids,  continues:  “Then  he  said  can  you  sell  PRAN  Milk  and  campaign  for  the item? I said sure sir. Then I started selling PRAN Milk, and it has opened up the business door for me. Then I gradually got involved in a greater way with PRAN and started supplying moog pulse (moong bean) to PRAN. Since then, my business has grown from strength to strength  and  I  never  had  to  look  back.”

Asked how much he now earns a month, a confident Wahab, who is now head of Haibatpur Agricultural  Hub,  said,  “Not  less  than  Tk  50,000  and  now  I’ve  got  assets  worth  about  Tk  1  crore.”

Already known as a good guy in his neighbourhood, Wahabgained further popularity and contested the last local union council election under the pressure of his well-wishers and came out successful as a member, beating his nearest rival with a big margin.

More interesting is that Wahab, now known as Member Wahab, helped his wifeJolekhato resume her education which she could not continue because of her early marriage and poverty. “I  couldn’t  even  complete  my  secondary  education  because  of  my  family’s  extreme  poverty,  but  I now want my wife  to  complete  her  graduation,  at  least,”  Wahab  says.

He, however, had some harsh words against his mother and father in-laws for what he said turning  down  his  proposal  to  marry  their  daughter.  “We  got  married  ultimately,  but  they  had  stood in our way. Now they  like  me  too  much  and  live  with  us  and  that's  a  poor  man's  success.”

A PRAN official said PRAN has been able to create many more Wahabs, not a hundred, but thousands in its project areas.

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Project Impact

The poor farmers are the ultimate beneficiaries as they have been able to team up involving themselves in a formal supply chain which helps them sell their produces at fair prices. They also get better yields due to quality seed supply and timely irrigation. They have also been able to improve farming skills due to training provided by the project-implementing company.

They  also  don’t  have  to  worry  about  price  fluctuation  due  to  consistent  demand  of  their  produce.

Amid the visible change, more and more unemployed villagers, including women, are getting encouraged to involve with the project due to the lifestyle change of the fellow-villagers and hassle-free farming and good marketing prospect, leading to their food security.

CSR

PRAN’s   CSR   role   also   deserves   attention   as   it   provides   supports to various local educational institutions. It is also going to set up a medical college hospital in Natore. Besides, it provides healthcare services to its workers and subsidy to their canteens in their factories. A worker can take his or her lunch at Tk 2 only.

Focus on Women

Over  90  percent  of  workers  in  PRAN’s  Natore  factories  are  women.  They  work  in  a  good  office environment. Natore Agro Limited has a total of 1,500 workers, also with 90 percent women. There also women among the farmers that they contract.

Missing Link

After talks with PRAN officials, it became clear that there is hardly any clear outline in the agreement with the IFC on how to achieve the project goals and objectives, which is essential for effective implementation of such an important project. When sought relevant documents, the IFC said it cannot share the Loan Agreement as it is confidential.

Besides, there is little project campaign among the farmers. As the project has a greater goal of helping the nation achieve food security through sustainable agriculture, all parties concerned need to know who is doing what and what their aims actually are.

To ensure the proper and effective implementation of any project, there should be a strong monitoring system as money lenders, particularly the World Bank, usually do in many cases. In this project, the monitoring system is yet to be introduced.

Risk Factors

A large number of farmers have become dependent on PRAN Group and they have been trying to change their lots by availing themselves of the opportunities it has created for them. In this booming agro-farming business, PRAN remains the largest

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market player. In case of any unexpected blow to the Group, the famers involved may also get hit hard.

Though the traditional middlemen are gradually disappearing from the marketing chain in the project areas, there is possibility that the centre heads (CHs) created under the project would emerge as the greater beneficiaries compared to the general famers brought under the project. One day they may behave like middlemen unless mechanisms are put in place to control them.

As the project has the greater focus on business and productivity, enough attention is not given on environment issues. Bangladesh is already facing the problems of overuse of chemical fertilizers in farming. Besides, the use of formalin in agricultural produces, even   at   the   farmers’   level   to   keep   perishable   items   fresh   for   a   longer   time   has   also  become a grave concern for the government.

Recommendations

As there is no concrete outline in the agreement signed between the IFC and PRAN as to how Natore Agro Limited will achieve the targets in line with the GASFP objectives, it is necessary to bring those unwritten goals under the future deal.

a. Prior to embarking on its second phase of the project, Natore Agro Limited should work out an action plan detailing how it will achieve the targets in line with the agreement.

b. To make sure that Natore Agro Limited is always on track while chasing its goals, there should be an IFC team to monitor its activities at the filed level after a reasonable time gap.

c. There should be a review meeting in Dhaka between the IFC team concerned and the relevant PRAN officials at least after every six months to discuss the progress and pinpoint the lapses of the project, and thus make recommendations to keep it always on track.

d. The two filed visits have given an impression that the centre heads (CHs) chosen under the project have the scope to emerge as middlemen because now they play the key role between PRAN and the farmers. Therefore, their activities need to be monitored as well be regulated so that the majority farmers are not deprived in any way because of them (CHs).

e. There should not be mere a business approach on the part of PRAN in implementing such a project, which has a greater goal of helping the poor communities by involving them in modern farming and thus promote sustainable agriculture leading to food security.

f. Bangladesh is one of the worst affected among the countries that are facing the early impacts of climate change. Therefore, support for sustainable climate-resilient agriculture is crucial to enable the farmers to increase food security and adapt. And this issue should be a priority agenda both for the IFC and PRAN while reaching a second deal.

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g. The overuse of chemical fertilisers in farming and the use of formalin in crops after the harvest have become a too common practice in Bangladesh posing a great threat to public health. So, there should a regular campaign among the farmers against this menace. PRAN can play a vital role in this regard because it has already got a network of 75,000 farmers.

Conclusion

In Bangladesh, farmers produce a lot of crops, including paddy, wheat, mustard seed, spices, vegetables, milk, poultry etc. But in many cases, they cannot even recover the production costs, let alone enjoying the benefits, for lack of marketing and appropriate processing. Tomato growers throw away the tomato for not having the production cost. Cow milk producers also face the same fate. Potato growers have to suffer a huge loss for not having good cold storage due to the lack of infra-structural support. Fish and poultry items can be exported if the processes are in place. So, agro-processing is essential for global food security point of view.

If Bangladesh wants to ensure food safety, agriculture including crops, livestock and aquaculture could be good important tools. And processing those items are imperative which requires mechanization (for harvesting, planting seeds, proper transportation etc).Bangladesh has a good future in achieving the food security if the support to the farmers could be improved by of ensuring their market.

Although food security has been very high on the policy agenda of the government, no single actor can achieve that. Private sector investment can play a vital role in delivering inclusive economic growth, improving access to food and employment opportunities that can raise smallholder farmer incomes. In doing that, the private sector also must adhere to some key principles, such as focusing on local food markets, working with producer organisations and respecting the rights of small-scale producers, workers and communities. Lasting change starts when communities participate.

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Annex: 1

A sample of the Contact Paper between Natore Agro Limited and the Contracted Farmers

The first party: Natore Agro Limited. Kamruzzaman will represent the company on its behalf and thus he will be considered as the first party of the agreement. And he will be considered as the legal or official representative of the company as long as the agreement will remain in force.

The second party: The contracted farmers. Centre head Saiful Islam will represent the contracted farmers and thus he will be considered as the second party of the agreement.

The Conditions of the Agreement:

1. The second party will grow Robi (winter) crops as prescribed by the First Party in 2012-13 season on a total of 127.39 acres land.

2. The second party will be bound to follow the rules and regulations of the first party from the crops growing time to crops trading period.

3. The second party will grow the crops from the seeds provided by the first party. The growers (second party) will bear all the crop production costs.

4. The first party will provide seeds and necessary technical support. The second party will implement the necessary works as per the suggestions of the first party.

5. All necessary training for growing the crops will be given as per the demand of the second party.

6. The second party of course will wipe out the weeds at different times of the cultivation as per the suggestions of the first party to ensure the better quality of the crops.

7. The second party will be bound to sell their all produce or a portion of those to the first party. The quality and level of dryness of the crops will have to match with the standard set by the first party.

8. The representatives of the two parties will set the prices of the crops in consultation with each other after evaluating the existing prices of the produce on at least two nearby local markets.

9. The first party will not be bound to buy the crops from the second party if those do not match with its set standard. The first party will provide the second party cheques as per the rules of the company after the QC accepts the crops quality of the second party.

We hereby knowingly signed the agreement accepting the above mentioned conditions in presence of the witnesses in sound mind without provocation from any one after reading and understanding the meaning of the conditions.

2nd party  representative’s  signature                                  1st  party  representative’s  signature  

Name of the centre

Witnesses’  signature                                                                                            Witnesses’  signature

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Annex: 2

List of References

www.thedailystar.net www.irinnews.org reliefweb.int/report/Bangladesh www.1.ifc.org www.mofdm.gov.bd www.unescap.org/rural/doc/sads/ban

www.wikipedia.org/ www.gafspfund.org/content/private-sector-window www.unescap.org/rural/doc/sads/ban www.pranfoods.net.

Annex: 3

The names of 10 farmers out of 50 interviewed during the study include:

SI. NO.

Names

1. Abdul Whab 2. Md. Shafiqul 3. Abdul Kader 4. Md. Alal Uddin 5. Md. Mokhter Hossain 6 Zillur Rahman 7 Sekandar Ali 8 Ahmed Ali 9 Abu Siddique Sarkar 10 Jahanara Begum