Abstract
This paper estimates profitability, input demand and output supply of mustard production at the farm-level in Bangladesh utilizing a survey data of 206 mustard farmers from two regions of Bangladesh by applying a profit function approach. Mustard production is profitable at the farm level (Benefit Cost Ratio = 1.34) with no adverse influence of farm size on yield and profitability. Mustard farmers are also responsive to changes in market prices of inputs and outputs. Mustard price is the most dominant determinant of output supply and input demand. A 1% increase in mustard price will increase output supply by 0.62% and increase demand for mechanical power, fertilizer and labour by 1.06%, 1.05% and 1.01%, respectively but will decrease seed demand by 3.96%. The fixed factors have no role except land fragmentation substantially reducing seed demand. Policy implications include price policy to improve mustard price and tenurial reform aimed at improving land fragmentation and smooth functioning of the hired labour market in order to increase production and profitability of mustard in Bangladesh.
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