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Returns to Investment in Summer Onion Research and Extension in Bangladesh

Md. Kamrul Hasan
Senior Scientific Officer
Senior Scientific Officer, Spices Research Centre, BARI, Shibgonj, Bogra

M. Serajul Islam
Professorss
Professor, Department of Agricultural Economics, BAU, Mymensingh.

M.A. Monayem Miah
Senior Scientific Officer
Senior Scientific Officer, Agricultural Economics Division, BARI, Joydebpur, Gazipur.

Abstract/ Executive Summary:

The study estimated the rates of returns to investment on research and development of summer onion in Bangladesh. The Economic Surplus Model with ex-post analysis using secondary data was used to determine the returns to investment and its distribution between the production and consumption. Several discounting techniques were also used to assess the impact of summer onion research. The results revealed that the growth of area and production of onion increased manifolds due to farm level adoption of summer onion. The summer onion adoption rate was found increasing trend over the period. The yield of summer onion was 57.04% higher than the local variety. The internal rate of return (IRR), net present value (NPV), and benefit cost ratio (BCR) were estimated to be 25%, Tk.35.29 million and 3.09 respectively. Sensitivity analysis revealed that under various assumptions IRR ranged from 20 to 41%, NPV from Tk.18.37 to Tk.64.05 million, and BCR from 2.31 to 5.95. The results indicated that investment in research and development of summer onion was a good investment.

Keywords: Returns,Investment, Summar onion,Research and extension

Location:

Start Date:

End Date:

Program Area: Socio-economic and Policy

Commodity: Onion

Objectives:

i) To determine the growth rate of area, production and yield of summer onion;

ii) To find the adoption of summer onion and its yield advantages over local variety,

iii) To estimate the rate of returns to summer onion research and development.

Methodology:

For the present study, data on area, production, and yield of summer onion were collected from SRC and DAE; adoption rates were collected through informal scientist’s interview; and harvest price and consumer price index (CPI) were collected from various issues of Statistical Yearbooks published by the Bangladesh Bureau of Statistics. The demand and supply elasticities were taken from the study conducted by Day and Norton, 1993. Since SRC is the main organization for summer onion research, the research cost included mainly from SRC and the project NCDP. The extension and promotion activities were done by DAE and the related costs were collected from this organization. BARC mainly provided the administrative costs. The on-farm yield data of summer onion varieties were collected from the SRC, Bogra. Data on the input cost change was calculated by the researcher through analyzing the cost of local variety onion and summer variety onion at farm level. Analytical Procedure: The collected data were analyzed using different statistical techniques.

Source of Information: Bangladesh J. Agric. Econs. XXXII, 1&2 (2009) 49-61

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

The results revealed that the growth of area and production of onion increased manifolds due to farm level adoption of summer onion. The summer onion adoption rate was found increasing trend over the period. The yield of summer onion was 57.04% higher than the local variety. The internal rate of return (IRR), net present value (NPV), and benefit cost ratio (BCR) were estimated to be 25%, Tk.35.29 million and 3.09 respectively. Sensitivity analysis revealed that under various assumptions IRR ranged from 20 to 41%, NPV from Tk.18.37 to Tk.64.05 million, and BCR from 2.31 to 5.95. The results indicated that investment in research and development of summer onion was a good investment.

Knowledge Management: Journal