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Viability of Sericulture Programme of Brac : Results of a Cost-benefit Analysis

Shantana R. Halder
Senior Research Economist, resear and Evaluation Division, BRAC

Abstract/ Executive Summary:

Sericulture is a part of BRAC's Employment and Income Generation (EIG) program started in 1978. Major components of the program are: a) nursery; b) mulberry plantation; c) rearing of the silkworms; d) reeling and e) weaving. The study aimed to measure the efficiency of the program from the participants' as well as the organizer's point of view. Results showed that the program involved a significant proportion of full-time housewives and created employment opportunity for them. All the participants earned accounting profit from the activities they were involved in. The net economic gain was also found positive for most of them although the amount was negligible. For BRAC the cost of services provided to the program participants was higher than the amount it received as service charge which has even increased over time

Keywords: Viability, Efficiency, Sericulture,Cost- benefit analysis

Location: Activity areas of BRAC spread over selected distrcts of Bangladesh

Start Date:

End Date:

Program Area: Socio-economic and Policy

Commodity: Silk

Objectives:

To measure the efficiency of the program from the participants' as well as the organizer's point of view.

Methodology:

Program efficiency from the participants point of view was calculated by using costs and returns data collected directly from the program 'beneficiaries. Program efficiency of BRAC was calculated by using its cost or input and revenue or output records. Output record include the total output with its input prices calculated through cash and credit sales of the products, and imputed values of the quantities consumed on the farm, i.e. given away and in-kind payment. Imputed value is estimated by using the current market price of the products. In measuring economic viability of the given activity the economic profit was calculated by deducting all opportunity costs from the financial profit. The imputed value of household labour was calculated based on the average wage of the similar kind of activities, which were carried out under each of the individual project. For chawki and late age rearing and pedal spinning cost of household labour was taken Tk. 30 per person day employment as taken by Rural Development Program (RDP) in measuring profitability of the similar activities (RDP Working Manual, 1995). To measure the opportunity cost of additional capital used in the activity other than BRAC loan 15% interest rate was considered similar to BRAC's rate of interest. The program can be treated as economically viable if the actual rate of return exceeds the market rate of interest. Indicators used to measure participant viability were: profit per unit of input; average rate of return on investment; average rate of return on operating cost; yield or value of output per unit of major input and amount of input per unit of output or cost of input per unit of output.

Source of Information: Bangladesh J. agric. Econs. XXII, 2(1999): 99-116

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

Results showed that the program involved a significant proportion of full-time housewives and created employment opportunity for them. All the participants earned accounting profit from the activities they were involved in. The net economic gain was also found positive for most of them although the amount was negligible. For BRAC the cost of services provided to the program participants was higher than the amount it received as service charge which has even increased over time.

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