Illegal debt networks spread from Dhaka to the sea

Though the practice of dadon (traditional lending with high interest) in Bangladesh goes back to the British era, it is socially contemptible and illegal under the laws of the land.

The practice of dadon began during the British rule to control the indigo farmers. The East India Company introduced this practice as a trade of interest. The company abolished and reintroduced these practices several times.

According to a law of 2006, the practice of such transactions is illegal without a license and permission.

A Prothom Alo investigation found bigger commission agents, also known as aratdars or mohajons (wholesaler), from Dhaka and other big cities provide loans to their suppliers. They get protection as the existing law is not enforced.

The Micro Credit Regulatory Authority Act, which was enacted in 2006, states no microcredit organisation shall run any microcredit programme without a certificate issued by the Micro Credit Regulatory Authority.

Running a microcredit programme without a certificate will constitute an offence under section 35 of the Act, and any person found guilty for any offence shall be punished with imprisonment not exceeding 1 (one) year, or with fine not exceeding Taka 5 (five) lac or with both.

Senior lawyer Ahsanul Karim told Prothom Alo, “For hilsa catching, traders are providing dadon to each other on the condition of selling the fish only to the credit suppliers on top of providing commissions, and that means they are taking advantages by lending money. This is a violation of the law, and the process of the transaction (dadon) is becoming illegal as per the law.”

Supreme Court lawyer Shihab Uddin Khan said the syndicate of businesspersons control the market by providing dadon before the season, destroying the competitive market.

From this point of view, the Competition Commission can also take action against dadon providers under the competition law, he added.

Prothom Alo contacted three officials of the Micro Credit Regulatory Authority. Wishing anonymity, one of them said, “Nothing has clearly been mentioned on the practice of dadon in the Micro Credit Regulatory Authority Act. So, no step has been taken on it.”

The official declined to speak further on this matter.

All kinds of fish (live and dried) are included as agricultural products in the schedule of the Agricultural Marketing Act 2018. Section 4(h) of the act states, “The functions of the Department of Agricultural Marketing shall be as follows, namely: monitoring the activities relating to storing or warehousing of agricultural produce and agricultural materials,” and section 4(i) states, “determination and implementation of the lowest and reasonable price of agricultural produce.”

Director general of the Department of Agricultural Marketing Md Masud Karim told Prothom Alo, “We have formed a committee under this act to determine a reasonable price of hilsa and the committee will fix the price soon.”

Replying to a query on why the price had not been fixed in the past, he said, “I do not know why it was not done in the past but I have started working after taking the charge.”

Section 15 of The Competition Act 2012 states, “No person shall, directly or indirectly, enter into any agreement or collusion, in respect of production, supply, distribution, storage or acquisition of any goods or services which causes or is likely to cause an adverse effect on competition or creates monopoly or oligopoly in the market.”

The Competition Commission can take action against anyone or any entity violating the law.

Competition Commission secretary Mahbubur Rahman Khan admitted that the control of hilsa market through providing dadon by traders in five steps is a violation of the Competition Act.

He told Prothom Alo, “No measure was taken in the current hilsa season. If anyone complains or any media reports on it, action will be taken.”

Prothom Alo tried to reach the acting chairperson of the Competition Commission Salma Akhter Jahan over mobile phone to know whether any step has been taken so far. She neither received the call nor replied to SMS.

The Consumers’ Right Protection Act 2009 has provisions for displaying the product price list. Section 35 of the Act states, “If any person violates any obligation, imposed by any Act or rules, of displaying the price-list of goods by affixing it at a conspicuous place of his shop or organization, he/she shall be punished with imprisonment for a term not exceeding 1 (one) year, or with fine not exceeding Taka 50 (fifty) thousands, or with both.”

However, an analysis of this year’s activities of the Directorate of National Consumers' Right Protection showed a single operation has been conducted on the customers’ hilsa consumption rights in the capital so far.

Assistant director of the Directorate Abdul Jabbar Mandal raided wholesale fish markets in the capital’s Jattrabari and Karwan Bazar on 25 September, as well as fined five traders Tk 42,000 in Karwan Bazar for failing to provide the receipts of purchase and sales of hilsa and information of purchase and sale prices.

However, the deputy director of the Directorate’s Dhaka divisional office, Bikash Chandra Das opined such raids are not a solution. He told Prothom Alo, “If the product price is determined beforehand, we can act directly, but goods prices like hilsa do not remain fixed.”

Department of Fisheries additional director general Md Abdur Rauf told Prothom Alo the Department does not have detailed knowledge on the hilsa dadon ring, that is why no step was taken on this matter. Once they learn details they would discuss the matter at the department and take action, he added.

It was 12:00 pm on 1 October. Several fish aratdars (wholesalers) were closing their tally at a small room on the first floor of DIT market No 1 in Karwan Bazar after their daily trade. When this correspondent started looking for an aratdar who is involved in hilsa trade, everyone said the name of Mohmmad Zakir, who became familiar as a big hilsa aratdar in Karwan Bazar in this season.

Mohmmad Zakir agreed to speak after several attempts. He told Prothom Alo, “Currently, the market of hilsa is very bad. I am not even finding any peace in this business. I sold more hilsa from Cox’s Bazar this year. Fish come from Cox’s Bazar, Kuakata and Borguna, but this year less fish are coming, and those are mostly from Mohipur of Kalapra in Patuakhali.”

According to the data from Karwan Bazar Fish Traders’ Association, there are 500 fish aratdars in Karwan Bazar. Less than 50 of them control the hilsa market and they are the big aratdar or mohajon like Mohammad Zakir. If fish traders want to purchase hilsa, they must take it from these 50 aratdars.

The aratdars provide a handsome amount of credit or dadon to local wholesalers and aratdars several months before the season to control the hilsa market. Sometime they even provide dadon several years ago. The aratdars control the market as much as they can provide credit.

This have been learned after talking to two arat (warehouse) leaders, four aratdars, and several retail traders and warehouse employees in several phases. All of them summarised that the aratdars from Dhaka and other major cities are the main stakeholders of the dadon involving hilsa fish.

Their money reaches the fishermen after changing hands four to five times. Mohammad Zakir is such an aratdar. He gave Tk 1.4-1.5 million in dadon despite knowing hilsa market might worsen this season, and now his total amount of dadon toped Tk 10 million over the past couple of years.

Mohammad Zakir told Prothom Alo, “I have provided dadon (credit) in Bhola, Monpura, Cox’s Bazar and Borguna. This money is not given in a single season. The borrowers have the money over several years. Every year, more dadon was provided on the previous dadon.”

Jatrabari Fish Arat (warehouse) general secretary Humayun Kabir Bhuiyan told Prothom Alo, “Aratdar give millions of money in dadon because if they do not invest capital beforehand, local aratdar or wholesale traders do not supply fish during the season.”

There are about 2,000 aratdars in Jatrabari and about 100 mohajons control the hilsa market, according to him.

People involved in arats also said hilsa was sold through bargain at warehouses in several markets of Dhaka. Aratdars also receive a commission of 3-10 per cent at some markets after the sale, but it was shown no more than 4 per cent on paper.

Besides, Tk 10 per kg hilsa is kept as koyal (employee salary, warehouse rent and other costs), and this is added to hilsa prices.

Karwan Bazar Fish Traders’ Association advisory council president Nasrul Alam opined there is no legal base for dadon, yet it has been practised for long. He told Prothom Alo, “Fish traders not only provide dadon in hisla also in other fish sectors in a similar fashion. Nobody raised questions on dadon ever.”

It has been learned after talking to them that big aratdar or mahajons lent Tk 5 million to 500 million in dadon and many of them admitted to taking bank loans as the source of money.

There are at least 10 fish warehouses and markets in Dhaka with the largest one in Jatrabari. This correspondent visited the Jatrabari area in the morning on 2 October. Fish markets opened on both sides of the highway starting from the entry point of the flyover. Hilsa was sold in the middle of the east side of the market. Hilsa weighing 1.25-1.5 kg was being sold for Tk 1,600-1,800 per kg, hilsa weighing more or less 1 kg for Tk 1,300-1,400 per kg, Hilsa weighing below 800-900 grams for Tk 1,000 per kg and hilsa weighing below 500 grams was being sold for Tk 400-500 per kg.

Pradip Roy is a retail fish trader from Zia Soroni in the Shonir Akhra area. He was seen purchasing 40 kg of hilsa from the Jatrabari fish market. He bought 10 kg of hilsa weighing 1.25-1.5 kg apiece at a price of Tk 1,750 per kg; 10 kg of hilsa weighing 1 kg per piece at a price of Tk 1,450; 10 kg of hilsa weighing 800 grams per piece at a price of Tk 1,200 per kg.

The correspondent followed Prodip Roy to his shop on Zia Soroni later. No customer was seen purchasing fish from 11:00 am to 1:00 pm. Traders said the hilsa customers might come after the evening. At last, this correspondent went to purchase hilsa in the guise of a customer and Prodip Roy’s assistant Mohammad Harun helped him. Mohammad Harun said the fixed price of a hilsa weighing 1.5 kg will be at Tk 2,000 per kg; a hilsa weighing 1.25 kg will be at Tk 1,800 per kg and the fixed price of a hilsa weighing 1 kg will be at Tk 1,600 per kg.

Though the government fixed the export price of hilsa at USD 10 (approximately Tk 1,200) per kg, hilsa is being exported to India at a higher price than in Bangladesh, according to the top leaders of the Karwan Bazar Fish Traders’ Association. Traders said hilsa is being exported for USD 15-20 or approximately Tk 1,800-2,400 per kg.

Replying to a query on USD 10 price per kg by the government, a leading trader from Karwan Bazar said on condition of anonymity, “Those who are exporting fish to India communicate directly to Indian traders, and they are purchasing and selling fish through negotiation, but price is showing USD 10 on papers, and these transactions are not being monitored by the government either.”

Supreme Court lawyer Shiab Uddin Khan said the Department of Agriculture Marketing can fix a rational price of hilsa under the Agricultural Marketing Act. Since hilsa is produced naturally, there is no cost in manufacturing; so this price can be set considering the cost of the collection or extraction of hilsa, he added.

Former chief scientific officer of Bangladesh Fisheries Research Institute and hilsa researcher Anisur Rahman said fishermen must be freed from the networks of dadon above everything. He told Prothom Alo, “Hilsa, in fact, has been caught in a strong chain through this dadon process. It is necessary to conduct research on dadon syndicates and these dadons syndicates must be busted.”

If fishermen can be brought out of this situation, it is possible to abolish this practice, Anisur Rahman opined adding, if necessary, fishermen must be rescued and provided grants and loans with low interests. Since fishermen are poor, dadon providers take advantage of it. If fishermen could manage livelihoods to run their families, they would not fall into this trap, he added.

*This is the last part of a three-part investigation series on hilsa.

*This report appeared in the print and online editions of Prothom Alo and has been rewritten in English by Hasanul Banna