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Productivity and Profitability of Sugarcane Production in Northern Bangladesh

Md. Selim Reza
Assistant Professor
Department of Economics, University of Rajshahi, Bangladesh

Mahmud Hossain Riazi
Assistant Professor
Department of Economics, University of Rajshahi, Bangladesh

Dr. M. Moazzem Hossain Khan
Professor
Department of Economics, University of Rajshahi, Bangladesh

Abstract/ Executive Summary:

Sugarcane is an important industrial and cash crop. It is grown in almost all areas in Bangladesh, but commercial basis sugarcane is produced in Rajshahi, Natore, Pabna, Kustia, Chuadanga, Panchagar, Joypurhat and Thakurgaon districts. Because of available raw materials, most of the sugar mills are located in these areas. By considering the sugarcane production, number of sugar mills and sugar research institutes and the availability of sugarcane related information, we select Lalpur and Ishardi Upazillas under Natore and Pabna districts respectively as our study areas and a total of 90 samples are collected that mainly represent the actual scenery of sugarcane production of North-Bengal Region. To find the profitability and productivity of sugarcane producers, profit function and linear regression analysis are used. The result has shown that farmers gain profit from sugarcane production and the profit margin increases if the farmers grow inter-crop with sugarcane. Fertilizer, seed and pesticides significantly affect the sugarcane production where the use of fertilizer and pesticides are positively and seed is negatively related with sugarcane production. In case of sugarcane production with inter-crop, tilling and pesticides are positively and significantly and human labor is significantly but negatively related with sugarcane production. As is shown from the study, to increase production and profit level of sugarcane, government as well agricultural organizations should encourage farmers for inter-cropping. More scientific research is necessary for improving the variety of sugarcane that will likely to reduce the gap of per acre yield between Bangladesh and other sugarcane-producing countries.

Keywords: Sugarcane Production, Inter-cropping, Productivity, Profitability

Location: In Bangladesh

Start Date: 00-00-2013

End Date: 00-00-2014

Program Area: Socio-economic and Policy

Commodity: Sugarcane

Objectives:

The following objectives will be formulated keeping in view the importance of farm mechanization and challenges faced by it. i) To measure and compare the profitability of sugarcane production between two districts; ii) To examine the productivity of different inputs used in sugarcane production; iii) To identify the constraints in sugar production and develop the policy initiatives for increasing its production.

Methodology:

A micro-level study based on the primary cross-section data has been designed to attain the objectives of this study. The methodology concerns mainly itself with the sources of data, selection of study areas, sampling procedure, data collection technique and analytical framework used in this study. Study Area and Data: Secondary data have been collected from various sources such as books, journals, research reports, statistical reports which related to socio-economic characteristics, productivity and efficiency analysis, sugarcane production, agricultural production and policy suggestions. In addition, data about districts, thanas, unions and villages were collected which give precise information for selecting the research areas. It includes cultivable land areas, sugarcane cultivated areas, number of agricultural households, number of sugarcane farming households, research institute, socio-economic characteristics, number of sugar mills and government policies in agricultural sector and sugarcane production. To conduct the research study, primary data were used and the main sugarcane producing area in northwest Bangladesh, the Natore and Pabna district were selected as the study area. Primary data of this study based on farm level cross-section data of the crop year 2013-2014 and the survey has been conducted October to March of crop year 2013-2014. Primary data have been collected from selected areas of Northern part of Bangladesh. The rationale behind the selection of this specific region as study area lies in the fact that till around 80% is engaged in farming activities in this region and most of the farmers produce two or three crops in a year. The overall cropping intensity of the region is 175 percent (Wadud 2001). The required number of samples has been collected by using purposive random sampling technique so that target group of farmers can enter in the sample. Three-stage stratified random sampling has been used. The study area covers two thanas such as Lalpur in Natore district and Ishardi thana in Pabna district. A sample of 90 farmers from two thanas has been chosen for the study. From each thana 45 samples have been collected from at least two villages. To select village area we give priority on those areas where large number of farmers produce sugarcane. Since the study pays attention to productivity and profitability and its determinants in a predominantly sugarcane cultivation area, attempt has been made to choose the villages which has an average level of agricultural performance in their respective subregions. This information has been available from thana agriculture offices. The sample is selected in such a way that farmers of each village have representation in the sample.

Source of Information: Indian Journal of Commerce & Management Studies ISSN: 2240-0310 EISSN: 2229-5674; Volume VII Issue 1, Jan. 2016

Article Link (Online Journal):

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

Many important insights have been found from this study which are necessary for profitable sugarcane cultivation. The present dismal condition of sugar mills and inefficiency of the farmers encourage us to conduct this study. The fact that multiple–cropping is more profitable than mono-cropping indicates that joint cultivation of sugarcane (with pulse etc.) increase the profit margin. The Costs of fertilizer and pesticides have positive and significant impact on sugarcane production where the cost of seed has negative but significant effect on sugarcane production. Human labour and irrigation have insignificant as well as negative effect on sugarcane production. In case of multiple cropping, a unit increase in human labour results in a decrease in output by 0.214 units. The elasticities of output with respect to cost of tillage and pesticides are 0.433 and .010 respectively implying that if famers increase the use of tillage cost and pesticides cost by 1 % then the production of sugarcane will increase by 0.433% and 0.010% respectively. In real sense, sugar mills and sugarcane producers in Bangladesh have faced many problems and day by day the condition is getting to worse. It is really unexpected, that our sugar mills unable to make profit since FY 1984-85 to FY 2004-05 except FY 1989-90 and FY 1994-95. Several factors are responsible for the farmers? lack of interest in sugarcane production and the resulting production fall. Old production technique, back dated machineries, unskilled human labour, low quality of sugarcane and molasses production by the farmers instead of selling sugarcane to sugar mills were considered the basic reasons for chronic losses of sugar mills. The field survey also helps find the problems that the farmer faces during cultivation. It is seen that lack of proper training, use of local variety, inadequate supply of inputs, high price of human labour, extended harvesting period and late payment by the sugar mills were identified as major constraints behind the low profit of the sugarcane producer

Knowledge Management: Journal