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Assessing Profitability, Marketing Activities and Problems in Modern Rice Production in Two Northern Districts of Bangladesh

A. H. Siddiquee
Department of Agribusiness and Marketing, Sher-e-Bangla Agricultural University, Dhaka, Bangladesh

H. M. Sammy
Department of Agricultural Statistics, Sher-e-Bangla Agricultural University, Dhaka, Bangladesh

M. R. Hasan
Department of Agribusiness and Marketing, Sher-e-Bangla Agricultural University, Dhaka, Bangladesh

Abstract/ Executive Summary:

This study estimated the cost and revenue of BRRI dhan 28 productions in two districts namely, Bogura and Gaibandha in Bangladesh. The paper also identifies farmers marketing activity and their production problems. Primary data were collected from 60 farm household’s survey using pretested semi-structured questionnaire during November to December, 2017. Farm level production and profitability were analysed by using net farm incomes and Benefit Cost Ratio (BCR) taking into account the variable cost and total cost. Applying descriptive statistics, the analysis showed that total cost of paddy production was higher in Bogura (BDT 44,555.3/acre) compared that of Gaibandha (BDT 42,199.5/acre) while net farm income was higher in Gaibandha (BDT 32992.2/acre) than Bogura (BDT 32475.9/acre). The analysis further showed that paddy production was profitable in both districts. BCR on the basis of variable cost and total cost indicated that return from paddy production was higher than cost which also ensures farmers profit in paddy production in both the districts. According to farmers’ opinion, disease infestation was the major production problem in Bogura district while both disease Invasion and natural calamities were the major production problems in Gaibandha district. Farmers’ suggested to reduce the cost of pesticides and they need marketing facilities to sell their product. They also suggested to establish cold storage facilities which create the opportunity to get fair price for their product.

Keywords: Benefit cost ratio, Gross margin, Marketing activities, Production problems, Profitability

Location: Bogura and Gaibandha districts

Start Date: 00-11-2017

End Date: 00-12-2017

Program Area: Postharvest and Agro-processing

Commodity: Rice

Objectives:

• To assess the socio economic structure of the paddy farmers in the study areas.

• To verify the cost and revenue situations of the modern Boro rice producing farms.

• To identify marketing activities of the paddy farmers in the sample areas and

• To identify the problems faced by the farmers and possible solutions as proposed by the farmers under study.

Methodology:

The present study was conducted in two paddy producing districts namely: Bogura and Gaibandha, considering that Bogura and Gaibandha districts are famous for rice production. These two districts were purposively selected. In the Boro season, farmers produced BRRI dhan 28 in both districts and therefore, BRRI dhan 28 producing farmers were selected for the present study. Purposive sampling technique was followed for data collection. A total of 60 farmers were purposively selected for the study. Among them 40 farmers from Bogura and 20 farmers from Gaibandha district were selected. Primary data were used for this study. As such, sample survey was done. A semi-structured pre- tested interview schedule was used for collecting data. Data were collected from the paddy farmers during November to December, 2017. The revenues and costs of modern variety production were calculated. The profitability of paddy production was calculated by the following indices. These indices were previously used by Hasan et al. 2014, Hasan et al. (2016 a), and Hasan et al. (2016 b). Total variable cost = Seed cost + Power tiller cost +Labor cost + Fertilizer cost + Pesticides cost + Irrigation cost. Total Fixed cost= Land use cost + Interest on operating capital; Total cost (full cost) = Total variable cost + Total fixed cost; Gross Margin = Total revenue - Total variable cost. Net farm income = Total revenue - Total cost; Benefit cost ratio (on variable cost) = Total revenue/ Total variable cost. Benefit cost ratio (on total cost) = Total revenue/ Total cost. The issue of fund is one of the main constraints, and also one of the important components of production costs in some farmers in Bangladesh. The interest rate therefore becomes an undeniable issue in the evaluation of profitability of paddy production. The interest on operating capital was calculated for five months considering 14% interest rate in the study areas. Farmers were asked to provide their opinions about the sixteen selected problems. Problems were ranked on the basis of farmers responses. Farmer’s suggestions were also included according to their opinion.

Source of Information: The Agriculturists 2019; 17(1-2) 31-40

Article Link (Online Journal): DOI: https://doi.org/10.3329/agric.v17i1-2.44694

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

This paper analyzes the profitability of modern variety boro paddy production in Bogura and Gaibandha districts. The paper identifies different marketing activities of farmers and the study identifies different problems of the farmers related to paddy production. The findings clearly indicate that, both net farm incomes and BCR in modern variety boro paddy production were positive in the study areas although farmers face different types of problems. According to the rank order, disease Invasion was the main problem in both Bogura and Gaibandha district.

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