Sherpa Hossainy's Blog

Foreign investment rules in practice in Myanmar (Part 4)

Posted in Agriculture, Investment, Legal, Myanmar, Yangon by Sherpa Hossainy on July 10, 2013

Part 4: Manufacturing of foods and beverages; non-food manufacturing; agriculture, forestry, livestock and fisheries

Published in Myanmar Business Today (Vol 1, Issue 22) on July 4, 2013

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Recently, international law firm Clifford Chance and VDB Loi have jointly released a briefing note on the practical implementation of the Foreign Investment Law in Myanmar. This is the fourth and final part of Myanmar Business Today’s series of sector-wise analysis based on the briefing. This week’s topics are manufacturing of foods and beverages; non-food manufacturing; agriculture, forestry, livestock and fisheries.

The Myanmar government implemented the country’s Foreign Investment Law (FIL) 2012 with two notifications or FIL Rules, creating a practical framework to match the government’s policy of welcoming foreign investment. Both notifications, 11/2013 of the Ministry of National Planning and Economic Development and 1/2013 of the Myanmar Investment Commission (MIC), were released on January 31.

Manufacturing of beverages

A joint venture (JV) is in principle required for the “production, blending, distilling, bottling, and distribution of beverages,” according to the rules. A JV is also required for barley fermentation and the production and distribution of products made from barley fermentation. In addition, a JV is required for all “purified water enterprises”.

“In practice, the commercial tax, a combination of an excise duty and a turnover tax, dictates how a producer of beer or spirits should be structured in Myanmar. The commercial tax weighs heaviest on the importation phase and the manufacturing phase of the supply chain, and investors may need to carefully devise a supply chain over different entities in Myanmar, keeping in mind unnecessary tax imposts and licensing restraints,” Edwin Vanderbruggen, co-author of the report and a partner at VDB Loi, a specialised law and tax advisory firm with offices across Southeast Asia, told Myanmar Business Today.

The rules say for the production, distribution and sale of soft drinks and other beverages, the investor must use at least 20 percent local raw materials for the first three years of production. Afterwards, the investor must use at least 60 percent local agricultural raw materials.

Manufacturing of foods

A JV is as a rule required for the “production, canning and distribution of foodstuffs except dairy products”, according to the rules. However, the foreign investor may hold up to 80 pecent in the JV as per current regulations.

“In reality a foreign investor would not purchase shares from an existing Myanmar shareholder in a local company, or subscribe for shares issued by such existing Myanmar company. In other words, the JV company would not be the existing company of the local partner. Instead, a new JV company is established under the FIL. Licences, assets and land leases are transferred from the local partner company to the new JV company through a contribution in capital. The transfer is done based on the terms agreed between the parties, subject to MIC approval,” Edwin said.

For the production, distribution and sale of vegetable and animal oils, at least 80 percent local raw materials must be used, while for production of Monosodium Glutamate (MSG), local raw materials must be used for the first three years of production.

Non-food manufacturing

Generally, there is no requirement for a local partner when manufacturing non-foods. A JV is required only for a few selected sectors including the production, distribution and sale of cotton threads, various types of paper, rubber, plastic and leather.

“Notification 1/2013 does not set out a lot of local content requirements in non-food, cosmetics and cigarettes being the main exceptions, but in our experience the Ministry of Industry may request the use of a certain amount of local raw materials,” Edwin explained. The Ministry of Industry provides recommendations to the MIC about the feasibility of proposed manufacturing investment projects.

Land used for manufacturing that is leased from the government or private parties must be obtained with the permission of the MIC. “Generally a minimum capital amount of $500,000 is required for manufacturing companies with an investment permit,” Edwin said.

Agriculture, forestry, livestock and fisheries

“Currently, we mostly see interest in palm oil, sugar, rubber, rice and livestock. Although some agricultural and livestock activities feature on the list of activities that require a JV, it is our view that the government may in practice decide to allow large investment projects in this field that are considered particularly beneficial to the country on a fully foreign-owned basis,” Edwin said.

In most cases, the government can offer land to the investor that is suitable for the project, either through the Ministry of Environmental Conservation and Forestry or the Ministry of Agriculture and Irrigation. Different lease prices and maximum sizes of plots apply depending on the authority and the status of the land.

Forests are normally not available for investment projects, but degraded forests may be leased for various projects, including wood-based industries and reforestation. Although the union government in theory has final say, the local authorities also need to cooperate with the allocation of land for a project. If the land is already in use by local farmers or residents, the resettlement and compensation may be particularly challenging and at times a major risk to the completion of the project.

A JV is required for small-scale agricultural businesses, as well as for agricultural businesses that do not use modern machinery. A JV is also required for the “growing and planting of traditional medicinal herbs (plantations),” as well as the “production and distribution of hybrid seeds”, the rules say.

A foreign investor involved in the development of modern farm land, production and distribution of seeds, fertiliser, pesticides, mechanised farm tools and machinery or crops must obtain a confirmation from the Union Government Board and comply with the guidance of the Ministry of Agriculture and Irrigation.

For livestock and fishery activities, a JV is required for small-scale livestock businesses, livestock businesses that do not use modern machinery and fishing in lakes, inland waters and from shores. Investors wishing to fish offshore in Myanmar territorial waters for saltwater fish, shrimp and other marine animals must operate through a JV and obtain the prior permission of the government.

According to the rules, investors involved in fresh or saltwater fish breeding may not breed such fish as would affect Myanmar’s biodiversity. The production of bee products must be conducted in accordance with Good Manufacturing Practice (GMP) technology. Investors involved in lab testing of marine products must perform such tests in accordance with ISO 17025, the rules say.

DuPont to foray into Myanmar

Posted in Agriculture, ASEAN, Myanmar, Technology, Yangon by Sherpa Hossainy on July 10, 2013

Eyes agriculture and sustainable energy solutions

Published in Myanmar Business Today (Vol 1, Issue 21) on June 27, 2013

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American science and chemical giant DuPont has set its eyes on Myanmar as part of its ASEAN expansion strategy and will open office in the Southeast Asian country this year, a top executive said.

“Our regional team has done a lot of good work to get us started in Myanmar. We are in the process of getting all the government permission and finishing other formalities, and our office will open by the last quarter of this year,” Rajeev A Vaidya, the Delaware-based company’s President of South Asia and ASEAN, told Myanmar Business Today.

“There’s a lot of potential. As we come into Myanmar and we see those opportunities, we would certainly like to be a part of that,” he added.

DuPont, founded in 1802, describes itself as a “global science company” and employs more than 70,000 people in 90 countries and has a diverse array of products. Garnering a revenue of $38 billion in 2011, DuPont ranked 72nd in the Fortune 500 ranking in 2012.

Emerging markets contributed to 34 percent of DuPont’s sales in 2011 and half the company’s agricultural sales are outside the US. DuPont also spends 5 percent of its revenue in research and development (R&D).

Rajeev Vaidya, Hsing Ho

Rajeev A Vaidya (L), Dupont’s President of South Asia and ASEAN, and Hsing Ho, managing director for ASEAN. Sherpa Hossainy

DuPont businesses are organised into five categories, known as marketing “platforms”: electronic and communication technologies, performance materials, coatings and color technologies, safety and protection, and agriculture and nutrition. Agriculture contributes the greatest share of DuPont’s revenue, $10.4 billion last year, up from $9.17 billion in 2011.

 

While DuPont will “bring all our offerings” in Myanmar, Rajeev said the priority would be agriculture and sustainable energy solutions. “We will offer anything to ensure food security for the Myanmar market. If you look at the development stage of Myanmar, the priority will of course be on agriculture at first. Enhancing the farmers’ livelihood and productivity through technical assistance would be the initial focus,” he explained.

“We will also look at sustainable energy because in a geography like Myanmar there’s always need for sustainable energy like biofuel and solar, and solutions that improve energy efficiency,” Rajeev said. Technologies that help protect people, assets and the environment through improved industrial processes and lowering the carbon foot print will be introduced, he added.

DuPont’s agriculture division makes and sells hybrid seed and genetically modified seed, some of which goes on to become genetically modified food. Rajeev said the company will bring a number of different solutions to the farmers including seeds and crop protection. “These solutions help the farmers to get the most value out of every acre. We not only want to make this solutions available, but we also want to do it in a way that we actually engage the farmer community in the best agronomic practices on using those solutions to create the best outputs.”

The DuPont South Asia and ASEAN President said the company will also invest in educating farmers, and in localising and enabling them to use the technology.

Rajeev said at a World Economic Forum session on agriculture and food security that science can play a critical role in achieving food security solutions. “Over 10 million farmers benefit from our solutions. We are working on how to grow more food with less land, and science-powered solutions is relevant for this approach. Also, science has to be put in the hands of the farmers to empower them. Collaboration will unlock the true potential of science.”

Rajeev said young people should be encouraged to adopt agriculture as a profession, adding that average age of a farmer in Southeast Asia is over 60. However, Rajeev said it’s not going to be an easy challenge to lure young people into agriculture.

“It’s a major challenge. We have to change the way a generation thinks. Is that possible? Yes. Can that be done by DuPont only? No. That’s where the ecosystem of collaboration comes in.”

“That’s a problem we must solve. If we don’t make farming an attractive business for young people it becomes a sustainability issue. A big part of the solution is to actually make farming profitable for small farmers. As that happens, some fundamental building blocks can be put in place through science and in collaboration with the government.”

Hsing Ho, managing director for ASEAN, said in this regard, “There is a great potential to make farming more productive and profitable. Therefore the profitability is on the discussion table and people say who is going to reap the profits. From our perspective, it is about the notion of equitable distribution of wealth.

“If we can bring up the value of creation, we would be able to split those values more equitably with the ones in the value chain, by putting them in the centre. That’s how we create more potential for the younger people to make them more excited about it.”

Hsing Ho said farming is not only about “hard work and sweat.” “It’s about applying the right technology. When farmers’ income goes up it results in more mechanisaiton, thereby increasing productivity. When farming becomes no longer a hard work and more tech-based young people will get encouraged.”

However, Myanmar also faces its own problems such as complete lack infrastructure and a weak supply chain. Most Myanmar farmers have been trapped by very high costs due to the lack of infrastructure, while internal transport costs are five times higher than in Thailand and 20 times higher than in China.

Rajeev said: “There has to be collaboration with the government where the government oragnisations are investing in the infrastructure and simplifying the regulations so that new technology can come in. Farmers, companies, governments and NGOs can work together to create a greater market access.

“The problem is when you look at the whole thing it sounds so big and so complex that nobody wants to touch it. There’s an old Chinese proverb that a thousand-mile journey starts with a single step. So, we just got to start. We’ve heard very positive comments from the government and when we make progress things will continue to fall in place.”

Myanmar needs investment in agriculture for a “Quick Win” for Poverty Reduction

Posted in Agriculture, Business, Myanmar, Yangon by Sherpa Hossainy on July 10, 2013

Published in Myanmar Business Today (Vol 1, Issue 19) on June 13, 2013

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To promote inclusive growth in Myanmar at this crucial stage in its development, investment in rural areas and finding ways to improve the livelihood of farmers should be a priority, business and government leaders said in a session on the long-term outlook for the economy at the 22nd World Economic Forum on East Asia.

“Putting a big focus on agriculture right now is key,” said meeting Co-Chair Helen E Clark, administrator of the United Nations Development Programme (UNDP) in New York. “You can get a quick win for poverty eradication now.” But, warned Clark, this will require investing in the infrastructure to drive agricultural growth and productivity. About 70 percent of the Myanmar labour force is employed in agriculture.

“We encourage investment in the agriculture sector,” said Serge Pun, chairman of Serge Pun and Associates, Myanmar, noting that the nation’s foreign investment laws provide some protection for small farmers. “While we are endowed with a lot of good things, we are not an agricultural force,” he said. The reasons: low productivity and a lack of investment, technology, and research and development.

“The only way to get discretionary income to the people of Myanmar is to give those people [a way to earn] money,” reckoned Indra Nooyi, chairman and chief executive officer of PepsiCo, USA. She said Pepsi is helping farmers grow high-yield potatoes and then buying up the crop for use in making food products.

The participants said promoting the agriculture sector can help ensure balanced growth in Myanmar over the long term, which will allow it to avoid the middle-income trap.

“You can have a very balanced economy here if you get the frameworks right,” said Michael Andrew, the Hong Kong-based Global Chairman of KPMG International. “Myanmar should proceed carefully with setting out the regulatory frameworks for its emerging industries and sectors. The government, for example, is soon to award crucial telecom licences. It is really important that these processes be seen as transparent and on a level playing field,” Andrew said.

Another key to creating a balanced, sustainable economy is education and skills training, the discussants said. India is focusing a number of its investments in neighbouring Myanmar in this area, including a technology institute in Mandalay. “Myanmar will need skilled people and that is where we are seeking to help,” said Anand Sharma, minister for commerce and industry and textiles of India.

Poultry leaders for tightened border to check bird flu

Posted in Agriculture, Bangladesh by Sherpa Hossainy on March 14, 2012

Published in The Independent on 13 March 2012

Digital print version

Poultry industry leaders have urged the government to beef up border security to stop illegal poultry import following the spread of highly pathogenic Avian Influenza (AI) virus in India.

In January, the World Organisation of Animal Health (OIE) reported a deadly H5H1 virus outbreak in six Indian states — Tripura, Meghalaya, Maharastra, Bihar, Orissa and Jharkhand, which resulted in culling of thousands of poultry birds. The Indian state of Assam and West Bengal also saw similar spate in July and August.

Moshiur Rahman, convener of the Bangladesh Poultry Industry Coordination Committee (BPICC) and president of the Breeders Association of Bangladesh (BAB), said, “The poultry industry in Bangladesh suffered huge losses in last year’s bird flu outbreak. If the virus hits once again crossing the border, it would cause a severe devastation.

“We have heard that infected birds and eggs are being smuggled to Bangladesh and media earlier reported selling of infected poultry birds at a cheaper price in the infected areas.”

He urged the government to install quarantine cell and certification unit at every International port to stop intrusion of AI virus as well as any other new deadly disease.

Fazle Rahim Khan Shahriar, managing director of Aftab Bahumukhi Farms Ltd, said import of one-day chick, birds and eggs from virus affected country is strictly prohibited according to the international law but the Commerce Ministry has issued such permissions earlier.

“These decisions are causing serious damage to our poultry industry,” Shahriar said. He requested the government to cancel all permission issued to import one-day chick, chicken, eggs and hatching eggs from neighbouring India and other AI affected countries.

Shamsul Arefin Khalid, vice-president of BAB and director of Nourish Poultry and Hatchery Ltd, said FAO has identified six countries including India, where AI virus exists and will require another decade or more to get rid of this deadly disease.

“The government should ban import of chicks, eggs and poultry birds at least for the next ten years,” Khalid said.

The poultry leaders requested farmers to bury dead body of any wild and migratory birds or crow without delay and maintain bio-security strictly. They also asked farmers to report suspected infection to their nearby livestock offices.

The poultry leaders urged the government to permit them to use vaccine against bird flu, and also expected directives from the prime minister to save poultry industry, which employs over seven million people.

The leaders called upon the Indian Farms doing business in Bangladesh to be careful and take necessary precaution.

The poultry industry in Bangladesh suffered losses around Tk 6,000 crore during 2007 to January 2012 due to bird flu attacks.

Move on diverse use of potato

Posted in Agriculture, Bangladesh, Export and Import by Sherpa Hossainy on November 5, 2011

Published in The Independent on 3 November 2011

Read the article on Independent website

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An agro processing company is set to resume its starch-making factory to use the huge stockpile of potatoes in cold storages in northern Bangladesh, a move to avert an alarming overstock situation to save farmers.

Flamingo Agro-tech Ltd will restart its operation from mid-November in Joypurhat district, the largest potato growing area in the country. The factory will require 220 tonnes of potato everyday, officials of the company said.

The $5.5 million (Tk 420 million) factory, which started in 2005, was forced to shut down a few months ago after operating for only two and a half months following a long break.

Flamingo Agro-Tech Ltd factory

“We always had to stop our operation from time to time because banks were unwilling to give us working capital and there was also lack of government subsidies on potato cultivation and exports,” said Abdul Kader Siddique, Flamingo’s managing director.

“The situation is so dire now that we have to come forward and save the farmers, even though the banks and government don’t understand the gravity of it; otherwise farmers will lose interest in potato cultivation,” he said.

A few months earlier, farmers started to store Diamond and Rosetta type potatoes in cold storages hoping to make more profit. But amid potato price-drop and diminishing  demand, farmers are left with a huge stockpile with few or no potential buyers.

There is an approximate stock of 70,000 tonnes of potatoes in all the 13 cold storages in Joypurhat, which have capacity to store 103,045 tonnes, cold storage owners said.
Production cost of every sack (84 kg) of Diamond and Lady Rosetta including storage charge is about Tk 1,000 but those  are sold at a maximum of Tk 600 per sack now because of the demand-drop, they said.

“Upon observing the market and considering the farmers’ condition, Flamingo decided to buy Rosetta and Diamond type potatoes from the farmers and resume production at the factory,” Siddique said.

The company has one starch-making and three potato flake factories in the country that demand over 2-3 lakh tonnes of potatoes every year, the official said.

Siddique said the government should have encouraged diversified use of potato long time ago and should have provided proper incentives.

“In China farmers get 10 per cent incentives only on cultivation, plus there is export incentive. Rather than giving us incentive, the government took down the existing 30 per cent incentive to 20 per cent,” he said.

Siddique said potato, other than consuming it as vegetable, has versatile uses in fast foods, noodles and pharmaceuticals and Bangladesh should bank on the rising demands of diverse use of potatoes.

“We export starch to Japan, South Korea, Vietnam and the Middle East. If the factory runs all year round we can earn around $6-7 million a year by exporting 12-14,000 tonnes of starch,” Siddique said.

A labourer working inside Flamingo Agro-Tech Ltd factory

“I’ve been going from door to door of various officials for the last 4-5 years, holding meetings with banks, government offices, but nothing happened,” lamented Siddique.

“We directly employ 300 persons and indirectly a couple of thousands, who will lose jobs if we are forced to shut down once and for all,” he said.

Siddique said despite all hindrances, Flamingo keeps running. “We know what it can bring to Bangladesh and the farmers. But our machines are sophisticated, they can’t be used intermittently like that for long,” he said.

Siddique also stressed production of high-quality potatoes like Diamond and Rosetta. “The market is now flooded with low quality Granola type. Companies must understand which one is industrial grade and which one will bring them profit and can be put to good use.”

Flamingo can only use Lady Rosetta type in their factories as only this variety complies with the industrial starch standard. Chips making factories also need Rosetta types because of the quality and the crispness they offer.

Siddique said to encourage farmers to cultivate potato, Flamingo is supplying quality seeds at fair prices and taking initiatives to cultivate high-quality variety of potato. Besides, the company is organising seminars for farmers jointly with Southpole Seed Ltd, another agro processing company, so that they do not get cheated while buying high quality seeds.

Md Nafisur Rahman, managing director of South Pole Seeds, said, “There are so many unused potatoes in the cold storage. They would’ve been consumed by now if there was diverse use of potatoes.”

Rahman said that he had visited China to import machines that can extract protein and fibre from the float water and pulp respectively – the items that are left as residue after starch production — and both have high export potential.

“We will go to China in December to get the machines so that we can extract protein and fibre from the residue that Flamingo will produce,” Rahman said.

“No one in Bangladesh knows how to use those residues. We are also trying to introduce it as fish and cattle food in Chalan Beel area,” he said. Rahman said private entrepreneurs are trying hard to promote diverse use of potato but government should step in urgently to encourage the farmers and provide cash incentives for exports.

“Chips making factories have just started operating in Bangladesh and there should be more processing industries. But every initiative is taken by the private entrepreneurs, why not government?” he said.

Machines inside Flamingo Agro-Tech Ltd factory

Liton Hossain, a farmer from Joypurhat who took part in Flamingo seminars, said, “Farmers were not really interested in farming potato because they incurred huge losses this year. But Flamingo has assured us that we don’t have to worry if we produce high quality potatoes.”

Hossain hopes to cultivate Lady Rosetta variety potato on 20 bighas of land next season.

Abdul Alim, another marginal farmer, said, “In previous seasons I sold every maund of Rosetta at Tk 400. I had put 45 sacks of potato in the cold storage to make more profit this year. Now I can’t even sell a kilo at Tk 6.” Alim said that he is happy that Flamingo is going to buy these potatoes; otherwise, he thinks, all those potatoes would have gotten wasted.

Mojibor Rahman, a wealthy farmer from Karimpur village, said, “I incurred a loss of Tk 700,000 this year. Last year was the same.” He said that as Flamingo Agro-tech restarts its factory, farmers will at least get “something” from now on.

Stored potato: Worry for Joypurhat farmers, traders

Posted in Agriculture, Bangladesh by Sherpa Hossainy on October 30, 2011

Published in The Independent on 26 October

Read the article on Independent website

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Farmers and traders of Joypurhat, the largest potato growing area of the country, are struggling to sell their produce stored in cold storages, even at lower prices than usual due to  diminishing demand.

Even after five months of storing potatoes, an approximate stock of 70,000 tonnes in 13 cold storages in the district is still waiting to be sold because of dearth of buyers.

According to officials at the Department of Agricultural Extension (DAE), this year around 36,500 hectares of land have been brought under potato cultivation, where Cardinal, Diamond, Granola and other varieties of potato were cultivated. Due to favourable climate and low cost of fertilisers, potato output reached 922,000 tonnes, which is 150,000 tonnes more than a season earlier.

But farmers and traders are in trouble with the potatoes that they stored in cold storages amid continuous downfall in prices and drop in demand in the market. Cold storage owners feared that it might not be possible to clear out the stock if the situation prevails, which will severely affect potato production next season.

Farmers sorting out potato in a cold storage in Joypurhat

Earlier in the season, amid a gradual downfall of potato prices, traders started storing potato in cold storages besides the farmers and the cold storage owners also took advantage. The rent for every sack (84 Kg) of potato last year was Tk 150-200, which spiked to Tk 250-300 this season.

Even though the rent was high, all 13 cold storages stored more than their capacity amid rising demands before the stipulated time. The 13 cold storages in the district can preserve 103,045 tonnes of potato, but upon farmers’ request they stored 110,000 tonnes, the cold storage owners said. Potatoes are usually stored in cold storages from May to December, whereas some 40 per cent are sold within September.

But as the prices and demands are low, cold storage owners became unable to supply potato from the cold storages.

“Currently all the cold storages in Joypurhat still have 70 to 80 per cent of the potatoes. It would be difficult to clear all the potato within a month,” said Monowar Hossain, manager of North Pole Cold Storage. The Northpole Cold Storage is storing 135,000 sacks instead of its 105,000 capacity.

“We stored 140,000 tonnes of potato this year. Around this time 50 per cent of potato should have been cleared out but this year no one is interested to buy,” Hossain said. The same condition prevails in Molla Cold Storage, Himadri Ltd, Southpole Cold Storage, Palli Himagar and others, he added.

The farmers said around this time there should be a good demand of potato but it’s different this time and every passing day the prices are going down. In August, Granola was Tk 650 per sack, now being sold at Tk 450-480 a sack.

For Cardinal potatoes prices came down from Tk 700 to Tk 500, for Diamond potatoes it was Tk 460 from Tk 650 and for Guti potato prices came down from Tk 1,100 to Tk950.
After giving Tk 250-300 rent, farmers and traders are incurring Tk 200-300 loss in every sack.

Potato trader Ahmed Ali said, “I stored potato worth of Tk 700,000 in cold storages and now I can’t even sell it even after counting a Tk 300 loss every sack.” Another trader, Abdul Momin, said he bought 260 sacks at Tk 770 and now he is forced to sell the item at Tk 430. “Although the loss is too high we are forced to sell it because there will be further downfall in prices,” Momin said.

Farmers sorting out potato in a cold storage in Joypurhat

Manik Ahmed said he always stores few thousand sacks of potato in cold storages and he couldn’t sell a sack among 5,000 this year, due to low demand. Mosharraf Hossain, a farmer, said, “I stored 500 sacks of potato in local cold storage and incurred a Tk 200 loss every sack. Abdul Barik, another farmer, said he incurred loss of Tk 150 every sack.

The farmers said government has to promote diversified use of potato and ensure exports of potato on urgent basis. Otherwise, farmers will lose interest in farming potato, they said.

“One of the problems is that there is a very little industrial use of potatoes. The use of potato should be diversified beyond only consumption as vegetable,” Hossain said.

The lone asparagus farmer

Posted in Agriculture, Bangladesh by Sherpa Hossainy on October 18, 2011

Published in The Independent on 18 October 2011

Read the article on Independent website

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“The asparagus appeared. They were enormous, succulent, and appetising. The smell of the melted butter tickled my nostrils as the nostrils of Jehovah were tickled by the burned offerings of the virtuous Semites.” — That’s how WS Maugham described the “horribly expensive” vegetable in his witty short story “The Luncheon”.

Ansar Ali, a vegetable farmer for almost 40 years, had little idea about asparagus’s inauspicious role in the story where Maugham got ripped off by a woman at a lunch in Paris; however, to Ali, as it seems, the jinxed vegetable for Maugham has brought luck.

Twelve years ago, Ali, 60, of Bujrukshokra village of Bogra district, was immersed in huge debt following a long legal tussle with a local Union Parishad chairman. Profits from paddy cultivation was barely enough for survival.

“I thought of cultivating something other than paddy or potato that will give me more money, but I was clueless,” Ali told The Independent, recalling his struggles.

Farmers in asparagus field

At that time Thengamara Mohila Sabuj Sangha (TMSS), an NGO, was trying to promote cultivation of atypical vegetables in Bogra.

“We provided information and training to farmers. Only Ansar Ali was keen and bold enough to start asparagus farming while others resorted to conventional produce,” said Sardar Mahtabuddin, senior assistant director (agriculture) of TMSS.

TMSS helped Ali by providing him the crowns (used for asparagus cultivation), which cost Tk 14,000 per kg. Ali got 100 grams of it and started growing asparagus on 5 decimals (1 decimal = .01 acre) of land. He never looked back as he made Tk 10,000 profit in the first year.

“Now I grow asparagus on 20 decimals of land and make Tk 50-70,000 profit by selling about 600 kilograms of produce every year,” Ali said.

“It’s more profitable than paddy, potato or any other local produce. I sell every kilo at Tk 200 or sometimes at Tk 250 or 300,” he said.

Encouraged by the success, Ali started growing high-value crops (foreign vegetables) such as sweet corn, baby corn, capsicum (red and yellow), squash, cherry tomato, broccoli and iceberg lettuce on 20 bigha of land (1 bigha = 0.33 acre).

“I earn Tk 5-7 lakh by selling these produces every year, while I spend around Tk 3 lakh,” the veteran vegetable farmer said.

Apart from asparagus’s lucrative potential for farmers, Asparagus also holds a great nutritional value. According to Michigan Asparagus Advisory Board, asparagus is one of the most nutritionally well-balanced vegetables in existence and one of nature’s most perfect foods, as it leads nearly all produce items in the wide array of nutrients it supplies.

Asparagus is a nutrient-dense food which is high in Folic acid and is a good source of potassium, fibre, vitamin B6, vitamins A and C, and thiamine. It has no fat, contains no cholesterol and is low in Sodium. A 5.3 ounce serving provides 60 per cent of the recommended daily allowance for folacin, which is necessary for blood cell formation, growth, and prevention of liver disease.

Ansar Ali and his asparagus field

Obscure as it may be to Bangladeshis, it is a well known culinary delight in the West and also in Southeast Asia. In Bangladesh, there is a high demand for asparagus in the Chinese restaurants and posh hotels in Dhaka.

“The expatriates living in Dhaka are the main customers of these vegetables,” Mahtabuddin said.

Although Ali has established a good network over the years he had to struggle to find proper channels to sell his produce in the first few years.

“I came to Dhaka myself and supplied them to Nandan superstore and Hotel Sheraton (now Hotel Ruposhi Bangla),” he said.

“Now there’s not enough time for me to go to Dhaka often. I send my produce to suppliers based in Dhaka, who deliver them to superstores like Agora, and 5-star hotels like Westin, Pan Pacific Sonargaon and Radisson,” Ali said.

Some of the produces also go to the vegetable market in Gulshan 1 and 2, he added.

Murad Hasan, a supplier who gets asparagus from Ansar Ali and supplies them to Hotel Ruposhi Bangla, said that Ali is doing a great job but the quantity he is producing is too low and the sizes (diameter of the asparagus) are much smaller than commercially acceptable ones.

However, Hasan said the foreign vegetable import pressure drops during winter as Bangladeshi farmers, especially from Gazipur, Savar, Bogra and Jessore, meet almost 70 per cent of the demand of foreign vegetables. “The prices of those foreign vegetables in the supermarkets also drop during winter as we get them locally,” he added.

Ansar Ali and his asparagus produce

Ali’s unconventional farming has drawn attention from many including some curious farmers from the Northern region of Bangladesh who wanted to start off this new venture.

“I have started teaching other farmers, from Mokamtola and Shonatola in Bogra and Ambari in Dinajpur, how to grow foreign vegetables,” Ali said.

Dibakar Saha, one such students of Ali, praised his efforts and said that now he is cultivating cherry tomato, sweet corn and capsicum and making good profits.

“I started learning how to grow asparagus from Ali chacha and hope to start farming asparagus this season. I will take his advice on how to market my produce also,” Saha said.

Mahtabuddin identified marketing as the biggest stumbling block to cultivation of high-value crops.

“Producing and selling is completely different. It is really hard to establish the marketing linkage for these crops. That’s why many farmers are reluctant to start the foreign vegetable cultivation,” he said.

Ansar Ali said he was the only farmer in North Bengal and most probably the only one in the country who is producing asparagus.

The TMSS officer said that although Ansar Ali is the only one producing asparagus right now, the NGO is planning to spread this trend and introduce new high-value crops in Bangladesh. Interested farmers can always get TMSS’s help, he added.

“We believe in diversified production of vegetables. The yield is low for these vegetables but profit is higher,” Mahtabuddin said.

Ansar Ali, poses with the best micro entrepreneur award in agriculture award in Bogra

Ansar Ali is also eager to help anyone who wants help. “I may be illiterate but I’m living happily and I am not poor. I’ll be happy to help anyone and show them the way to success,” he said.

Ali believes that the government, by providing cold storage facility, crowns at cheaper price, and training, can take this high-value crop farming to a more feasible stage.

“If the government sends farmers abroad for training, we can make hundreds of Ansar Ali in every corner of Bangladesh,” the lone asparagus farmer hoped.

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