AAPI Bulletin Vol 1, March 2011

AAPI NEWS BULLETIN Accelerating Agriculture Productivity Improvement (AAPI) Volume 1

A project supported by USAID in collaboration with DAE

Inside this issue:

Notes from Chief of Party, AAPI

About AAPI

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Guti Urea - the product and its use

3

Guti Urea is gradually moving!

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Profit from Adoption of Guti Urea

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AAPI News Bulletin is a monthly publication of the AAPI project.

Subscriptions are free.

IFDC is a public international organization based in Alabama, USA. IFDC focuses on increasing and sustaining food security and agri-cultural productivity in developing countries.

Managing Editor: Ishrat Jahan Project Coordinator, AAPI Design and Layout: Syed Afzal Hossain Data Management Unit, AAPI

Welcome to the first issue of the AAPI News Bulletin. This is a monthly bulletin for all AAPI Partners, Beneficiaries and Stakeholders. In each Bulletin you will find technical, business and market information intended to inform farmers, entrepreneurs, the fertilizer industry and the Guti urea market. You will also find news of AAPI activities that integrates the judicious use of balanced fertilizer, good seed and better water management.

In this issue, we have provided information about AAPI as a project, Guti urea and the current state of the Guti urea market.

The highlight for this month was the Project Launching Ceremony and we were fortunate to have the event hosted by the Nalitabari Upazila Parishad in Sherpur District. The Honorable Minister of Agriculture, Mrs. Matia Chowdhury and the U.S. Ambassador, Mr. James F. Moriarty formally launched the AAPI project on March 5, 2011. Other dignitaries attending the event were Ministry of Agriculture Secretary, Mr. C.Q.K. Mustaq Ahmed; USAID Deputy Mission Director, Mr. Dennis Sharma; Acting Director General of the Department of Agricultural

March 30, 2011

Extension (DAE), Mr. Dulal Chandra Sarker; and Deputy Commissioner of Sherpur, Mr. Md. Nasiruzzaman, who Chaired the Launching Ceremony.

Honorable Minister of Agriculture, Mrs. Matia Chowdhury and the U.S. Ambassador, Mr. James F. Moriarty and other distinguished at the AAPI Launching Ceremony

As the implementing Agency, IFDC was led by its President and CEO, Dr. Amit Roy and the Director of its Eurasia Division, Mr. John H. Allgood. Ms. Ishrat Jahan, Resident R epresent at i ve for IFDC i n Bangladesh and Project Coordinator and Mr. Grahame D. Hunter, Chief of Party led the AAPI staff who organized the event. I would like to acknowledge the support and assistance provided by the project Agreement Officer’s Technical R epresent at i ve (AOTR ), M r.

Aniruddha Hom Roy and his team from USAID. The whole day turned out to be a great success and is a credit to all concerned. ***

The views expressed in this bulletin do not necessarily reflect views of the United States Agency for International Development or the United States Government

AAPI NEWS BULLETIN AAPI News Bulletin Contact Persons: Ishrat Jahan Grahame D. Hunter Address: Dhaka Office: Road No. 62, House No. 4B, Apt-B2 Gulshan - 2, Dhaka -1212 Bangladesh Tel: 880-2-8817617 Fax: 880-2-8826109 Website: www.ifdc.org Barisal Office: ―Zohora‖ 834 (New) Police Line Road Barisal Tel: 0431-2176566 AAPI Management: Ishrat Jahan, Project Coordinator; Grahame D. Hunter, Chief of Party; Md. Mofizul Islam, Sr. Agriculture Specialist; Md. Mozammel Haq, Agriculture Specialist; Dr. Shaharuk Ahmed Agriculture Specialist; Mahmood Hussain, Training Specialist; Abul Hossain Mollah, Training Specialist, Dr. Md. Abdul Mazid Mia, Soil Scientist; Mainul Ahsan, Soil Scientist; Md. Nurul Islam, Market/Business Dev. Specialist; Ram Proshad Ghosh, Mechanical Engineer; Rubina Islam, Gender Specialist; Syed Afzal Mahmood Hossain, Senior Data Management Specialist; AFM Saleh Chowdhury, Chief Accountant; Bishnu Rup Chowdhury, Administration and Procurement Officer

Volume 1 About AAPI Improving food security and accelerating income growth in rural areas by increasing agricultural productivity on a sustainable basis.

The Accelerating Agricultural Productivity Improvement (AAPI) is a five-year project funded by the American people through the U.S. Agency for International Development (USAID). It is designed to strengthen and re-orient agricultural production systems in Bangladesh. It commenced on 29th September 2010 and is being implemented by the International Fertilizer Development Center (IFDC). The Bangladesh Ministry of Agriculture and the DAE are the main collaborators of the project, playing key roles in disseminating information through field demonstrations and farmer education. The AAPI also collaborates with Bangladesh Chemical Industries Corporation (BCIC), Bangladesh Rice Research Institute (BRRI), Bangladesh Agricultural Research Council (BARC) and Bangladesh Agricultural Development Corporation (BADC) as well as Bangladesh Fertilizer Association (BFA) and private enterprise, donor assist ed proj ects and Non Government Organization (NGOs).

The project will promote efficiency of agricultural inputs through an integrated approach. It will promote use of good quality seed, judicious application of balanced fertilizer and better water management practices.

Emphasis is on improving farmer access to and use of fertilizer deep placement (FDP) technology to improve crop yields and economic returns to farmers. In addition, AAPI will support capacity building, policy reform, and micro-enterprise development that are crucial to sustai nabilit y of agri culture production systems.

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AAPI is located in the Districts of Southern Bangladesh: Bagerhat, Barisal, Borguna, Gopalganj, Jhalokati, Madaripur, Patuakhali, Pirojpur, and Shariatpur along with Mymensingh and Sherpur in the northeast. In its first year, it is being implemented in 68 Upazilas in these 11 Districts.

An estimated 3.5 million farmers will benefit from AAPI and 1,800 private entrepreneur supply points will be established to afford farmer access to FDP products. These will provide the product to cover 1.8 million ha of rice land across three seasons in a year, Boro, Aus and Aman. The estimated saving to the Government of Bangladesh due to improved nutrient use efficiency is $84 million. The expected value of the incremental yield of 3.3 million tones is $1.1 billion.

The AAPI activities are designed to achieve these results by increasing farmer demand for FDP technology, supporting balanced fertilizer and increase water use efficiency, use and development of capacity to achieve sustainability in market development and soil fertility management improvement. ***

AAPI NEWS BULLETIN

Volume 1

Guti Urea — The Product and its Use Guti urea is a modified urea fertilizer product. It contains 46% nitrogen. That is the same nitrogen content contained in conventional urea fertilizer.

The only difference between Guti urea and conventional urea fertilizer is the particle size.

The particle size for Guti urea varies depending upon the rice crop under cultivation.

Guti urea ranges in size from 1.8 grams (g) to 2.7 g in weight. Guti urea was developed specifically for deep placement in rice production. One Guti urea particle contains enough nitrogen needed for four hills of rice plants. It is sized to reduce the labor requirement for application. Each Guti urea briquette is inserted 7–10 cm below the soil surface, near the root zone.

A Briquette Machine

The manufacture of the Guti urea is a simple process that involves a limited number of moving parts, driven by either a diesel or electric powered motor. The motor size may vary from 7.5 horsepower (450 kg/hour) up to 20 horsepower (1,000 kg/hour) depending upon the size and capability of the Guti urea machine.

The production/briquetting capacity of the machines is in the range of 250–1,000 kg/hour; most of the machines have the capacity to produce 450 kg/hour.

For best results, the Guti urea should be applied within 7 days following seedling transplantation.

The application of Guti urea through deep placement reduces nitrogen losses. And, yield increases from 20% to 25% can be attained due to efficient uptake of nitrogen by the crop. This phenomenon represents a clear ―win:win‖ situation for farmers — higher yields and lower N fertilizer use.

The Guti urea briquette machine and the manufacturing process are briefly described as follows:

The Manufacturing Process Manufacture of Guti urea is done by compaction.

Standard sized urea prills or small granules are compacted under pressure in a mold to form the large Guti urea particles. The process, in simple terms, is the physical transformation of conventional urea fertilizer. There is no chemical interaction and no additives are incorporated to change the chemical composition of the urea fertilizer. Guti urea and conventional urea both contain 46% N. Currently, all Guti urea manufacture is done by small-scale equipment. The Guti machine is a stand-alone unit, weighing from 300 to 460 kg.

The weight of one high-capacity machine producing 1,000 kg/hour is about 700 kg. The photograph here is of an actual Guti urea briquette machine. It is shown as a complete unit.

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The small metal frame for housing a small hopper, mounted at the top of the unit, allows for gravity flow of the standard urea.

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At the base of the hopper is an opening to allow the urea to freely flow to a pair of feed rollers to push to the compaction rollers, designed with a concave mold that compacts the urea under pressure.

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The rollers discharge the Guti urea into a small cone-shaped trammel that channels/ further discharges the Guti urea to a pan or bucket.

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The Guti urea is then placed in the same 50‑kg sack of urea for the farmer to take to the field for application. ***

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AAPI NEWS BULLETIN

Volume 1 service providers in order to develop small-scale agribusiness. A total of 292 urea briquette machines have been made operational in the project area during Boro 2011. All these producers produced 28,446 MT of Guti urea during this season. *** Profits from Adoption of Guti Urea

Guti Urea is Gradually Moving!

The FDP is finding its way with the implementation of the AAPI project. The Boro 2011 farmers have used Guti urea in more than 170,000 hectare of land in the 68 Upazilas of Bangladesh. The total Boro HYV area in these 68 Upazilas is more than 600,000 hectare. AAPI has been able to bring more than 28% of the Boro HYV/hybrid lands under Guti urea in the first season of its implementation. According to a DAE estimate, about 600,000 hectares of land has been brought under FDP technology during Boro 2011 throughout the country.

The AAPI project continually monitors the costs and returns for small businesses and farmers involved in the production, sale, purchase and application of Guti urea using simple analyses.

Compared with prilled urea, both the small business and the farmer will increase their profit margin. The table shows that if a small business sells prilled urea to a farmer who uses 260kg/ha, the profit for that sale will be Tk. 312 per hectare.

However, if the business sells Guti urea to a farmer who uses 170kg/ha as recommended by AAPI, the profit will be between Tk. 287 to Tk. 413, depending on the selling price of Guti urea.

Most businesses sell Guti urea at Tk13.50-14.00/ kg. At such a price it is more profitable to sell Guti urea than prilled urea.

Supply Network of Guti Urea There is no established national network of FDP product suppliers. One of the critical lessons learned in disseminating FDP technology is the importance of building up a reliable supply chain so that farmers have access to briquettes at an affordable price. AAPI is (a) providing technical and marketing assistance to potential buyers to ensure successful operation and marketing of Guti urea by small scale enterprises and (b) promoting supply chain in general and to specifically create synergy among the service providers involved in Guti urea production. The supply chain approach for disseminating FDP technology is provided in Figure 1.

Farmer

Fertilizer dealer (retailer)

Selling Cost Profit Required Profit Price Tk/Kg Tk/Kg Application Tk/ha Tk/Kg Kg/ha

Types of Business PU buying and selling GU urea production and selling GU urea production and selling GU urea production and selling

• training • on-farm demos/trials • farmer-to-farmer • costs/benefits • marketing • seasonality • other potential crops

12.00

10.80

1.20

260

312

13.25

11.57

1.68

170

287

13.50

11.57

1.93

170

328

14.00

11.57

2.43

170

413

PU = Prilled Urea; GU = Guti Urea Machine manufacturer

Briquette producer

• machine price • machine capacity • machine quality • specialty product • marketing

Urea source

• machine price/capacity • machine maintenance • marketing • seasonality • other potential crops

From the farmer’s point of view, there are savings on urea costs of between Tk. 740-867/ha depending on the price of Guti urea.

Required Purchase Total Required Purchase Applica- price of Cost of Applica- price of tion of PU PU tion of GU PU Tk/Kg Tk/ha GU Tk/Kg Kg/ha kg/ha 260 12.00 3,120 170 13.25

• domestic or imported • price • transport cost • quality

Figure 1: The supply chain approach for disseminating FDP technology under AAPI

It is a welcome approach as it clearly recognizes the need for providing technical and marketing assistance as well as creating synergy among

Urea cost Saving Tk/ha

2,253

867

260

12.00

3,120

170

13.50

2,295

825

260

12.00

3,120

170

14.00

2,380

740

PU = Prilled Urea; GU = Guti Urea

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Total Cost of GU Tk/ha