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Market Reform and Farm Demand for Inorganic Fertilizers in Bangladesh

Mohd. Nazrul Islam
United Graduate school of Agricultural Sciences, Tottori University, Japan.

Akira Ishida
Faculty of Life and Environmental Science, Shimane University, Japan.

Kenji Taniguchi
Faculty of Life and Environmental Science, Shimane University, Japan.

Abstract/ Executive Summary:

The underpin issues of the study were to examine the farm level inorganic fertilizers (urea, TSP and MP known as primary plant nutrients) use, their determinants and suggest policy measures in changing circumstances of policy reform in the inorganic fertilizers market of Bangladesh. The findings of the study revealed that the farmers were using excessive urea and comparatively fewer amounts of TSP and MP and those farmers were using comparatively more TSP and MP, in contrast they were using less amount of urea. The estimated results of determinant functions indicated that, the use of TSP and MP at the farm level could be increased by reducing their prices and increasing the urea price at the farm level, simultaneously. Side by side, massive extension program regarding the balance fertilizers use could also increase the use of these two fertilizers at farm level and the use of better combination of TSP and MP alone with urea might reduce the tendency of using more urea. The mean of reducing prices of TSP and MP at the farm level was price subsidy. To overcome the budgetary constrain, government of Bangladesh could increase the urea price and earn extra revenue. And this extra revenue earned from urea sale could be provided as price subsidy for TSP and MP in the country.

Keywords: Inorganic fertilizers, Urea,TSP, MP, Policy implication

Location: Bogra, Rangpur and Jamalpur.

Start Date: 00-00-1999

End Date: 00-00-2000

Program Area: Socio-economic and Policy

Commodity: Fertilizer

Objectives:

To study the trend in the use of inorganic fertilizers e.g urea, TSP and MP at the farm level and
To evaluate the determinants of these fertilizers use at the farm level as influenced by policy recommendation(s)

Methodology:

The study was based on farm-level cross-section data of three districts of Bangladesh out of 64 districts. The districts were selected on the basis of cropping intensity, namely Bogra, Rangpur and Jamalpur,consulting the Yearbook of Agricultural Statistics of Bangladesh, 2001. It was assumed that, the findings would be applicable for the whole country equally. From each district, one upazila (sub-districts) was selected randomly. From the each upazila, two side by side villages were selected and from the each village 50 farmers were interviewed randomly with pre-designed questionnaires. Finally, a total of 100 sample farmers from each district consist a total number of (100 x 3=) 300 sample farmers from the three districts. Farm interviews were conducted from December 22, 2005 to January 28, 2006 covering the cropping season October, 2004 to September 2005. Survey data for each respondent included age, schooling and occupation of household head, farm size, family composition, income source, details of input-output data and information on infra structural facilities, etc. Estimation of single equation in cross section data analysis is the easiest and most popular way for estimating the determinants of input demand. A farm level demand for an input is depend on the level of the prices of the various inputs used in crop production. Although the objective is to measure the demand function for different types of fertilizers uses at farm level, the approach must be grounded at the farm level profit maximizing behavior of farmers for a single crop. The determinants of different types of inorganic fertilizers use functions at farm level are the relative inputs prices regarded to weighted output price (total gross return from all crops grown at farm level divided by the quantity of all crops grown) and a set of exogenous factors. In a number of recent studies explaining fertilizer adoption, beside usual price factors, an emphasis is given to access to markets, farm and farmer characteristics and liquidity/credit. Thus, Determinants of household level inorganic fertilizers use include (1) the relative price of inorganic fertilizers, (2) some other relative inputs prices, (3) access to market or market orientation, (4) type of farm, whether the farm is own operated or not, (5) other source of income, (6) communication with extension personnel, (7) infrastructure development, (8) age of the household head, (9) schooling of household head and (10) regional dummy variable(s).

Source of Information: International Journal of Agricultural Research, 2(4): 325-337, 2007, ISSN 1816-4897.

Article Link (Online Journal): DOI: 10.3923/ijar.2007.325.337; URL: http://scialert.net/abstract/?doi=ijar.2007.325.337

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

It was found from the study that, the farmers were using more or less inorganic fertilizers for growing all crops in the study area. Among these fertilizers, the primary plant nutrients (urea, TSP and MP) consisted of about 99% of total fertilizer use at the farm level and secondary plant nutrients (gypsum and zinc) had very insignificant use in the study area. The study also revealed that farmers of the study area were using excessive urea and fewer amounts of TSP and MP and the farmers who were using less amount of urea at their farm, alternatively, they were using more amounts of TSP and MP at their farm and market oriented farm was using better combination of inorganic fertilizers than the less market oriented farms.

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