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Economic Analysis of Turmeric Cultivation: Evidence from Khagrachari District

M. E. A. Begum
Senior Scientific Officer
Agricultural Economics Division, Bangladesh Agricultural Research Institute (BARI), Joydebpur, Gazipur-1701

M. A. Monayem Miah
Principal Scientific Officer
Agricultural Economics Division, BARI, Joydebpur, Gazipur-1701

M. A. Rashid
Principal Scientific Officer
Agricultural Economics Division, BARI, Joydebpur, Gazipur-1701

M. T. Islam
Scientific Officer
Pomology Division, Horticulture Research Centre (HRC), BARI, Joydebpur, Gazipur- 1701

M. I. Hossain
Professor
Department of Agribusiness and Marketing, Bangladesh Agricultural University, Mymensingh-2202, Bangladesh.

Abstract/ Executive Summary:

Turmeric is a good source of income for hilly people of Bangladesh. The study estimated the profitability and technical efficiency of turmeric cultivation in Khagrachhari district. In total 150 turmeric farms located in Khagrachari Sadar, Panchari and Matiranga Upazilas of Khagrachari district, were surveyed. Data were collected, using a pre-tested questionnaire during January, 2015. The study revealed that turmeric farming is a profitable farming with some dominating variable costs like seed (rhizome) and sowing, harvesting and carrying. As the net return was Tk. 112139 per hectare and the BCR of sampled farmers was 2.20, this indicates that turmeric farms with a BCR greater than 1 have greater benefits than costs as well as positive net benefits. Seed (rhizome) and fertilizer showed significant positive effects on the turmeric production in the stochastic frontier production model. Turmeric farming displayed a mean technical efficiency of 82%, which suggested a substantial 18% of potential output of turmeric can be recovered by removing inefficiency. Besides improving technical efficiency, potential also exists for raising turmeric production through higher education and extension services. For a land scarce country like Bangladesh this gain could help increase income and ensure better livelihood for the hilly farmers. The policy implication of the analysis is that investment in education and extension service would greatly improve technical efficiency that contribute to income of the hilly people.

Keywords: Turmeric cultivation, Cost and return, Profitability, Technical efficiency

Location: Khagrachari district

Start Date: 00-00-2010

End Date: 00-00-2015

Program Area: Socio-economic and Policy

Commodity: Turmeric

Objectives:

i) to find out the productivity and profitability of turmeric cultivation in the hill areas; ii) to estimate the technical efficiency of the turmeric growers; iii) to identify the factors causing technical inefficiency of turmeric growers; iv) to identify the constraints to turmeric cultivation and v) to suggest some policy implications for its further improvement.

Methodology:

Selection of the study area and sampling procedure
The study was carried out in Khagrachari district which is one of the major turmeric growing districts in Bangladesh. It accounted for 8.9% of the total turmeric area. A stratified random sample was constructed by dividing the district into Upazila and village. Khagrachari district consists of eight Upazilas: Dighinala, Khagrachari Sadar, Laxshmichhari, Mahalchhari, Manikchhari, Matiranga, Panchhari and Ramgarh. Among these eight Upazilas Khagrachari Sadar, Matiranga and Panchhari were purposively selected for the study. These Upazilas were identified as the most important areas for turmeric farming. In 2010-11, a total of 2039 acres of land was cultivated for turmeric in these Upazilas which is around 41% of cultivated area of turmeric in Khagrachari district (BBS, 2013). Within each of these three Upazilas, two villages were randomly selected based on a complete list of villages. Within each village 20-33 households were randomly selected from the list provided by Sub Assistant Agriculture Officer, Department of Agriculture Extension office. This procedure gave a total sample of 150 households involved in turmeric cultivation in Khagrachari district.

Data collection
The data for this study were collected both from primary and secondary sources. The primary data were collected from the selected farmers for the whole year of 2014. The formal data, however, were collected during January 2015 by using face to face interview technique with the help of a pre-designed and pre-tested questionnaire. The main information gathered includes general household information like household size, age and education level, farming activities, experience with turmeric cultivation, use of inputs including land, labour (both family and hired labour), seeds, fertilizers and pesticides, yields and prices of turmeric, perceptions on constraints to increased turmeric productivity etc. The secondary data were collected from different published and unpublished sources, internet browsing, BBS, Agricultural Statistical Yearbooks, etc.

Data analysis
Gross return: Gross return was calculated by multiplying the total volume of production of an enterprise by the average farmgate prices of that product in the harvesting period (Dillon and Hardaker, 1993).

Source of Information: Bangladesh J. Agril. Res. 44(1): 43-58, March 2019 ISSN 0258-7122 (Print), 2408-8293 (Online)

Article Link (Online Journal):

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

The profitability and technical efficiency of turmeric farming have been estimated by applying descriptive and Cobb-Douglas stochastic frontier production function analyses. Production of turmeric was profitable as farmers earned higher level of net returns from turmeric they produced. The gross margin was calculated to be Tk. 127219 per ha in turmeric farming. It is observed that turmeric farms were able to generate positive returns to variable costs. This indicates that farms are willing to pursue turmeric farming as the returns to variable costs are positive. The BCR of sampled farmers was 2.20. This indicates that the turmeric farmers are able to recover Tk. 2.20 per Tk. 1 of investment.
According to a stochastic frontier production function, seed (rhizome) and fertilizer showed significant positive effects on the turmeric production. From the factors that were assumed to affect technical efficiency, age, education and higher number of farm visits of extension officers increased the efficiency level of farms in the study areas. All these observations were significantly contribute the efficiency level.

Knowledge Management: Journal