Transcript International Trade and Development at the Grassroot: A Case

International Trade and Development at the
Grassroot: A Case Study in the context of the
Mango Economy of Malda
Presentation by:
Arnab Ganguly,
CUTS International
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International Trade and Development at the Grassroots

Trade can be a powerful source of economic growth

International trade
 Expands Market
 Facilitates Competition
 Creates Opportunities for Growth
 Facilitates Poverty Reduction
 Fosters human development

International trade by itself does not necessarily lead to human development.
It requires supporting domestic policies and important safety nets
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National Foreign Trade Policy 2004-09: The Indian Context
In the Indian context the National Foreign Trade Policy, 2004-09, envisages a
programme that seeks to secure economic growth and national development.
Formulated and effective from August 2004, major landmarks attained are:

Increase in exports from US $63 billion in 2004 to US $155 billion in 2007-08
i.e. 2.5 times increase in what it was 4 years ago

Total Trade in goods and services accounts for 50% of India’s GDP

In the last four years increased trade activity has created 136 lakh new jobs
Source: Foreign Trade Policy 2004-09, Annual Supplement – 2008-09
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National Foreign Trade Policy 2004-09:
The Indian Context………(contd.)
The Question is

How much of the resultant benefits have accrued to the real producers?

How increase in exports of specific products have affected various
stakeholders at the Grassroots?
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Relevance of the Case Study
CUTS-International with the support of Royal Norwegian Embassy, New
Delhi and Oxfam (The Netherlands) conducted a case study on the mango
economy of Malda.
Objectives of the Case Study:
 To understand whether NFTP has impacted (or not impacted) export of
Specific Products
 To explore the various channels through which benefits of International
Trade trickle down at the grassroot thereby affecting specific variables
like employment generation, women empowerment etc.
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Tools used for the Study
 Questionnaire Survey of the various stakeholders
 Focused Group Discussion with Growers, Exporters and Mango
Merchants and Processing Units (wherever applicable)
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Stakeholders interviewed for the study
 Government Officials
 Mango Growers
 Exporters
 Mango Merchants
 Aratdars
 Processing Units
 Daily Labourers working in the mango orchards
 Wooden Box Manufacturing Units
 Women Groups (wherever applicable)
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Stakeholder
Category
Their Role in the Mango-Economy
Number
Mango Exporters
Export mango to Other countries (though a majority of them
export mango to Bangladesh)
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Mango Merchants
(Mahajan)
This group of stakeholders invest their money in mango
cultivation which includes buying and selling of orchards. They
appoint Barials, who purchase/ sell orchards on behalf of the
mango merchants and also oversee the activities necessary to
maintain the orchards during the entire cultivation period. The
mango merchants share profit with barials on pre-specified
terms. These mango merchants may or may not have their own
marketing network. During the ripening season for mango, the
mango merchants sell the produce either to the local
wholesaler (aratdars) or to the exporters.
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Growers
Primary stakeholders who grow mango. They are different from
the barials in the sense that the barials are more like
contractors and share profit with the merchants. Growers on
the other hand invest their own fund, look after their own
orchards and finally sell the product themselves to the aratdars.
Growers also do not share their profit with any other group of
stakeholders.
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Stakeholder
Category
Their Role in the Mango-Economy
Labourers
This refers to the wage labourers working in the orchards. They
get their payment either daily or, weekly.
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Processing Units in the
Formal Sector
The processing units registered with the DoFPI&H or any other
government certifying agencies
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Processing units in the
Informal Sector
The unregistered units mainly engaged in selling mango slice
to the various registered Food Processing units for preparing
pickles
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Women
They prepare various mango products like Amshawtto, Amchur.
They also work in various fruit processing industries (locally
called SLICE FACTORIES, during May-August
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Packing Box
manufacturing unit
After the mango is plucked, it is packed in wooden boxes for
exporting to Bangladesh or other states of India. This is
necessary to prevent the fruits from perishing in the transit.
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Total
Number
110
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Approach to the Survey
Step-1
Interviewing the exporters and identify the major mango growing areas in the
district, the major export destinations, change in livelihood pattern of the
grassroots stakehodlers related to production of mango in the district and
involvement of women in the entire mango economy
Step-2
Interviewing the Mango Merchants and identify the major mango growing areas
in the district, their nature of contract with the growers, the barials and the wage
labourers, change in livelihood pattern of the grassroots stakeholders related to
production of mango in the district etc
Step-3
Interview the growers and the labourers to understand the nature of contract
between the merchants and the exporters
Step-4
Interview the processors and understand their role in the mango economy
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Major Findings of the Field Survey
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Interlinkage among various stakeholders in
the Mango Economy of Malda
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Growers
Aratdars
Rs10/Kg + 5%
(Commission of the
ARATDARS to be paid
by the growers) =
Rs10.50/Kg
Indian Markets
Rs10.50/Kg + 5%
(Commission of the
ARATDARS to be paid
by the Exporters) =
Rs11/Kg
Middleman / Traders
Indian Exporters
Rs11 + 2.5% (Exporter’s
Profit Percentage) +
Rs18/Kg (Import Duty) ≈
Rs30/Kg
Bangladesh Market
Importers in Bangladesh
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Mango
Merchants
Aratdars
Bariyal
Indian Markets
Bangladesh Market
Indian Exporters
Middleman / Traders
Importers in Bangladesh
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Reasons why the growers, mango merchants, and the exporters prefer
trading with Bangladesh
Perspective of Growers
Price of mango in Bangladesh is higher than in any other market in India. For
example, the same Fajli variety that sells for Rs10/Kg in Indian markets, will
fetch anything around Rs. 12-13/Kg when sold to a Bangladeshi importer
Bangladesh consumes almost sixty percent of the mango produced in Malda
Due to the geographical proximity of Malda and Bangladesh, chances of the
consignment getting perished due to transportation lags are less
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Reasons why the growers, mango merchants, and the
exporters prefer trading with Bangladesh
Perspective of the Mango Merchants
Due to long standing trading relation with a few mango importers in
Bangladesh
It is much cheaper to export to Bangladesh when compared to other
countries due to proximity, low transportation charges and loose or no
quality control specifications for mango,
They have limited knowledge about other export markets.
The mango merchants do not directly export. They send the
consignments to Bangladesh via the local exporters. Since most of
the exporters are keen to send the consignments to Bangladesh, the
mango merchants follow suit.
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Reasons why the growers, mango merchants, and the exporters prefer
trading with Bangladesh
Perspective of Exporters
• The exporters have long standing trade relationship with the importers in
Bangladesh
• Cost of transporting consignments of mango to Bangladesh is much less
than any other country
• Due to the proximity to Bangladesh the exporters can visit Bangladesh
frequently and can follow up with the importers. This helps in reducing the
default risk to a large extent
• Quantum of orders received from importers in Bangladesh is much higher
when compared to any other country
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Wooden Box
Manufacturing
Units
Various Unskilled /
Skilled jobs in the
mango Orchards &
packaging units
Different Types of Employment
Opportunities in a MangoEconomy
Women Preparing
Mango Products at
home
Men & Women*
working in the
Processing Units
(Formal / Informal)
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Beneficial Changes in the Mango-Economy
 Increase in the area and production of mango
 Improvement in the quality of mango orchards
 Increase in daily wage of the labourers
 Increased employment in supporting sectors
 Exporters are being able to access various government schemes better than
before
 Women are more involved in Mango-Economy than before
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Some Roadblocks to a better Mango–Economy
 Security of Payment
 Growers were not sure whether exporting mango to other countries will be
Profitable
 Lack of necessary export infrastructure in Malda
 Processing Units in the District suffer from infrastructural weaknesses
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Key Recommendations
Promoting mangoes from Malda as a brand in International Markets
Orientation to the local growers and exporters in the district to export to
countries apart from Bangladesh
Promoting formation of Growers’ cooperatives
Providing the necessary infrastructural support required for export
Strengthening the Processing Units in the District
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