Title of the Proposal : Supply Chain Management and possible value creation process of locally

produced safe and completely organic mushroom seeds/spawns & fresh mushroom throughout the slum
area in Dhaka City./Inclusive market.

OUTLINE OF THE PROJECT

Introduction:

Bangladesh is one of the most populated countries of the world. The total population of Bangladesh is 142
million with a growth rate 1.43 per cent (BER, 2007). In a survey carried out by the United Nations, Dhaka is
identified as a mega city and it would be eighth populous city of the world. Dhaka is now experiencing a period
of cramped population growth and migrants are mainly responsible for this high growth rate. In 2007 the
population of Dhaka city is more than 10 million and a report expects it to swell 16 million by the year 2010
and 25 million by the year 2025 (Democracy Watch, 2002). Many people of urban areas are in search of jobs
and continue to live in a very unhealthy environment without proper shelter, drinking water and sewerage
facilities. Some of the slums are located near the waste dumping sites and many of them are near the railway
lines. Equally notable is the mental and psychosocial factors which divide between the poor and the not so poor,
ridden with misconceptions and a lack of understanding of what comprises poverty or vulnerability.
Development of income generation as well as entrepreneurship development in slum area can be a possible
solution to upgrade the vulnerable situation of people living in slum areas. Creation of entrepreneurs in
mushroom production and marketing will help to reduce poverty as well as improve protein deficiency of
people living in slum areas. Mushrooms are the only fruit or vegetable source of this critical vitamin. Like
humans, mushrooms produce vitamin D when in sunlight. Exposing them to high levels of ultraviolet B just
before going to market converts more of the plant sterol ergo sterol into the so-called sunshine vitamin. When it
comes to antioxidants the substances that help fight free radicals that are the result of oxidation in our body
Mushroom contains B vitamins that are vital for turning food (carbohydrates) into fuel (glucose), which the
body burns to produce energy. They also help the body metabolize fats and protein. An analysis of seven studies
published last year in Cancer Epidemiology, Biomarkers & Prevention showed that the higher the level of
selenium in, as measured in blood serum and toenails, the lower the risk of bladder cancer. And mushroom
contains selenium as well.

1. Identification of the problem and its significance:

The poor economic condition of most of the people in slum areas is also due to the unavailability of job
opportunities in the Dhaka city. Urban poverty in fact emerges as a complex phenomenon than rural poverty,
with aspects of environmental degradation, inadequate planning and management of urban resources,
unemployment, mismanaged investments in technology as well as insufficient mobilization of communities.
The common factors of these slums are poverty, poor-quality households, over-crowded, center of low–income
people, skilled and unskilled manpower, limited health care service and unhealthy environment, awkward social
structure, corruption etc. (Jaman, 1993). Entrepreneurship growth can be better solution to minimize the poverty
level which can help to improve their livelihood patterns.
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 2. Detailed research objectives:

The overall objective of the project is a slum area development program which will focuses on entrepreneurship
development, income generation as well as mushroom seeds/spawns & fresh mushroom production which
reduces poverty in slam area.
The specific objectives are –
 To examine the production cost and profit of mushroom growers.
 To identify the existing marketing systems of Mushroom growers
 To determine the marketing cost and margins of different levels of market actors in mushroom
marketing
 To identify factors that affects mushroom production and entrepreneurship development in slam area.

3. Review of works already performed or in progress at other institute in the country or elsewhere:

The Chinese mushroom has very old history. This mushroom has been used as food for human beings since Cho
dynasty about 3000 years ago in China. It was introduced in southeast Asian countries by overseas Chinese,
(Baker, 1934 and Benemertio, 1936), since then, its cultivation has been conducted in various countries outside
the China, like Philippines, (Clora, 1937; Go, 1959), Malaysia (Baker 1934; Sands 1935), Burma (Seth, 1944)
and Thailand (Jalavicharama, 1950;Hashioka, 1962) Bangladesh (Firoz, 1983). The history of the Chinese
mushroom cultivation is very old. As far as its artificial cultivation is concerned it is believed that, it was begun
in Nanhua temple of Chaohsi, Kwantung province in southern China, almost 200 years ago, (Chang, 1977).
Since the time being Mushroom has always played a valuable source of nutrition and medicinal value (Shekhor,
1986). Value chain analysis is the process of breaking a chain into its constituent parts in order to better
understand its structure and functioning (UNIDO, 2009). According to Trienekens (2011) value added may be
related among others to quality, costs, delivery times, delivery flexibility and innovativeness. Mushroom is good
source of vitamins B, C and D, including niacin, riboflavin, thiamine, folic acid, ascorbic acid and various
minerals including potassium, phosphorus, calcium, magnesium, iron and copper. They provide carbohydrates,
but are low in fat and fiber, and contain no starch. On a dry weight basis, mushroom is high in protein.
Mushroom proteins contain essential amino acids (Halpern, 2007). The most common types of mushroom in the
world markets were oyster, shiitake and button, while mycorrizal mushrooms were the most difficult to cultivate
(Jones and Buttolph, 2012). Marketing potential of dried oyster mushrooms is limited, though the taste becomes
stronger after drying. Prices fluctuate, following demand and supply (Oei, 1991). The income generated from
mushroom was 1.2 times income of wheat and 2.3 times income of rice. It was concluded that mushroom
cultivation was potential job for Bangladesh and for those countries where unemployment rate was high and
thus providing employment for all family member (Imtiaj and Rahman, 2008). Research result on economics of
mushroom conducted in Bangladesh shows that mushroom was found to be profitable and promising
agricultural enterprise which generates high income per household (Barmon et al., 2012).

4. Justification of the research proposal:

Slums mainly provide informal labor market, characterized by low wage, insecurity and uncertainty of working
hour. Almost all the newcomers to the city join the informal sectors. The main sectors are garment industry,
rickshaw pulling, street vending, construction works and small business. They are living in such houses where
ventilation, drinking water, electricity and sewerage facilities are absent and they create new problems like
unemployment, underemployment, high incidence of crime, proliferation of shanty towns, sub-standard
housing, transportation, pollution and service supply problems. Some government organizations and NGOs
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have been working for decades to improve the slum dwellers’ standard of living, but as a whole the results are
minimal. An attempt has been made to evaluate the factors influencing on the socioeconomic development of
slum dwellers must be identified as well as generating income through entrepreneurship can be helpful for
people living in slum areas. Bangladesh Bureau of Statistics (BBS) (2015) reported about 332,558 economically
active unemployed persons available in Dhaka city. The unemployment rate in Bangladesh; still rate of female
is higher than male. On one hand, since mushroom production was labor intensive business especially suitable
for females and disabled persons that provides employment opportunity. On the other hand, if there are
sustainable supply in terms of quantity and quality it will be one of the cash crops that fetch foreign currency for
the country. As a means of sustaining and accelerating mushroom firm and thereby promoting them in
Bangladesh there is a great need to study the reasons for poor development of mushroom sector and find ways
to overcome these constraints mushroom production, marketing and profitability. This study will help to
identify problems in different value chains stages from production to marketing, and also give suggestions for
probable solutions which in turn will improve the mushroom marketing in Bangladesh. So, it is expected that
the present study would be helpful to individual mushroom produce farmers, whole seller, processors, retailers,
policy makers, extension workers and researchers with a view to taking further plan for mushroom sector
development.

5. Methodology (in details):

Appropriate designing of a research is very important. The project will be made both on primary and secondary
data. I will select some slam areas in Dhaka city. Sample of the population will be chosen in such a way so that
it will be representative of the population. Equal size of the farmers will be selected for the present study and
two hundred and ten farmers will be selected for the present study. Total sample size of the traders will be 75
(25 wholesalers + 50 retailers). All samples will select purposively. Data collection will be done by direct
interviews with the farmers and traders. Two types of interview schedule will be prepared, one for farmers and
one for traders. At first draft interview schedule will be prepared. After pre-testing and necessary correction,
modification and adjustment, final interview schedules will be developed. Both primary and secondary data will
be used for the research. The main source of secondary data is the Bangladesh Bureau of Statistics. In addition
we will use the Yearbook of Agricultural Statistics of Bangladesh. When data collection will be finished, then
collected data will be checked carefully to detect errors and omissions. The data then transferred to excel sheet
from the survey schedules. Finally the tabulated data will be analyzed on the basis of the objectives.

Analytical technique
In our research the tabular technique will be used. The collected data will be tabulated, summarized and
analyzed according to the objectives of the study. Average profitability will be calculated for different farmer.
The cost of mushroom production will be calculated on cash cost basis. The total cost will be calculated by
adding fixed and variable cost.

Input cost includes manure, seed, insecticide, pesticide cost. We will calculate interest on operating capital by
the following way:
Interest on operating capital =
Operating capital × rate of interest × time considered (months)
100 × 12
We will consider per hectare rent for cultivating mushrooms. Here we consider land use cost as fixed cost.
We will use the following equation to estimate gross return
GR=∑QvPv
Where:
GR= Gross return from mushroom
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Qv= Quantity of the mushroom
Pv= Average price of the mushroom
To calculate the net return for the farmer, we will use the following equation for our research:
Net return or profit, п = Gross return-(variable cost+ fixed cost)
We will calculate cost and return for different types of intermediaries by using following formula:
a. Estimation of Marketing Margin:
We will use the following formula for calculating marketing margin:
MM = S – P
Where,
MM = Gross Marketing Margin
S = Sale price
P = Purchase price
b. Estimation of Net Margin:
The following formula will be used for calculating net margin:
Net Margin = Gross margin – Marketing cost
Marketing cost includes dalal's commission, market tolls, personal expenses, transportation cost, labor cost and
tips and donation.
Factor Analysis
Factor analysis is a multivariate statistical technique that addresses itself to the study of interrelationships
among a total set of observed variables. The technique allows looking at groups of variables that tend to be
correlated to one another and identify underlying dimensions that explain these correlations. While in multiple
regression model, one variable is explicitly considered as dependent variable and all the other variables as the
predictors; in factor analysis all the variables are considered as dependent variables simultaneously. In a sense,
each of the observed variables is considered as a dependent variable that is a function of some underlying,
latent, and hypothetical set of factors. Conversely, one can look at each factor as dependent variable that is a
function of the observed variables.

If {X1, X2, ----, Xn} be a set of n observed variables and {F1, F2, -----, F m} be a set of unobservable variables
then the factor analysis model can be expressed as
X 1  1  l11 F1  l12 F 2        l1m Fm   1
X 2   2  l 21 F1  l 22 F2        l 2 m Fm   2
 --------------- (2.1)

X n   n  l n1 F1  l n 2 F2        l nm Fm   m
where  i is mean of Xi,  i is error or specific factor. The coefficient l ij is the loading of i-th variable on the j-
th factor. In matrix notation the factor analysis model can be expressed as
X    LF   - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (2.2)
where Lnm is the matrix of factor loadings.

Several methods are available in literature to estimate factor loadings and factor scores. The study considers
m

principal component method to estimate the factor loadings and communalities [ hi   l ij ], a measure of the
2 2

j 1

variation of observed variables through factors. ‘Varimax’, factor rotation is adopted to find estimate of factor
loadings.

6. Goal of the project:

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The project is expected to find positive changes in the selected slam area after involving in the entrepreneurial
process. The project will help in reducing barriers of the mushroom growers and entrepreneurship development.
The present government emphasizes on development on slam areas as well as entrepreneurship development in
all nationwide plans and policies undertaken by various ministries, departments and agencies. It is now one of
the priority area s of GoB. Again the government encourages the entrepreneurship development to create more
employment opportunities which will contribute in the national economy as a whole. Mushroom cultivation and
marketing can create a greater opportunity for income generation of people living in slam areas.

7. References:

Acharya, S. S and Agarwal, N. L. (2004). Agricultural Marketing in India. New Dehli, Oxford and IBN
Publishing Co. Pvt. Ltd.

Alam, S. M. and Saboohi, R. (2007). Importance of Mushroom. www.Mush-World- com. htm.

Asian and Pacific Centre for Agricultural Engineering and Machinery (APCAEM), (2010). Training manual on
mushroom cultivation technology: China international science and technology convention centre.

Barmon, B.K., Sharmin, I., Abbasi, P.K. and Al-Mamun, (2012). Economics of mushroom (Agaricus bisporus)
production in a selected Upazila of Bangladesh. A scientific journal of krishi foundation. 10(2): 77-89

Bhupinder, K., and Ibitwar, B.B. (2007). Mushroom cultivation and processing. Department of Food Science
and Technology, Punjab Agricultural University.

Chakravarty, B., (2011). Trends in mushroom cultivation and breeding: Australian Journal of Agricultural
Engineering. 2(4): 102-109.

Imtiaj, A. and Rahman, S. A., (2008). Economic viability of mushroom cultivation to poverty reduction in
Bangladesh, An International Multidisciplinary Journal. 8(001): 93-99.

Islam, M.A. (2008). Motivation towards Mushroom Cultivation, Bangladesh Journal Training and
Development, 13(1-2):107-114.