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Credit Facilities in Groundnut Production and Its Impact on Poverty Reduction- a Farm Level Survey in Mymensingh District

J. R. Sarker
Dept. of Agricultural Economics, Bangabandhu Sheikh Mujibur Rahman Agricultural University, Gazipur, Bangladesh.

S. Akhter
Department of Development and Poverty Studies, Sher-e-Bangla Agricultural University, Sher-e-Bangla Nagar, Dhaka-1207, Bangladesh.

M. Jahan
Dept. of Agricultural Economics, Bangabandhu Sheikh Mujibur Rahman Agricultural University, Gazipur, Bangladesh.

Abstract/ Executive Summary:

A study was conducted to determine the poverty and credit facilities of groundnut producers and profitability and resource use efficiency of groundnut production in the selected char areas of Gaffargaon upazila in Mymensingh district. In this study, 100 respondents were randomly selected from the mentioned upazila. Farmers were classified into three categories on the basis of loan size. Cobb - Douglas production function was used to determine the contribution of factors to groundnut yield. It is evident from the study that per acre net returns were greatly influenced by the use of human labour, animal labour, seeds and insecticides and it was found that they got profit from groundnut cultivation and the undiscounted BCRs (both the variable cost and total cost basis) was estimated at 1. 88 in case of all c ategories of farmers. The mentioned factors were directly or jointly responsible for influencing per acre net returns for groundnut cultivation . Maximum loan money was utilized in family expenditure purpose for meeting their emergency and urgent needs to survive. But their repayment was satisfactory. However some problems were identified (i.e, tips and bribes, delay in providing loan and their poverty) in receiving loan for groundnut cultivation. It appears from the analysis that among three categories of farmers marginal farmers suffered a lot from inadequate supply of credit. The present study suggests that to develop agriculture, to reduce poverty and to increase the productivity of the farmers, both public and private sectors need to give attention on groundnut production in char area for their poverty reduction .

Keywords: Char area, Credit, Groundnut production, Poverty reduction

Location: Gaffargaon upazila in Mymensingh district

Start Date:

End Date:

Program Area: Socio-economic and Policy

Commodity: Ground nut

Objectives:

1. To determine the poverty and credit facilities of groundnut producers and profitability and resource use efficiency of groundnut production in the selected study area.

2. To examine how poverty of target farmers could be alleviated through improved cultivation of groundnut production.

3. To identify farmers attitude towards groundnut cultivation in the study area.

Methodology:

Primary data were collected through a farm level survey. A Multi - stage sampling technique was employed for this purpose. In the first stage, Mymensingh district of Bangladesh was purposively selected. Then, from this district the top groundnut producing upazila named as Gaffargaon upazila and from the selected upazila two top groundnut producing villages namely charalgi and panchpy were purposively selected. The study purposively focused on extensively groundnut growing areas since groundnut is not grown all over the country. Moreover, programmes for popularizing modern groundnut varieties are more likely to be successful in these areas. In the final stage, 50 groundnut growers were selected randomly from each village using a list of groundnut growers available from the concerned agricultural extension office . Thus, a total of 100 groundnut farmers belonging to two villages were selected as sample of the study and accordingly following structured interview schedule . Farmers were classified into three categories on the basis of loan size, namely category A (having loan below Tk. 5000), category B (having loan within Tk.5,000 to 10,000) and category C (having loan above Tk. 10, 000). The analysis of data was based on tabular and descriptive techniques. In this research, tabular technique was applied for the analysis of data using simple statistical tools like averages and percentages. The following formula was use for analysis of data in the study areas. Higher production and profit are the two most important factors to motivate farmers towards any new technology. A detailed cost - benefit analysis was calculated for groundnut farmers using tabular analyses techniques. The gross revenue of groundnut is likely to be influenced by different factors, such as the cost of human labour, seed, and chemical fertilizer. The following Cobb - Douglas production function was used to estimate the parameters. The Cobb - Douglas Production function equation was as follows: Y=aX₁^bi X₂^b2 X₃^b3 X₄^b4 X₅^b5 X₆^b6U. By taking log on both sides the Cobb - Douglas production function was transformed in to the following logarithmic form because it could be solved by ordinary least squares (OLS) method , i.e. LogY= Log a+ b₁ log X₁ - - ----- - - --- - --------- - - - b_n Log Xn+ e^ui. The empirical production function was the following Log Y = Log+ b₁LogX₁ + b₂LogX₂ +b₃ LogX₃ +b₄ LogX₄ +b₅ LogX₄ +b₅ LogX₅ +Ui. Where, Y = Yield (Kg/acre) X₁ = No. of human labor (man-day/acre) X₂ = Animal labor (Tk/acre) X₃ = Amount of seed (Kg/acre) X₄ = Amount of manure (Kg/acre) X₅ = Cost of insecticides (Tk/acre) a = constant value and b₁, b₂ ………….b₅ = Co-efficient of the respective variables and Ui = Error term.

Source of Information: J. Environ. Sci. & Natural Resources, 8(2): 57-62 2015, ISSN 1999-7361

Article Link (Online Journal): DOI: http://dx.doi.org/10.3329/jesnr.v8i2.26866

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

It is evident from the study that per acre net returns were greatly influenced by the use of human labour, animal labour, seeds and insecticides and it was found that they got profit from groundnut cultivation and the un discounted BCRs (both the variable cost and total cost basis) was estimated at 1.88 in case of all categories of farmers. As groundnut is a profitable crop for its low cost of production, it can take part in char areas for poverty reduction. For that reason technological improvement and high yielding variety of seed is necessary for groundnut production in char areas.

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