PROFITABILITY AND RESOURCE USE EFFICIENCY OF PRODUCING MAJOR SPICES IN BANGLADESH

Author

M. Serajul Islam, K. M. Mostafizur Rahman and Md. Kamrul Hasan

Bangladesh Journal of Agricultural Economics, 2011, vol. 34, issue 1-2

Abstract: The present study attempts to determine the productivity, profitability and resource use efficiency of four promising spices crops such as garlic, chilli, ginger and turmeric. The data were collected from 480 farm households in the crop year 2010-2011. Productions of all the crops were profitable as estimated by net returns and benefit cost ratios. Functional analyses showed that farm size, seed, inorganic and organic fertilisers, cost of power tiller and draft power, irrigation, education, farming experience and training had positive impact on the production of spices. Increasing returns to scale prevailed in the production process for garlic, chilli, ginger whereas constant returns to scale prevailed for the production of turmeric. All the models used fitted well to analyse the selected data for all crops. Small farmers were more efficient for garlic production only whereas the large farmers were more efficient for other spices crops. More educated and more experienced farmers were technically more efficient than less educated and less experienced farmers. Training reduced significantly the inefficiency of farmers in producing respective crops. The average estimated technical efficiencies for garlic, chilli, ginger and turmeric were respectively 88, 80, 69 and 79% which indicated that garlic production could be increased by 12%, chilli by 20%, ginger by 31% and turmeric by 21% with the same level of inputs without incurring any additional cost. As a policy option, training should be extended to all farmers to have a reduced inefficiency effect, which in turn would increase the profitability of spices crop production by saving resources. However, training should be provided frequently to improve the efficiency of farmer for spices production.

Keywords: Production Economics (search for similar items in EconPapers)
Date: 2011
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