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Dimensions of Structural Changes in Cost and Return of Hyv Boro Paddy Over Time in Bangladesh and Determinants of the Changes

Hasneen Jahan
Lecturer, Department of Agricultural Economics, Bangladesh Agricultural University, Mymensingh, Bangladesh

W. M. H. Jaim
Professor, Department of Agricultural Economics, Bangladesh Agricultural University, Mymensingh, Bangladesh

Abstract/ Executive Summary:

Dimension of changes in cost and return structure of HYV Boro paddy during the last two decades and the determinants of the changes have been examined in this paper. This study is entirely based on secondary data and nominal prices of all inputs as well as output of HYV Boro overtime have been converted into real price using Consumer Price Index (CPI). The findings showed that out of total cost, the share of labour cost decreased over time while the share non-labour cost increased. Again, the share of cash cost compared to non-cash cost increased over time. The negative growth of labour cost and positive growth of non-labour cost over time indicate the expansion of capital intensive and labour saving technology in Bangladesh agriculture in recent years. Further, the positive growth of cash cost and negative growth of non-cash cost imply the transformation of traditional agriculture into a modern one in Bangladesh. Analysis of growth rates of input and output prices in real terms showed that labour wage increased slightly during the study period while fertilizer price, as well as irrigation cost decreased. Further, in real terms, the price of Boro paddy significantly declined over the years. The overall analysis of this study showed that although both total cost and gross return decreased over time the rate of decrease in gross return was higher than that of total cost during the whole period which resulted in decreased profitability of the farmers over time. The declining farmers' profitability from production of the main rice crop (HYV Boro) in recent years is likely to have had adverse effect on farmers' incentive to produce rice which has serious implication on the national policy of attaining or maintaining food grain self-sufficiency in Bangladesh.

Keywords: Dimensions, Structural changes, Cost and return, HYV Boro

Location:

Start Date: 00-00-1978

End Date: 00-00-2000

Program Area: Socio-economic and Policy

Commodity: Rice

Objectives:

To examine the structural changes in costs and returns of rice production (HYV Boro)

Methodology:

To examine the structural changes in costs and returns of rice production (HYV Boro) over time the data for different cost items (i.e. human labour, animal labour/power tiller, seed/seedling, fertilizers, irrigation and pesticides) as well as return from Boro paddy were collected for the period of 1978-79 to 1999-2000. Costs and returns data of HYV Boro were collected from different secondary sources such as Bangladesh Bureau of Statistics; Food Planning and Monitoring Unit (FPMU), Ministry of Food; Directorate of Agricultural Marketing (DAM); International Fertilizer Development Centre (IFDC), etc. For computing growth as well as trend of different cost components and return of HYV Boro over time, 20 years data from 1980-81 to 1999-2000 have been used. Again, 20 years time series data were broken down into two sub-periods (consisting of 10 years each) in order to determine how growth rates varied between two decades. The sub-periods were: a ) Period-I: 1980-81 to 1989-90 b) Period-11: 1990-91 to 1999-2000.

Source of Information: Bangladesh J. Agric. Econs. XXV, 1 (2002) 35-62

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

On the basis of the findings of this study it may be concluded that there has been significant structural changes in total cost and return of HYV Boro over time. Compared to non-cash cost, cash cost has gradually increased over time which means that the farmers now neet' more cash to meet operating expenses. Further, compared to cost of human labour, non- human labour cost (i.e. seed, fertilizer, irrigation, etc.) has increased over time indicating that rice production has become more capital intensive rather than labour intensive. This also implies that farmers' need for credit is increasing in recent years than the past. Therefore, credit facilities to the farmers particularly for the poor farmers should be expanded on easy terms and conditions, so that they can adopt new technologies.

Knowledge Management: Journal