Agricultural Research Management Information System

Home
Research Summary
Search
About Us
- ARMIS
- Brochure
Contact Us
Report
User Request
Data Input
Help
- Operation Manual
  - PDF
  - Video
- Program Area & Commodity
We have reached 37600 number of research entries at this moment.

- Logout

Research Detail

Home
Research
Detail

Profitability Analysis of Aloe Vera (l.) Production in Selected Areas of Bangladesh

Md. Abu Saiyem
Fellow
Department of Agribusiness and Marketing, Bangladesh Agricultural University, Mymensingh- 2202, Bangladesh

Shaikh Abdus Sabur
Professor
Department of Agribusiness and Marketing, Bangladesh Agricultural University, Mymensingh

Mohammad Ismail Hossain
Professor
Department of Agribusiness and Marketing, Bangladesh Agricultural University, Mymensingh

Md. Akhtaruzzaman Khan
Professor
Department of Agricultural Finance, Bangladesh Agricultural University, Mymensingh

Mst. Fatema Begum
Research Associate
Centre for Innovation studies, Dhaka, Bangladesh

Abstract/ Executive Summary:

Medicinal plants serve as important therapeutic agents as well as valuable raw materials for manufacturing numerous traditional and modern medicines. Aloe vera is a top ranked medicinal plant in Bangladesh. The objective of this study is to investigate the costs, returns and profitability of Aloe vera medicinal plant. The data were collected from the selected farmers of Bogura and Natore districts in Bangladesh during 2018. The total sample size is 123. The study applies the profitability analysis, break-even points and margin of safety percentage techniques. Surveyed farms are found at ranged from 0.01 to 0.41 hectares. Average cost of production per hectare is found at Tk. 876468.80, of which Tk. 647156.40 for operational cost and Tk. 229312.40 for fixed costs accounting for 73.84% and 26.16% of the total cost, respectively. The average yield of Aloe vera is stood at 41487.62 kg per hectare which is sold to two different markets: contract markets and local market. The mean price is estimated at Tk. 32.42 per kg in study area. The gross margin and net margin per hectare are found to be Tk. 698068.02 and Tk. 468755.61, respectively. The breakeven analysis showed that in the case of yield and price, the margin of safety percentage of Aloe vera is -53.48. It is also found at 42.01, 67.15 and 34.85 for variable cost, fixed cost and total cost of Aloe vera production. Therefore, the study noted that the Aloe vera medicinal plant production is profitable in the study area. Farmers have a great opportunity to allocate more land to Aloe vera production, which will make them more profit. Break-even analysis of Aloe vera production resists a large drop of yield and price before incurring a loss, which gives the farmers a comfortable margin of safety and a risk bearing ability.

Keywords: Aloe vera, Production cost, Returns, Medicinal plant

Location: Bogura and Natore in Bangladesh

Start Date: 00-00-2018

End Date: 00-00-2018

Program Area: Development of Host and Medicinal Plants

Commodity: Aloe Vera

Objectives:

To find out the costs, returns and profitability of Aloe vera production in the study locations.

Methodology:

Study area The study was conducted in the districts of Bogura and Natore in Bangladesh as these are the much medicinal plant growing area in Bangladesh (BFTI, 2016). From these districts the Laxmipur union of Nator district and Hoibotpur union of Bogura district were selected based on the concentration of area allocation of Aloe vera production. Aloe vera is commercially producing in these unions (Hossain et al., 2013; Rashid et al., 2010; Sharmin, 2006). From the unions the Aloe vera farmers were selected purposively. Data collection Data were collected through personal interviews by the researchers themselves during 2018, using pretested questionnaire. The farmers were identified by consulting with DAE personnel. Both primary and secondary data were used for this study. Primary data were collected from the farmers who producing Aloe vera medicinal plant. The total number of sample was 123. Data analysis: The study applies the profitability analysis, break-even points and margin of safety percentage techniques. Total cost (TC) includes all types of variable and fixed cost items involved in the production process. The study was derived margin of safety percentage for yield, price, variable cost, fixed cost, and total cost for Aloe vera. No doubt, a greater margin of safety indicates the soundness of the business. The unsatisfactory margin of safety can be rectified by lowering variable or fixed cost, by increasing selling price or by substituting unprofitable product by profitable product.

Source of Information: Res. Agric. Livest. Fish. Vol. 7, No. 1, April 2020: 75-81.

Article Link (Online Journal): ISSN : P-2409-0603, E-2409-9325

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

The study critically looked into the Aloe vera production in the study areas to explore information about how much it actually costs to produce and make returns; therefore, farmers can assess which activities have the most potential for highest net profit. Profitability analysis shows that the Aloe vera production is profitable in the study area and farmers can earn noteworthy profit from Aloe vera. It is largely attributed that the cost of human labour accounts for the largest proportion among all cost items, indicating that the Aloe vera medicinal plant production is labour intensive, mostly comes from hired labour sources. Farmers also utilize family labour when needed. However, the land use cost shares a large portion in the total cost structure. Therefore, the farmers have a great opportunity to allocate more land to Aloe vera production, which will make them more profit. But the evidence from the study survey clear that absorption of whole Aloe vera produces should be ensured. It may possible by establishing processing industries of medicinal plants. To motivate the farmers for Aloe vera production Government can take some initiatives with line departments.

Knowledge Management: Journal