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Economic Impacts of Oilseed Research and Development in Bangladesh

M. A. Monayem Miah
Senior Scientific Officer
Agricultural Economics Division, Bangladesh Agricultural Research Institute (BARI), Bangladesh.

M. A. Rashid
Principal Scientific Officer
Agricultural Economics Division, Bangladesh Agricultural Research Institute (BARI), Bangladesh.

S. M. A. Shiblee
Senior Scientific Officer
Agricultural Economics Division, Bangladesh Agricultural Research Institute (BARI), Bangladesh.

Abstract/ Executive Summary:

This paper estimates the economic impacts of oilseed research and development (R&D) in Bangladesh. For the purpose, a total of 1,980 oilseed growing farmers were randomly selected from 11 oilseed growing districts in the country for gathering primary data using pre-tested interview schedules during 2011-12. An ex-post evaluation method using economic surplus model under both closed and small-open market economy situations has been adopted to estimate the rate of returns of investment in oilseeds R&D. The adoption of improved mustard, groundnut, sesame and soybean varieties at the farm level creates an additional employment of 12.7, 11.6, 15.4, and 6.1 man-days/ha for the respondent farmers respectively. The livelihood status of the adopted households was much better than that of non-adopting households. Ex-post evaluation of the past investment on oilseeds R&D reveals an IRR of 24 per cent, which ranges from 22 per cent to 26 per cent under different assumptions. The amounts of NPV and foreign exchange savings due to R&D of oilseeds during 1998-2012 are Tk. 4,769.04 million and US$ 97.11 million respectively.

Keywords: Oilseeds, Economic surplus model, Research and Development, IRR, NPV, BCR, Foreign Exchange savings

Location: Manikgonj, Faridpur, Tangail, Mymensingh, Rajshahi, Pabna, Dinajpur, Noakhali, Laxmipur, Comilla and Jessore.

Start Date: 00-00-2011

End Date: 00-00-2012

Program Area: Socio-economic and Policy

Commodity: Mustard, Sesame, Ground nut, Linseed, Soybean, Ground nut

Objectives:

1. Identify the level of adoption of improved oilseed varieties;
2. Estimate the yield advantage and profitability of improved oilseed varieties cultivation; and
3. Estimate the rate of return of investment in oilseed research and development in Bangladesh.

Methodology:

A total of 1,980 oilseed growing farmers were randomly selected from 11 oilseed growing districts, namely Manikgonj, Faridpur, Tangail, Mymensingh, Rajshahi, Pabna, Dinajpur, Noakhali, Laxmipur, Comilla and Jessore, in the country for gathering primary data using pre-tested interview schedules during 2011-12.The Oilseed Research Centre (ORC) deals with six oilseed crops, namely mustard, sesame, groundnut, soybean, linseed and sunflower. Among these oilseed crops, the first four major oilseed crops were considered for socio-economic evaluation. a total of 540 households for each type of crop were selected for interview using simple random sampling technique to collect primary data. Thus, a total of 2,160 (540 HHs × 4 crops) oilseeds cultivating farmers were interviewed for the study. But the actual sample size was 1,980, as no data could be found from other areas. Primary data were collected by interviewing oilseed farmers using a structured pre-tested interview schedule during October 2011 to October 2012. Farm level primary data and information were collected by different project personnel, such as Principle Investigator, Co-Investigator, Scientific Officer, and trained Scientific Assistants. In order to cross check the information collected from the farm survey, a number of focus group discussions (FGDs) were conducted with oil scientists of BARI and the extension personnel of DAE of different districts. In this study to estimate the benefit-cost ratio BCR, internal rate of return (IRR) and net present value (NPV) of the investment on oilseeds R&D in Bangladesh. Theoretical Concept of Economic Surplus Model, The Empirical Model and Limitations of the Economic Surplus Model has been used to measure the economic welfare and the changes in economic welfare from policy and other interventions. Estimation of Employment Generation and Assessing Livelihood Development to the adoption of improved varieties of oilseeds and production practices and estimated impacts of R&D on oilseeds in Bangladesh.

Source of Information: Bang. Dev. studies, BIDS, Agargoan, Dhaka, Vol. XXXVIII, March 2015, No. 1

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

This paper provided an in-depth account of the economic impacts of oilseeds R&D in Bangladesh. It has been observed that the current level of adoption of improved oilseed technologies has created a variety of economic impacts in the country. The adoption of improved oilseed technologies has ensured higher production, higher income, created employments and improved livelihood of the farmers to some extent. Ex-post evaluation of the past investment in oilseed R&D revealed an IRR of 24 per cent, which seemed to be low due to lower adoption of improved oilseed varieties. Under various assumptions, the IRR ranged from 22 per cent to 26 per cent and BCR from 2.84 to 3.5. Moreover, the increased production of oilseeds has saved a huge amount of foreign exchange through producing additional oilseed crops and thus contributed to the national economy of Bangladesh. The estimated NPV and foreign exchange savings due to R&D of oilseeds for the period 1998 to 2012 are Tk 4,769.04 million and US$ 97.11 million respectively. Therefore, the investment in R&D of oilseeds was found to be encouraging in Bangladesh.

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