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Returns to Investment in Modern Variety Potato Cultivation in High Density Region (hdr) of Bangladesh

Md.Abdul Baset
Principal Scientific Officer
Agricultural Economics Division, BARI Joydebpur, Gazipur-1701

M. R. Karim
Senior Scientific Officer
Agricultural Economics Division, BARI Joydebpur, Gazipur-1701

Q.M.Alam
Chief Scientific Officer
Agricultural Economics Division, BARI Joydebpur, Gazipur-1701

Abstract/ Executive Summary:

This Paper attempts to quantify the returns to investment in potato research in High Density Region (HDR) of Bangladesh and their distribution between the producers and consumers based on the economic surplus model. Several discounting techniques were used to assess the efficiency of potato research. The Internal rate of return (IRR) in High Density Region (HDR) of Bangladesh was found 89%. The Benefit Cost Ratio (BCR) was estimated to be 9.33 and Net Present Value (NPV) was found Tk. 11492.42 million. The results showed that the consumers were more beneficiaries and the producers a bit less beneficiaries from the Modern Variety Potato Cultivation in High Density Region (HDR) of Bangladesh at the initial stage and after then the situation was found reverse. It means that the producers were going to harvest higher benefit from research. The results indicate that the funding for Modern Variety Potato Cultivation in High Density Region (HDR) of Bangladesh is a good investment.

Keywords: Returns to investment, Modern Variety, Potato, High Density Region

Location: Dhaka, Comilla, Bogra and Dinajpur districts

Start Date:

End Date:

Program Area: Socio-economic and Policy

Commodity: Potato

Objectives:

a) To estimate the rate of return to potato research in High Density Region (HDR) of Bangladesh

b) To compare the distribution of benefits between producers and consumers in High Density Region (HDR) of Bangladesh.

C) To provide information to policy makers, donor agencies and research managers

Methodology:

There are different analytical techniques used by numerous authors for analyzing the research benefits. Most of them need to have data over the years of research cost, extension cost, % area covered by the modern variety (MV) or improved package (IP). A disaggregated analysis of the potato research benefits have been worked out in this study. In the study, the disaggregation was done on the basis of Density of Potato Area. District wise (old greater) average net -cropped area and area under potatoes for five years (1992-93 to 1996-97) was taken into account for making disaggregation. The percentage of potato area with respect to net cropped area was the premise of disaggregation. Districts in which total potato area covered 3 percent and above of the net-cropped area has been termed as High Density Region (HDR). Dhaka, Comilla, Bogra and Dinajpur districts are included in this category. The districts where potato was grown at a medium level and potato area constituted 1.00 to less than 3 percent of the net cropped area were termed as Medium Density Region (MDR). Similarly, those districts where potato area are comprised less than 1 percent of the net-cropped area were called Low Density Region (LDR). Marshallian concepts of social welfare and cost, social returns to potato research are measured by changes in consumers and producers surpluses that result from the shifts in the supply curve corresponding to a shift in the potato production function. NPV,IRR,Elasticity was also calculated.

Source of Information: Annual Research Report, Agricultural Economics Division, BARI

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

it is observed that in the year 1981-1982 the gross return was found Tk.842 million and in the year 1982-83 the gross return was found Tk. 800 million. From the 1982-83 the gross return rises Tk.1870 million and similarly the trend of gross return a bit slowly increasing but from the year 2000-2001 to 2005-2006 gross return was found increasing and up to Tk.30787 million meaning that a good return from the High Density Region.the consumers were getting higher benefit from High Density Region (HDR) at the beginning that is from the year 1981-82. From the year 1981-82 to 1991-92 most of the benefit share went to the consumers. This is due to lower prices of potato in the market But it can be noticed here that in the period of 1981-82 to 1991-92 consumers were getting higher benefit from potato research in High Density Region (HDR) of Bangladesh but year after year up to 1991-92 they were getting benefit but less than the previous year. The net benefit in High Density Region (HDR) of Bangladesh was found Tk. 20467.65 million in the year 2004-05 and Tk. 18554.12 million in the year 2005-06. This amount is increasing in recent past i.e. probably from 1997-98.For calculating yield advantage data over the year the regional data were used. From the reports we found 64% yield advantage of modern variety over the local variety and then this estimate was used for calculating K in each year in High Density Region (HDR). Net social benefit from potato research is obtained to be Tk. 11492.42 million. The internal rate of return (IRR) for potato research in High Density Region (HDR) was found to be 89%. The internal rate of return (IRR) to potato research in High Density (HDR) was found 89%.

Knowledge Management: Report/Proceedings