AN ECONOMIC STUDY ON PRESENT STATUS AND POTENTIALITIES OF GROWING POTATO IN

JAMALPUR AND SHERPUR DISTRICTS

A THESIS BY

Examination Roll No. 08 Ag. Econ. JD-06 M Registration No. 30800

MASTER OF SCIENCE (MS) IN

AGRICULTURAL ECONOMICS (PRODUCTION)

DEPARTMENT OF AGRICULTURAL ECONOMICS BANGLADESH AGRICULTURAL UNIVERSITY

MYMENSINGH

NOVEMBER 2009

AN ECONOMIC STUDY ON PRESENT STATUS AND POTENTIALITIES OF GROWING POTATO IN

JAMALPUR AND SHERPUR DISTRICTS

A Thesis By

Examination Roll No. 08 Ag. Econ. JD-06 M Registration No. 30800

Session: 2003-2004 Semester: July-December 2008

Submitted to The Department of Agricultural Economics

Bangladesh Agricultural University, Mymensingh in partial fulfillment of the requirements

for the degree of

MASTER OF SCIENCE (MS) IN

AGRICULTURAL ECONOMICS (PRODUCTION)

DEPARTMENT OF AGRICULTURAL ECONOMICS BANGLADESH AGRICULTURAL UNIVERSITY

MYMENSINGH

NOVEMBER 2009

AN ECONOMIC STUDY ON PRESENT STATUS AND POTENTIALITIES OF GROWING POTATO IN

JAMALPUR AND SHERPUR DISTRICTS

A Thesis By

Examination Roll No. 08 Ag. Econ. JD-06M Registration No. 30800

Session: 2003-2004 Semester: July-December, 2008

Approved as to the style and content by

(Prof. Dr. M. Serajul Islam)

Supervisor

(Prof. Dr. M. Harun-Ar Rashid)

Co-supervisor

(Prof. Dr. M. Harun-Ar Rashid) Chairman

Examination Committee and

Head, Department of Agricultural Economics Bangladesh Agricultural University

Mymensingh

NOVEMBER 2009

Chapter I

INTRODUCTION

1.1 Background of the Study

Bangladesh is a country dependent mainly on agriculture. Out of land area of

14.96 million hectares, the total cultivated area of the country is 7.97 million

hectares and its cropping intensity is 176 percent (BBS, 2007) which is the highest

in the world. Although the total land area is the same in each year, the total

cultivated area is decreasing year to year. It was 8.03 million hectares in

2003/2004 but it reduced to 7.97 million hectare in 2004/2005 (BBS, 2007).

Bangladesh is striving hard for its development. The economy of Bangladesh

remains predominantly agricultural. The economic development of country is

mainly based on agricultural. The direct contribution of agricultural to GDP is

20.87 percent (MoF, 2008). But its indirect contribution including agro-based

industries to GDP in much higher. The crop sub-sector alone contributes 11.70

percent to GDP (MoF, 2008). About 76.47 percent of the total population of this

country lives in rural areas, where agriculture is the major occupation (BBS,

2007). It is the main occupation of the people where 68.5 percent of labour force

is engaged (BBS, 2005) in agriculture. As such the national development depends

to a substantial extent on the development of its agriculture and farmers. The

population growth rate is 1.41 percent annum. The sex ratio of the population is

105 males per 100 females (MoF, 2008). The literacy rate of the country

according to 2001 census was 68 percent for population of 7 years and above.

Agricultural land is decreasing every year due to population growth, which in turn

requires more housing, urbanization, more establishments of educational

institutions, government and non-government office building, play ground and

other infrastructural development activities.

The root and tuber crops commonly grown in Bangladesh. Comprise potato, sweet

patato, aroids, yam, arrowroot and cassava (Rahman, 1999); potato is the principal

crops. Potato is the third largest crop in Bangladesh after rice and wheat and

therefore contributes much to the total food supply of tile country. It is used

primarily as a vegetable and has potential as a staple food.

Table 1.1 Share of agriculture over the year in GDP of Bangladesh.

Year Agriculture Crops Livestock Forestry Fisheries

1999-00 19.49 14.49 3.02 1.88 6.09

2000-01 19.51 14.70 2.95 1.87 5.51

2001-02 18.58 13.75 2.96 1.88 5.40

2002-03 18.22 13.43 2.93 1.86 5.25

2003-04 17.97 13.23 2.91 1.83 5.11

2004-05 17.27 12.51 2.95 1.82 5.00

2005-06 16.91 12.19 2.93 1.79 4048

2006-07 21.11 11.72 2.90 1.79 4.73

2007-08 20.87 11.70 2.79 1.75 4.67

Source: MoF, 2008 and BBS, 2006.

Within the crop sub-sector, food grains particularly the rice crops dominated the

country, agricultural scenario in respect of both area productions. At present and

rice covers 76.27 percent of total cultivated land in the country. Area coverage by

other crops are pluses 2.71 percent, wheat 4.52 percent, oilseeds 2.74 percent, jute

2.87 percent, and sugar-cane 1.15 percent, potato 1.19 percent, fruits 1.53 percent

and vegetables 1.93 percent respectively (BBS, 2004).

The consumption of the people of Bangladesh is dominated by a high degree of

rice intake. Rice alone is not capable of providing balanced and nutritious food

intake. In addition to rice, consumption of a sufficient quantity of vegetables

including potato can improve the nutrition situation in the country.

1.2 History and Overview of Potato Sector

Potato (Solanum tuberosum) is a edible tuber of the cultivated plant of the family

Solanaceae has been cultivated in this part of the sub-continent for more than a

century and has recently occupied an important place in the list of major food and

cash crop of Bangladesh (Hussain, 2008). It is assumed that Portuguese navigators

first brought potato to India Sub-continent at the beginning of the 17th century.

During the history of potato cultivation in this country, different varieties were

introduced here from different parts of the world and, in course of time, they

become degenerated and had lost their identity (Siddique, 1995). The varieties are

commonly known as indigenous potato varieties (IPV); and despite their low yield

potentiality, the IPVs are still in cultivation in this country under different popular

names. Until late fifties, only IPVs were grown here and in 1959-60 about 277

thousand MT of potatoes were produced in about 47.34 thousand hectares of land

with an average yield of about 5.96 t/ha (Hussian, 1985).

Introduction of Modern Potato Varieties (MPV) started in early sixties. Since then

the area, production and yield of potato gradually began to rise although in a slow

pace initially. In the meantime, there had been an approach of popularizing TPS

(True Potato Seed) technology in potato production with the support of CIP.

(Rashid and Rashid, 1990). There had been thorough studies on production and

utilization of TPS derived seeding tubers (Hossain, 2003), production of hybrid

TPS (Banik, 2005) and quality of hybrid TPS (Yasmin, 2006), as reported in

Ph.D. dissertations of the agricultural universities.

Sustained efforts of TCRC of BADC led to gradual development of the potato

sector of Bangladesh, particularly in respect of recommendation of varieties, seed

potato production and improvement of production technology of MPV. At present

the much higher area coverage (4.02 lac hectare) and production (66.5 lac MT)

and yield (16.6 t/ha) of potato in Bangladesh during the 2007-08. Today potato

has become one of the major food and cash crops in Bangladesh.

1.3 Importance of Potatoes in Agriculture of Bangladesh

Bangladesh is an agricultural country. Though rice and wheat are main food

crops, their production is not sufficient to meet the increasing requirements for the

growing population in the country. In this regard, potato can play an important

role as an alternative and a multipurpose food crop in Bangladesh. It also

important cash crop for the farmers. It becomes a highly successful October-

March winter crop in Bangladesh. The current potato production in Bangladesh

appears to be adequate to meet the domestic demand for potatoes in household

consumption. In 2007-08 about 8 million metric tones of potatoes were produced

in Bangladesh (BBS, 2007). The yearly per capita consumption of potato in

Bangladesh is about 24 kg (Hossain, 2008).

Potato is the leading vegetable crop in the world, which occupies the topmost

position after rice and wheat both in respect of production and consumption

(Table 1.2). Considering worldwide food grain shortage especially declining trend

of rice production, the importance of potato in the food list is increasing day by

day.

Bangladesh is now 14th among the worlds potato producers and 4th largest in Asia.

On an average, the world production of rice, wheat and potato from 1998 to 2003

were 5, 91.122.17; 5, 81245.50; and 3, 12,255.83 thousand metric tons

respectively. Potato production was 24.66 percent of the total world production of

rice, wheat and potato (Table 1.2). Rice is the dominant crop in Bangladesh, but

as production costs and cash investment in rise, the production of rice will become

too expensive for farmers in many areas.

Table1.2: World production of rice, wheat and potato, 1998 to 2003

Year Production (in, 000 tons)

Potato Rice Wheat Total * % of potato in

total productions

1998 579514 593316 300356 1473186 20.39

1999 611341 587809 300625 1499775 21.04

2000 599051 585966 328654 1513671 21.71

2001 598174 590520 312261 1500955 20.80

2002 569527 573516 320829 1463869 21.92

2003 589126 556349 310810 1456283 21.34

Average 591122.17 581245.50 312255.83 1266290.17 24.66

Source: FAO, 2003

*Total = Rice + Wheat + Potatoes

Potato may play an important role in crop diversification and therefore may

contribute to the economy and the food self-sufficiency of Bangladesh because

potato is a short duration crop in Bangladesh. Although it is difficult to change the

food habit of people within a short time, by taking potato in different forms it can

be possible to reduce the pressure on rice to a great extent. Its area and production

are increasing day by day (BBS, 2005). In declaring 2008, the international year

of the potato, the UN General Assembly seeks to focus world attention on the role

of potato in defeating hunger and poverty.

Figure 1.1 World production of rice,wheat and potato 1998 to 2003

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

1998 1999 2000 2001 2002 2003

Year

Prod

uctio

n(in

, 000

tons

)

Potato Rice Wheat Total

The future prospect of cultivation of potato in Bangladesh is quite bright. Potato is

mostly consumed as vegetable in the households in Bangladesh. There usually no

household can be found where potato is not consumed as vegetables.

Consumption of potatoes as a substitute of rice and wheat is increased during the

peak harvest season (February-March). The total requirement of potato could be

about 664800 MT in Bangladesh and its added value to agricultural sector is about

Tk. 44016 million in 2007-08 (BBS, 2007).

With the direct technical assistance of the Agro-based Industries and Technical

Development Project (ATDP) of the MoA in Bangladesh, funded by the United

States Agency for International Development (USAID) Bangladesh private

exporters have successfully exported about 130 MT of potatoes which was valued

in about Tk.2.04 million to Singapore, Malaysia and Sri Lanka in March-April of

the year 1999. For 1999-2000 and 2000-2001 Bangladesh earned about Tk.4.04

million and Tk.3.81 million by exporting potatoes respectively (Export Statistics,

1998-99).

Generally, Granula types of potato are produced in Bangladesh. However, for export

purpose, Seeds of Atlanta, Spunta and Banta type varieties are also imported to produce

high quality potatoes in the country. About 100 Small and Medium Enterprises

(SMEs) are involved in production and processing of food products of which only

10 companies export fresh potato and potato products from Bangladesh (Alam,

2006).

Table 1.3 Statement of export of potato

Year Total Export (Value in Million US$)

Exports of potatoes Quantity (in M.T.)

Value (in Thous. US$)

2002-2003 6548.44 1028 218 2003-2004 7602.99 2106 563 2004-2005 8654.52 5680 1177 2005-2006 (July-April)

8365.59 13092 3932

Source: Alam, 2006

Major export markets of Bangladesh potato and potato products are Republic of

Korea, Italy, Singapore, Malaysia, U.K. and India. Potato exporting agencies in

Bangladesh are Agriconcern, Surovi Agro Industries Ltd. (a sister organization of

Supreme Seed Co. Ltd.), BRAC and Global Agro Resources Incorporation. The

Gobal Agro Resources Incorpotation exported 5000 mt in 2006, 2500 mt in 2007,

700 mt in 2008. The vegetable and potato export program of BRAC during the

period from 1998 to 2008 exported on average 2000 mt of fresh potatoes to

Singapore and Malaysia per year. The Surovi Agro Industries Ltd., exports were

78 mt to Singapore in 2006, 192 mt to Singapore in 2007 and 486 mt to both

Singapore and Malaysia in 2008 and Agricon in 2008 they exported 3500 mt of

potatoes (KATALYST and BAU, 2009).

Earlier the price of potato was lower than rice and wheat. But in 2009, price of

potato increased significantly. Comparatively potato has a lower production cost

than rice and wheat. Potato requires 1/3rd to 1/4th of irrigation water than that of

Boro paddy or wheat. Potato is more risk avert crop than Boro paddy and wheat.

The fresh yield of potato is eight times than those rice and wheat per hectare land.

Per unit area produces about two times dry matter and calorie from potato than

those rice and wheat (Hussain, 2000).

BADC is the only public agency with a seed production program. It contributes 5

percent of the seed potato requirement. At the beginning of 1998-99, ATDP a

USAID supported project of the ministry of agriculture, started supporting private

sector seed potato production and contribution another 6 percent of the needed

quality seed potatoes (Saha, 2005). Therefore, potato seed production industries

might be set up in private sector. At present there is no formal potato processing

industries in full scale. Throughout the country, small independent shops prepare

local potato chips. Raw potatoes are cut into French fries. Existing potato varieties

can use for start up processing into potato chips as well as frozen French fries.

1.4 Varieties of potato in Bangladesh

Potato varieties that are cultivated in Bangladesh are broadly categorized into two

groups, local and high yielding. The so-called local varieties are in fact, not

strictly native.

In the distant past those were brought to this part of the subcontinent but in the

absence of varietal improvement efforts, gradually degenerated, showing poor

yield performance. In spite of poor yields, some of the local varieties are still

being cultivated because of their taste and cooking qualities. There are about 27

local varieties of potatoes cultivated in different parts of the country.

Huge amount of potato seeds are imported every year by the Bangladesh

Agricultural Development Corporation (BADC) for distribution among farmers.

Bangladesh Agricultural Research Institute (BARI) has also established a farm at

Debbiganj in Panchagar district for production of HYV seed potatoes. Following

are among the high yielding popular varieties:

a) Cardinal- probably most popular among the foreign varieties with oblong,

reddish, tubers, shallow eyes, and, smooth skin. The variety has been introduction

from Holland and has yield potential of 20-25 m tons/ha.

b) Diament-another Holland variety with oval to oblong, pale yellow tubers,

smooth skin and shallow eyes. It is quite diseases resistant. Per hectare yield

ranges from 18-24 m tons.

c) Kufri Shindhury-tubers are reddish and round and deep eyes with rough skin.

This variety was introduction from India and is comparatively less susceptible to

pests and diseases. It has a yield potential of 18 to 22 m tons/ha.

d) Other notable exotic varieties are patronis, Alpha, Archa, Multa, Ukama, Hira,

Maurin, Origo, Alisa, etc.

In recent years, the Tuber Crops Centre of BARI has collected many new varieties

of potato from the International Potato Research Centre, Peru and from other

sources. These being tested under Bangladesh field conditions to determine

whether they can be recommended for cultivation in the country. The centre has

already made good contribution towards the development of some high yielding

potato varieties.

1.5 Nutritional Facts of Potato

Potato is used as food as well as vegetables by both the poor and rich people.

Potatoes have about 620 mg of potassium. Potassium is essential to the body

because of its role in attaining optimal muscle performance and improving the

nerves' response to stimulation. Iron, essential in helping the body convert food to

energy as well as resist infection, is also present.

Potatoes are also a great source of vitamins, even supplying vitamin B and C, the

sunshine vitamin. Vitamin B6 plays numerous roles in our nervous system, many

of which involve neurological (brain cell) activity. B6 is necessary for the creation

of amines, a type of messaging molecule or neurotransmitter that the nervous

system relies on to transmit messages from one nerve to the next. Vitamin B6

plays another critically important role in methylation, a chemical process in which

methyl groups are transferred from one molecule to another. Many essential

chemical events in the body are made possible by methylation, for example, genes

can be switched on and turned off in this way. Vitamin B6 is also necessary for

the breakdown of glycogen, the form in which sugar is stored in our muscle cells

and liver, so this vitamin is a key player in athletic performance and endurance.

Vitamin C is essential to help maintain healthy connective tissue and heal

wounds. The many varieties of potatoes are also good sources of B vitamins,

helping the body make healthy red blood cells and amino acids.

Potatoes contain no fat or cholesterol and minimal sodium. Fiber of potatoes in

the skins, all those vitamins and minerals and great flavor. And a six-ounce potato

contains 2 grams of highly digestible protein, almost as much as half a glass of

milk, making it a great foundation for a whole meal. Because of the variety of

potato colors, shapes, sizes and textures and their versatility as recipe ingredients,

potatoes for breakfast, lunch or dinner (or all three) and support the daily fruit and

vegetable servings recommended for good health and nutrition.

One of the most popular nutritional myths today concerns the dietary evils of

carbohydrates. Carbohydrates are the body's primary fuel source. Muscles prefer

them and the brain relies on them. In fact, carbohydrates are so crucial to the body

that if severely cut them from other vital organs-in orders to make them.

Table 1.4: Nutritional facts of potato

Nutritional Facts

Serving size 1 potato (148g/5.30z) Amount per serving Calories 110 Calories from

Fat 0 % Daily Value Total fact 0 g 0% Saturated Fat 0g 0% Trans Fact 0g 0% Cholesterol 0mg 0% Sodium 0mg 0% Potassium 620mg 18% Total Carbohydrate 26g 9% Dietary Fiber 2g 8% Sugars 1g Protein 3g Vitamin and Mineral Vitamin A 0% Vitamin C 45% Calcium 2% Iron 6% Thiamin 8% Riboflavin 2% Niacin 8% Vitamin B6 10% Folate 6% Phosphorous 6% Zinc 2% Magnesium 6% Copper 4%

Source: http://potatoconference.com/Research.cfm

Potatoes are used in textile, paper industry and other processing industries

Glucose and dextrose are also prepared from potatoes for using in media treatment

(Thompsom and Kelly, 1957). Lactic acid, alcohol and some chemicals are now

being produced from which have a great value in chemical sciences.

From the viewpoint of nutritional requirement, Bangladesh has high deficit in

tubers and vegetables. To solve the malnutrition problem, emphasis should be

given on producing more non-cereal crops like potato. Potato has the desirable

characteristics of high yields, nutrition’s and delicious food and palatable in taste.

1.6 Area, Production and Yield of Potato in Bangladesh

In recent years, potato has occupied an important position in area allocation

because of its high yield among major food and vegetable crops of Bangladesh.

Bangladesh has made a remarkable progress in the production of potatoes during

the last two decades 1997-98 to2008-09.Considering the area coverage in the

country, potato is the third crop after paddy and wheat.

Potato area increased from 1, 36,330 hectares in 1997-98 to 4, 64,035 hectares in

2008-09 of potato has been almost triple during the same period. The average

yield per hectare also increased from 11.39 to 14.54 tons during this period. The

production and area increased due to the use of HYV seed and modern production

technology.

In 2007-08 cropping season, the highest potato area was shown and recorded the

highest Production in the history of Bangladesh.

Table 1.5 Area, production and yield of potato in Bangladesh, 1997-98 to 2008-09

Years Area(,000 ha) Production(,000 m ton) Yield (tons/ha)

1997-98 136.33 1553.00 11.39 1998-99 244.39 2752.00 11.30 1999-00 243.13 2933.00 12.06 2000-01 249.99 3216.00 12.86 2001-02 237.60 2994.00 12.60 2002-03 245.34 3386.00 13.79 2003-04 270.8 3908.00 14.41 2004-05 301.08 4161.00 13.82 2005-06 326.35 4856.00 14.87 2006-07 345.19 5167.00 14.96 2007-08 520.447 9236.835 17.75 2008-09 464.035 6746.103 14.54

Source: BBS, 2007 and Field Service Wing of DAE, 2009

A comparative picture of area, production and yield per hectare of potato in

Bangladesh along with the major potato producing Asian countries are shown in

(Table1.6). Bangladesh however, was found to be the seventh leading potato

growing country among all other Asian countries.

Table1.6: Area, production and yield of different Asian Countries, 2003

Country Area(,000 ha) Production (,000MT) Yields (Kg/ha)

Bangladesh 245 3386 1380F Myanmar 30F 338F 11267F India 1337 23161 17321F Indonesia 63 851 13550F China 4002F 66813 14842 Turky 200 5300 26500F Pakistan 119F 1946 16406F Iran 180F 3550F 19722F Japan 96F 3200F 33333F Uzbekistan 51F 760F 14902F Source: FAO, 2003 F indicates Food and Agricultural Organizations estimate.

Bangladesh has therefore, a lot to do to increase the per hectare yield. As per

DAE, potato is grown in all the districts of Bangladesh (Table 1.7). The highest

area concentration of potato is in Bogra (65,300 ha) in 2007-2008 and

contributing to 10.13 % of national total .The lowest area coverage is reported to

be in Rajbari (96 ha) in 2007-2008. The Munshigonj which is generally known as

the potato production belt of Bangladesh is gradually losing its importance in

terms of area coverage in potato, whereas districts like Bogra, Rangpur, Dinajpur,

Joypurhat, Jamalpur, Sherpur , Rajshahi , etc are gaining increasing momentum in

this respect .

Table1.7: Area, production and yield of potato in different districts of Bangladesh,

2007-08

Sl. No. Districts 2007-2008

Area (ha) Production (mt) Yield (mt/ha)

1 Dhaka 2965 53300 20.00 2 Narayanganj 4316 104663 24.25 3 Gazipur 604 10872 18.00 4 Narsingdi 2190 38325 17.50 5 Munshigangj 36045 1081350 30.00 6 Manikganj 4830 86940 18.00 7 Tangail 5343 72665 13.60 8 Mymensingh 5015 52658 10.50 9 Jamalpur 7225 123259 17.06 10 Sherpur 4025 64601 16.05 11 Netrokona 1800 18000 10.00 12 Kishoreganj 5557 68073 12.25 13 Comilla 19755 379296 19.20 14 Chadpur 16792 311156 18.53 15 Brahmanbaria 2955 52008 17.60 16 Sylhet 1900 17670 9.30 17 Mpulavibazar 2045 18957 9.27 18 Hobiganj 2031 19146 9.43 19 Sunamganj 1575 17561 11.15 20 Chittagong 3350 47905 14.30 21 Coxs bazaar 2326 32262 13.87 22 Noakhali 500 7500 15.00 23 Feni 474 7703 16.25 24 Lakshmipur 310 5751 18.55 25 Rangamati 335 4744 14.16 26 Khagrachari 520 7800 15.00 27 Bandarnban 747 11205 15.00 28 Rajshashi 35000 688800 16.68 29 Naaogaon 24440 322364 13.19 30 Natore 1724 20688 12.00 31 Nababganj 2517 31387 12.47 32 Bogra 65300 902446 13.82 33 Joypurhat 38870 645242 16.60 34 Pabna 1350 17550 13.00 35 Sirajgang 2890 35258 12.20 36 Rangpur 52720 1107120 21.00 37 Gaibandha 11840 189440 16.00 38 Kurigram 6376 127520 20.00

39 Lalmanirhat 5463 98334 18.00 40 Nilphamari 24600 369000 15.00 41 Dinajpur 42430 684820 16.14 42 Thakurgaon 24725 444061 17.96 43 Panchagarh 9960 179280 18.00 44 Jessore 4745 87023 18.34 45 Jhenaidaha 1759 26028 14.50 46 Magura 100 1327 13.27 47 Narail 200 3600 18.00 48 Khulna 595 8925 15.00 49 Bagerhat 573 8882 15.50 50 Satkira 4825 65813 13.64 51 Kustia 2806 56120 20.00 52 Chuadanga 2505 45867 18.31 53 Meherpur 1920 45043 23.46 54 Barisal 850 12750 15.00 55 Pirojpur 1143 17145 15.00 56 Jhalokathi 390 6240 16.00 57 Patuakhali 2015 44330 22.00 58 Borguna 1200 21600 18.00 59 Bhola 3185 54145 17.00 60 Faridpur 657 11826 18.00 61 Madaripur 891 16038 18.00 62 Gopalgonj 651 11067 17.00 63 Rajbari 96 1289 13.43 64 Shariatpur 3570 107100 30.00

Total 520447 9236835 17.75 Source: Field Service Wing of DAE, 2009

Considering the similarity in agro-ecological conditions, production practices and

socioeconomic conditions, six potato growing zones of Bangladesh may be

considered and they are Munshigonj, Comilla-Chandpur, Jessore-Kustia,

Rajshahi-Bogra, Rangpur-Dinajpur, and Jamalpur- Sherpur. The area

concentration of potato was the highest in Rajshahi-Bogra zone (93.2 thousand

ha) followed by Rangpur-Dinajpur (91.32 thousand ha), Munshigonj (32.7

thousand ha), Jamalpur-Sherpur (10.3 thousand ha) and Jessore-Kushtia (7.8

thousand ha) during 2008-2009 (Table 1.8).

Table 1.8: Zones wise potato production of Bangladesh, 2007-08

Zones Area (ha) Production (mt) Yield (mt/ha)

Munshigonj 36045 1081350 30.00 Comilla- Chandpur 36547 690452 18.89 Jessore- Kustia 9490 174046 18.34 Rajshahi-Bogra 100300 159246 15.86 Rangpur-Dinajpur 95150 1791940 18.83 Jamalpur- Sherpur 11250 187860 16.70 Total / Average 288782 5516894 19.77

Source: Field Service Wing of DAE 1.7 Role of Crop Diversification Program to Increase Potato Production

In the past, growth of agriculture in Bangladesh has been centered on food grain

production; rice alone comprises over 90% of that growth. Massive increase in

rice production leads to decline in area of tubers, pulses, oilseeds and other minor

crops. Realizing the importance of minor crop particularly tuber, pulses and

oilseeds for improvement of the nutritional status of the people, the government of

Bangladesh had undertaken a Crop Diversification Program (CDP) in the fourth

Five-Year Plan (1997-2002). Under the CDP strategy, emphasis has been given

on increasing production and consumption of nutrition-rich food i.e. potato, pulses

and maize. Potato production increased to 11.55 million tons in 1997-98 and to

2.00 million tons in 1998-99 from 1.5 million tons in 1996-97. The average yields

of potatoes increased from 12 tons/ha to 16.75 tons/ha. In order to increased

productions and yield of potato efforts have been made for closing the gap

between potential yield and actual yield though the introduction of improved

production technologies, development of high yielding varieties of potatoes,

promotion of diversified use of potatoes, improvement of storage and marketing

facilities, expansions of on-farm demonstration and farmers training facilities

(Planning Commission , 2000). But the diversification has not yet taken place

within the crop sector, which is still dominated by the production of cereals. At

present potatoes accounts for only 1.91 percent of the total cultivated land in

Bangladesh.

1.8 Significance of the Study

The potato was introduced in this subcontinent in the sixteenth century. It was

grown then in small plots as a vegetable. Today potato has emerged as a major

crop in Bangladesh as it adds value to agricultural sectors is about $ 44016 million

in 2007-08 (BBS 2007). Though Bangladesh has become a major potato

production in the SAARC countries, the status of this crop has remained as

vegetable in the country i.e. what it was four centuries ago. The time has come

now for all of us to understand and appreciate the role that potato can play in the

present situation of Bangladesh.

One of the major problems faced by developing countries in general and

Bangladesh in particular, is the ever increasing population. As per current trend,

the population in Bangladesh is expected to be around 172.9 million by the year

2020. In order to increase agricultural production further, the only option is to

grow high productivity crops, like potato.

Still country has been relying heavily on the major cereal crops-rice, wheat and

maize to feed the ever increasing population in our country. Such an over

dependence on cereals should be end up, to ensure food security; in the decades to

come. Dr. M.S. Swaminathan says “The present vulnerability of national food

budgets to the vagaries of weather arises from our dependence on too few crops

for our daily bread”. Potato can help widen the food supply base and thereby help

to minimize the risk of serious food shortages in the tropics and sub-tropics.

Potato, one of the most productive crops known to man can play a significant role

in ensuring foods security.

A developing country like Bangladesh needs not only the quality of food but

sufficient quantity and quality of a balanced nutritious food. It is a proven fact that

if the food available provides balanced nutrition, the food intake is relatively low,

e.g. in developed countries the food availability is not well balanced, the dietary

intake is higher because people tend to eat more to compensate for the poor

nutrition. This results in greater demand for food and higher pressure on the

limited land available to produce required quantity of food. Keeping all those

situations, the government of Bangladesh has been pursuing a crop diversification

strategy to reduce the dependency on rice and to increase the consumption of

potato. Potato is considered as an important vegetable and cash crop and has high

nutritive value. It supplies more carbohydrates in combination with many other

items of food like rice. So, it is essential to increase the potato production which

will obviously ensure the food security of the farm households along with

providing significant cash income also. Accordingly, to increase food production

it is urgently needed to give necessary support to the potato farmers. The results

of this study will be helpful to potato farmers as well as policy makers by

providing a base line results for taking appropriate decision to produce potato.

This study may also help extension workers to learn the various problems of the

potato cultivation. Therefore, concerned experts will be equipped with adequate

knowledge for giving various suggestions to the farmers.

1.9 Objectives of the Study

The objectives of the study are:

1. To document the socio-economic characteristics of potato farmers;

2. To determine the costs, returns and relative profitability of different varieties of

potato under different categories of potato farmers;

3. To determine the marketing profit of potato farmers under the present

marketing system;

4. To assess the responsible factors influencing economic returns of potato

production;

5. To identify major problems faced by the potato farmers.

1.10 Structure of the Study

The study is divided into nine chapters. After this introduction, review of

literature is presented in chapter 2. Chapter 3 deals with the research methods of

the study. A socioeconomic profile of the sample farmers and households is

presented in chapter 4. Chapter 5 deals with profitability of potato production. The

marketing system of potato presented in chapter 6. The factors affecting economic

returns of potato production is presented in chapter 7. Problem and constraints of

potato production is presented in chapter 8. Finally, chapter 9 presents the

summary, conclusion and recommendations of the study.

Chapter II

REVIEW OF LITERATURE

The focus of this chapter is to provide a selected review of the past research works

which are related to the present study. These knowledge and information give a

guideline in designing the future research problem and validating the new

findings.

Ahamed (2009) conducted a study to determine the comparative profitability of

Boro rice and potato production. The major finding of the study was that the

cultivation of the rice and potato was profitable from the view point of farmers.

The total return per hectare for Boro rice and potato were Tk. 83,320.00 and Tk.

2, 62,625.22 respectively. The gross cost of the Boro rice and potato were Tk.

54,202.74 and for potato was Tk. 1, 20,221.71. Again the net return of Boro rice

and potato were Tk. 24,117.26 and Tk. 1,42,403.51 respectively. The Benefit

Cost Ratio (BCR) was 1.41 and 2.18 respectively. The result indicates that potato

production more profitable than the Boro rice production.

Islam (2009) conducted a study on “Potato Production and Credit-A Study in

Lalmonirhat District”. The majors findings of this study revealed that potato

cultivation under the institutional and non-institutional loan was a profitable

business. The overall benefit cost ratio (undiscounted) of potato farming cane out

to be 1.42 indicating that one Tk investment resulted in a net benefit of Tk 0.42.

The findings of the study clearly indicate that the loanee farmers having large

farm holding obtained higher profit followed by medium and small farmers in the

study villages. The findings also show that science use of inputs has increased the

production of potatoes.

Firdashi (2008) conducted a study on “Alternative rice and potato production in

selected area of Rangpur district”. The major finding of the study showed that the

alternate rice and potato production was profitable. However, per hectare net

return of potato production was higher than those of Aman and Boro rice. The

study found that average daily per capital calorie was the highest for the members

of large farm households (2407 K. calorie) followed by marginal (1856 K.

calorie), small (1836 K. calorie) and medium farmers (1637 K. calorie).

Yeasmin (2008) studied the economics of potato production in a selected area of

Thakurgong district. It was estimated that per hectare costs of production were

Tk. 129327 and 113060 respectively based on ful cost and cash and basis, while

gross returns per hectare was Tk 206623 and net returns were Tk 77296 and

93563 respectively considering full cost and cash cost. Evidence showed that

potato cultivation was profitable both on full cash cost basis. The findings suggest

that most of the selected variables had significant impact on production of potato.

Huq et al. (2005) endeavored to analyze marketable surplus of potato in

Bangladesh. Cobb-Douglas type function form was tried in this study. Results of

the study indicated that marketable surplus of total production of confirmed that

total production was the best predictor in determining the level of marketable

surplus. So, emphasis should be given on increasing yield though use of improved

technology (irrigation, fertilizer) and hybrid seed with short maturation period.

Huq et al. (2004) conducted a study on “Estimation of potato Demand Elasticity

in Bangladesh”. The study employed AIDS model with corrected Stone price

Index. The income elasticity of demand for potato was 0.632. The study

compensated and uncompensated own price elasticity indicated that all food items

were price inelastic. The estimated own price elasticity implied that if the potato

price fell by 10 percent, demand for potato would increase by 8.82 percent. The

estimates of cross price elasticity indicated that the substitution effects of price

change were not quite strong. Therefore, government price interventions may not

lead to considerable price repercussions in the economy.

Majid (2004) performed an analysis on the availability and utilization of potato

credit in Bogra district. The findings of the study revealed that potato cultivation

under the institutional loan was a profitable business. It was found that the

average per acre potato production for small, medium and large farmers were 800,

740 and 760 kg respectively. The findings of the study clearly indicated that the

loanee farmers having small farm holding obtained higher profit followed by

medium and large farmers. The credit aspects of the study indicated that RAKUB

has greater contribution as financing agency to potato production than other

institutional sources of credit.

Hossain (2003) assumed the availability, utilization and repayment of potato

production loan in a selected area Mymemsingh district. The study indicates that

potato cultivation under the institutional credit become profitable. It was found

that the average per hectare potato yield for small, medium and large farmers were

30732, 28934 and 28043 kg respectively. The findings of the study cleared that

the small loanee farmers secured the highest profit. The findings also showed that

scientific use of inputs increased the Production of potato. The study also found

that Sonali Bank had the greater contribution agency to potato Production than

other institutional sources.

Rajput et al.(2003) conducted a study on the relative profitability of different

potato cultivars ( Kufri Lavkar, Kufre joyti and Sindhuri). Amonng the cultivars,

the overall returns ( Rs 23333378) and quintal was estimated to be lowest in Kufri

Sindhuri, Kufri joyti recored the highest over all gross returns per hectare (Rs

19966) and Kufri Siindhuri recored the highest overall net returns per hectare. The

overall profitability in terms of benefit cost ratio for Kufri Sindhuri, Kufre joyti

and Kufri, Lavkar were estimated as 1.40, 1.36 and 1.34 respectively.

Akhter et al. (2001) investigated the production practices, input use, costs,

returns and constraints potato production in 5 locations in Bangladesh viz,

Rangpur, Bogra, Jessore, Mymensingh and Comilla. The results showed that

potato production was highly profitable and it could provide cash money to

farmers. In terms of profitability, potato production is more attractive than the

other winter vegetables .Per unit yield and gross returns of potato were found

higher than those of other competitive crops.

Borouya (2001) conducted a study entitled “Area, Yield and Production Growth

of Potato in Bangladesh: A Quantitative Estimation”.The study estimated

quantitative growth and instability of areas, yield and production of potato

utilizing the time series data from 1981-42 to 1997-98. It carried out a

disaggregated analysis to compute the status of the parameters according to high

concentration region (HRC), medium concentration region (MCR) and low

concentration (LCR). The findings showed that area, yield and production indices

of local potato decreased in HCR, LCR, LCR and aggregate (Bangladesh as a

whole) category while it was almost stagnant in MRC category. These indices of

Indian variety potato increased in all the categories except MRC however that of

modern potato showed the increasing trend.

Rahman (1999) carried out a study on “Economic Analysis of Potato production

is Some Selected Areas of Rangpur District”. The study was mainly designed to

analyze the socioeconomic characteristics of potato farmers and to determine the

costs and returns of producing HYV potato according different varieties and

different categories of farmers and identifying the factors affecting yield and

returns. One hundred twenty potato farmers were selected as sample. Findings

showed that, the total costs Tk. 84291.85 per hectare was the highest for the large

farmers growing Cardinal and it was the lowest Tk.56760.85 for the small farmers

growing the same variety. The gross return Tk. 113333224.80 per hectare was the

highest for the large farmers producing BARI TSP 1.On the contrary, the gross

return Tk.95759.16 per hectare was the lowest for the small farmers producing

Diamant. The functional analysis showed the effects of using human labour,

animal power, manure, seed and irrigation were positive for Diamant production.

Arif (1998) conducted an economic study on potato production in selected areas

of commilla District. He found that with or without irrigation made virtually no

difference (hardly Tk. 500.00 per hectare) in the terms of gross costs and returns.

The estimated gross costs per hectare amounted Tk. 64,833.83 with irrigation and

Tk 63,697.08 with no irrigation, return per were Tk. 99,902.04 with irrigation and

Tk 98,097.02 without irrigation condition and Tk. 34,399.94 without irrigation.

Singh et al. (1998) estimated the growth rates for wheat, potato, rice and

sugarcane in different regions of the state of Uttar Pradesh during the period

1969-70 to 1989-90. The study showed that compound growth rates of area,

production and productivity were positive in all regions and the state as a whole.

The study concluded that the growth rates of area, production and productivity of

potato in Uttar Pradesh were 4.872, 10.859 and 5.693 per annum respectively.

Das (1992) conducted a study on the profitability of potato cultivation and found

that the average the yield of potato was 4720 kg per hectare and the average gross

return amounted to Tk. 33040 per hectare. He further calculated the per hectare

net return over full-costs at Tk. 11085.89. The best yield was obtained by sowing

seeds during the last week of October and first week of November.

Above review and discussions indicate that there are large numbers of studies

conducted on profitability of potato production. The present study was conducted

on present status and potentialities of potato production. This study is a moderate

attempt to find out the relative costs and returns of growing potato at farmers field

in selected areas of Jamalpur and Sherpur districts. Under the circumstances, the

present study could be treated as a pioneering attempt and the findings of the

present study are expected to provide useful information for the researchers and

policy makers.

Chapter III

METHODOLOGY OF THE STUDY

The reliability of a research depends on the proper methodology. So, methodology

is very important for any research process and has to be chosen carefully to fulfill

the purpose of the study. Methodology should be such that it would enable the

researcher to collect valid and reliable information and analyze those data to

arrive at correct decision. To achieve the expected outcomes of the research use

both primary and secondary data. A farm management study is usually involves

on field level primary data. The type and nature of data to be collected depends on

the objectives of the study. Although there are some other methods for collecting

data from the field level, the survey method was chosen for this study considering

limitation of time, shortage of money, easy access to the study area and

availability of other facilities. Methods used for data collection was interviewing

respondents, as the farmers of Bangladesh do not keep written record of their farm

operations, the investigator had to rely upon the memory of the respondents.

Secondary data of difference sources including national and international

organizations such as BBS, FAO, KATALIST and DAE were used.

Methodology deserves a very careful consideration in any scientific research. The

methodology of the present study involved the following steps:

3.1 Selection of the Study Area

Selection of the study area is an important step of methodology. To achieve the

objectives of the present study, Bakshiganj upazila of Jamalpur district and

Sherpur sadar upazila of Sherpur district were selected. Then two villages namely

Noymia under of Bakshiganj upazila and Kusumhati under Sherpur sadar upazila

which are the most neighboring villages were selected purposively. The

researcher selected these villages because of

(i) Availability of farmers growing potato and easy communication and good

transportation facilities,

(ii) The researcher was familiar with socioeconomic characteristics of the

farmers in the selected villages. The expected cooperation from the

respondents would be high so that reliable data would be obtained, and

(iii) No previous study of this type was carried out in this area.

3.2 Selection of the Samples and Sampling Technique

It is impossible to make a farm survey covering all the farmers producing potato

in the study area due to limitation of time, money and personnel. For this reason,

sampling technique was followed to select representative farmers to minimize

time and cost of the study. In total, 60 sample farmers were selected randomly.

First, two different villages namely Noymia under of Bakshiganj Upazila of

Jamalpur district and Kusumhati under Sherpur sadar Upazila of Sherpur district

were selected purposively, then prepared a list of potato farmers, from the list of

potato farmers, 60 potato farmers were selected randomly for data collection.

Then, the sample farmers were divided into three categories according to land

holding. Based on the classification of DAE and the area of potato cultivation, the

potato farmers of each area were classified into three categories depending on size

of land holding larger farmer, medium farmer and small farmer and their size of

holding mention follows:

Small farmer: the farmer having total land of 0.02-1.00 hectare and above and

produced potato at leased 0.20 hectare of land.

Medium farmer: the farmer having total land of 1.01-3.03 hectare and above and

produced potato at leased .04 hectare of land.

Large farmer: the farmer having total land of 3.04 hectare and above and

produced potato at leased 0.81 hectare of land.

Farm size = Own cultivable land + Lease in + Mortgaged in – Lease out –

Mortgaged out

The primary data were collected through personal interviewing of the selected

farmers of these three categories. Then 38 small farmers, 16 medium farmers and

6 large farmers were selected randomly. Thus, the total sample size was 60 potato

farmers. The sampling design and distribution of sample farmers are shown in

Table 3.1.

Table 3.1: Sampling design and distribution of sample farmers

Categories of potato farmers

No of farmers Total

Jamalpur Sherpur

Small farmers 19 19 38 Medium farmers 8 8 16 Large farmers 3 3 6 All farmers 30 30 60

3.3 Data Collection Instruments

Keeping in view the expected outcomes of the assessment survey, appropriate

data collection instruments were prepared. Interview schedule was prepared to

collect primary data from the potato farmers. The schedule was pre-tested and

modified accordingly before final use. The interview schedule was prepared in

such a way that all aspects associated with the objectives could be included. A

draft schedule was pre-tested. In the pre-test survey, attention was paid to identify

any new information, which was not included in the draft schedule. Then some

parts of draft schedule were improved, rearranged and modified in the light of the

experience gained from the field. Lastly, the final interview schedule was

prepared to collect information. The framing of the questions in interview

schedule was done in such a way, that they could be easily understood by the

informants and their responses could be quicker. Besides, leading questions were

avoided; questions pertaining to the private and personal life of the respondents

were also not included in the schedule. The questions were properly structured, so

that even the most reluctant informants could have no hesitation in passing the

necessary information. The questionnaire included the following items of

information needed for the analysis.

a) Identification of sample farmer;

b) Farm size and tenure status of sample farmer;

c) Use of material inputs for cultivation of potato;

d) Yield, output, cost and returns of producing of potato;

e) Problems faced by the potato growing farmers and suggested solution.

3.4 Collection of Data

The study was based on a set of field level primary data which were collected

from the selected farmers through direct interview with the help of pre-designed

and pre-tested interview schedule designed for this study. The data were collected

during the period from July to August, 2009. A brief introduction regarding the

nature and objectives of the study was given to each respondent before interview.

The respondents were given assurance that all information would be kept

confidential, be used exclusively for research purpose and the study will not affect

their interest in any adverse way, rather it might produce some benefits to general

mass in course of time. Before interviewing, the selected respondents were

contacted so that they could be interviewed according to their convenient time.

Then the questions were asked systematically in a very simple manner with

necessary explanation and the information provided by the respondents was

recorded directly on the schedule. After completion of each interview the

interview schedule was cheeked to be sure that information to each of the items

had been properly recorded. Any items overlooked or found contradictory were

corrected in the second visit. The secondary data were collected from the

Bangladesh Bureau of Statistics (BBS, 2008), Population Census reports, the daily

newspapers, DAE, published and unpublished articles, etc.

3.5 Processing and Analysis of Data

After collecting requisite data, they were processed and analyzed with a view to

achieve the objectives of the study. The primary data collected from the potato

farmers were processed (edited and coded) and computerized using MS Excel and

SPSS 11.5 (Statistical Package for Social Survey). All the collected qualitative

and quantitative data were analyzed in accordance with the objectives of the study

so as to answer the issues involved in the study.

3.6 Analytical technique

Both tabular and statistical techniques were used to analyze the collected data.

3.6.1 Tabular techniques

Tabular technique that is commonly followed to find out the crude association or

differences between variables and outputs. Tabular technique is a well known and

widely used technique to show the result of farm management study because it is

simple, convenient and very easy to understand. The data and information so

collected were recorded to tabular form which included classification of tables

into meaningful results by some statistical measures like the sum, average,

percentage etc. to show the relationship between/among the selected variables.

Tabular analysis was done to address the first three objectives of the study. On the

other hand, statistical analysis was employed to determine the factors influencing

production of potato.

Gross return was calculated by multiplying the total volume of output by the

average price in the harvesting period. It consisted of sum of the volume of main

product and by product. The following equation was used to estimate the gross

return (GR):

GRi = ∑=

n

imimiPQ

1

Where,

GR1 =Gross return from ith product (Tk/ha);

Qmi = Quantity of the ith main product (kg/ha);

Pmi = Average price of the ith main product (Tk/kg);

i = 1, 2, 3… n

Gross margin has given an estimate of the difference between total return and

variable costs.

That is,

GM= TR-VC

Where,

GM = Gross margin;

TR= Total return;

VC = Variable cost.

The argument for using the gross margin analysis is that the farmers of

Bangladesh are more interested to know their return over variable costs.

Moreover, gross margin is widely used in short run analysis as well as farms

planning. This analysis is early understandable for its simplicity.

Net return analysis considered fixed cost; land use cost, interest on operating

capital, etc. Net return was calculated by deducting all costs (variable and fixed)

from gross return. To determine the net return of potato production the following

equation was used in the present study:

∑=

−−=n

ixi TFCPPyY

1)(π

Where,

π = Net return (Tk/ha);

Py = per unit price of the product (Tk/kg);

Y = Quantity of the product per hectare (kg);

Pxi = per unit price of ith inputs (Tk);

Xi = Quantity of the ith inputs per hectare (kg);

TFC = Total fixed cost (Tk);

i = 1, 2, 3… n (number of inputs).In this study cost and return analysis were done

on both variable and total cost basis. To achieve the objective of the study a

simple tabular analysis was accomplished. The following profit equation was

developed to assess the profitability of potato cultivation.

π = Gross return – (Variable cost + Fixed cost)

Here,

π = Profit per hectare

Gross return = Total production × per unit price

3.6.2 Summarization and tabulation of data

The first job was to scrutinize the data of each and every questionnaire to find out

any inconsistency or omission in the data set and to avoid irrelevant information.

Processed scrutinized data were transferred to a master sheet and compiled with a

view to facilitating tabulation. It may be noted here that many information were

collected initially in local units, and after checking, those were converted into

standard units.

3.7 Statistical Techniques

The production of potato is likely to be influenced by different key inputs. The

Cobb-Douglas production has been chosen to estimate the contribution of input

used in potato production of farmers. In this analysis, output (gross return) was

considered as “dependent variable” (Islam el.al.2007). consistency of the double

log model the applicability of the model more reliable. A multicolinerity test was

performed to predict the correlation among the importanes independent variables

in the mode.

Specification and measurement of variables

To explore the input-output relationship of potato production stochastic frontier

production function (a modified Cobb-Douglas form of production function) form

was expressed as (Gujarati, 2003):

The specified stochastic frontier production function used in present study is explained

as followings:

lnyi = lnβo + ∑ =

6

1jβj l n Xij + ∑ =

2

1mβm Dim +єi , i= 1, 2. 3............N

Here, i=ith Potato grower

J= jth Input (j=1, 2, 3, 4, 5, 6)

βo= Coefficient of different variables

βm= Coefficient of different dummy variables (m= 1,2)

yi= Return from potato of ith farmer (Taka)

Xi1= Seed cost (Taka)

Xi2= Human Labour cost (Taka)

Xi3= Power tiller cost (Taka)

Xi4= Fertilizer cost (Taka)

Xi5= Insecticide cost (Taka)

Xi6= Irrigation cost (Taka)

Dm1 = Dummy for small potato farmers if land holding 0.02-1.00 hectare then l,

otherwise 0

Dm2 = Dummy for medium potato farmers if land holding 1.01-3.03 hectare then

1, otherwise 0

ei= Error term

N = 60

In = Natural logarithm

Returns to scale

Since the concept of the functional coefficient requires a proportional change in

all variable inputs, it is useful in considering returns to scale.

R2 and adjusted R2

R2 can be computed by the following formula,

R2 =1- and)y-i(y

ie2

2

∑∑

The adjusted coefficient of determination can be estimated which is as follows:

Adjusted R2 =1- 1)i/(Ny

K)i/(Ne2

2

−

−

∑∑

Where,

∑ ei2 = Residual sum of squares

∑ yi2 = Total sum of squares

K = The number of parameters in the model including intercept term.

N = Number of the total observations 3.8 Procedure for Computation of Costs and Return

Variable costs

i. Hired human labour

ii. Power tiller

iii. Seed

iv. Fertilizer

v. Insecticides

vi. Irrigation

vii. Land use cost

Fixed costs

I. Family labour

II. Interest on operating capital

Both cash costs and full cost were considered in enterprise costing techniques.

Full costs included cost of all inputs whether purchased or not.

3.8.1 Variable costs

i. Cost of human labour

Human labour was found to be the major input in producing potato. Human labour

was classified as family labour for which cash payment was not made and hired

labour for which the farmers had to pay cash. To determine the cost of unpaid

family labour, the opportunity cost of labour was normally considered. However,

a number of researchers used the prevailing wage rate of hired labour for

estimating family labour cost which included the value of necessary privileges in

addition to the cash payment. Information of each payment for hired labour was

collected on the basis of actual cost. In this study 8 hours period was considered to

be one labour man day. The wage rate varied from Tk. 50 to Tk. 150 depending

on the season and availability of day labours. However, the average wage rate was

considered to be Tk. 135.

ii. Cost of power tiller

Power tiller was used by the farmers for land preparation to producing potato.

There was a competitive rate for power tiller use in the study area. The payment

involved charge for the use of power tiller and the driver. It was very difficult to

separate the cost for the power tiller and the driver. A power tiller owner supplied

fuel as well as driver for land preparation. The farmers paid the charge for power

tiller use at a fixed rate 134.33 Tk. per acre in the study area.

iii. Cost of seed

The sample farmers mostly used home supplied seeds but in some cases

purchased seeds were used by the farmers in producing potato. The costs of home

supplied seeds were determined at the present market rate in the study area and

costs of purchased seeds were calculated on the basis of prices paid by the

farmers.

iv. Cost of fertilizer

Fertilizers and manures namely Urea, TSP, MP, Gypsum and cow dung were used

by the farmers. Fertilizer cost varied according to actual price paid by the

individual farmers and the amount of fertilizers they used. Cost of these fertilizers

was estimated according to the cash price paid by the farmers.

v. Cost of insecticides

Most of the farmers used insecticides in producing potato. Some farmers in the

study areas used various insecticides. The costs of various pesticides were

computed on the basis of price which farmers actually paid for it.

2productionofPeriodinterestofRatecapitalOperating ××

vi. Cost of irrigation

All the farmers in the study area used irrigation water for producing potato. In the

study area, there was only one system of payment for irrigation. This was cash

payment per unit of land. The cost of irrigation was computed form the hiring

charges per unit of land and net fuel cost paid by the owner of irrigation

equipments.

vii. Land use cost

The cost of land use was different for different plots depending upon the location,

topography and fertility of soil. The cost of land use may be estimated by using

any of the following concepts.

a) Interest on value of land

b) Valuation of land at its rental price

For this study, cost of the land use was accounted for by taking the rental value of

land.

3.8.2 Fixed cost

i. Interest on operating capital

Interest on operating capital was calculated by taking into account the cost

incurred for all the field operations.

The formula was used as follows:

Interest on operating capital =

The interest was charged at the rate of 10 per cent per annum. Five months were

considered for potato production. The period considered for an enterprise ranged

from the time of land preparation to the harvesting of the crop.

3.8.3 Procedure for estimating of return

Per hectare gross return was calculated by multiplying the total amount of

products by their respective average market price. Gross return per hectare

consisted of the values of products. The net return was estimated as net return

above cash cost and net return above full cost. Excluding the cash expenses from

the gross return, the return above cash cost was derived. The net return above full

cost was calculated by deduction all cash and non-cash expenses from gross

return.

Chapter IV

SOCIOECONOMIC CHARACTERISTICS OF THE POTATO

FARMERS

The aims of chapter is to highlight the major socioeconomic aspects such as

family size and composition, classification of family members, level of education,

occupational status, land holding, etc of selected sample farmers.

4.1 Age Distribution of the Potato Farmers

Age of the respondents is an important factor in involvement in any income

generating activity. The farmers were classified into four age groups i.e.

distribution of sample farmers, 18 to 24 years, 25 to 45 years, 46 to 60 years and

above 60 years.

Considering all sample farmers, age of 18 to 24 years were 5, 25 to 45 years

were50, 46 to 60 years were 42 and above 60 years were 3 percent respectively

(Table 4.1).

4.1 Distribution of selected potato farmers according to age groups

% distribution of farmers reported

Age groups Small

farmers n=38 Medium

farmers n=16 Large farmers

n=6

All categories

n=60 % % % %

18-24years 5 6 - 5 25-45years 55 50 33 50 46-60years 37 42 17 42 Above 60years 3 2 - 3 All groups 100 100 100 100

Source: Field survey 2009 It appears from Table 4.1 that, most of the farmers belonged to 25 to 45 years age

group and they were active and young. Few farmers were found aged above 60

years who represent 3 percent for small farmers and that of 2 percent for medium

farmers. No large farmer was found above the age group of above 60 year.

4.2 Level of Education of the Potato Farmers

Education was considered as the key factor for transforming technology.

Education was defined as the ability of an individual aged above 6 years to read

and write or formal education received up-to certain standard.

Considering all farmers about 27 percent farmers were illiterate and that of 3

Percent farmers completed graduation degree. About 7 to 13 percent farmers had

education of SSC and HSC level. The percentages of illiterate farmers were 36, 7

and 17 percent for the small, medium and large farmers respectively. However,

primary level both for small and medium farmers was 18 percent. Since here, the

secondary class completed of 33 percent total of all farmers (Table 4.2).

Table 4 .2: Level of education of potato farmers

% distribution of farmers reported

Education

Small farmers n=38

Medium farmers n=16

Large farmers n=6

All farmers n=60

% % % %

Illiterate 36 7 17 27 Primary 18 18 - 17 Secondary 29 50 17 33 S.S.C 11 13 33 13 H.S.C 6 6 17 7 Graduate and above

- 6 16 3

All groups 100 100 100 100 Source: Field survey 2009 4.3 Occupational Status of the Potato Farmers

The sample farmers engaged various types of occupations. The occupation of the

farmers and farmers family’s members were classified such as agriculture,

business, service and other (i.e. small trading, tailoring, day laboring, van pulling

and rickshaw pulling, etc)

Table 4.4 Occupation status of the sample potato farmers and family members of the potato farmers

% distribution of farmers reported

Occupation groups

Small farmers n=38

Medium farmers n=16

Large farmers n=6

All farmers n=60

% % % % Agriculture 66 63 50 65 Business 13 12 33 15 Service 5 6 17 5 Others 16 19 - 15 Total 100 100 100 100

Source: Field survey 2009 Agriculture was found to be the inherent and single major occupation of almost al

the farmers in the study areas. A bulk of the total labour force was engaged in

agriculture. Only a small portion of the farmers families were found to have dealt

with business, services and other occupations (Rickshaw/ Van pulling, Day

labouring, Tailoring, Petty business, etc) in addition to agriculture. Tables 4.3

shows that the occupational classification of the farmers according to size of land

holding. It shows that 65 percent of the farmers had agriculture as the single main

occupation. Whereas, 15 percent, 5 percent and 15 percent were engaged of the

business, service and others occupations respectively.

4.4 Size and Composition of Family of Potato Farmers

A family in the present study was defined as a group of persons living together,

taking meals from a single kitchen and living under the control of one head. If any

person of a family is employed outside home but take meals from the same

kitchen while at home and shares the income and expenditure of the family,

he/she has been considered to be a member of that family .Considering all family

members of potato (Table 4.4), age group below 15 years it was 41, 26 and 34

percent for small, medium and large farmers respectively. Total family members

of small, medium and large farmers were 257, 104 and 38 among them age group

15 to less than 60 years constituted the largest portion of members of potato

farmers irrespective of farm size and it was 59, 85 and 66 percent for small,

medium and large farmers respectively. In this age group, the most of the family

members are related with various economical activities in the society (Table 4.4).

Table 4.4: Family members and age distribution of households members of potato farmers

% distribution of farmers reported Categories of farmers

Family members (No)

>15 years

15-60 years (Working members)

(% % Small farmers 257 41 59 Medium farmers 104 26 85 Large farmers 38 34 66 All farmers 399 28 72

Source: Field Survey, 2009 4.5 Educational Level of the Family Members of the Potato Farmers

Table 4.5 reveals that only 22 percent members are illiterate. Family member

having primary, Secondary, S.S.C, H.S.C and above education were found to be

24, 22, 17 and 9 percent respectively. Among the illiterate family members, small

and medium farmer holders were the higher whereas larger farmers constituted

the highest among those who have to H.S.C and above level of the education

during the investigation.

Table 4.5: Educational level of the potato farmers family members

% distribution of farmers reported

Level of education

Small farmer Medium farmer Large farmer All farmers % % % %

Illiterate 25 22 13 22 Primary 24 22 24 24 Secondary 20 24 32 22 S.S.C 16 17 16 17 H.S.C 9 10 10 9 Graduate and above

6 5 5 6

All groups 100 100 100 100

Source: Field survey, 2009

4.6 Average Size of the Land Holding of the Potato Farmers

Land is the most important asset for farmer household. Land was used for

producing diversified crops and productive enterprises. Sample farmers were

categorized into three groups according to total land owned by them. According to

Yang (1995) “Farm size is measured by the entire land area operated by the

operator.”

Table 4.6: Average size of the land holding of the potato farmers

Land category

Small farmers (ha)

Medium farmers (ha)

Larger farmers (ha)

All categories(ha)

Own land 0.436 1.211 2.62 1.422 Rent in /Lease in

0.230 0.804 1.039 0.691

Homestead 0.074 0.195 0.157 0.142 Pond 0.026 0.024 0.026 0.025 Other( garden, pasture etc)

- 0.04 0.30 0.11

Farm size 0.766 2.275 4.142 2.394 Source: Field survey 2009 It computed by adding the area of land owned, rented in and mortgaged in farm

from others and subtracting the area rented out and mortgaged out to others. It

may be noted that, sample farmers did not lease out or rented out in the study area.

Thus the farm size was measured by using the following formula:

Farm size= Own cultivable land + Lease in + Mortgaged in – Lease out –

Mortgaged out

Table 4.6 reveals that the average farm size for small farmers stood at 0.766

hectares; while it was 2.275 hectares for medium farmers and 4.142 hectares for

large farmers, respectively. It also indicates that the average farm size in the study

area was 2.394 hectares.

Chapter V

PROFITABILITY OF POTATO PRODUCTION

The main purpose of this chapter is to assess the per hectare cost, return and

profitability of potato production in the study area. Cost of inputs used for

producing a crop play an important role in farmers decision making. Cost of

potato production very from variety to variety. In the study area all potato farmer

practices production of Diament variety potato for availability of seed and

climatic condition. Farmers used both purchased and home supplied inputs for

producing potato. Both inputs and outputs were valued at the farm gate price

during the survey period. It was easier for a farmer to determine the cost of the

purchased inputs like seed, fertilizer, insecticide etc. But it was not so easy to

determine the cost of home supplied inputs like family labour, animal labour, etc,

for which no payment was actually made. For solving this problem of such home

supplied inputs the principle of opportunity cost was employed in this study.

5.1 Production Cost

5.1.1 Cost of human labour

The wage rate was varied from Tk. 50 to Tk 130 per man day depending on the

season and availability of day laborers. Considering the causes of variation, it was

estimated average cost estimated to be Tk. 125 per day and for women labour it

was about Tk. 84. Labours required for different farm operations were like land

preparation, sowing, mulching, weeding, irrigation, insecticide application,

application of fertilizer, harvesting, carrying, etc.

In the case of potato production, total human labour requirement were 216, 187

and 226 man-days per hectare and among them women labour were 86, 57 and 97

man-days of small, medium and large farmers of potato production respectively.

The per hectare costs of hired labour were Tk.13,165.00, Tk.13,327.00 and

Tk.22,453.00 which representing 8.03, 7.9 and 12.67 percent of the total cost for

small, medium and large categories farmers respectively. Other hand, the per

hectare costs of permanent (family labour) labour were Tk.10,395.00, Tk.7597.00

and Tk.2,250.00 which representing 6.33, 4.50 and 1.27 percent of total cost for

small, medium and large categories farmers respectively (Tables 5.1, 5.2, 5.3).

This indicates that the large categories farmers are use hired labour more than

small and medium categories farmers and most of the small categories farmers are

labouring their own land cultivation.

5.1.2 Cost of seed

The cost of seed is one of the basic cost items for potato production. In the study

area, the seed cost per hectare was found to be highest for medium farmers

amounted Tk. 41,838.00 followed by small farmers Tk. 35,117.50 and large

farmers Tk. 36612.37 which were representing 21.38, 24.81 and 23.50 percent of

the total cost for small, medium and large farmers respectively (Tables

5.1,5.2,5.3).

5.1.3 Cost of power tiller power

Power tiller was used in lieu of animal power. It is a time saving modern tillage

technology. Per hectare average power tiller cost was Tk. 3330.37 which shared

2.03, 1.97 and 1.88 percent of total cost for small, medium and large potato

farmers respectively. So, power tiller cost per hectare was the highest for small

farmers followed by the large farmers and medium farmers (Tables 5.1, 5.2, 5.3).

5.1.4 Cost of fertilizer

In the study area, farmers used four types of fertilizer namely urea, triple super

phosphate (TSP), mediate of potash (MP) and gypsum for potato cultivation.

Fertilizer cost was determined by the actual market prices paid by the farmers.

The average per kg price of those fertilizers was Tk. 12.00, 56.05 and 6.00 for

small, medium and large potato farmers respectively. Thus the respective total

average cost of fertilizer per hectare stood at Tk. 38,190.25, Tk. 38, 722.05 and

Tk. 42, 995.30 representing 23.29, 22.91 and 24.26 percent of the total cost

(Tables 5.1, 5.2, 5.3) in the study area fertilizer cost per hectare was the highest

for large farmers followed by small and medium farmers.

5.1.5 Cost of manure

In the study area, the potato farmers only used cow dung as manure. Cow dung

cost per hectare was the highest in large farmers Tk.1920.00 followed by small

farmers Tk. 1560.00 and medium potato farmers Tk. 1580.00. The average cost of

cow dung for small, medium and large potato farmer constituting 0.95, 0.94 and

1.08 percent of total cost respectively (Tables 5.1, 5.2, 5.3).

5.1.6 Cost of insecticides

All sample potato farmers used insecticides in their potato fields. They used

different kinds of insecticides namely Sundronil, Indrotil, Comigrin, Tiodit, etc.

The price of the insecticides largely varied from brand to brand. The total average

cost of insecticide per hectare was Tk. 13500.00 for all categories of potato

farmers which representing 8.23, 8.00 and 7.62 percent of total cost for small,

medium and large farmer respectively. So, the highest insecticide cost was borne

by small farmers followed by large and medium farmers (Tables 5.1, 5.2, 5.3).

5.1.7 Cost of irrigation

Potato farmers in all the villages used irrigation water in the potato fields during

cultivation period. It may be noted here that maximum of the selected farmers had

to buy water from the owners of shallow tube-wells (STWs) and a few of them

had their own STWs. The average per hectare cost of irrigation for all categories

was Tk 17,500.00 of and it was almost the same for small and medium farmers.

The cost of irrigation constituted 10.67, 10.38 and 9.88 percent of total cost for

small, medium and large farmers (Tables 5.1, 5.2, 5.3). The cost of irrigation was

the lowest for large farmers followed by small and medium farmers.

5.1.8 Land use cost

Some of the potato farmers leased in land for study year and they had to pay a

certain amount of money per hectare of land. Other farmers produced potatoes on

their own land. Land use cost was estimated for the cropping period covering 5

months in the study area. The average per hectare land use cost for all categories

was Tk. 27,664.00 which representing 16.87, 16.41 and 15.61 percent of total cost

for small, medium and large farmers respectively. So, the highest land use cost

was borne by small farmers followed by large and medium farmers in the study

area.

5.1.9 Interest on operating capital (IOC)

IOC included both labour and materials used in the production of potato and were

calculated for a period of four months at the rate of 13.00 percent per annum. It

was assumed that if the farmers borrowed money from bank and other financial

and non-financial institutions, they had to pay interest at specified rate. This rate

was taken to calculate IOC. IOC per hectare was estimated at Tk. 3010.54,

Tk.3059.23 and Tk.3430.29 for small, medium and large potato farmers and

which comprising 1.84, 1.81 and 1.98 percent of the total cost for small, medium

and large farmers respectively (Tables 5.1,5.2,5.3).

5.2 Total Cost (TC)

The total cost was worked out for each category of potato farmers and is presented

in table (5.2, 5. 3, 5.4). The average per hectare total cost of potato production was

estimated at Tk.163932.64 for small farmers, Tk.168971.78 for medium farmers

and Tk.177194.76 for large farmers. So, large farmers incurred the highest cost

followed by the small and medium potato farmers.

5.3 Gross Returns (GR)

Gross return from potato production was defined as the sum of the returns from

maim product as potato. The average per hectare yields of potato were 18988.52

kg, 19302.99 kg and 19520.58 kg and sale prices of per kg potato were Tk. 15.17,

Tk. 15.60 and Tk.16.00 for small, medium and large farmers in the study area.

Returns from main product (potato) were Tk.2, 88,055.85, Tk.3, 01,126.64 and

Tk.3, 12,329.28 for small, medium and large farmers respectively.

5.4 Gross Margin (GM)

Gross margin is defined as the difference between gross return and variable costs.

Farmers generally want to maximize return over variable cost of production. Per

hectare gross margins from potato production were estimated at Tk.1,37,528.73

Tk.1,43,165.24 and Tk.1,40,814.81 for small, medium and large potato farmers

respectively in the study area (Tables 5.1, 5.2, 5.3).

5.5 Net Returns (NR)

Net returns were obtained by deducting total cost. Per hectare net returns of potato

were Tk.1, 24,123.19, Tk.1, 32,509.01 and Tk.1, 35,134.52 for small, medium and

large farmers respectively in the study area (Tables 5.1, 5.2, 5.3).

5.6 Benefit Cost Ratio (BCR)

In the study area, BCR was the highest for medium farmers compared of small

and large farmers because of better management system which were 1.75, 1.79

and 1.76 for small, medium and large farmers respectively (Tables 5.1, 5.2, 5.3).

5.7 Profits

Profit (Tk/kg) of potato production means the different between per kg selling

price of main product (potato) and per kg production cost. In the study area,

profits were Tk/kg 6.54, Tk/kg.6.87 and Tk/kg 6.92 for small, medium and large

potato farmers respectively. So, large farmers incurred the highest profit (Tk/kg)

followed by small and medium farmers (Tables 5.1, 5.2, 5.3).

5.8 Comparative Economic Returns of Producing Potato by Different

Categories of Farmers

The per hectare gross return and net return were found to be highest for large

farmers which were Tk. 312329.28 and Tk. 135134.52, followed by small farmers

which were Tk. 288055.85 and Tk. 124123.19, medium farmers found to be Tk.

301126.64 and Tk. 132509.01 respectively, due to high production and high per

kg market price of potato. Total variable cost and total cost were highest for large

farmers which were Tk. 171514.47 and Tk. 177194.76 because more use of hire

labour and high cost of seed and fertilizer followed by small and medium farmers.

Profit Tk/kg of potato was higher large categories farmers than those of small and

medium farmers. The undiscounted benefit cost ratio (BCR) highest for medium

farmers. Potato production was highly profitable business for medium farmers

followed by small and large farmers.

Table5.1: Per hectare cost and returns of potato production for small potato farmers

Items Unit Quantity

Price per unit (Tk)

Total value (Tk)

% of the total cost

Gross Cost Hired labor Male Man-days 72 125.00 9000.00 5.49 Female Man-days 49 85.00 4165.00 2.54 Power tiller - - - 3330.37 2.03 Seed Home supplied

kg 285.12 22.00 6272.64 3.82

Seed Purchased kg 1311.13 22.00 28844.86 17.56 Urea kg 320 12.00 3840.00 2.34 TSP kg 295 56.45 16652.75 10.15 MP kg 315 54.00 17010.00 10.37 Gypsum kg 125 5.5 687.50 0.42 Manure Cow dung kg 3120 0.50 1560.00 0.95 Insecticides - - - 13500.00 8.23 Irrigation - - - 17500.00 10.67 Lease value - - - 27664.00 16.87 Others (ash, replacing bad seedling etc )

- - - 500.00 0.30

A. Total Variable Cost 150527.12

91.77

Fixed Cost Family labour Male Man-days 58 125.00 7250.00 4.42 Female Man-days 37 85.00 3145.00 1.91 IOP - - - 3010.54 1.84 B. Total Fixed Cost 13680.21 8.17 C. Total Cost (A+B)

13405.54 100

Gross Return Main product kg 18988.52 15.17 288055.85 - D. Gross Return 288055.85 - E. Gross Margin(D-A)

137528.73 -

F.Net Return (D-C)

124123.19 -

G .Cost Tk/kg 8.63 - H. Profit Tk/kg 6.54 - I.BCR 1.75 -

Table 5.2: Per hectare cost and returns of potato production Medium potato farmers Items Unit Quantity Price per

unit (Tk) Total value (Tk)

% of the total cost

Gross Cost Hired labor Male Man-days 83 125.00 10375.00 6.15 Female Man-days 36 82.00 2952.00 1.75 Power tiller - - - 3330.37 1.97 Seed Home supplied

kg 756 22.80 17236.80 10.22

Seed Purchased kg 1079 22.80 24601.20 14.59 Urea kg 328 12.10 3968.80 2.35 TSP kg 305 55.85 17034.25 10.10 MP kg 320 53.00 16960.00 10.06 Gypsum kg 138 5.5 759.00 0.45 Manure Cow dung kg 3160 0.50 1580.00 0.94 Insecticides - - - 13500.00 8.00 Irrigation - - - 17500.00 10.38 Lease value - - - 27664.00 16.41 Others (ash, replacing bad seedling etc )

- - - 500.00 0.30

A. Total Variable Cost 157961.40

93.62

Fixed Cost Family labour Male Man-days 47 125.00 5875.00 3.48 Female Man-days 21 82.00 1722.00 1.02 IOP - - - 3059.23 1.81 B. Total Fixed Cost 10656.23

6.31

C. Total Cost (A+B)

168617.63 100

Gross Return - Main product kg 19302.99 15.60 301126.64 - D .Gross Return 301126.64 - E. Gross Margin(D-A)

143165.24 -

F.Net Return(D-C)

132509.01 -

G. Cost Tk/kg 8.73 - H. Profit Tk/kg 6.87 - I.BCR 1.79 -

Table 5.3: Per hectare cost and returns of potato production larger potato farmers Items Unit Quantity Price per unit

(Tk) Total value (Tk)

% of the total cost

Gross Cost Hired labor Male Man-days 111 128.00 14208.00 8.02 Female Man-days 97 85.00 8245.00 4.65 Power tiller - - - 3330.37 1.88 Seed Home supplied

kg 810 22.60 18306.00 10.33

Seed Purchased kg 1033 22.60 23345.80 13.17 Urea kg 343 12.00 4116.00 2.32 TSP kg 338 55.85 18877.30 10.65 MP kg 352 54.00 19008.00 10.73 Gypsum kg 142 7.0 994.00 0.56 Manure Cow dung kg 3840 .50 1920.00 1.08 Insecticides - - - 13500.00 7.62 Irrigation - - - 17500.00 9.88 Lease value - - - 27664.00 15.61 Others (ash, replacing bad seedling etc)

- - - 500.00 0.28

A. Total Variable Cost 171514.47 96.75 Fixed Cost Family labor Male Man-days 18 125.00 2250.00 1.27 Female Man-days - 85..00 - - IOP - - - 3430.29 1.98 B. Total Fixed Cost 5680.29 3.20 C. Total Cost (A+B)

177194.76 100

Gross Return Main product kg 19520.58 16.00 312329.28 - D. Gross Return 312329.28 - E. Gross Margin (D-A)

140814.81 -

F.Net Return(D-C)

135134.52 -

G. Cost Tk/kg 9.08 - H. Profit Tk/kg 6.92 - I. BCR 1.76 -

Table 5.4: Average per hectare gross returns, total cost, gross margins, net returns,

profits and BCR for small, medium and large potato farmers

Particulars Small farmers Medium farmers Large farmers All

categories farmers

Gross Returns (Tk)

288055.85 301126.64 312329.28 300503.92

Total Cost (Tk) 163932.64 168971.78 177194.76 169915.02

Total Variable

Cost (Tk)

150527.10 157961.40 171514.47 112600.99

Gross Margin

(Tk)

167528.73 143165.24 140814.81 140502.28

Net Returns(Tk) 124123.19 132509.01 135134.52 134256.77

Profit (Tk/kg) 6.54 6.87 6.92 6.78

BCR 1.75 1.79 1.76 1.77

Source: Field Survey, 2009

0

50000

100000

150000

200000

250000

300000

350000

Taka

GrossReturns

Total Cost TotalVariable

Cost

GrossMargin

Net Returns Profit BCR

Particulers

Figure: Average per hectare gross returns, total costs, total variables costs, gross margins, net returns and profit (Tk/kg) and BCR

Small farmersMedium farmersLarge farmers

Chapter VI

MARKETING SYSTEM OF POTATO

This chapter deals with existing marketing system of potato production in the

study area. Marketing of any product is essential to transfer it to the

consumers from widely scattered producing points. Marketing system of a

product means a process or system, which involves different marketing

components such as marketing channels, market intermediaries and their

marketing functions.

Marketing system may be thought of as the connecting link, the bridge

between producers and consumers. The marketing system sometimes

referred to as "the marketing machinery" or " the distribution system". A

marketing system includes all activities involved in the flow of goods from

the point of initial production to the consumer. It also plays two important

roles. The role of physical distribution, which is concerned with the

physical handing and transfer of products as they move from producers to

consumers, the role of adding value to farm commodities and facilitating

the exchange process between buyers and sellers ( Kohls and Uhl, 2005).

An efficient marketing system is essential for fair profit both for the potato

farmers and traders. Potato marketing system is composed of marketing

channels, market intermediaries and marketing functions. The components

of the potato marketing systems are analyzed in the succeeding pages.

6.1 Marketing Channels

Marketing channels are the alternative routes of product flows from

producers to consumers (Kohls and Uhl, 2005). It refers to the sequential

arrangement of various marketing intermediaries involved in the movement

of product from producers to ultimate consumers. Marketing channel plays

an important role in achieving the marketing objective of any organization.

In the study area, potato moved from the producer-sellers to consumers

through the channel i.e through some market intermediaries such as

Beparis, aratdars, Paikers, retailers and cold storage owners. It was

observed that potato needed to move a long distance from the point of

production to the consumers.

Figure 6.1: General channels of potato

Farmers

Beparis

Cold storage owners

Paikers

Aratders

Retailers

Consumers

Marketing channels through which the potato moved from potato farmers to

consumers which may be shown by drawing flow charts. Under this channel

potato is being marketed and distributed without storing in cold storage

(Figure 6.1):

Channel I: Potato Farmers --> Consumer

Channel II: Potato Farmers -> Retailer -> Consumer

Channel III: Potato Farmers -> Paiker -> Retailer -> Consumer

Channel IV: Potato Farmers -> Cold storage owner -> Paiker ->Retailer

-> Consumer

Channel V: Potato Farmers - Bepari ->Aratder - >Paiker ->Retailer

Consumer

Channel VI: Potato Farmers -> Bepari-> Paiker -> Retailer

->Consumer

Channel VII: Potato Farmers -> Bepari -> Retailer -> Consumer

Channel VIII: Potato Farmers -> Bepari -> Cold storage owner -> Paiker

-> Retailer -> Consumer

Channel IX: Farmer -> Bepari -> Cold storage owner -> Retailer

-> Consumer

Marketing channels of potato in the study area, the major marketing

intermediaries were the Bepari, cold storage owners, Aratder, Paikers and

retailers who performed marketing functions and took a portion of

marketing margin.

6.2 Characteristics of Market Participants

From figure 7.1 it is clear that along with the farmers, a number of'

intermediaries participated in the marketing of potato from the point of'

producers to the ultimate consumers. The intermediaries involved in potato

marketing in the study areas were Beparis, Aratdars, and Cold storage

owners. A brief description of market participants is given below.

6.2.1 Potato farmers

The potato farmers were the initial link in the potato marketing channel.

Producer-sellers were those farmers who performed the role of a seller in

selling of potato after harvesting. The producer-sellers and various

intermediaries formed the linkage in the channels. In the study areas the

producers sold their product to the intermediaries such as Beparis,

Aratdars, Paikers, retailers, Cold storage owners and consumers either in

market or at the farmyard.

6.2.2 Beparis

Beparis were relatively big and non-licensed traders in the study areas.

They handled relatively a large volume of potato than other traders. They

were independently organized. In the study areas, the Bepari purchased

potato from the farmers and sold it to cold storage owners, Aratdars,

Paikers and retailers.

6.2.3 Aratdars

Aratdars were basically the commission agents who normally had flixed

establishments in the market. They did the functions of negotiating

transaction between buyers and sellers in exchange of commission.the

potato farmer or trader generally give the potato to the aratdars for sale

either to retailers or big consumers. Aratars were big merchants and

licensed traders having fixed business premises and godowns. They had

some hired labourers or parts or full time salaried person for performing

various functions. Generally aratdars were self-financed as they did not

require large for operating the business. In general, Aratdars operation in a

large geographic area between the points of production and the points of

consumption.

6.2.4 Cold storage owners

Cold storage owners possessed cold storage plants for potato storage and

rendered storage facilities to the potato traders and farmers on receipts of

storage charges. They also bought potato from farmers and Beparis, stored

the same in their plants and sold to Paikers and to the retailers through

Aratdars on payment of commission.

6.2.5 Paikers

Paikers were independently organized and most of them were involved in

potato trading throughout the year. They were licensed traders having fixed

business premises in the wholesale markets. They bought potato from

farmers, Beparis, Aratdars and cold storage owners and sold it to the

retailers. They acted as the sales agents and stockholders for other potato

traders. They had storage facilities; sometimes they also acted as Aratdars.

6.2.6 Retailers

Retailers were the last link in the channel of potato marketing. They were

the specialized sellers who directly connected with the consumers. Retailers

were small of all types of traders. They did not have any permanent

establishment but had fixed place to sit on the market centre. They

purchased potato from Beparis, Paikers and cold storage owners and also

from. Farmers and finally sold their potato in small quantity to the ultimate

consumers.

6.3 Marketing Cost and Marketing Margin of Intermediaries

Marketing cost and marketing margin is useful for all those people (dealers,

retailers and farmers) who are involved in performing marketing functions.

It has a great significance because, by referring to the marketing cost and

margin one can whether or not the services of the intermediaries are

provided at reasonable rates (Sidhu, 1990).

In this chapter an attempt has been made to analyze marketing costs and

margins by using DAE wings survey data, 2009 on potato marketing system

in Jamalpur-Sherpur region.

Marketing cost represents the cost of performing various marketing

functions which are required to transfer a commodity from the place of

production to the ultimate consumers. The marketing cost includes costs of

all business activities necessary to ascertain the needs and wants of market,

plan product availability, effect transfer in the ownership of products,

provide for the physical distribution and facilitate the entire marketing

process.

Marketing margin at particular stages of product may be defined as the

difference between purchase and sale price of a commodity. According to

(Kohls and Uhls, 1980) marketing margin is defined as the difference

between what is paid by the consumers and what is received by the

producers. Marketing margin refers to the difference in value for equivalent

physical quantities of a given commodity between different stages of

marketing. Marketing margin of each intermediary was estimated by

deducting the purchase price of potato from its sale price while the net profit

was estimated by deducting marketing cost from the marketing margin.

.Although the marketing costs and margin of potato differed highly at

different levels, an average situation for farmer and each intermediary has

been discussed below.

6.3.1 Marketing costs of farmers

Major items of marketing cost of farmers of all groups were loading and

unloading, grading, market toll, transportation, storage, packaging, wastage

and personal personal expenses data on the marketing costs of potato

(Table6.1).

Farmer who sold potato at farm gate, they incurred very small amount of

marketing cost. Total marketing cost of farmers at Jamalpur-Sherpur region

was Tk/kg 0.20.The highest cost was due to storage and the second highest

cost was transportation of potato which was percent, percent respectively

(Table6.1).

Table 6.1: Marketing cost of farmer in Jamalpur-Sherpur region

Cost items Cost(Tk/quintal) %

Transportation 6.36 20.00

Storage 8.12 40.60

Wastage 3.10 15.50

Grading 0.05 0.25

Market toll 0.25 1.25

Loading and unloading

0.08 0.40

Packing 0.90 4.50

Personal expenses 1.14 5.7

Total 20.00 100

Cost of Tk/kg 0.20 -

Source: The Potato Sector of Bangladesh: Its Opportunities and Growth Hindrances, KATALYST and BAU, 2009. Note: Marketing information collected and related costs were estimated from field survey and FGD data, and guided discussion of field service Wing, DEA, 2009. 6.3.2 Marketing cost of intermediaries

Marketing cost of potato at intermediaries level included the expenses made

by different intermediaries for movement of the product through the

marketing channel. Different items of cost such as loading and unloading,

grading, packaging, market toll, commission, transportation, storage,

wastage, personal expenses and other costs (i.e., entertainment and tips,

weighing charge, electricity charge, stationary item like papers, pad, mobile

charges etc.) were included in the intermediaries involved in potato

marketing.

The marketing cost of the traders (bapari, paiker) and retailers were Tk./kg

1.90 and 0.20 respectively. All time, traders spent a good amount of money

for providing marketing services.

Table6.2: Marketing channel, marketing margin and marketing cost of

market participants in marketing of potato (without storing in cold storage),

Jamalpur-Sherpur

Intermediaries and market participants

Particulars of marketing. Marketing unit: Tk/kg Production cost

Purchase price

Sales price

Marketing margin

Marketing cost

Marketing profit

1 2 3 4 5=4-(2=3) 6 7=(5-6) Farmers 11.40 - 13.50 2.10 0.20 1.90(21) Traders - 13.50 21.90 8.40 1.90 6.50(72) Retailers - 21.90 22.70 0.80 0.20 0.60(7) All participants

- - - 11.30 2.30 9.00(100)

Source: The Potato Sector of Bangladesh: Its Opportunities and Growth Hindrances, KATALYST and BAU, 2009. Note: 1-4, Marketing information collected and related costs were estimated from

field survey and FGD data, and guided discussion of field service Wing, DEA,

2009. (Figures within parenthesis indicate the percentage of total profit).

6.3.3 Marketing margin and profitability of intermediaries

The marketing margin depends on market condition in time of buying and selling.

At each level of market, most of the intermediaries act as buyers and as well as

sellers. Marketing margin is the price for adding activities and functions

performed by intermediaries (Kohs and Uhl, 2005). Marketing margin at a

particular stage of transaction is the difference between sales price and purchase

price while marketing profit is the difference between the marketing margin and

marketing cost for potato marketed. Total marketing margin is the difference

between the price paid by consumer and the price received by the producer. The

marketing margins of potato for different intermediaries of Jamalpur-Sherpur

region were Tk/kg 8.40 and Tk/kg 0.80 for traders and retailers and the

corresponding values for marketing profits for farmers, traders and retailers were

Tk/kg1.90, Tk/kg 6.50 and Tk/kg 0.60 respectively (Table 6.2).

0

5

10

15

20

25

% o

f M

ark

ert

ing

pro

fit

Production cost Purchase price Sales price Marketingmargin

Marketing cost Marketing profit

Jamalpur-Sherpur

Figure6.2: Percentage of marketing profit of different market participants in Jamalpur-Sherpur regions

FarmersTradersRetailersAll participants

In the marketing system, all the intermediaries provide services and marketing

facilities and incur cost for them, but still marketing margin and profit for

different intermediaries of market were higher. The figure 6.2 shows that the

marketing margin and the marketing profit for trader were Tk. 8.40 and Tk. 6.50

per kg potato, respectively. The marketing margin for the retailers was Tk. 0.80

and that of marketing profit was Tk. 0.20. Marketing margin and marketing profit

for farmers were Tk. 2.30 and Tk. 1.90 respectively which shared marketing profit

only 21%. However, marketing margin and marketing profit for all participants

were Tk. 11.30 and Tk. 9.00 respectively.

6.4 Market Exchange and Buyers of Potato

In Jamapur-Sherpur zones, 70.00% of the farmers sold their potato in the local

assembly market followed by farm gate 26.67% and cold store 3.33% (Table 6.3).

Table 6.3: Distribution of potato farmers of Jamalpur-Sherpur Zones according to

their place of selling their potatoes

Place of sale Jamalpur-Sherpur

n=30 % Farm gate 8 26.67 Arots - - Local assembly market 21 70.00 Cold store 1 3.33

Source: The Potato Sector of Bangladesh: Its Opportunities and Growth Hindrances, KATALYST and BAU, 2009. Note: Figure in parentheses indicate to sample size (n)

In the study areas, 100% of selected respondents sold their potato to the traders.

The traders play an important role in marketing of potato from the farmers

followed by the cold store owners and others (Table 6.4).

Table 6.4: Distribution of potato farmers of Jamalpur-Sherpur zones according to

whom they mostly sold their potatoes

Buyers of potato Jamalpur-Sherpur n=30 %

Traders 30 100 Cold storage owner - - Others - -

Source: The Potato Sector of Bangladesh: Its Opportunities and Growth Hindrances, KATALYST and BAU, 2009. Note: Figure in parentheses indicate to sample size (n)

Chapter VII

FACTORS AFFECTING ECONOMIC RETURNS OF POTATO

PRODUCTION

This chapter is attempting to identify and measure the effects of the factors of

production on economic return of potato production in the framework of

production function analysis. For this purpose, Cobb-Douglas production function

(in value term) has been chosen to determine the effects of selected inputs on

potato production. Production of potato was assumed to be affected by seven cost

items and other factors.

Considering the importance of the inputs affecting potato production, a number

of inputs such as human labour, power tiller, seeds, fertilizer, irrigation and

insecticides were considered as explanatory variables. The individual effects of

these inputs on the dependent variable can be explained to a certain degree by

multiple regression analysis.

7.1 Explanation of the Variables Included in the Model

At first, let the null hypothesis H0= βjk the coefficient of interaction and variables

terms in translog production function are zero i.e. there is no relation of potato

production with the categories of farmers.

After testing the hypothesis, stochastic frontier production function is an adequate

representation of the data. The estimated values of the co-efficient and related

statistics of the stochastic of potato production are shown in Table 7.1. The

interpretations of the values and the major findings are presented below:

lny1= 3.505+0.096X1i+0.025X2i-0.047X3i+1.010 X4i-0.104 X5i-0.081 X6i-0143D

1i+0.015 D 2i

7.2 Interpretation of the Results

Seed and fertilizer

The regression coefficient of seed and fertilizer (Urea, TSP, MP, and Gypsum)

cost were 0.096 and 1.01 which were positive and significant at 1 percent level.

This implies that 1 percent increase in seed cost and fertilizer, keeping other

factors constant, would increase the gross return by 0.096 and 1.01 percent

respectively.

Power tiller and irrigation

The regression coefficient of power tiller cost and irrigation cost were -.047 and -

.081 which were negative and statistically significant at 1 percent level. This

implies that keeping other factors constant, 1 percent increase in additional power

tiller cost and irrigation cost would decrease the gross return of potato by 0.047

percent and 0.081 percent respectively (Table 7.1).

Insecticides

The regression coefficient of insecticides cost was -.104 which was negative and

statistically significant at 5 percent level. This implies that keeping other factors

constant, 1 percent increase in additional insecticides cost would decrease the

gross return of potato (Table 7.1).

Human labour

The regression coefficient of human labour cost was .025 which was positive and

statistically insignificant.

Dummy for small and medium categories farmers

The regression co-efficient of dummy for small potato farmers was -1.43, which

was significant at 1 percent level which indicates that the null hypothesis is

accepted that gross return has no relation with farmer categories of gross return

from potato production. The estimated coefficient of medium potato farmers was

.015 which was positive and statistically insignificant .It suggests that there were

no relation between gross return with categories farmers.

Adjusted R2

The co-efficient of multiple determinations, Adjusted R2 was 0.88 for potato

production, which indicated that about 88 percent of the variation in potato yields

was explained by the independent variables included in the model. The estimated

values of the co-coefficients and related statistics of the Cobb-Douglas production

of potato are shown in the Table 7.1.

Table 7.1 Estimated values of the coefficients and related statistics of the stochastic frontier production function of potato

Exploratory variables

Potato Values of coefficients t-value Significant (p

values) Intercepts 3.505 - .000 Seeds (X1) 0.096* 3.367 .001 Human labour (X2) .025 .740 .463 Power tiller (X3) -.047* -2.889 .006 Fertilizer(X4) 1.010* 30.543 .000 Insecticides (X5) -.104** -2.002 .051 Irrigation (X6) -.081* -4.073 .000 Dummy for small potato farmers (D1i )

-.143** -2.408 0.020

Dummy for medium potato farmers (D2i)

.015 .309 .759

Adjusted R2 0.86 - - F-value 680.942 - - Return to scale 0.771 - -

Sample size 60 - -

Source: Field survey, 2009

* Significant at 1 percent level

** Significant at 5 percent level

*** Significant at 10 percent level

F-value

The F value of the equation was highly significant at 1 percent probability level

implying that all the variation in potato yield depends mainly upon the

explanatory variables included in the model.

Return to scale

The sum of all the production function co-efficient of the equation for potato

production was 0.771. This indicated that the production function exhibited

decreasing return to scale for potato production. That means there is no need to

increase allocating more resources for higher potato production. One unit change

in investment will lead to 0.771 unit change in return.

.

Chapter VIII

PROBLEMS AND CONSTRAINTS OF POTATO

PRODUCTION

The purpose of this chapter is to identify and analyze the major problems

associated with potato production and marketing in the study area. The most

burning problems of growing potato that the farmers were usually facing are

summarized and briefly discussed in this chapter.

Table 8.1: Problems and constraints in potato production

Problems and constraints and constraints in growing potato

Categories of farmers Small farmers Medium

farmers Large

farmers No % No % No %

High Land use cost ( Lease value)

20 53 8 50 1 17

Quality seed, fertilizer and insecticides are highly expensive

25 66 9 56 3 19

Higher charge of cold storage 15 39 4 11 2 33 High labour wage rate 13 34.21 7 44 2 33 Uncertainty in input supply and risk in product sale

4 11 2 5 1 17

Lack of adequate transportation facilities

7 18 3 19 - -

Source: Field Survey, 2009 Note: The sum of percentage may not equal to 100 because some farmers mentioned more one problems. 8.1 Land Use Cost is High

The seasonal land use cost (lease value) is very high in the study areas .About 53

percent small farmers, 50 percent medium farmers and 17 percent large farmers

faced high land use cost respectively (Table 8.1).

8.2 Quality Seed, Fertilizer and Insecticides are Highly Expensive

Non-availability of improved modern quality seed and its high price were found to

be major limiting factor in producing potato in the study areas. 66 percent small,

56 percent medium and 19 percent large potato farmers reported this problem

(Table 8.1). Most of the farmers purchased HYV seed potatoes but they reported

that in most cases the seeds were of very inferior quality. Besides, the prices of

the seeds very high during the planting season.

Fertilizer and insecticide are vital inputs in the production of potato. Insecticides

of standard brands and quality are often not available in time and at reasonable

price. The supplies of the chemical during the potato growing season are generally

not regular and adequate, and the prices also often remain much higher than the

standard company rates. The TSP, Urea, MP and Gypsum fertilizers available in

the markets are often of extremely poor quality, and are reported to be adulterated.

There has been an extensive complain of the potato farmers against the quality of

fertilizers packaged by the local small industries. 66 percent small farmers, 56

percent medium and 19 percent farmers reported that although there was timely

supply of fertilizer yet the price was high (Table 8.1). This is a usual phenomenon

in Bangladesh and it is happening very frequently with the privatization of the

input supply for agricultural production.

8.3 Higher Charge of Cold Storage

Lack of proper adequate storage facilities was a serious problem. About 39

percent of small farmers, 11 percent of medium farmers and 33 percent of large

farmers complained about this problem (Table 8.1). Potato is a perishable product

and due to lack of adequate storage facilities, many farmers were compelled to

sell quite a considerable portion of their product at a lower price just after the

harvest time. The quality of the seed potato was even worse in the sense that most

of the farmers could not store it properly because of insufficient storage facility.

8.4 High Labour Wage Rate

Since potato is the very labour intensive crop, supply human labour should

balance the demand so that wage rate could remain within the acceptable limit.

Potato season is usually the busiest season in terms of crop production; labour

wage remains in the high side which compel farmers to limit lob our intensive

crop production. About 34 percent small, 44 percent medium and 33 percent

large potato farmers faced acute shortage of human labour in the production of

potato resulting in high wage rate and sub-optimal potato hectare (Table 8.1).

8.5 Uncertainty in Input Supply and Risk in Product Sale

Facilities for marketing of potatoes during the peak harvesting time are limited.

Often there is no completion among the buyers (Table 8.1).

8.6 Lack of Adequate Transportation Facilities

To have` fair price for commodity, transportation is one of the important

indicators which lacking in the study areas. About 18 percent of small potato

farmers and 19 percent medium potato farmers reported that due to lack of

transportation facilities they could not take their products to distant markets towns

and cities and so could not have the advantage of getting higher prices prevailing

in town and city markets (Table 8.1).

Chapter IX

SUMMARY, CONCLUCION AND RECOMMENDATION

This chapter highlights of the major finding and conclusions of the research. The

findings of the survey, observation of the potato farmers on various issues related

to the potato production as well as the livelihood of the households are presented

in this chapter. For the sake of a meaningful study, it contains the salient features

dealing with introduction, methodology, socioeconomic characteristics, costs and

returns of potato production, marketing system of potato and production and

marketing problems faced by the potato farmers and all other issues related to

potato production.

9.1 Summary

Agriculture, being the mainstay of Bangladesh Economy, contributes about is

20.87 percent (MoF, 2008) to GDP and provides employment to 68.5 percent

(BBS, 2005) of its national labour force. Thus its importance in the economy can

not be exaggerated. However, due to paucity of capital and modern technology,

agricultural productivity in this country is one of the lowest in the world, even

though the country is blessed with most fertile soils. Agriculture, sectors generates

about 30 percent of the total foreign exchange earnings, and moreover supplies a

huge amount of raw materials to the industry sector of this country. Corp as sub-

sectors is the most important in terms of GDP contribution; export earning,

employment opportunities and nation’s food security. However, nutritional needs

of the people demand that serious attention should be paid to the non rice food

crops as well as to attain food self sufficiency within a reasonable time frame. In

this context, potato is one of most important cash crops and it is one of the leading

crops of the world after rice and wheat.

Potato is a complementary vegetable to rice and when rice becomes scarce,

potatoes are eaten as temporary or partial substitution. In this context, potato may

be considered as one important vegetable crop which is most important from

nutritional point of view. The production of potato needs to be increased in order

to ensure the required sufficient quantities of vitamins, mineral, and protein in the

human diet of low income earning people. Since it combine in one crop, the

desirable characteristics of higher acceptability due to low cost and also higher

nutrition status and palatability, the people of Bangladesh can reduce pressure on

rice by taking potato as a rice substitute by changing their food habit. Moreover,

potato grows within a short time period and potato is generally labour intensive

crop and offers a considerable promise for generating increased rural employment

opportunities. But in fact, today potato has attained the status of only a very minor

crop in Bangladesh. One of the importance problems of potato production is its

non-acceptance as a popular food item.

Potato is also the main crop and is widely cultivated in Jamalpur-Sherpur regions

of Bangladesh along with rice production. The potato is used as supplementary

crop with rice and relatively it has high calorie content. The potato has a wider use

as different forms as vegetables not only in Bangladesh but also in other countries

of the world. Realizing these situations, the Government of Bangladesh has been

pursuing a crop diversification strategy to reduce the dependency on rice and to

increase the consumption of potato. Potato is considered as an important vegetable

and cash crop and has high nutritive value.

The present study attempts at looking the analyzing the profitability and the

effects of inputs on potato production at different categories of potato farmers in

context of rural Bangladesh. The focus of the present research was to satisfy the

following objectives.

1. To document the socio-economic characteristics of potato farmers;

2. To determine the cost, returns and relative profitability of potato different

categories of potato farmers;

3. To determine the marketing profit of potato farmers under the present

marketing system;

4. To assess the factors influencing economic returns of potato production;

5. To identify major problems faced by the potato farmers.

Keeping those objectives in view, a farm survey was conducted in two villages in

Bakshiganj Upazila of Jamalpur district and Sherpur sadar Upazila of Sherpur

district were selected.Then two villages namely Noymia under of Bakshiganj

Upazila and Kusumhati under Sherpur sadar Upazila which are the most

neighboring villages. In total, 60 samples were taken of which 38 were small

farmer, 16 were medium and 6 were large farmers. Data were collected by direct

interview. The collected data were then sorted and scrutinized to meet the

objectives of the study. Finally costs, returns, and functional analysis were done

by using different statistical techniques to fulfill the objectives of the study.

In this study, an attempt has been made to identify the socioeconomic

characteristics of the sample farmers. Considering the age of the potato farmers, it

appeared that majority of the farmers belonged to the age group of 25-45 years of

age. Out of 73 percent of the potato farmers were educated where the majority

29%, 50% and 17% had secondary level of education for small, medium and large

farmers potato farmers. Only 7% had higher secondary level of education.

Primary level of education had 17%. Average family size was 7 of potato farmers.

Working members of the family were 59%, 85% and 66% for small, medium and

large potato farmers respectively. Educational level of the potato farmers family

members were primary 24%, secondary 22%, S.S.C 17%, H.S.C % and above

H.S.C only 6% on an average. According to land holding, categories of farmers

farm size were 0.766, 2.275 and 4.142 hectares for small, medium and large

farmers respectively. The benefit cost ratios (BCR) above the total cost were 1.75,

1.79 and 1.76 for small, medium and 1.77 for all categories potato farmers

respectively.

The farmers used different inputs for producing potato production. Some of these

inputs were purchased and some of them were home supplied.

The yield of potato were 18,988.52 kg/ha, 19,302.99 kg/ha and 19,520.585 kg/ha

for small, medium and large farmers respectively as well as the corresponding

gross returns were Tk.2,88,055.85/ha, Tk.3,01,126.64/ha and Tk.312329.28/ha.

Cost of production of potato were found to be Tk. 1,63,932.64/ha, Tk.1,68,617.63

/ha and Tk.1,77,194.76/ha. Net return of potato per hectare amounted to

Tk.1,24,123.19/ha, Tk.1,32,509.01/ha and Tk.1,35,134.52/ha for small, medium

and large potato farmers respectively.

Farmers in the study area used purchased as well as home supplied inputs. In

calculating family supplied inputs, the principle of opportunity cost was followed.

Tabular technique of analysis was used to measure the profitability of potato.

Potato was found to be profitable in terms of total cost. About eighty percent

potato farmers reported that their income increased due to potato production. In

terms of overall socioeconomic improvement 60 percent of the potato farmers

opined that potato production greatly helped to improve their socioeconomic

condition.

The present study identified, marketing margin and marketing profit under

existing marketing system such as marketing channels, market intermediaries,

various function of them. In potato marketing, the marketing costs and margins

were relatively high. The net share of the farmers was found to vary widely. The

farmers share in the marketing profit was 21%.

The results of empirical analysis reveal that factors affecting potato production

has significantly positive impact of two variables among six explanatory variable

namely seed and fertilizer. Medium farm size has significantly impact on potato

production.

With regard to the major problems faced by the farmers, the findings revealed that

low output price, quality seeds, marketing facilities, high price of fertilizers, and

other important inputs, infestation of insects and disease, inadequate facilities of

cold storage, etc. were the major obstacle which stand in the way of potato

production in the study area. As measures to overcome these problems it was

suggested that supply of fertilizers and good quality of seeds at reduced prices as

well as availability of pesticides were more important measures, which could

encourage farmers to expand potato production. The farmers in the study area also

mentioned some relative advantages growing potato which included relatively

higher profit produced with low irrigation cost, early harvest and go for other

crops, less disease infestation, use of less fertile land etc.

9.2 Conclusion Potato is important and leading staple and cash crop of Bangladesh. Farmers

earned higher profit from potato production. If modern inputs and production

technology can be made available to farmers in time, yield and production of

potato may be increased which can help the farmers increase income and improve

livelihood conditions. Potato can help in improving the nutritional status of the

rural people. Therefore it may be, concluded that where there is lack of irrigation

facilities, farmers can profitably produce potato instead of its others competitive

crops. Further, in the areas where land remains fallow in the winter season,

production of potato can be undertaken to increase income and employment

opportunities of the farmers. The domestic consumption of potato as human food

is likely to increase in future. The present and future potential market and demand

for potato should be determined through a comprehensive study in order to take

up a well-planned potato production programme at national level. This study,

therefore, confirms that the potential for increasing production through improved

performance with available resources and traditional technology is limited. Given

the weak institutional support services such as extension, education and the

finding of considerable inefficiency in improved potato. Potato production is as

expected and thus an efficient use of improved techniques of production coupled

with better management of land through increased institutional and infrastructural

support will help enhance potato production.

9.3 Recommendations

Based on the findings of the study, some recommendations may be advanced

which are presented below:

i. For increasing the production of potato, regular and adequate supply of seed,

fertilizers and insecticides should be ensured to the farmers on time at fair price.

ii. Policy makers and extension workers should take all possible steps to

encourage farmers to introduce potato production where is feasible.

iii. Reasonable market prices of potato should be ensured by increasing available

storage facilities and establishing various types of food processing industries.

iv. The evil practice of middlemen in the marketing of potato should be

minimized thought arrangement of direct sale of potato by the seed producers and

involving their genuine dealers.

v. Positive steps should be taken for improving transport and marketing facilities

in the study area

vi. Government should provide all possible help to supply required inputs and

others necessary support to the farmer to produce more potato rather than cereal

crops.

9.4 Limitations of the Study and Scope for Further Research

One of the major limitations of the present study is that for data collection, the

researcher had to rely upon the memory of the potato farmers since majorities of

the farmers did not keep any written records; they had to furnish information

mainly from their memory.

The study was conducted on a small size of samples and with one geographic area

due to time and fund constraints. If the study was conducted on a large sample

covering broad area, the result might be more reliable and accurate. In the present

study some specific variables considered, but the further research might be

conducted on some other important variables influencing potato production.

Since the present study was not a comprehensive study, it is very difficult to

arrive at any specific generalization. Thus the present study might be helpful for

the researcher, policy makers and to other concerned authorities for conducting

further comprehensive research or to arrive at any plan for the development of the

potato farmers.

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