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Factors Determining the Profitability of Rice Farming in Bangladesh

Tahmina Akter
Department of Agricultural Economics, Faculty of Agricultural Economics and Rural Sociology, Bangladesh Agricultural University, Mymensingh-2202, Bangladesh

Mst. Tania Parvin
Department of Agribusiness, Faculty of Agricultural Economics and Rural Development, Bangabandhu Sheikh Mujibur Rahman Agricultural University, Salna, Gazipur-1706, Bangladesh

Farhana Arefeen Mila
Department of Agribusiness, Faculty of Agricultural Economics and Rural Development, Bangabandhu Sheikh Mujibur Rahman Agricultural University, Salna, Gazipur-1706, Bangladesh

Ashrafun Nahar
Department of Agribusiness, Faculty of Agricultural Economics and Rural Development, Bangabandhu Sheikh Mujibur Rahman Agricultural University, Salna, Gazipur-1706, Bangladesh

Abstract/ Executive Summary:

This study was conducted to analyze the profitability of rice farming in Bangladesh. In doing so, it utilized the multistage sampling technique to collect the cross-sectional data from seven rice producing districts in Bangladesh during 2016. A total of 140 samples were directly interviewed using a structured questionnaire for achieving the purpose. Apart from the descriptive analysis of the socioeconomic variables of the selected respondents, the benefit-cost and functional profitability analysis of rice were also performed. The log-linear form of Cobb-Douglas production function was chosen to determine the effects of various inputs on the profitability of rice. The finding of cost-benefit analysis reveals that rice farming is a profitable activity in Bangladesh as the estimated cost of production was lower than the return in the selected study areas. However, the profitability differs among different farmers’ group and large farmers are more profitable in rice cultivation than small and medium farmers. In addition, the functional analysis identifies three inputs such as the cost of power tiller, fertilizer and hired labor as the significant determinants of profitability for all farmers in the study regions. Moreover, these factors also differ across the farmer's groups except the cost of fertilizer. Therefore, it is recommended in this study that the concerned authority of the government should ensure adequate and timely fertilizer use at a subsidized price which would be affordable by the farmers. Besides, a fair pricing policy should be set so that fluctuation in the price level can be controlled. Effective extension service may also help the farmers using a better combination of input that will generate higher productivity and return, thereby, will contribute to being food secure and self-sufficient in rice cultivation.

Keywords: Bangladesh, Benefit-cost analysis, Profitability analysis, Rice farming

Location: Barisal, Comilla, Tangail, Jessore, Bogra, Dinajpur and Habigonj covering seven divisions of Bangladesh

Start Date: 00-08-2016

End Date: 00-09-2016

Program Area: Socio-economic and Policy

Non-commodity: Profitability

Objectives:

This study was undertaken to fill the research gap. It is expected that the systematic calculation of costs and returns, as well as the profitability of rice under this study, will add up knowledge to the researchers, policymakers as well as other interested parties who will conduct farther study on rice farming in Bangladesh. In addition, such a study may contribute to achieving the sustainable rice production system through the foreseeable future.

Methodology:

Sampling Technique and Data Collection This study mainly used primary data to carry out the highlighted objectives. In doing so, it followed a multistage sampling technique for the selection of study regions and samples. In the first stage of multistage sampling, it purposively selected seven different rice producing districts viz. Barisal, Comilla, Tangail, Jessore, Bogra, Dinajpur and Habigonj covering seven divisions of Bangladesh. Using the simple random sampling technique in the second stage, furthermore, the study selected 140 rice farmers out of total 2580 from seven villages such as Raipura, Chaikot, Atharodana, Toniagara, Rainagar, Boropukur and Ratanpur under the selected districts. The study did not distinguish among Aus, Aman and Boro rice growers in selecting the sample. The primary data were collected on the respondents’ socioeconomic characteristics such as age, education, family size, farm size, and literacy level as well as the rice farming practices. A structured questionnaire was used for the purpose. The data collection process covered two months period from August-September, 2016. Besides primary data, secondary data were also collected from different sources such as the Bangladesh Bureau of Statistics (BBS), different published journals and unpublished reports, articles, and so forth. The information collected from these sources has been used to supplement different parts (such as introduction, results and discussions) of this study. Some information was needed during the selection of the study areas and samples which is difficult to summarize. Analytical Method The data were analyzed using both descriptive and functional analysis. Descriptive analysis was done for estimating the net profit from rice cultivation using the following profit equation was used:

Source of Information: J Bangladesh Agril Univ 17(1): 86–91, 2019 ISSN 1810-3030 (Print) 2408-8684 (Online)

Article Link (Online Journal): https://doi.org/10.3329/jbau.v17i1.40668

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

Rice, being the staple food for almost all the population in Bangladesh, plays a significant role in the agricultural development and food security. Even though the soil and the sub-tropical climatic condition are favorable for rice cultivation in this country, ensuring food security in the face of limited land size per household poses a serious challenge for the Government of Bangladesh (GoB). Combined with this problems, most of the farmers are deprived of the advantages of modern varieties of seed, fertilizer, pesticides as well as modern technologies which affect the productivity as well as the profitability of rice per hectare. The findings reveal that rice farming is a profitable activity in Bangladesh. However, the level of profit is significantly higher for large farmers than small and medium farmers. The functional analysis reveals that different factors determine the level of profit from rice farming across different groups. Among them, the cost of fertilizer is a common concern for all the groups of farmers. Even though the government has subsidized the fertilizer price, whether there is the timely procurement of such services by the needy farmers or not should be monitored through different ministries and departments. As rice farming is a profitable activity in Bangladesh and it is a country of natural disaster, different research organizations should develop rice varieties, that are resistant to the adverse climatic condition. In addition, the government can maintain collaboration with different private and research organizations so that they can come up with better and affordable technology for the rice farmers. Extension department can also play a role in providing training on modern technology use and strengthen the field demonstration process to suggest a better combination of input use for higher return. Extended credit facilities will also help the farmers adopting different technologies to prevent the losses before and after the harvest. Overall, a fair price policy should be designed to control price fluctuation of rice so that the farmers can earn a higher profit from selling their crops. If all those suggestions are well taken, Bangladesh may become food secured and self-sufficient in rice cultivation soon.

Knowledge Management: Journal