An economic analysis of winter vegetables production in some selected areas of Narsingdi district

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2 242 An economic analysis of winter vegetables production Materials and Methods Due to limitation of time and resources, a small area with uniform topographical and ecological characteristics was considered as study area. Keeping in mind the main objective, two villages namely Vogorcandi and Chorsujapur of Putia Bazar Union under Shibpur upazila in Narsingdi district were purposively selected for the study. Survey method was applied to collect the data and the study period was July to September, In total 90 samples were randomly selected (30 from each vegetable). Data were collected by comprehensive interview schedules. In this study, simple profit equation was used for calculating profitability of the said vegetables. The profit function is as follows: Π= P1iQ1i -TC Where, P1i= Price of main product Q1i= Quantity of main products TC= Total Cost Simple statistical techniques as well as Cobb-Douglas production function were used to process and analyze the data to achieve the goals of the study. Specific model is as follows Seven variables were hypothesized to explain the production of selected winter vegetables. The Cobb- Douglas production function analysis was used to determine the effect of these inputs. The model was specified comprehensively in such way that it can specify adequately the production process of the vegetables. The selected Cobb-Douglas production function model (Gujarati, 2003), in its stochastic form may be expressed as: b b 2 b 3 b 4 b 5 b 6 b 7 u Y 1 X X X X X e i i = ax 1i X 2i 3i 4i 5i 6i 7i The function was linearized by transforming it into the following double log or log-linear form i.e. lny i = lna 1 1i 2 2i 3 3i 4 4i 5 5i 6 6i 7 7i + u i Where Y = Gross return (Tk./ha); X 1 = Human labour cost (Tk./ha); X 2 = Tillage cost (Tk./ha); X 3 = Seedling cost (Tk./ha); X 4 = Fertilizer cost (Tk./ha); X 5 = Manure cost (Tk./ha); X 6 = Irrigation cost (Tk./ha); X 7 = Insecticides cost (Tk./ha); i = l, 2, 3,... n b 1,b 2,...b 7 = Regression co-efficient to be estimated and u i = Error term. Results and Discussion Profitability of vegetables production In order to determine the cost of purchased inputs, prevailing market price was used and for that of home supplied inputs the opportunity cost considered. The bank rate of 8 percent per annum was used to determine the opportunity cost of operating capital. In the production process human labour was the most important factor. On an average per hectare human labour required for tomato, cauliflower and cabbage were 511, 445 and 467 man-days, respectively. The per hectare costs of human labour for tomato, cauliflower and cabbage were Tk , and 56040, respectively, which covered 51.96, and 46.51% of the total cost respectively.

3 Akter et al. 243 Table 1. Operation wise per hectare human labour cost (Tk.) of different enterprises Items of cost Tomato Cauliflower Cabbage Land preparation Seedling transplanting Weeding and mulching Fertilizer, manure and insecticide applications Irrigation Harvesting and carrying Total Animal labour was used mainly for preparing land. For tomato, cauliflower and cabbage cultivation, the cost of animal power were Tk. 1800, 1440 and 1620, respectively. In the study areas, farmers also used power tiller. The per hectare power tiller cost for tomato, cauliflower and cabbage were Tk. 5880, Tk and Tk covering 4.98, 3.85 and 4.98 percent of total cost, respectively. The per hectare seedling costs for tomato, cauliflower and cabbage were Tk. 5250, Tk and Tk , respectively. The cost of seed constituted 4.45, and 12.94% of total cost of tomato, cauliflower and cabbage production, respectively. Fertilizer is a major requirement of tomato, cauliflower and cabbage production. In the study areas, farmers mainly used four types of fertilizer namely Urea, TSP, MP and Gypsum. The per hectare cost of these fertilizers were calculated at Tk , Tk and Tk which shared 15.90, and 12.53% of total cost for tomato, cauliflower and cabbage, respectively. Per hectare cost of manure amounted to be Tk. 6350, 5660 and 5880 for tomato, cauliflower and cabbage production. The per hectare cost of irrigation water amounted to Tk. 4500, Tk and Tk for tomato, cauliflower and cabbage production, which represented 3.81, 4.27 and 4.56 percent of their respective total cost, respectively. Table 2. Per hectare costs and returns of different enterprises Items Tomato Cauliflower Cabbage A. Gross Return Main product B. Variable cost Hired labour Total labour Animal labour Power tiller Seeds Fertilizer Urea TSP MP Gypsum Cowdung Oil cake Irrigation charge Insecticides Total C. Fixed cost Land use cost Family labour Interest on operating capital Total D. Gross cost (B+C) Source: Field survey, 2009

4 244 An economic analysis of winter vegetables production Per hectare cost of insecticides amounted Tk. 4800, 3100 and 4000 for tomato, cauliflower and cabbage production, which occupied 4.10, 2.65 and 3.32 percent of their respective total cost. The land use cost per hectare was Tk for tomato production and Tk for cauliflower and Tk for cabbage production. Land use cost covered 7.63, 8.27 and 8.03% of total cost of tomato, cauliflower and cabbage production, respectively. Per hectare interest on operating capital was Tk. 1079, Tk and Tk. 1097, for tomato, cauliflower and cabbage production, respectively. Table 3. Per hectare costs and returns of producing tomato cauliflower and cabbage Particulars Tomato Cauliflower Cabbage Average yield kg pieces pieces Per unit price (Tk..) Gross return (Tk.) Gross cost (Tk.) Gross margin (Tk.) Net return (Tk.) BCR (Undiscounted) Tomato Cauliflower Cabbage Tk/ha Gross return Gross costs Gross margins Net returns Particular Fig. Figure 1. Gross 1 Gross returns, returns, gross gross cost, gross cost, margin gross margin and net and return net of return tomato, of cauliflower tomato, and cabbage cauluflower production and cabbage production Per hectare variable cost of tomato, cauliflower and cabbage production was estimated at Tk , Tk and Tk , respectively and their corresponding fixed cost was Tk , Tk and Tk , respectively. Per hectare gross cost of tomato, cauliflower and cabbage production was Tk , Tk and Tk , respectively. Per hectare gross margin of selected vegetables was Tk , Tk and Tk Per hectare net return of tomato, cauliflower and cabbage production was Tk , Tk and Tk , respectively. Undiscounted benefit cost ratio of tomato, cauliflower and cabbage production per hectare came out to be 1.82, 1.79 and 1.83 respectively.

5 Akter et al. 245 Factors affecting gross return of vegetables production Cobb-Douglas Production Function model was applied on the basis of the best-fit and significant effects of resources on gross returns. For all the enterprises seven explanatory variables were taken into account to explain variations in production. Some of the key variables are explained below. Human labour cost (X 1 ): It is observed from the Cobb-Douglas production function that the production coefficient of human labour cost of cauliflower production was significant at one percent level of significance. It implies that one percent increase of human labour, keeping other factors constant, would increase the gross return by percent (Table 4). Tillage cost (X 2 ): The coefficient of tillage cost of cauliflower production was 0.30 with a positive sign. It was significant at one percent probability level which implies that one percent increase of tillage cost of cauliflower production, keeping other factors constant, would lead to an increase in the gross return by 0.30 percent (Table 4). Tillage cost (X 2 ): The magnitude of the regression coefficient of tillage cost for cabbage was with a positive sign. This coefficient was significant at one percent probability level. It implies that one percent increase of tillage cost of cabbage production, keeping other factors constant, would lead to an increase in the gross return by percent (Table 4). Seedling cost (X 3 ): The magnitude of the regression coefficient of seedling cost for cabbage was 0.19 with a negative sign. This coefficient was significant at one percent probability level. It implies that one percent increase of seedling cost of cabbage production, keeping other factors constant, would lead to a decrease in the gross return by 0.19 percent (Table 4). Fertilizer cost (X 4 ): The regression coefficient of fertilizer cost for cabbage was It was positive and was significant at one percent probability level. This indicates that an increase in one percent of fertilizer cost of cabbage production, remaining other factors constant, would result in an increase in the gross return by percent (Table 4). Manure cost (X 5 ): The regression coefficient of manure cost of tomato production was (Table 4). This coefficient was significant at one percent level of significance. It implies that one percent increase of manure cost, keeping other factors constant, would lead to an increase in the gross return by percent. Table 4. Estimated values of coefficients and related statistics of some vegetables production Explanatory variables Tomato Cauliflower Cabbage Estimated Std. Error Estimated Std. Error Estimated Std. Error coefficient coefficient coefficient Constant Human labour (X 1 ) *** ** Tillage cost(x 2 ) *** *** Seedling cost(x 3 ) * *** Fertilizer cost (X 4 ) ** *** Manure cost (X 5 ) 1.068*** Irrigation cost (X 6 ) * Insecticide cost (X 7 ) R F-value *** *** *** - Returns to scale ( b i ) Source: Field survey (2009). Note: *** Significant at 1 percent level ** Significant at 5 percent level * Significant at 10 percent level

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