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Economic and Financial Profitability of Aromatic and Fine Rice Production in Bangladesh

A. R. Anik
Ex postgraduate student of the Department of Agricultural Economics, Bangladesh Agricultural University, Mymensingh.

R. K. Talukder
Professor of the Department of Agricultural Economics, Bangladesh Agricultural University, Mymensingh.

Abstract/ Executive Summary:

The study was undertaken to evaluate the economic and financial profitability of aromatic and fine rice production, using both primary and secondary data. Forty farmers who cultivated both Kataribhog and Chinigura, and fifteen farmers each producing Pajam and Nizershail were selected from Dinajpur district. For the Kalijira variety, thirty farmers were selected from Sherpur district. Among the aromatic and fine rice varieties Pajam had the maximum per hectare yield. But net returns per hectare for the aromatic varieties were higher due to the higher market prices and less production cost of the varieties. Domestic Resource Cost (DRC) ratios showed that Bangladesh had comparative advantage in the production of aromatic and fine rice both from the point of view of export and import substitution, except the Nizershail variety which was marginally unprofitable under export proposition. The study also identified some problems faced by the farmers in producing aromatic and fine rice. Finally, some policy guidelines were suggested.

Keywords: Economic,Financial, Profitability, Aromatic,Fine rice production

Location:

Start Date: 00-02-2003

End Date: 00-04-2003

Program Area: Socio-economic and Policy

Commodity: Rice

Objectives:

To evaluate the economic and financial profitability of aromatic and fine rice production, using both primary and secondary data.

Methodology:

Determination of Financial Profitability The information that were needed to determine the financial profitability of aromatic and fine rice were collected through structured interview schedule by directly interviewing the farmers who cultivated aromatic and fine rice. The survey was conducted during the period February to April 2003 to get the information of production of Aman season of the year 2002. A list of farmers growing aromatic and fine rice was collected from the Thana Agriculture Office of Chirirbandar and Sadar thana of Dinajpur and Sadar thana of Sherpur district. Forty farmers who cultivated both Kataribhog and Chinigura, 30 farmers producing Kalijira and 15 farmers each producing Nizershail and Pajam were selected randomly from the list. In total, 100 farmers were chosen from the selected areas. The costs and returns were calculated by enterprise costing method. Determination of Economic Profitability The main sources of the data were various publications of the Bangladesh Bureau of Statistics (BBS), Bangladesh Bank, World Bank and Food and Agricultural Organization (FAO) of the United Nations. The f.o.b. price Bangkok was collected from the website of Food market.com. The variety White Fragrant Rice of Class A 100% was considered as the representative variety for the varieties Kataribhog, Chinigura and Kalijira and the variety White 15% milled rice was used for pricing Pajam and Nizershail varieties. Some of the specific documents used were Huda (2001) and Hossain (1999) and a report by Rahman (1993).

Source of Information: Bangladesh J. Agric. Econs XXV, 2(2002) 103-113

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

Results of the analysis showed that production of aromatic and fine rice was profitable both from financial and economic point of view. Except for Nizershail, all the selected aromatic and fine rice varieties had comparative advantage of production both for import substitution and export. Although Nizershail did not have comparative advantage in the export market, production of the variety had sufficient merit as an import substitution proportion. Thus aromatic and fine rice production would be amply justified both from private and social point of view. The study identified some constraints which need to be addressed for improving the production environment of aromatic and fine rice.

Knowledge Management: Journal