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A Comparative Financial Analysis of Aus Rice and Jute Production in Some Selected Areas of Mymensingh District

M. S. Rahman*
Department of Agricultural Economics, Bangladesh Agricultural University, Mymensingh 2202, Bangladesh

M. S. H. Forman
Department of Agricultural Economics, Bangladesh Agricultural University, Mymensingh 2202, Bangladesh

Abstract/ Executive Summary:

This study is designed to determine the costs and returns and relative profitability of an early variety aus rice and jute in greater Mymensingh. It was revealed that the cultivation of aus rice and jute was a profitable business from the viewpoint of farmers. Per hectare gross costs of production of aus rice and jute were Tk. 42945 and Tk. 63906 respectively and the corresponding gross returns were Tk. 43323 and Tk. 75391, respectively. The per hectare net returns of producing aus rice and jute were Tk.378 and Tk. 11484, respectively. Partial budgeting analysis revealed that the jute growers were benefited an amount of Tk. 11108/- per hectare than the aus growers. Cobb-Douglas production function was applied to realize the specific effects of individual inputs on production of aus rice and jute. It was observed that most of the included variables had significant impact on aus rice and jute production. Among the included variables, four variables namely human labor, seed, fertilizer and manure had positive and significant impact on returns from both aus rice and jute production. The major problems of the study were seed purity level, insufficient water and irrigation facility and higher input costs.

Keywords: Aus rice, Comparative financial analysis, Jute, Production, Profitability.

Location: Five villages of Mymensingh Sadar Upazila of Mymensingh district

Start Date:

End Date:

Program Area: Socio-economic and Policy

Commodity: Aus, Jute

Objectives:

The present study was undertaken with a view to analyzing the comparative advantage of producing jute and Aus rice; that will give a proper idea to go for particular crops. Considering the importance of the study the following objectives were formulated for this study namely as to document the socioeconomic profiles of the Aus rice and jute growers; to compare the relative profitability of Aus rice and jute production; to estimate the major factors affecting the financial returns of Aus rice and jute, and to suggest some policy guidelines.

Methodology:

Keeping the objectives in mind, the present study was carried out in five villages of Mymensingh Sadar Upazila of Mymensingh district. Survey method was used for data collection by interviewing respondents. In this study, the area was selected purposively and the farmers were selected randomly for minimizing cost, time and to achieve the ultimate objectives of the study. In total 60 farmers were randomly selected taking 30 from Aus rice and another 30 from jute growers. The data were collected by the researcher himself during August 2010. The collected data were then stored and scrutinized. Costs and returns analyses were done on both variable and total cost basis. In comparing the profitability between Aus and jute, the present study used the partial budgeting method. Finally, econometric technique such as Cobb-Douglas production function (Gujarati 1995) was used to examine the effects of the independent variable on the dependent variables in the production of aus rice and jute.

Source of Information: Journal of Science and Technology 11(June 2013): 12-16

Article Link (Online Journal):

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

It was observed in the study area that, Aus rice and jute production was profitable. However, jute production was more profitable than Aus rice production. Both Aus rice and jute are labor-intensive enterprises. So cultivation of jute can help in increasing income and employment opportunity of the people. The management practices of aus rice and jute enterprises in the study area were not found efficient enough. Farmers were not known about the application of inputs in right time with right doses. Consequently, they made over or underuse of some inputs. It was observed that most of the included variables had significant impact on Aus rice and jute production. Among the included variables, four variables in the model had positive impact on returns from both Aus rice and jute production. There was a scope of utilizing more fertilizers on both Aus rice and jute production and thus the production would be increased. According to the famers problems, they need goals, resources and well-planned management training, so that the farmers can lead to viable production practices and sustainable income from Aus rice and jute cultivation. Considering the major findings of the study, some important policy considerations arise as lack of washing water for jute is the main problem of the farmers in the study area. To minimize this problem government should take a step to dig canal or community-based ponds. So those farmers can get available water for washing jute. Low and fluctuation of Aus rice and jute price are the main problem of the farmers. Government can determine the floor price of rice and jute which may protect farmers from loss. Due to the lack of cash and the lack of storage facility, farmers were compelled to sell a major part of their produce immediately after harvest. Government can provide loans to the farmers with low interest rate and construct storehouse which may provide an additional opportunity to the farmers during off-season by enabling them to get a reasonable price.

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