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An Ex-post Analysis of Ginger (zingiber Officinalis) Research and Extension Investment in Bangladesh

Md. Kamrul Hasan
Dept. of Agricultural Economics, Bangladesh Agricultural University, Mymensingh

M. Serajul Islam
Spices Research Centre, Bangladesh Agricultural Research Institute, Shibgonj, Bogra Bangladesh;

Abstract/ Executive Summary:

The study estimated the benefit and rate of returns to investment on ginger research and extension in Bangladesh. The Economic Surplus Model with ex-post analysis was used to determine the returns to investment and their distribution between production and consumption. Several discounting techniques were also used to assess the efficiency of ginger research. The adoption rate was found increasing over the period. The yield of modern varieties of ginger developed by Bangladesh Agricultural Research Institute (BARI) was 78 per cent higher than that of the local varieties. Society got net benefit of Tk. 432.31 million by investing in ginger research and extension. The net present value (NPV) and present value of research cost (PVRC) were estimated to be Tk. 135.01 and 81.15 million, respectively. The internal rate of return (IRR) and benefit cost ratio (BCR) were estimated to be 32 per cent and 3.75, respectively indicating that investment on ginger research and development was profitable. Ginger seed production programme should be taken largely to increase production by increasing improved variety adoption area.

Keywords: Ginger, Investment, Returns, Adoption, Yield advantage, Benefit and Rate of return

Location: Dept. of Agricultural Economics, Bangladesh Agricultural University, Mymensingh

Start Date:

End Date:

Program Area: Knowledge Management

Commodity: Ginger

Objectives:

To examine the adoption of improved variety of ginger and its yield advantages over local varieties;
To measures the social benefits derived from ginger research and extension activities and
To estimate the rate of return of ginger research and extension in Bangladesh.

Methodology:

For the present study, the data were collected from different published and unpublished reports, and informal scientists’ interview. The area, production and yield of BARI Developed Modern Variety (BDMV) of ginger were collected from Spices Research Centre; adoption rates were collected through informal scientists’ interview; and harvest price and consumer price index (CPI) were collected from various issues of Statistical Yearbooks (1996-2008) published by the Bangladesh Bureau of Statistics. Data on the input cost change was calculated by the researcher through analyzing increased production, higher labour costs for harvesting and transporting, higher cost of modern seeds, and slightly more fertilizers application for improved variety than for traditional varieties. The collected data were analyzed using graphical, tabular and statistical methods. The Economic Surplus Model (ESM) with Ex- Post analysis was used to estimate the rate of returns to investment in ginger research and extension. The analysis was done under small open-economy market situation. The theoretical concept of ESM has been illustrated below. Theoretical concept of economic surplus model (ESM) was determined. Empirical approach, The supply shifter (k), Estimation of net present value (NPV), Internal rate of return (IRR) was calculated.

Source of Information: The Agriculturists 12(2): 103-115(2014) ISSN 2304-7321 (Online), ISSN 1729-5211 (Print), A Scientific Journal of Krishi Foundation

Article Link (Online Journal): http://banglajol.info/index.php/AGRIC/article/view/21738/14944

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

The empirical results indicate that the expenditure on ginger research and development paid a favourable rate of returns and the society were also enormously benefited out of it. The IRR to ginger research and development expenditure was found to be 32 per cent. A 32 per cent IRR on investment in ginger research and development is a good rate of return. The consumer’s surplus is found to be very few only due to small open economy. However, this situation might not be a good sign for the economic prosperity. For the survival of the consumers, price support should be given by government. The annual adoption rate of BARI Ginger-1 is not good because of non availability of seeds. Therefore, seed production programme should be undertaken largely by the government and non governmental organizations, so that the farmers can get quality seeds easily at a reasonable price.

Knowledge Management: Journal