BANGLADESH - FERTILIZER DISTRIBUTION IMPROVEMENT I

AID ASSISTANCE FOCUSES UPON: INCREASING IN-COUNTRY SUPPLIES OF FERTILIZER; UPGRADING THE BADC"S FACILITIES FOR STORING FERTIL; AND IMPROVING THE OPERATNS & MGMT OF THE FERTIL DISTRIB SYSTEM. PROJ COMPLEMENTS A MAJOR GOB/MULTI-DONOR EFFORT TO INCREASE THE PRODUCTIVITY & FARM INCOME OF SMALL RICE FARMERS. DURING PROJ PERIOD,GRANT WILL FUND THE PURCHASE OF BETWEEN 1.1 AND 1.5 MILLION TONS OF IMPORTED FERTIL. THIS AMOUNTS TO 37-49% OF THE TOTAL AMOUNT IMPORTED AND UTILIZED IN THE DISTRIB PROGRAM. AID ASSISTANCE WILL ALSO COVER 80% OF THE COSTS FOR THE CONSTRUCTION OF BAGGED STORAGE FACILS AT 50 DESIGNATED BADC DISTRIB SITES AND THE CONSTRCTN OF BULK HANDLING & BAGGING FACILS AT THE 2 MAJOR PORTS OF CHITTAGONG & CHALUA. GOB WILL DEFRAY THE REMAINDER OF THE CONSTRCTN COSTS AND WILL PROVIDE THE NECESSARY ACCESS INFRASTRUCTURE & MAINTENANCE FOR THESE FACILS. AS A CONDITION TO THE FULL DISBURSEMENT OF THE GRANT,THE GOB WILL ALSO BE REQUIRED TO FINANCE A STUDY TO DETERMINE THE OPTIMAL MEANS FOR REHABILITATING THE BULK STORAGE FACILS OF THE UREA FACTORIES AT FENCHUGANJ & GHORASAL. A CONSULTANT WILL BE CONTRACTED TO PROVIDE 3 SPECIALISTS IN MARKETING-A TEAM LEADER,TRAINING EXPERT,AND DISTRIB EXPERT-TO ASSIST THE BADC WITH REFORM OF THE DISTRIB SYS. THE TEAM LEADER(A GENERAL MKTG SPEC) WILL PROVIDE PRIVATE FERTIL DEALERS & BADC CNTRPRTS WITH ASSISTANCE IN SALES PROMO & ADVERTISING,CREDIT,FINANCE,PRICING,MKTG ANALYSIS,AND SALES FORECASTING. TRNG EXPERT WILL DEVELOP & CONDUCT TRNG PROGS FOR NON-PUBLIC WHOLESALERS & DEALERS IN ALL ELEMENTS OF MKTG. THIS SPEC WILL ALSO TRAIN BADC TRAINERS TO CONTINUE THESE ACTIVITIES AND WILL ASSIST THE BADC WITH GATHERING MATLS FOR A REFERENCE CNTR. DISTRIB EXPERT WILL ADVISE WHOLESALERS & DEALERS ON WAREHSNG,STOCK LVLS & INVNTRY CONTROL,TRANSPRTATN,FIELD SUPRVSN,AND COLLCTN & ANALYSIS OF WAREHSE & MOVEMENT COST INFO. SHRT-TRM SPECS WILL BACKSTOP THESE ACTIVITIES. PROJ GOALS:UNRESTRICTED FERTIL PRICING,PRIVATE CONTROL OF DISTRIB WAREHSES & EFFICIENT FERTIL SUPPLY. Project Paper amendment of 8/81 extends project 3 years to 7/28/85. To increase fertilizer supplies, the project will provide a portion of the country"s phosphate needs (75,000 MT"s in FY"s 1981/82 and 1982/83) and build rail sidings for ships at 14 existing fertilizer warehouses as well as new warehouses with a combined capacity of 120,000 MT"s (bringing total capacity of project-funded warehouses to 282,000 MT"s). TA will help the BADC - which will eliminate controlled retail prices and set prices for fertilizer dealers - improve the efficiency of public distribution. To promote private sector fertilizer marketing, dealers will be provided with incentives, training, and credit. The project will provide farmers - through the private dealer network - with bank credit for the purchase of fertilizer and with increased information on fertilizer use. It will also introduce 4,000 MT"s of secondary and micronutrient (zinc and sulphur) fertilizers. (PD-AAI-158)