DIMENSIONS OF STRUCTURAL CHANGES IN COST AND RETURN OF HYV BORO PADDY OVER TIME IN BANGLADESH AND DETERMINANTS OF THE CHANGES

Abstract

Dimension of changes in cost and return structure of HYV Boro paddy during the last two decades and the determinants of the changes have been examined in this paper. This study is entirely based on secondary data and nominal prices of all inputs as well as output of HYV Boro overtime have been converted into real price using Consumer Price Index (CPI). The findings showed that out of total cost, the share of labour cost decreased over time while the share non-labour cost increased. Again, the share of cash cost compared to non-cash cost increased over time. The negative growth of labour cost and positive growth of non-labour cost over time indicate the expansion of capital intensive and labour saving technology in Bangladesh agriculture in recent years. Further, the positive growth of cash cost and negative growth of non-cash cost imply the transformation of traditional agriculture into a modern one in Bangladesh. Analysis of growth rates of input and output prices in real terms showed that labour wage increased slightly during the study period while fertilizer price, as well as irrigation cost decreased. Further, in real terms, the price of Boro paddy significantly declined over the years. The overall analyses of this study showed that although both total cost and gross return decreased over time the rate of decrease in gross return was higher than that of total cost during the whole period which resulted in decreased profitability of the farmers over time. The declining farmers' profitability from production of the main rice crop (HYV Boro) in recent years is likely to have had adverse effect on farmers' incentive to produce rice which has serious implication on the national policy of attaining or maintaining food grain self-sufficiency in Bangladesh.