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Business Rationale for Investment on Closed Drum Thresher in Bamgladesh

Swapan Kumar Roy
Markets & Livelihoods Program, Practical Action-Bangladesh, Dhanmondi, Dhaka, Bangladesh.

Abdur Rob
Markets & Livelihoods Program, Practical Action-Bangladesh, Dhanmondi, Dhaka, Bangladesh.

Mike Albu
Markets & Livelihoods Program, Practical Action-U.K.

Shahjahan Ali Pramanik
Markets & Livelihoods Program, Practical Action-Bangladesh, Dhanmondi, Dhaka, Bangladesh.

Abstract/ Executive Summary:

A study was carried out to investigate the investment of a selected agro-machinery i.e. power operated Closed Drum Thresher in the course of mechanization of Bangladesh to overcome the expensive limited labour during rice threshing season. A power operated Closed Drum Thresher is used to remove rice grains from plant-panicle by means of shearing force while harvested paddy plants move axially over a rotating central spike-drum inside a closed metal structure. The analysis considers different models of Closed Drum Thresher as well as inter-regional differences in agro-economic factors that influence the business rationale for investment. Closed Drum Threshers look like a wise investment, compared to manual pedal-threshers to wealthier farmers who cultivate at least 5-10 acres land annually (assuming at least two crops per year). Capital cost is modest (upto Tk³ 30000) and can be recouped in a short period. Therefore, power operated Closed Drum Thresher is able to overcome the shortage of labour during peak harvesting season.

Keywords: Closed Drum Thresher, Business rationale, Inter-regional wage rate, Pedal thresher, Break-even area.

Location: Bogra, Comilla, Dinajpur, Kushtia, Mymensingh and Sylhet.

Start Date: 01-07-2006

End Date: 31-12-2006

Program Area: Socio-economic and Policy

Non-commodity: Analysis and interpretations

Objectives:

To investigate the investment of a selected agro-machinery, i.e., power operated closed drum thresher in the course of mechanization of Bangladesh to over-come the expencived limited labour during rice threshing season.

Methodology:

The field survey was done to collect information on Closed Drum Thresher from farmers and different stakeholders in selected regions of Bangladesh. For this purpose, we developed a questionnaire for farmers to collect the information on types and models, advantageous locations, incurred capital cost, running costs items, expected economic life, usage operating hours and acres, cost savings in terms of labours and other factors. To find the farmers who are using the Closed Drum Thresher, we communicated with agro-machinery manufacturers, repairing workshops, local farmers, research organizations and Department of Agricultural Extension (DAE) in the selected regions. After understanding the locations of farmers, we moved to farmer’s house in rural to get their views/data on agro-machine according to the questionnaire. Regarding selection of regions, we consulted regional research organizations, the Department of Agricultural Extension, local private institutions and literature about current usage patterns of Closed Drum Thresher (BBS, 1999; BRRI, 1997; Hatch, 2005; ITDG, 2003). Initially, we selected eight regions for the field work which cover almost all the typical crops and agricultural practices used in Bangladesh. During field survey, we found 18 users of Closed Drum Thresher among which 1, 3, 3, 3, 5 and 3 interviewers were found in Bogra, Comilla, Dinajpur, Kushtia, Mymensingh and Sylhet, respectively. This study examines variations in capital cost and performance characteristics (C) by comparing different types of agro-machinery. It tooks at variations in substituted costs (L) by considering inter-regional differences in rural wage rates. And it the examines scale of production (S) or capacity utilization, i.e. the annual acreages of crop that is covered by the agro-machinery. The exact difference in results depends on the interest rate and period of depreciation. However, for the calculations in this study, reducing the “simple” result by 20% gives a result that is more than sufficiently accurate for our purposes (within one or two percent of an IRR calculation).

Source of Information: SAARC JOURNAL OF AGRICULTURE, Vol. 5, Issue 1, 2007, pp. 11-21, ISSN 1682-8348, SAARC Agricultural Information Centre.

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

This study set out to analyze the business rationale for small holder investment in specific type of the agro-machinery in Bangladesh, the Closed Drum Thresher. The analysis considers both different types and models of agro-machinery and inter-regional differences in agro-economic factors that influence the business rationale for investment. Closed Drum Thresher is a good investment for farmers cultivating at least 5-10 acres land annually (assuming at least two crops per year). This and the capital cost (up to Tk. 30000) makes it an opportunity for a small minority of wealthier farmers only. However, the technology is well-suited for promotion as a rental service provider and a viable scale of operation for this is very achievable (e.g. 60-100 hours a year Tk. 200 per hour).

Knowledge Management: Journal