Profitability and Technical Efficiency of Vegetable Production in Bangladesh

Abstract

There is a substantial variation in profitability and efficiency among vegetables farms in Bangladesh. This study examined the level of profitability and technical efficiency of bean, brinjal and tomato production in Bangladesh. The study documented the crucial problems of vegetables producing farms. Data were collected through a field survey of 213 vegetable farmers selected by multi-stage random sampling technique in three districts from May to July 2014. Profitability of vegetable was analyzed using conventional farm income of farmers and the Benefit-Cost Ratio (BCR). Cobb-Douglas stochastic frontier production function model was used to estimate the farm level technical efficiencies. Analysis found that farmer’s average age was 44.4 years. They had 5.51 years of education, 1.42 numbers of agricultural training and 12.2 years of farming experience. Results showed that total costs were Tk. 196,198 (US$ 2,312.56)/ha for bean, Tk. 220,047 (US$ 2,593.66)/ha for brinjal, and Tk. 240,063 (US$ 2,829.59)/ha for tomato production. Net margin was Tk. 28,601 (US$ 337.11)/ha for bean, Tk. 36,557 (US$ 430.89)/ha for brinjal and Tk. 49,762 (US$ 586.53)/ha for tomato production. The net margin and the BCR indicated that the above mentioned vegetables were profitable in the study areas. CobbDouglas stochastic frontier production function indicated that agricultural training and number of adult households reduce the vegetable producers’ inefficiency. Overall technical efficiency was 87.3 % and there is opportunity for increasing technical efficiency by taking different management practices. Lack of capital and low prices of vegetables were the major problem of farmers. Department of Agricultural Extension (DAE) may provide some training to the farmers about storage of vegetables to ensure fair price of vegetables. Government may provide loan with a low interest rate which may solve capital shortage of farmers. There is scope for same type of further research in other vegetables producing districts in Bangladesh.