Custom Hiring Service of Reaper for Harvesting Paddy

Abstract

Paddy harvesting is labor and time intensive operation. There is an acute shortage of labor in pick paddy harvesting seasons in Bangladesh that promotes the growing market potential for providing hiring services of reaper by small entrepreneur to the farmers. Therefore, the study was conducted to determine the economic performance of Custom Hiring Service (CHS) of reaper for harvesting paddy in Bangladesh. Primary data were collected through field experiments and survey at Dumuria, Wazirpur, Subarnachar and Kalapara Upazilas of Khulna, Barisal, Noakhali and Patuakhali districts, respectively, of Bangladesh during six paddy harvesting seasons. Economic analyses for CHS of reaper were also carried out in the study. Operating costs were calculated and financial profitability was determined by four major financial parameters, namely, benefit-cost ratio (BCR), net present value (NPV), internal rate of return (IRR) and payback period. The BCR of the reaper was found 2.04 which indicates that the reaper is highly profitable for the hiring service. Considering 10% discount rate, NPV of the reaper was found BDT 426106 which indicates that reaper can be considered as financially viable. The estimated IRR of the reaper was found 91%, which is far greater than the bank rate of interest (9%). The payback period of the reaper was found 1.06 years. The break-even use of the reaper was found 14.79 ha per year. Major indicators in the analysis show that the investment on a reaper is highly profitable for custom hiring service. This analysis also supports for growing custom hiring service market of reaper in rural Bangladesh.