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Profitability and Comparative Advantage of Selected Secondary Crops in Bangladesh

Jahangir Alam
Agricultural Economics and Rural Sociology Division, Bangladesh Agricultural Research Council, Farmgate, Dhaka-1215, Bangladesh.

Abstract/ Executive Summary:

The study was undertaken to examine the profitability, economic incentive and comparative advantage of producing some selected secondary crops in Bangladesh. It revealed that coarse grains, pulses, potato and sweet potato have high potentials in domestic production for export promotion and import substitution. The economic and financial returns for these crops are high and they use lesser inputs per unit of land than the major crops. The domestic market for these crops is not protected and the country has comparative advantage in producing these crops. Results of the study imply that Bangladesh should go for a greater degree of crop diversification through promotion of secondary crops.

Keywords: Profitability, Comparative advantages, Economic incentive, Crops,

Location: Manikgonj, Lalmonirhat, Kurigram, Nilphamari, Jessore, Jhenaidah, Rajshahi, Munshiganj, Noakhali and Jamalpur

Start Date: 01-09-2003

End Date: 31-12-2003

Program Area: Socio-economic and Policy

Non-commodity: Profitability

Objectives:

To examine the profitability, economic incentives and comparative advantage of growing some selected secondary crops in Bangladesh.

Methodology:

This study generated field data on the yield rate, profitability, economic incentive and comparative advantage indicators of CGPRT crops. Detailed cost of production, processing and marketing were worked out for each crop separately. Returns from products and by-products were calculated at farmgate price. Financial and economic profitability, nominal and effective protection, and domestic resource cost were calculated for each crop using input-output coefficients obtained from survey data conducted in 2003. An important aspect of the study was to determine the yield rate and magnitude of profitability of producing CGPRT crops in Bangladesh. For this purpose, primary data were collected from farmers of 10 districts of the country representing the most concentrated areas of the crop. The districts surveyed are Manikgonj, Lalmonirhat, Kurigram, Nilphamari, Jessore, Jhenaidah, Rajshahi, Munshiganj, Noakhali, and Jamalpur (Alam, 2004a). Data were collected from respondents by field visits using structured questionnaire. The size of samples varied from 30 to 80 for each crop depending upon the nature of crop and the number of total farmers available for the survey in selected areas. The selection of samples was made following a simple random sampling technique. A total of 400 farm households were investigated. The detailed field survey was conducted from September to December 2003 covering one crop season for the financial year 2002-2003. This study examined both financial and economic returns over variable and full costs. Variable costs included all cost items like cost of labour, draft power, irrigation, seed, organic manures and chemical fertilizers, insecticides and pesticides etc. used in the process of cultivation and production at market prices. Both cash expenses and imputed value of family owned inputs used in the survey plots were included in calculating cost of production. The impact of public policy on the financial incentives for production of CGPRT crops was examined by calculating Nominal Protection Co-efficient (NPC), Nominal Rate of Protection (NRP), Effective Protection Co-efficient (EPC) and Effective Rate of Protection (ERP) (Byerlee and Longmire, 1986; Gonzales et al., 1993; Huda and Talukder, 2000; Timer, 1987).

Source of Information: Bangladesh Journal of Agriculture, Vol. 27 & 28, pp. 13-23, 2002 & 2003, ISSN- 0253-5408, Bangladesh Agricultural Research Council.

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

Financial and economic returns of producing some selected secondary crops (CGPRT crops) were examined. Results show that CGPRT crops generated satisfactory returns over variable and full costs. The returns were high for potato, maize and pulses mainly due to adoption of new techniques of production. The returns were low for millets due to non-adoption of improved cultivation practices. Sweet potatoes were highly profitable even under traditional system of production mainly due to higher yield. A measure of comparative advantage shows that Bangladesh had the comparative advantage in producing all CGPRT crops, as DRC values had been less than one over the last three decades. The value was positive for potato even at export parity level during the most recent years. It reveals that the country has enough potentials for diversification of the crop sector through expansion of secondary (CGPRT) crops.

Knowledge Management: Journal