AN ECONOMETRIC ANALYSIS OF THE EXPORTED QUANTITY OF VEGETABLES FROM BANGLADESH

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1 Bangladesh J. Agric. Econs XXVII, 2 (2004) AN ECONOMETRIC ANALYSIS OF THE EXPORTED QUANTITY OF VEGETABLES FROM BANGLADESH S. Majumder M. K. Saha M. A. Akbar ABSTRACT This paper analyses the marketing performance of the selected exportable vegetables of Bangladesh at some national and international regions. In this study, a regression analysis was performed to determine the effect of some factors (variables) influencing the quantity of vegetables exported from Bangladesh. Among the national regions, Ullokhola (Gazipur) was the most profitable market of selected vegetables for the Beparies/selected agents due to its lowest marketing cost. The leading exporters of the selected vegetables were more benefited than that of other exporters from each of the international markets. The highest benefit-cost ratio of the selected vegetables was achieved for the Middle-East countries (except Kuwait). The exported quantity of vegetables increased for an increment in each of the factors, viz., total production, average unit export price, world import of fresh vegetables and exchange rate of money. A decreasing trend in the exported quantity of vegetables was observed only for increasing the national weighted average farmgate constant ( ) price. The highest average change in the exported quantity of vegetables was found for a unit change in the exchange rate of money. On the average, the exported quantity of vegetables increased by Metric Tons (MT) for an increment of one taka in the exchange rate of money with US dollar, when all other factors (variables) were held as fixed. The national weighted average farmgate constant ( ) price and the average unit export price were inelastic with the exported quantity of vegetables. That means percentage change in exported quantity of vegetables is lower than that of national weighted average farmgate constant price and that of average unit export price. I. INTRODUCTION Bangladesh has achieved a remarkable progress in the export of some agricultural products. It occupies an important role in the test of exportable items of their total exportable earnings. Contribution of agricultural production to total export earning increased to 0.76 per cent in from an insignificant contribution of 0.27 per cent in In the total earning from agricultural products, the average contribution of vegetables was 46.2 per cent over the period to Moreover, the production of vegetables is more profitable in terms of land, time and investment. It requires more manpower for production and marketing, and thus helps in creating a lot of opportunities for all walks of life. The export of vegetables directly benefits the rural poor. It raises their income and hence alleviates the rural poverty. The authors are respectively Assistant Professor, Department of Agricultural Statistics, BAU, Mymensingh, Ex-postgraduate student, and Professor, Department of Cooperation and Marketing, BAU, Mymensingh.

2 46 The Bangladesh Journal of Agricultural Economics Bangladesh exports vegetables to more than 35 countries. United Kingdom and the Middle East countries viz., Saudi Arabia, United Arab Emirates, Bahrain, Kuwait, Qatar and Oman are the main importers of vegetables from Bangladesh. So, for the development of vegetables export, the Government of the People's Republic of Bangladesh has undertaken some decisions such as (i) to establish some "Export Village" in and around some selected vegetables growing areas; (ii) to explore markets in Western Europe, Middle East and Japan for export of fresh vegetables; (iii) to increase cargo space capacities for carrying fresh vegetables by specially Biman Bangladesh Airlines and other Airways; and (iv) to ensure availability of international standard packaging materials and its use for the interest of maintaining quality and freshness of exportable vegetables. Ullah (1995) conducted a study on 'Export of fresh and processed vegetables from Bangladesh." The study found that 45 listed items of vegetables were exported to the United Kingdom, Middle East, Germany, Italy, USA (New York), Netherlands (Amsterdam), etc. The findings reflected the need for linkage among the researchers, producers, exporters, etc. Export Promotion Bureau, Ministries of Agriculture and Commerce and other concerned agencies should be strengthened to improve the vegetables export industry of Bangladesh. Kamaly (1995) performed a study on "Exporting Vegetables: problems and solutions". The study identified some problems that should be first addressed and solved to prove the way for a smoother and easier flow of export activities. He recommended that aircrafts should reduce airfreights by at least 15 per cent and other airlines should be allowed to operate with lower royalty from the civil aviation authority. Sunanwadee (1989) conducted a study on "Thailand's export development of fresh fruits and vegetables'. The study emphasized on the existing major markets of fresh fruits and vegetables such as Hong Kong, Malaysia, Singapore and new potential markets viz., Japan, France and the United Kingdom. The variance and correlation analyses were done in this study. Mayer et al. (1991) carried out a study on " Modelling export opportunities for the Hong Kong fresh fruits and vegetables market" The study describes a method of quantifying the economic feasibility of export schemes to supply this market. A simple regression model of semilogarithmic form was fitted for determining the effect of exported quantity of fresh fruits and vegetables on price. No study was conducted for estimating the factors influencing the quantity of vegetables exported from Bangladesh. The main objectives of the present study are: (i) (ii) to determine the net margin and benefit-cost ratio for Beparies/selected agents as well as for different types of vegetables exporters at different markets; and to estimate the individual effects of the factors affecting the quantity of vegetables exported from Bangladesh. II. SOURCES OF DATA The study was based on primary as well as secondary data. Primary data relating to export marketing were collected from the respondents (Baparies/selected agents and

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6 50 The Bangladesh Journal of Agricultural Economics Part I IV. RESULTS AND DISCUSSION Table 1 shows that the gross marketing margin from the selected exportable vegetables of Beparies/selected agents of Chandina market was the highest (Tk per MT), but the maximum net margin (profit) was obtained from Ullokhola market due to its lowest marketing cost. The benefit-cost ratios indicated that each of the markets was profitable for the Beparies/selected agents though the maximum profit was achieved from the Ullokhola market. Table 1. Net margin (profit) and benefit-cost ratio of Beparies/ selected agents at Ullokhola (Gazipur), Chandina (Comilla) and Riazuddinbazar (Chittagong city) during the period February to July, 1999 Particulars Name of the mark ts Ullokhola Chandina Riazuddinbazar A. Average sale price (Tk./MT) B. Average purchase price (Tk./MT) C. Marketing margin (A-B) D. Marketing cost (Tk./MT) E. Net margin F. Benefit-cost ratio It is evident from Table 2 that the maximum gross marketing margin (Tk per MT) from the selected exportable vegetables was found for the leading exporter. Even the net margin (profit) was the highest for this exporter though marketing cost was maximum (Tk per MT). The benefit-cost ratio for the leading exporter was the highest (1.3) and it indicates that the markets of the middle east countries were the most profitable for the leading exporter. Table 3 reveals that in the markets of Kuwait, the net margin (profit) was the highest (Tk per MT) for the leading exporter of the selected vegetables, though the marketing cost of this exporter was the highest. The benefit cost ratio of the leading exporter from this market was sufficiently greater than that of other exporters and it depicts that the markets of Kuwait were the most profitable for this exporter.

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