M. A. Baset
Senior Scientific Officer
Agricultural Economics Division, BARI, Gazipur
Q. M. Alam
Principal Scientific Officer
Agricultural Economics Division, BARI, Gazipur
Rafiqul Islam
Scientific Officer
Agricultural Economics Division, BARI, Gazipur
An ex-post rate of return analysis for estimating the returns of HYV variety of potato research and extension has been conducted in Bangladesh using Akino and Hayami Model based on the Economic Surplus Model through ex-post analysis. Discounting technique was used to assess the efficiency of potato research and extension. It was found that IRR to the total investment in HYV potato research and extension was calculated at 54%. Therefore, the HYV potato research and extension has proved to be as outstanding contributing variety for increasing potato production in Bangladesh.
Impact, potato, research, extension, ex-post.
All over Bangladesh
i. To estimate the rate of return to potato research and extension in Bangladesh
ii. To compare the distribution of benefits between producers and consumers.
An ex-post economic surplus approach by using small closed economy model has been applied in the analysis. There are two parts for obtaining the rate of returns of potato research and extension expenditures. Firstly, each yearly benefit in monetary term from the adoption of potato has been estimated. Secondly, this yearly benefit was related, calculating internal rate of return, to the yearly cost of research and extension. Using Marshallian concepts of social welfare and cost, social returns to potato research are measured by changes in consumer’s and producer’s surpluses that result from the shifts in the supply curve corresponding to a shift in the potato production function. The IRR is calculated relating the total social benefit (TS) in each year to the research expenditure in each year and r is the discount rate that results in a zero NPVB. The analysis used the closed economy model and therefore requires demand elasticity. Nagy recently found two estimated demand elasticities at -0.5 and-1.27. In this ex-post potato model-0.5demand elasticity was used. Data on potato prices, quantity produced, cost of production per hectare, total potato area have been collected from various issues of BSS 1985 to 1999. The percentage of area under modern variety replacing local varieties is estimated through discussion with TCRC scientists. Actual area is then estimated from the total potato area. The most important data for potato research on research expenditure is calculated by approximation from the research budget of the TCRC. For approximating the potato research expenditure BARI account section helped to a greater extent.
Annual Research Report 2005, Agricultural Economics Division, BARI, Gazipur
The study revealed that 60% yield advantage of modern variety over the local variety and then this estimate was used. Study showed that the new potato variety played a tremendous role to cover more and more area by replacing the unimproved variety in our country. The internal rate of return was found 54%. This IRR on investments in research and extension is a good rate of return. The analysis also includes the benefits over the local varieties. The benefit cost ratio was found 3.06 which indicated higher benefits to the investment. Therefore both government and donor agencies should come forward to invest potato research and extension in the country.
Report/Proceedings