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How Much Can Smallholders in Bangladesh Benefit from Summer Tomato Cultivation? an Applied Agro-economic Analysis of On-farm Data

M. E. Baksh
International Center for the Improvement of Maize and Wheat (CIMMYT), Dhaka-1212, Bangladesh.

F. Rossi
International Center for the Improvement of Maize and Wheat (CIMMYT), Dhaka-1212, Bangladesh.

T. J. Krupnik
International Center for the Improvement of Maize and Wheat (CIMMYT), Dhaka-1212, Bangladesh.

A. S. M. H. Talukder
University of Adelaide, School of Agriculture, Food and Wine, Adelaide, South Australia, 5005 Australia.

A. McDonald
International Center for the Improvement of Maize and Wheat (CIMMYT), South Asia Regional Office, Kathmandu, Nepal.

Abstract/ Executive Summary:

Cultivating summer (monsoon season) tomatoes in Bangladesh holds promise as a profitable enterprise with which farmers can augment existing cropping patterns, since only small amounts of land are required. Using on-farm production data collected from 18 farmers in Jessore District, gross margin and other economic indicators were estimated. Results indicate that, with careful management implemented early in the crop season, small farmers can earn impressive profits if they harvest summer tomatoes at least twice (two fruiting stages). With an average gross margin equivalent to US$13,737 ha^-1, for example, a smallholder that owns or leases only 0.028 ha (approximately 7 decimals) could earn more than US$ 350. In addition a very high rate of return over investment (5.66) was calculated for farmers harvesting four times during the seven month cultivation period. Nevertheless, additional research remains to fine-tune farmers’ management of the summer tomato crop in order increase profits further by lowering the costs associated with key inputs (e.g., more efficient hormone application), or by utilizing the inputs more effectively (e.g., timing the spraying of hormones to coincide fruit setting with periods of high demand). Since summer grown tomatoes are also disease and pest risk prone, the development of effective integrated pest management strategies are also required in order to reduce the high level of chemical use observed.

Keywords: Agronomic management, Bangladesh, Economic assessment, Gross margin,Marginal rate of return, Profitability,Summer tomato, Tomato production

Location: Jessore area

Start Date: 00-00-2011

End Date: 00-00-2011

Program Area: Socio-economic and Policy

Non-commodity: Adoption of technology

Objectives:

To guide further study as well as to improve the application of the summer tomato technology in farmers‘ fields.

Methodology:

During 2011, the Cereal Systems Initiative for South Asia in Bangladesh project provided basic training to farmers in Jessore Sadar and Monirampur upazilas (i.e., sub-districts of Jessore District) in an attempt to scale-out, learn from, and refine summer tomato production. Subsequently, 18 of these farmers established summer tomato plots in the Arabpur union under Jessore Sardar upazila. These farmers agreed to provide detailed production information in order to analyse the constraints and opportunities presented by summer tomato; as such, the agro-economic data analyzed herein allow estimation of the economic profitability of summer tomato cultivation under actual field conditions. For the purposes of this study, the 18 farmers are stratified by the number of fruiting periods (flowering events) from which they harvested tomatoes during the course of the year: 7 farmers harvested fruits from all four flowering events possible; while 4, 5, and 2 farmers harvested respectively from 3, 2, and 1 fruit flowering. The economic analyses presented in this article are based upon the calculation of average returns from the yield and sales of tomatoes, and average cost values for all labour and material inputs, for all 18 farmers collectively and asstratified by the number of flowerings. Concurrent input-output market prices reported by the farmers were considered as the basis for the cost and return analysis; all monetary values presented in the article are converted to US dollars at an exchange rate of US$ 1 = 80 Bagladeshi Taka (BDT). All empirical data are presented on a per hectare basis, although it should be noted that the land area employed for cultivating summer tomatoes is typically very small (often 0.04 ha or less). Benefit-cost ratios were calculated for each of the flowering stages, and collectively for all 18 farmers. Salvage values were considered for the material costs incurred for the construction of the bamboo infrastructure by assuming two years longevity of the basic inputs (e.g., polyethylene plastic sheeting, bamboo). Profitability was also estimated by calculating the gross margin (i.e., total revenue over variable cost) and the marginal rate of return. Data were analyzed using marginal analysis (MA) under a partial budgeting system. MA is the process of calculating marginal rates of return between treatments options (or different tillage options for machinery studies) by proceeding in steps from a lower cost treatment to that of the next higher cost, and comparing those rates of return to the minimum rate of return acceptable to farmers. The marginal rate of return (MRR) is the ratio of marginal gross margin (i.e., the change in net benefits) and the marginal cost (i.e., the change in net costs) expressed as a percentage. The MRR can easily be interpreted as the percent return to invested capital, after the capital has been repaid. Additionally, a comparative profitability assessment was made with respect to transplanted rainy season 'Aman' rice (T.Aman), which is the primary crop grown during the late-summer/autumn cropping season during which summer tomato is cultivated.

Source of Information: SAARC J. Agri., 13(2): 80-93 (2015), ISSN: 1682-8348

Article Link (Online Journal): DOI: http://dx.doi.org/10.3329/sja.v13i2.26570

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

The results suggest that small holders who cultivate summer tomatoes can earn (on average) a profit equivalent to US$ 13,737 ha^-1 , which indicates that devoting only 0.028 ha to summer tomato cultivation would allow adopting farmers to earn more than US$ 350 per year. While not every farmer is in a position to grow summer tomatoes (e.g. low-lying land is not suitable, start-upcostscan be prohibitive), this intensive cropping alternative remains within the reach of even very small holders that own 0.2 ha or less provided they receive the requisite training and the sine qua non investment capital, which will likely have to be supplied through micro-credit financing (e.g. from local NGOs) for farmers who are unable to cover initial costs themselves. For those that do adopt summer tomato cultivation, however, this income generating crop can help to diversify farm production and generate additional income for households otherwise reliant upon T. Aman rice in the rainy season; it thus appears to hold promise for large numbers of farmers, given suitable soil conditions, elevation, and access to inputs. Much work still needs to be done to improve both the agronomic best practices and the economic efficiency of this crop, however. For example, in order to control insects and viruses, farmers had to frequently apply 16 different insecticides/fungicides 41 times in a season, which constituted approximately 26% of the total cost of production. This not only has an impact on the profitability of the enterprise, but it exemplifies the heavy reliance on pesticides for which the vegetable farmers of Bangladesh are known. For the sake of farmer, consumer,and environmental health, summer tomato cultivators require IPM options that can offer alternative methods of insect control balanced with judicial use of insecticides and fungicides. Thus, an urgent need exists for research to develop economically viable IPM programs to overcome farmers‘ reliance on heavy pesticide use and adopt other pest control options. To develop appropriate IPM recommendations, locally specific research solutions are required to integrate cultural control with bio pesticides that are available in the country. Finally, economic performance can be improved by simply utilizing a focused approach in terms of the application of growth-inducing hormones. With proper materials and attention to detail, farmers can reduce costs by applying hormones to individual tomato flowers through targeted spraying (with proper low-cost equipment) instead of the blanket spraying that they employed, which wasted much of the hormone. Simply changing to this technique, as well as training farmers to produce their own hormones, provides another avenue for these farmers to increase profits by reducing the amount of growth hormones used.

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