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International Competitiveness of Selected Pulse Crops in Bangladesh

M. A. Rashid
Principle Scientific Officer
Agricultural Economics Division, BARI, Gazipur.

M.A. Matin
Chief Scientific Officer
Agricultural Economics Division, BARI, Gazipur.

Abstract/ Executive Summary:

The study was undertaken to assess the financial and economic profitability of selected pulse crops in Bangladesh. One hundred eighty pulse growers were randomly selected in Rajshahi, Natore and Jessore districts for the study. Net return analysis was done on both variable and total cost basis. Policy Analysis Matrix (PAM) and Domestic Resource Cost (DRC) analysis were also done for estimating comparative advantage of the selected pulse crops. The study revealed that net returns were positive for all pulse crops. However, the highest net return was estimated for lentil (Tk 75,235/ha) followed by chickpea (Tk 42,119/ha). Comparatively lowest net returns was found for mungbean (Tk 34,435/ha). The highest benefit cost ratio (BCR) was also for lentil (2.07) followed by chickpea (1.64). PAM and DRC analysis showed that Bangladesh had comparative advantage for producing all selected pulse crops as the estimates of domestic resource cost (DRC) were less than one implied that the production of pulse crops would be highly efficient for import substitution.

Keywords: Import parity, Policy analysis matrix, Domestic resource cost, Benefit cost ratio, Mungbean

Location: Rajshahi, Natore and Jessore districts

Start Date:

End Date:

Program Area: Variety and Species

Commodity: Pulses

Objectives:

To estimate the financial and economic profitability of pulse crops;
To assess the import substitution status of major pulse crops; and
To examine the policy implications arising from the findings.

Methodology:

The pulses growing farmers were considered as the population for this study. Keeping in view the objectives and time constraint of the study, altogether 180 sample taking 30 from each crop and each location. The study areas were purposively selected based on intensive pulse growing pockets in Bangladesh. Using the Policy Analysis Matrix (PAM) framework was utilized to measure competitiveness, economic efficiency and effects of policy interventions of the pulse crops. This framework was developed first by Monke and Pearson (1989), and augmented by recent developments in price distortion analysis by Masters and Winter-Nelson (1995). PAM is a tool that allows to examine the impact of policy by constructing two enterprise budgets, one valued at market prices and the other valued at social prices. The PAM, once assembled, provides a convenient method of calculating the measure of policy effects and measures of competitiveness and economic efficiency/ comparative advantage. This framework is particularly useful in identifying the appropriate direction of change in policy (Gonzale et al., 1993). In the present study, particular attention is given to competitiveness and economic efficiency in domestic resources by using a PAM framework. The assessment of competitiveness and economic efficiency of pulse crops at the farmgate level in different locations in Bangladesh were undertaken and the necessary indicators were derived to explain the private profitability, social profitability and divergence.

Source of Information: Bangladesh Agricultural Economics Division, BARI, Gazipur - Report -2016

Article Link (Online Journal):

Funding Source:

1.

Budget:

Total Budget (Tk.) :

Achievement/Findings:

The study revealed that net returns were positive for all pulse crops. However, the highest net return was estimated for lentil followed by chickpea and mungbean. The highest benefit cost ratio (BCR) was also for lentil followed by chickpea and mungbean. PAM results under import parity prices of pulse crops showed that revenue transfer was negative indicating the government policies affect negatively to the pulse producer incentives. The input transfer was also negative indicating that the domestic pulse producer bought the imported inputs at prices which was less than the world price. It means that pulse producer received input subsidies for pulse production. The domestic factor transfer was positive illustrating that opportunity costs of non-tradable inputs were lower than their market prices. Finally the net profit/net policy was negative which means that under the existing policy circumstances, the producers earn less profit and enjoy limited scope for minimizing the net policy transfer. DRC results indicated that Bangladesh had comparative advantage of producing these pulse crops as the estimates of domestic resource cost (DRC) were less than one implied that the production of these pulse crops would be highly efficient for import substitution.

Knowledge Management: Report/Proceedings