FIRST EVALUATION OF THE NEW MARKETING SYSTEM IN THE CHITTAGONG DIVISION (SPECIAL EVALUATION OF 2/79)

Evaluation covers the period 12/1/78-2/1/79 and is based on the on-site observations of a specially contracted team. In general, the new marketing sysem (NMS) in the Chittagong Division is proceeding well. Fertilizer sales are up 5.5% over the same 2-month period last year, while the 15 newly created principal distribution points (PDP's) are handling 67.7% of the division's total fertilizer sales. By reducing warehousing, transportation, and other costs, the PDP's have enabled a drop in retail prices to a level much closer to official prices. Although fertilizer stocks are generally still not adequate to meet sales targets, the flow of fertilizer in the division has been improved through the transportation methods used by a new group of fertilizer wholesaler merchants. Other problems faced by NMS include inadequate fertilizer stocks in most districts, persistent transportation difficulties, and inadequate warehousing capacity. Recommendations are: (1) the warehouse construction program should be concentrated at PDP locations, especially those with acute storage inadequacies; (2) the awarding of transportation contracts should be re-evaluated and a uniform code of rates and qualifications should be developed; (3) PDP's should receive priority shipping status, and thana outlets whose sales drop 50% or more due to PDP business should be closed; (4) a dealer classification system should be developed in order to better estimate sales, identify warehousing needs, and bring farmers and dealers into close cooperation; (5) dealer training should be offered to encourage better understanding and management of the free market system; (6) NMS staffing pattern should be reorganized to reflect the high volume of PDP sales; (7) adequate stocks of fertilizer should be maintained; and (8) a cost evaluation of NMS should be made and dealers should be required to sell at or below official retail prices.