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Productivity and Efficiency of Rice Mills in Bangladesh: Economic, Social and Food Security Implications

Dr.M Asaduzzaman
Bangladesh Institute of Development Studies (BIDS)E-17, Agargaon, Sher-e-Bangla Nagar Dhaka-1207.

Dr.Nazneen Ahmed
Bangladesh Institute of Development Studies (BIDS)E-17, Agargaon, Sher-e-Bangla Nagar Dhaka-1207.

Dr. Md. Ahiduzzaman
Bangladesh Institute of Development Studies (BIDS)E-17, Agargaon, Sher-e-Bangla Nagar Dhaka-1207.

Md. Abdur Rahman
Bangladesh Institute of Development Studies (BIDS)E-17, Agargaon, Sher-e-Bangla Nagar Dhaka-1207.

Moogdho Mim Mahzab
Bangladesh Institute of Development Studies (BIDS)E-17, Agargaon, Sher-e-Bangla Nagar Dhaka-1207.

Abstract/ Executive Summary:

Rice mills remain at the central part of the rice value chain which entails close relationships with both paddy and rice markets. The age old traditional milling system is being replaced more and more by modern and mechanized mills, some of which are fully automatic. Though automatic mills require huge amount of investment, the gross revenue is also higher.Operations of rice mills have notable implications for consumption, trading of rice, employment generation, land use, electricity consumption etc. This study aimed at looking into the efficiency of various types of rice mills in their operation and implications of that on social and economic issue and on food security.

Keywords: Productivity, Efficiency, Rice mills, Food security

Location: 402 rice mills in Bangladesh

Start Date:

End Date:

Program Area: Socio-economic and Policy

Commodity: Crusher

Objectives:

To look into the efficiency of various types of rice mills in their operation and implications of that on social and economic issue and on food security.

Methodology:

The study is based on both primary and secondary data covering quantitative and qualitative information. Primary data was collected through a survey of 402 rice mills in Bangladesh, which included auto and semi-auto rice mills, traditional chatals and hullers. Analysis of various operational aspects of rice mills reveal that a structural change has been taking place in the operations of rice milling. Various econometric models used in analyzing the characteristics and productivity of various types of mills reveal the followings: i) the volume of paddy milled is a major factor when it comes to value addition. In that regard, the auto mills have comparative advantage over semi auto mills and traditional mills; ii) for all categories of mills, labor has positive relationship with overall output. Capital has also positive relationship only except semi auto mills. This implies that the structure of semi auto mills can operate efficiently in the current form and any increase in the capital may give negative productivity; iii) Maximum likelihood estimation of the parameters of the stochastic frontier provides efficiency scores for different types of mills and it is noted that traditional and semi auto mills are doing better in terms of efficiency.

Source of Information: Biennial Report-2011-2012, BIDS

Article Link (Online Journal):

Funding Source:

1.

Budget:

Total Budget (Tk.) :

Achievement/Findings:

Given the cost structure of auto mills it is noted that every auto mill cannot run the production process efficiently from the very onset. It usually takes a good amount of time for them to increase the average score of efficiency. Whereas Semi Auto and Traditional mills have low capital cost structure and they optimize within a shorter period of time even with their limited resources.In terms of food security increase in the number of auto rice mills may ensure better supply of rice and accessibility throughout the year covering different parts of the country. However natural size of this auto mills indicate their power to influence price of rice which may be threat to ensure food security. Another dimension of implication is demand for some apparently unnecessary machineries by the auto mills such as color sorters and polishers. These are mainly used to make the rice more white and attractive. However the white rice has less nutritional value. Thus it may be the case that rising number of auto mills are creating demand for less nutritious rice which is a concern for food security.

Knowledge Management: Report/Proceedings