Agricultural Research Management Information System

Home
Research Summary
Search
About Us
- ARMIS
- Brochure
Contact Us
Report
User Request
Data Input
Help
- Operation Manual
  - PDF
  - Video
- Program Area & Commodity
We have reached 37600 number of research entries at this moment.

- Logout

Research Detail

Home
Research
Detail

Impact of Agricultural Cash and Kind Subsidy System on the Rural Farm Economy of Bangladesh

Tanvir Mahmud Bin Hossain
Senior Scientific Officer
Agricultural Economics Division, BARI, Gazipur

M. A. Monayem Miah
Senior Scientific Officer
Agricultural Economics Division, BARI, Gazipur

Md. Sadique Rahman
Scientific Officer
Agricultural Economics Division, BARI, Gazipur

Sahadat Hossain
Chief Scientific Officer
Agricultural Economics Division, BARI, Gazipur

Abstract/ Executive Summary:

The study aims to evaluate and assess the cash and kind support system, which was provided to the Boro and Aus rice farmers of Bangladesh. As these two systems are very new in Bangladesh, so contribution of these supports in rice production economy and evaluation of these system to know the performance, acceptance, efficiency factors, reform options are very essential and timely. Aiming these issues this study has undertaken with some objectives which will provide very possibilities and constraints of the system and offer the possible options to improve these system. The study revealed that the average cash support Tk. 839 for diesel operated irrigation contributes 5% of irrigation cost and 1% of total cost in Boro rice production. The most important inefficient factors of the cash support system was late payment of money mentioned by 77% farmer and insufficient amount of money mentioned by 83% farmers. Based on the 66% of cash supported farmer’s outlook, cash support system was a very good efficient system. The BCR in rice production obtained by the cash supported farmer was 1.27 and unsupported farmer was 1.26. The returns to irrigation through cash support was Tk. 1936. To make it more efficient it needs to be ensured that it is given in proper time through increasing the amount of money and number of farmers need to be increase under this support. In the year 2011-12, the government provided kind support to the Aus rice producer through giving Urea 20 kg, TSP 10 kg., and MP 10 kg. It is revealed that, 79% of farmer’s experience on fertilizer support system indicated that this system offered a very good level of performance. The cost and return analysis exposed that government provided NPK fertilizer was valued at Tk 766. The value of fertilizer package was shared 16% of NPK cost, 15% of total fertilizer cost, 2.59% of total variable cash cost (WS-TVCC) and 1.47% of the Total cost (WS-TC). When the support was given the BCR (TVCC) was little higher (2.04) compare to the WS-BCR (TVCC) (1.98) achieved by the supported farmer if support would not be given. The rate of return to fertilizer was Tk. 7 and returns to supported fertilizer was Tk. 5329. To improve this system increase the amount of fertilizer, number of supporting farmer and improve farmer selection procedure to reducing biasness and unfairness is necessary. In comparison between cash support for irrigation and kind support for fertilizer, highest percentage of the sample farmer (74%) supported that direct fertilizer support was better than cash support.

Keywords: Rice Production, Cost and Return, Benefit Cost Ratio

Location: Sadar Upazila of Panchagarh, Satkhira, Habiganj and Hathazari upazila of Chiggatong district

Start Date: 01-07-2010

End Date: 30-06-2012

Program Area: Socio-economic and Policy

Non-commodity: Subsidy

Objectives:

i. Assessment of socio-economic profile of subsidised and non-subsidised farmer; ii. Evaluation of cash and kind subsidy programme performance from the farmer’s insight; iii. Estimation of contribution and impact of cash and kind subsidy on rice production economy and iv. Identification of policy reform options to improve the system and government support

Methodology:

The field survey of the study was conducted in the FY 2010-11 to evaluate the contribution of the cash subsidy in rice production (boro season) of the FY 2009-10 and in the FY 2011-12 to evaluate the impact of kind support to the Aus rice producer which was given in the FY 2011-12 Aus season. The study areas were selected purposively from the Boro and Aus rice growing areas of Bangladesh. For the cash subsidy evaluation the selected study areas were located in the sadar upazila of Panchagarh, Satkhira, Habiganj, and Hathazari upazila of Chittagong districts. For the kind subsidy system evaluation the selected study areas were Sadar upzila of Dinajpur, Rajshahi, Jessore, Mymensingh, Comilla and Potuakhali district. As the application of cash subsidy and kind subsidy were distributed country wide therefore four distant for cash subsidy and 6 for kind subsidy districts were selected to understand the wideness of the subsidy system in the country. 50 subsidised and 50 non-subsidised farmers were selected from each of the study area (extension block) of the respective upazila of each district. A total of 400 samples for cash subsidy evaluation and 600 samples for kind subsidy evaluation were selected through stratified random sampling procedure to achieve the objectives of this study. Two groups of farmers were chosen to compare perception of cash subsidy and other subsidy programme and comparative profitability between the subsidised and non-subsidised farmer of the study area. The selected non-subsidised (cash subsidy) farmers were also diesel irrigated farmer. As because electricity operated irrigation required less cost compare to diesel operated irrigation so taking non-subsidised farmer as control can be more effective in comparison analysis. The dependency ratio of the farmer was calculated by the ratio between the total family member and total number of earning member of the family. Rank order technique was followed to identify agricultural non-technical knowledge level of the farmer and the performance of cash subsidy system.

Source of Information:

Article Link (Online Journal):

Funding Source:

1. Bangladesh Agricultural Research Council

Budget: 300000

Total Budget (Tk.) : 300000

Achievement/Findings:

The most important inefficient factors of the cash support system was late payment of money mentioned by 77% farmer and insufficient amount of money mentioned by 83% farmers. Based on the 66% of cash supported farmer’s outlook, cash support system was a very good efficient system. The BCR in rice production obtained by the cash supported farmer was 1.27 and unsupported farmer was 1.26. The returns to irrigation through cash support was Tk. 1936. To make it more efficient it needs to be ensured that it is given in proper time through increasing the amount of money and number of farmers need to be increase under this support. In the year 2011-12, the government provided kind support to the Aus rice producer through giving Urea 20 kg, TSP 10 kg., and MP 10 kg. It is revealed that, 79% of farmer’s experience on fertilizer support system indicated that this system offered a very good level of performance. The cost and return analysis exposed that government provided NPK fertilizer was valued at Tk 766. The value of fertilizer package was shared 16% of NPK cost, 15% of total fertilizer cost, 2.59% of total variable cash cost (WS-TVCC) and 1.47% of the Total cost (WS-TC). When the support was given the BCR (TVCC) was little higher (2.04) compare to the WS-BCR (TVCC) (1.98) achieved by the supported farmer if support would not be given. The rate of return to fertilizer was Tk. 7 and returns to supported fertilizer was Tk. 5329. To improve this system increase the amount of fertilizer, number of supporting farmer and improve farmer selection procedure to reducing biasness and unfairness is necessary. In comparison between cash support for irrigation and kind support for fertilizer, highest percentage of the sample farmer (74%) supported that direct fertilizer support was better than cash support.

Knowledge Management: Report/Proceedings