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Research Detail

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Dayal Talukder
Lecturer
ICL Business School, Auckland, New Zealand

Love Chile
Associate Professor
Auckland University of Technology, Auckland, New Zealand

The purpose of this paper is to examine the characteristics of rice cultivation and rural rice market in the post-trade-liberalization era. The study used mainly primary data collected through a field survey. It found that agricultural trade liberalization facilitated rice farmers with access to cheaper inputs such as irrigation, fertilizers, pesticides and HYV seeds, and led to the technological transformation in rice cultivation. The technological transformation in agricultural production led to major structural changes in agriculture and the rural economy, resulting in a substantial increase in the productivity of rice. Average yields per hectare and total rice production increased significantly, leading to a substantial increase in the supply of rice in the domestic market which resulted in significant reductions in rice prices. The average production cost of rice per acre in terms of input use varied across the three rice crops as well as across the various stages of rice cultivation. All rural households were involved with rice market as sellers or buyers or both. The study identified market failure in the rice market in the form of controls over the rice market by syndicates of rice traders. The study argues that small farmers experienced a higher loss than that of large farmers from this market imperfection as they mostly sold rice during the peak season at lower prices and bought rice during the lean season at higher prices. The study recommends the formulation of a government regulatory framework as a tool for market intervention to support small farmers and poor households. 

  Rice cultivation, Market agriculture, Trade liberalisation, Bangladesh
  In Bangladesh
  00-00-2010
  00-00-2010
  Crop-Soil-Water Management
  Market analysis, Socioeconomic

To examine the characteristics of rice cultivation and rural rice market in the post-liberalization era. 

Data The study used mainly primary data collected through a field survey in January 2010. It used a mixed-method research design in primary data collection. Questionnaire and face-to-face interview techniques were used for collecting data. A structured survey questionnaire was designed with both closed-ended and open-ended questions. Therefore, the datasets included both quantitative (closed-ended) information through using a closed-ended checklist and qualitative (open-ended) information through interviews with participants. The questionnaire included questions on households’ involvement in rice production, rice market and input markets. The choice of this method was warranted to achieve the objectives of the study. The study used both probability and non-probability sampling methods for field surveys to collect primary data. Using convenience and judgment sampling, non-probability sampling methods (Bartlett-II et al., 2008: 47), it selected Comilla amongst the sixty-four districts of Bangladesh for conducting the field survey. 1. Comilla was a pioneer district in the field of the Green Revolution in Bangladesh. It was expected that it might have experienced significant technological transformation in agriculture as a result of agricultural trade liberalization. 2. It is basically an agricultural district. It is neither a hilly nor a coastal area, representing the typical geographical feature, which is conducive to agricultural activities. Therefore, data would not be affected by geographical bias. The farmers of this district produce three crops of rice – Aus, Amon, and Boro, representing the basic characteristics of rice cultivation in Bangladesh. 3. The Bangladesh Academy for Rural Development (BARD), a research institute for agriculture and rural development, is located in the Comilla district. The BARD and other research institutes usually conduct surveys in this district and the participants are familiar with surveys and research. Therefore, it was expected that conducting a field survey in this district would present fewer logistical challenges. According to the Bangladesh Bureau of Statistics (BBS, 2007a), there are thirteen Upazilas (sub-districts) in the Comilla district. They are: 1) Barura, 2) Brahmanpara, 3) Burichang, 4) Chandina, 5) Chauddagram, 6) Daudkandi, 7) Debidwar, 8) Homna, 9) Comilla Sadar, 10) Laksam, 11) Meghna, 12) Muradnagar, and 13) Nangalkot. The study selected Comilla Sadar Upazila, then Chouara Union from that Upazila and finally Shrimontapur village from that union for conducting the field survey. Based on cluster sampling, the households of the selected village were divided into three clusters (A, B and C) and then, using the random sampling technique, cluster C was selected for the field survey. The study surveyed all 60 households from this cluster. Therefore, the sample size of this survey was 60 households of that village. The details of observations are presented. The household head or a senior person of the household who had access to information of all household members answered this structured interview questionnaire. The authors conducted this structured interview through asking participants questions and writing their answers. If a participant did not have information about all members of the household, the participant was not requested to participate in the survey. Therefore, all 60 observations for all questions were found correct/valid and no sample was dropped from the original data set. The study also conducted a Data Exploratory Analysis to identify outliers and no outlier was found in this data set. The study also used time-series data from secondary sources, mainly from ‘Handbook of Agricultural Statistics, December 2007’ (Ministry of Agriculture, 2007). Other sources included BBS (2007) and the Ministry of Finance (2010). Time series data included rice production, average yield and rice market during 1985-2005.  questionnaire was designed with both closed-ended and open-ended questions. Therefore, the datasets included both quantitative (closed-ended) information through using a closed-ended checklist and qualitative (open-ended) information through interviews with participants. The questionnaire included questions on households’ involvement in rice production, rice market and input markets. The choice of this method was warranted to achieve the objectives of the study. The study used both probability and non-probability sampling methods for field surveys to collect primary data. Using convenience and judgment sampling, non-probability sampling methods (Bartlett-II et al., 2008: 47), it selected Comilla amongst the sixty-four districts of Bangladesh for conducting the field survey. 1. Comilla was a pioneer district in the field of the Green Revolution in Bangladesh. It was expected that it might have experienced significant technological transformation in agriculture as a result of agricultural trade liberalization. 2. It is basically an agricultural district. It is neither a hilly nor a coastal area, representing the typical geographical feature, which is conducive to agricultural activities. Therefore, data would not be affected by geographical bias. The farmers of this district produce three crops of rice – Aus, Amon, and Boro, representing the basic characteristics of rice cultivation in Bangladesh. 3. The Bangladesh Academy for Rural Development (BARD), a research institute for agriculture and rural development, is located in the Comilla district. The BARD and other research institutes usually conduct surveys in this district and the participants are familiar with surveys and research. Therefore, it was expected that conducting a field survey in this district would present fewer logistical challenges. According to the Bangladesh Bureau of Statistics (BBS, 2007a), there are thirteen upazilas (sub-districts) in the Comilla district. They are: 1) Barura, 2) Brahmanpara, 3) Burichang, 4) Chandina, 5) Chauddagram, 6) Daudkandi, 7) Debidwar, 8) Homna, 9) Comilla Sadar, 10) Laksam, 11) Meghna, 12) Muradnagar, and 13) Nangalkot. The study selected Comilla Sadar Upazila, then Chouara Union from that upazila and finally Shrimontapur village from that union for conducting the field survey. Based on cluster sampling, the households of the selected village were divided into three clusters (A, B and C) and then, using the random sampling technique, cluster C was selected for the field survey. The study surveyed all 60 households from this cluster. Therefore, the sample size of this survey was 60 households of that village. The details of observations are presented. The household head or a senior person of the household who had access to information of all household members answered this structured interview questionnaire. The authors conducted this structured interview through asking participants questions and writing their answers. If a participant did not have information about all members of the household, the participant was not requested to participate in the survey. Therefore, all 60 observations for all questions were found correct/valid and no sample was dropped from the original data set. The study also conducted a Data Exploratory Analysis to identify outliers and no outlier was found in this data set. The study also used time series data from secondary sources, mainly from ‘Handbook of Agricultural Statistics, December 2007’ (Ministry of Agriculture, 2007). Other sources included BBS (2007) and Ministry of Finance (2010). Time series data included rice production, average yield and rice market during 1985-2005. questionnaire was designed with both closed-ended and open-ended questions. Therefore, the datasets included both quantitative (closed-ended) information through using a closed-ended checklist and qualitative (open-ended) information through interviews with participants. The questionnaire included questions on households’ involvement in rice production, rice market and input markets. The choice of this method was warranted to achieve the objectives of the study. The study used both probability and non-probability sampling methods for field surveys to collect primary data. Using convenience and judgment sampling, non-probability sampling methods (Bartlett-II et al., 2008: 47), it selected Comilla amongst the sixty-four districts of Bangladesh for conducting the field survey. 1. Comilla was a pioneer district in the field of the Green Revolution in Bangladesh. It was expected that it might have experienced significant technological transformation in agriculture as a result of agricultural trade liberalisation. 2. It is basically an agricultural district. It is neither a hilly nor a coastal area, representing the typical geographical feature, which is conducive to agricultural activities. Therefore, data would not be affected by geographical bias. The farmers of this district produce three crops of rice – Aus, Amon, and Boro, representing the basic characteristics of rice cultivation in Bangladesh. 3. The Bangladesh Academy for Rural Development (BARD), a research institute for agriculture and rural development, is located in the Comilla district. The BARD and other research institutes usually conduct surveys in this district and the participants are familiar with surveys and research. Therefore, it was expected that conducting a field survey in this district would present fewer logistical challenges. According to the Bangladesh Bureau of Statistics (BBS, 2007a), there are thirteen upazilas (sub-districts) in the Comilla district. They are: 1) Barura, 2) Brahmanpara, 3) Burichang, 4) Chandina, 5) Chauddagram, 6) Daudkandi, 7) Debidwar, 8) Homna, 9) Comilla Sadar, 10) Laksam, 11) Meghna, 12) Muradnagar, and 13) Nangalkot. The study selected Comilla Sadar Upazila, then Chouara Union from that upazila and finally Shrimontapur village from that union for conducting the field survey. Based on cluster sampling, the households of the selected village were divided into three clusters (A, B and C) and then, using the random sampling technique, the cluster C was selected for the field survey. The study surveyed all 60 households from this cluster. Therefore, the sample size of this survey was 60 households of that village. The details of observations are presented. The household head or a senior person of the household who had access to information of all household members answered this structured interview questionnaire. The authors conducted this structured interview through asking participants questions and writing their answers. If a participant did not have information about all members of the household, the participant was not requested to participate in the survey. Therefore, all 60 observations for all questions were found correct/valid and no sample was dropped from the original data set. The study also conducted a Data Exploratory Analysis to identify outliers and no outlier was found in this data set. The study also used time series data from secondary sources, mainly from ‘Handbook of Agricultural Statistics, December 2007’ (Ministry of Agriculture, 2007). Other sources included BBS (2007) and Ministry of Finance (2010). Time series data included rice production, average yield and rice market during 1985-2005.

  AGRICULTURAL ECONOMICS REVIEW, 2014, Vol 15, No. 2
  
Funding Source:
1.   Budget:  
  

From the above analyses, farmers produced three rice crops in a year. The average production cost of rice per acre in terms of input use varied across the three rice crops as well as across the various stages of rice cultivation. All rural households were involved with rice market as sellers or buyers or both. The technological transformation in agricultural production led to major structural changes in agriculture and the rural economy, leading to a substantial increase in the productivity of rice. Average yields per hectare and total rice production increased significantly, leading to a substantial increase in the supply of rice in the domestic market which resulted in significant reductions in rice prices. The study identified market failure (imperfection) in the rice market in the form of controls over the rice market by syndicates of rice traders. They benefited from the rice market in two ways: rice trader syndicates bought rice at a lower producer price during the peak season and sold at a higher consumer price during the lean season. They manipulated the rice prices and played the role of intermediaries in the rice market, thus exploiting both producers and consumers. The study also identified higher losses experienced by small farmers from this market imperfection as they mostly sold rice during the peak season at lower prices and bought rice during the lean season at higher prices. The study recommends the formulation of a government regulatory framework (in the form of enactment of rules and regulations) as a tool for market intervention to support small farmers and poor households. Similarly, the government should undertake the following measures: (1) encourage the promotion of small farmers’ cooperatives with institutional supports to have a stronger voice in the rice market; (2) provide storage facilities where small farmers and cooperatives could store excess grain both for family consumption and trade; (3) introduce producer-guaranteed prices to support small farmers; and (4) offer preferential purchases by the government at producer-guaranteed prices, or through farmers’ cooperatives.  

  Journal
  


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