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Profitability and Productivity of Rice Production in Selected Coastal Area of Satkhira District in Bangladesh

Md. Zohurul Islam
Dept. of Agricultural Finance, Bangladesh Agricultural University, Mymensingh-2202

Ratna Begum
Dept. of Agricultural Finance and Cooperatives, Bangabandhu Sheikh Mujibur Rahman Agricultural University; Salna, Gazipur-1706

Sajia Sharmin
Dept. of Agricultural Economics, Bangabandhu Sheikh Mujibur Rahman Agricultural University; Salna, Gazipur-1706, Bangladesh

Akteruzzman Khan
Dept. of Agricultural Finance, Bangladesh Agricultural University, Mymensingh-2202

Abstract/ Executive Summary:

The present study was conducted to assess the profitability, constraints and factors affecting rice production in coastal area of Shamnagar upazila, Satkhaira district, Bangladesh by using stratified random sampling method. Simple statistical technique as well as Cobb-Douglas production function was used to achieve the objectives of the study. The study found that the small farmers (Tk. 10292.89) got higher net returns than the medium (Tk. 6894.39) and large (Tk. 4798.70) farmers per hectare, respectively. The undiscounted BCR was 1.38, 1.23 and 1.15 for small, medium and large farmers respectively. It is found that the coefficient of seed, fertilizer, power tiller, irrigation cost and human labor have significantly impact on gross return. Lack of saline tolerable good quality seeds, high price of inputs, low price of outputs and natural calamity were the major problems for rice farming in the study area though rice farming was a profitable enterprise.

Keywords: Rice, Profitability, Productivity, Coastal area

Location: Shamnagar upazila, Satkhaira district, Bangladesh

Start Date: 00-01-2014

End Date: 00-04-2014

Program Area: Socio-economic and Policy

Non-commodity: Profitability

Objectives:

The present study had been taken for measuring profitability of rice production in coastal areas of Shamnagar upazila of Satkhaira district for a successful rice revolution in Bangladesh and expected to provide valuable data and useful for formulating appropriate policy for widespread cultivation of rice in coastal areas of Bangladesh.

Methodology:

The present study was conducted in coastal areas of Shamnagar upazila, Satkhaira district, Bangladesh to examine the profitability of rice production during the period of January to April, 2014. Necessary data were collected through direct interviewing from the sample of 75 farmers which constituted 35 small, 20 medium and 20 large farmers respectively by a purposive random sampling method. The collected data were then sorted, scrutinized and analyzed to achieve the objectives set for the study. The average percentage, total cost, total return etc were the simple statistical measures employed to show the economic performance of rice production. A Cobb-Douglas production function model was used to estimate the contribution of key inputs to the production processes of rice. This is a conventional model where the level of production depends on the level of input use. The specification of the Cobb-Douglas production function was as follows: Yi= aX1b1 X2b2 X3b3 X4b4 X5b5 X6b6 X7b7 X8b8 X9b9 eui In the linear form it can be written as follows: In Y = ln a+b1lnX1+b2lnX2+b3lnX3b4lnX4+b5lnX5+b6lnX6+b7lnX7+b8lnX8+b9lnX9xui Where, ln = Natural logarithm; Y = Gross return (Kg/ha); X1= Seed cost (Kg/ha); X2= Human labor cost (Man days/ha); X3= Power tiller cost (Tk/ha); X4= Urea cost (Kg/ha); X5= TSP cost (Kg/ha); X6= MP cost (Kg/ha);X7= Irrigation cost (Tk/ha);X8= Manure cost (Kg/ha); X9= Insecticide cost (Tk/ha); a = Constant or intercept term; b1, b2, b3, b4, b5, b6, b7, b8, b9 = production coefficient of the respective input variable to be estimated; and ui = error term Profitability analysis of rice production has been determined on the basis of net return analysis.To determine the net returns from rice production, gross costs (variable and fixed cost) were deducted from gross returns.

The equation has been applied for each of the selected farmers: π= Pm* Ym+Pb* Yb-Σ(Pxi * Xi)-TFCWhere, π = Net return Pm= Price of main product per units Ym= Total quantity of main product Pb = Price of by-product per unit Yb= Quantity of by-product Pxi= Price of ith input per unit used for rice production Xi= Quantity of the ith input used for rice production TFC = Total fixed cost i = 1, 2, 3........n (number of input)The estimation of Interest on operating capital (IOC) was as follows: Interest on OC = AI × i × t Where, AI = (Total investment)/2; I = Rate of interest per annum (%); and T = Period of rice production (in month). The benefit cost ratio (BCR) is a relative measure which is used to compare benefit per unit of cost. Benefit-cost ratio is the ratio of present net worth of benefit and present net worth of cost. It indicates that the benefit of per unit cost at present worth.

Source of Information: (2017) / Int. J. Bus. Manag. Soc.Res.03(01): 148-153

Article Link (Online Journal): https://doi.org/10.18801/ijbmsr.030117.17

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

Rice production is profitable in the study area and small farmers earned higher profit compared to medium and large farmers. Thus the present study might be helpful for the researcher, policy makers and to other concerned authorities for conducting further comprehensive research or to arrive at any plan for the development of the rice farmers in coastal areas of Bangladesh. However, the sustainability of rice production in coastal areas of Bangladesh depends on optimization of planting time, quality seed of appropriate varieties, and balanced nutrient management along with soil fertility conservation and other management.

Knowledge Management: Journal