TREND, VARIABILITY AND RELATIVE PROFITABILITY OF SPICES IN BANGLADESH

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1 Bangladesh J. Agric. Econs. XVI, 1 (June 1993): 1-15 TREND, VARIABILITY AND RELATIVE PROFITABILITY OF SPICES IN BANGLADESH S. A. Sabur and Atiar Rahman Molla ABSTRACT The study examines the trend, annual and seasonal variability and relative profitability of spices in Bangladesh. All spices except turmeric and ginger show negative growth rates in production since independence. Production growth trend of all spices was lower compared with other food crops but it was reverse in case of nominal price trend. Real price remained more or less same during the study period. Production as well as price fluctuation were higher for onion and garlic and lower for ginger and turmeric. Price fluctuation is directly related to the production fluctuation. Seasonality mostly depends on the perishability of the product and seasonal price variation of spices decreased in the recent years. All the selected spices except coriander are more profitable compared with their competing crops except potato and lentil. On average, 82% of production, were sold during harvesting period. I. INTRODUCTION Bangladesh agriculture is still dominated by one crop, ie., rice. Seventy per cent of the cropped area is a under rice while all other crops compete for remaining 30 per cent of the cropped land (Appendix Table 2). For that reason, government of Bangladesh has placed special emphasis on the development of minor crops under crop diversification programme. But unfortunately, spices, the important minor crops, which have important role in generating farmers' income, creating employment opportunities and earning foreign exchange have not been included in this programme. Since spices need less irrigation water and about two thirds of cultivated land remain fallow during winter season, there is a great potential to expand the area and production of spices in Bangladesh. Nevertheless, the area and production of major spices remained constant or even decline over the years in the country (CAST 1984). Studies (CAST 1984; Elias & Hossain 1984) show that spices are more profitable compared with their competing crops. However, recently Rahman (1993) shows that some vegetables like bottle gourd, bean and tomato yield more net return compared with turmeric and chilli. These phenomena raise many questions: Do all types of spices' production remain constant? Are spices more profitable compared with their competing crops'? Why has not spices production increased? This paper will seek answers to the above questions regarding spices production in Bangladesh. Section II discusses the sources of data for this study. Compound growth rates of area, production, The authors are Associate Professors respectively in the Dept. of Cooperation & Marketing and Agricultural Economics, BAU, Mymensingh. The article has been derived from a report entitled "Constraints to the Production and Marketing of Spices in Bangladesh" submitted to Winrock International, Dhaka.

2 2 The Banglaclesla Journal ofagricultural Economics and price of spices are presented in Section IIL Section IV and V show the annual production and price fluctuations and seasonal price variation of spices respectively. Economics of producing spices and disposal, time of sale and price received are presented respectively in section VI and VII. Conclusion and recommendation are made in the last section. II. SOURCES OF DATA Data were collected from both primary and secondary sources. Five important spices growing regios (old districts) viz., Faridpur, Rangpur, Dinajpur, Comilla and Jessore were selected for this study. On the basis of concentration of spices cultivation, one or two thanas from each region and two or three villages from each thana were selected. The selected thanas are Baliakandi in Faridpur, Magura in Jessore, Pirgonj and Kishorgonj in Rangpur. Birol and Khansama in Dinjpur and Laksharn and Daudkandi in Comilla Total 250 farmers, taking 50 farmers from each region, were randomly chosen. The selected farmers were amongst those who produced spices conunercially. Data collection was completed during December-February, Monthly wholesale prices of selected spices during were obtained from the Department of Agricultural Marketing, Government of Bangladesh. Yearbook of Agricultural Statistics published by the Bangladesh Bureau of Statistics provided data on area, production and yield of spices during 1972/73 to 1990/91. III. GROWTH RATES OF AREA, PRODUCTION, YIELD AND PRICES OF SPICES The compound growth rate (C.G,R,) of area, production, productivity and price of spices were calculated by fitting semilog function. Apart from overall period, their compound growth rates were estimated for the periods 1972/ /80 and 1980/ /91 separately and are presented in Tables 1 and 2. The rationale behind the division of whole period into two subperiods was to see the performace of spices economy during two decades after independence. Area The area under Dinger, turmeric and onion increased by 1.6%, 1.5% and 0.6% respectively since independence (Table 1). On the other hand, area of minor spices and Rabi chilli decreased by 12.3% and 0.95% respectively. The insignificant growth rates of other spices indicate that their areas remained more or less same. The area of all spices is found to have declined by 0.33% per annum in Bangladesh. When growth rates during 1972/73-79/80 and 1980/81-90/91 are compared, it is found that the growth rates of all types of spices except Rabi chilli and minor spices improved in the 80s compared to the 70s. Since major food crops area increased during the same period (Appendix Table 1), it may be inferred that minor spices and Rabi chilli area has been replaced by other food crops such as cereals and vegetables. Production Production of all spices except turmeric, ginger and coriander shows negative growth rate in the post-independence period. Production of turmeric increased by 3.6% and ginger by 1.05%,

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