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Profitability and Resource Use Efficiency of Potato Cultivation in Munshiganj District of Bangladesh

H.K. Sujan*

F. Islam
Faculty of Agribusiness Management, Sher-e-Bangla Agricultural University, Dhaka 1207, Bangladesh

M.H. Kazal
Department of Development and Poverty Studies, Sher-e-Bangla Agricultural University Dhaka 1207, Bangladesh

R.K. Mondal
Department of Agricultural Economics, Sher-e-Bangla Agricultural University Dhaka 1207, Bangladesh

Abstract/ Executive Summary:

Potato is the third largest food crop in Bangladesh by tonnage of production. Its acreage and production are also increasing in day after day. This study was accomplished to examine the profitability and resource use efficiency of potato cultivation in five upazilas of Munshiganj district of Bangladesh. A total of 52 farmers were selected randomly from the study area. Data were collected through farm survey by using a suitable pre-tested questionnaire in February-March, 2016. Profitability analysis, Cobb-Douglas production function, MVP, MFC and Farm Budgeting model were used to analyze the objectives. Average gross return, gross margin and net return were found Tk. 3,47,200, Tk. 1,47,125 and Tk. 1,17,300, respectively. Benefit-cost ratio was found 1.51 and 1.74 on full cost and variable cost basis, respectively. The key production factors, i.e. human labour, land preparation, seed, fertilizer, insecticides and irrigations had significant effect on gross return of potato. Resource use efficiency analysis revealed that farmers were not efficient in using resources in potato cultivation. Human labor, land preparation, insecticide and irrigation were under-utilized and therefore increasing use of those resources could maximize the profitability. Seed and fertilizer constituted major parts of the cost of production hence optimum use of those resources could also enhance the profitability and resource use efficiency of potato cultivation in Munshiganj district.

Keywords: Potato, Profitability, Resource use efficiency.

Location: In five upazilas of Munshiganj district which were: Sreenagar, Sirajdikhan, Tongibari, Munshiganj Sadar and Gazaria

Start Date: 00-02-2016

End Date: 00-03-2016

Program Area: Socio-economic and Policy

Commodity: Amaranth

Objectives:

The specific objective of the present study is to analyze the profitability, resource use efficiency and the factors affecting the production of potato in the selected study area.

Methodology:

A micro-level study based on primary cross-section data was designed to attain the objectives of this study. The methodology of the study is mainly about the sampling procedure, collection of data and analytical framework. Sampling technique The study was conducted in five upazilas of Munshiganj district which were: Sreenagar, Sirajdikhan, Tongibari, Munshiganj Sadar and Gazaria. A total of 52 potato farmers taking at least 10 farmers from each upazila were selected by random sampling technique. Since the study focuses on resources use efficiency in a predominantly potato growing area an attempt was made to choose respondents from those areas which had an average level of agricultural performance in their respective sub-regions. Method of data collection Following the conventional survey techniques, primary data on resource availability and their use, input-output levels, prices of farm production and inputs as well as some other information were collected by interviewing the farmers personally using a designed and pre-tested questionnaire in February-March, 2016. Analytical Framework Both fixed cost and variable cost were taken into account in calculating cost of potato cultivation. Land use cost was calculated on the basis of per year existing lease value of land. Irrespective of potato varieties, the profitability of potato production was examined on the basis of gross return, gross margin, net return and benefit cost ratio analysis. The collected data were edited, summarized, tabulated and analyzed to fulfill the objectives of the study. Empirical model Different parameters of costs and return were analyzed to measure the profitability of potato cultivation on the study area. The following algebraic equation was developed to assess the costs and returns of potato production.

Source of Information: SAARC J. Agri., 15(2): 193-206 (2017)

Article Link (Online Journal): DOI: http://dx.doi.org/10.3329/sja.v15i2.35151

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

It is evidenced from the study that cultivation of potato in Munshiganj district of Bangladesh is a profitable venture. Each taka invested in potato cultivation would return 1.51 taka to its investor. Seed cost was found as the major cost (36.82) constituents of total cost. Besides, over doses chemical fertilizer applied for potato cultivation but their effects on yield were still remunerative. Nevertheless, farmers allocated their resources in the rational stage (Stage-II) of production where diminishing returns to scale (0.59) existed. Sufficient supply of quality seed at fair price in sowing time can help to reduce the cost of production. Furthermore, optimum use of fertilizer can also increase the productivity and profitability of potato cultivation

Knowledge Management: Journal