ABSTRACT

The present study was designed to analyze the production cost, return, and assess the comparative profitability of two winter vegetables (Cabbage and Country Bean) production of a village of Mathbaria Upazila in Pirojpur. To reach the objectives, data were collected from 40 farmers. A tabular analysis was done to acquire the major findings of the study. Cobb-Douglas production function model was used as a tool to identify and measure the specific effects of the factors on vegetable production. The main findings of the study exposed that per hectare gross costs of Cabbage and Country Bean production were Tk. 206650 and Tk. 175500 respectively, and per hectare, the average yield of Cabbage and Country Bean was estimated at 18625 pieces/ha and 12100 kg/ha, respectively. Per hectare gross returns Cabbage and Country Bean were Tk. 372500 and Tk. 302500, respectively. The Adjusted (R2) was found to be 0.622 and 0.838 for Cabbage and Country Bean, respectively. The F-values of Cabbage and Country Bean production were 2.82 and 8.90 respectively and both were significant at 1% level, which implied a good fit of the model. Therefore, it is clear that Cabbage production was most profitable between the two crops.

Keywords: Winter vegetables, Production, costs, Yield, Returns and Profitability

Introduction

Vegetables are very significant for nutrition, the economy as well as food security. Vegetables are the obligatory foods in daily meals as they contain all the required nutrients for a balanced diet. The vegetables also have medicinal and aesthetic demand. In the year 2009-2010, the national production area of winter vegetables was 1.91 lakh hectares and the production was 6.30 million tons (BBS, 2010). Among the vegetables, brinjal, gourd, cauliflower, country bean and cabbage are the most common and popular winter vegetables in Bangladesh. 

The profitability of a crop depends on yield, price cost of inputs, and farmers’ management capacity. Parvin (2008) found, alternate of rice and other cereal crops, vegetable production was profitable from the viewpoint of marginal, small, medium, and large farmers. Naher (2005), looked at vegetable production, and exporting to foreign countries is more profitable than other crops. Hossain (1997), found that cucumber growers received the highest return above full costs, and cabbage growers received the lowest return above full cost.

Vegetable production all year-round is essential to meet the nutritional and caloric requirements of the growing population as well as for increasing employment opportunities and income of farmers. For the production of winter vegetables, relevant and adequate information on different aspects of production is required at the farm level. For this reason, the present study was designed to analyze the production cost, return, and assess the comparative profitability of two winter vegetables (Cabbage and Country Bean) production of a village of Mathbaria Upazila in Pirojpur.

Materials and Methods

In the present study, the necessary information was collected from 40 farmers (20 Cabbage and Country Bean 20) by the author through personal interviews. Data were collected from a village of Mathbaria, Pirojpur during February-March, 2019. Per hectare profitability of growing vegetables was measured in terms of gross return, and net return from the viewpoints of the individual farmers. In order to reach a conclusion, tabular technique and statistical analysis were employed. Cobb – Douglas production function model (Gujarati, 2003), was selected to estimate the effects of key variables on production.

The following profit (Π) equation was used to calculate the net return of the vegetable producers: 

Π=ΣP1iQ1i -TC

Where, 

Π= Profit 

P1i= Price of the product

Q1i= Quantity of products

TC= Total Cost

The stochastic form of Cobb-Douglas production function model may be expressed as:

Y= aX1b1 X2b2 X3b3 X4b4 X5b5 X6b6 X7b7 eUi

The function is estimated as follows:

ln Y = Ina + b1InX1+ b2InX2+ b3InX3+ b4InX4+ b5InX5+ b6InX6+ b7lnX7+Ui

Where,

a = Constant or Intercept

Y = Gross return (Tk/ha);

X1= Human labor cost (Tk/ha);

X2 = Tillage cost (Tk/ha);

X3 = Seed/ Seedling cost (Tk/ha);

X4= Fertilizer and cost (Tk/ha);

X5= Irrigation cost (Tk/ha);

X6= Insecticides cost (Tk/ha);

X7 = Others (Fence and Mancha etc.) cost (Tk/ha);

i = I, 2, 3, ………………n

b1, b2…………b7= Regression co-efficient to be estimated

In = Natural logarithm

e = Base of natural logarithm and

Ui= Error term

Results and Discussion

The profitability of Cabbage and Country Bean Production

In order to estimate the profitability of Cabbage and Country Bean production variable cost, fixed cost, gross cost, gross return, the net return, and benefit-cost ratio have been calculated. 

Variable cost: The per hectare total cost of human labor was Tk. 125000 (60.48%) for Cabbage production and Tk. 100000 (56.98%) for Country Bean production. Land preparation using power tiler cost for Cabbage and Country Bean were Tk.4350 (2.10%), and Tk. 3500 (1.99%) respectively. The cost of seeds of Cabbage was Tk. 4375 (2.39%), and Country Bean was Tk. 2000 (1.13%). Per hectare, fertilizer cost of Cabbage was Tk. 34900 (16.89%) and Country Bean was Tk. 23000 (13.10%). Per hectare cost of irrigation water was Tk. 11665 (5.64%) for Cabbage, and Tk. 23000 (5.98%) for Country Bean. The cost of insecticides was Tk. 3660 (1.77%) per hectare for Cabbage and Tk. 3000 (1.70%) for Country Bean production.

Figure 4.1: Variable cost items of Cabbage and Country Bean production

Other Costs (such as fence and mancha, Interest on operating capital, guard cost, etc.) was Tk. 2700 (1.30%) and Tk. 13500 (7.70%) per hectare for Cabbage and Country Bean production respectively (Figure 4.1).

The total variable costs which was Tk. 186650 (90.32%) and Tk. 155500 (88.60%) per hectare for Cabbage and Country Bean production respectively (Table: 4.1).

Fixed costs: Land use cost was calculated by using per hectare cash rental value of land. The cost of land use per hectare was Tk. 20000 (9.67%) for Cabbage and Tk. 20000 (11.39%) for Country Bean production (Table 4.1 and Table 4.2). 

Table: 4.1: Per hectare costs of Cabbage production

Source: Field survey, 2019

Gross cost: Tables 4.1 and Table 4.2 showed that per hectare gross cost for producing Cabbage and Country Bean production were Tk. 206650 and Tk. 175500 respectively. 

Table: 4.2: Per hectare costs of Country Bean production

Source: Field survey, 2019

Per hectare gross cost of Country Bean was lower than Cabbage due to higher amount of seed cost incurred in producing Cabbage

Gross return: The average market price of Cabbage and Country Bean was Tk. 20 per piece and Tk. 25 per kg respectively. The average per hectare gross returns was Tk. 372500 and Tk. 302500 for Cabbage and Country Bean production respectively (Figure 4.2).

Net Return: Net return was calculated by subtracting gross cost from its gross return. Per hectare net return from Cabbage was Tk. 165850, from Country Bean was Tk. 127000 (Figure 4.2). 

Benefit-cost ratio: In this study, BCR was found 1.94 and 1.63 for Cabbage and Country Bean production, respectively. According to BCR both productions are profitable but Cabbage production is more profitable than Country Bean production (Figure 4.2)

Figure 4.2: Gross return, Total cost, Gross margin and Net return of Cabbage and Country Bean production

Factors Affecting the Production of Cabbage and Country Bean

Seven variables were taken for the variation of the production of the selected vegetables. Multiple regression analysis was conducted to understand the possible relationship between the input and output and the Cobb-Douglas production function determined the effect of a variable. 

Human labor cost (X1): The magnitude of the regression coefficient of human labor cost were found to be positive and significant at 1 percent level for both Cabbage and Bean production. The coefficient of human labor cost (X1) was 0.397 for Cabbage and 0.0279 for Country Bean production (Table 4.3).

The Land preparation cost (X2): The regression coefficient of power tiller cost (X2) was positive and significant at 5 percent level for both Cabbage and Country Bean production. The regression coefficient means a one percent increase of power tiller cost (other factors constant), would lead to an increase in the yield of Cabbage and Country Bean by 0.009 and 0.0895 percent, respectively (Table 4.3). 

Seed cost (X3): It can be seen from Table 4.3 that the regression coefficient of seed was 0.0488 and 0.2221 (significant at 5 percent level) for Cabbage and Country Bean production respectively. 

Table 4.3: Estimated values of the coefficients and related statistics of Cobb-Douglas production function of Cabbage and Country Bean 

Source: Field survey, 2019 

*** Significant at 1 percent level 

** Significant at 5 percent level 

* Significant at 10

Fertilizer and Manure cost (X4): The regression coefficient of fertilizer and manure cost was 0.339 (significant at 5 percent level) for Cabbage production and 0.0700 (significant at 1 percent level) for Country Bean production. (Table 4.3). 

 Irrigation cost (X5): The regression coefficient of irrigation cost was 0.006 (significant at 10 percent level) for Cabbage production but 0.269 insignificant for Country Bean production (Table 4.3).

Insecticides cost (X6): It can be seen from Table 4.3 that the magnitude of the regression coefficient of insecticides cost was 0.264 and 0.0170 with a positive sign but insignificant for both Cabbage and Country Bean production. 

Other costs (X7): The magnitude of the regression coefficient of fence and Mancha, guard, etc. cost was found 0.016 and 0.222 but insignificant for both Cabbage and Country Bean production (Table 4.3). 

The Adjusted (R2) was found to be 0.622 and 0.838 for Cabbage and Country Bean, respectively (Table 4.3). The F-values of Cabbage and Country Bean production were 2.82 and 8.90 respectively and both were significant at a 1 percent level, which implied a good fit of the model. The summation of all the regression coefficients of the estimated production function of Cabbage and Country Bean was 0.918 and 0.980 respectively (Table 4.3).

Conclusion

In determining the comparative profitability of Cabbage and Country Bean it was found that per hectare yield and gross return of Cabbage were higher than that of Country Bean. The study brought out that Cabbage production was relatively more profitable than Country Bean. In summary of all the regression coefficients of the assessed production function of Cabbage and Country Bean were 0.980 and 0.918, respectively. That is, the farmers were working their farming in the second stage of production. In this case, there is a scope to increase the yield of both vegetables.

References

BBS, 2010. Yearbook of Agricultural Statistics of Bangladesh, Bangladesh Bureau of Statistics, Statistical Division, Ministry of Planning, Government of the People’s Republic of Bangladesh, Dhaka.

Gujarati, D.N. 2003. Basic Econometrics, Fourth Edition (International Edition). Published by McGraw-Hill/Irwin, New York, NY, 100200.

Hossain, M. M. 1997. A comparative economic analysis of some selected high yielding varieties of winter vegetables in an area of Bangladesh. M. S. Thesis, Department of Agricultural Economics, BAU, Mymensingh, Bangladesh.

Naher, K. 2005. Export of Fresh Vegetables from Bangladesh, Problems and Prospects. M.S. Thesis, Department of Agricultural Economics, BAU, Mymensingh, Bangladesh.

Parvin, S. 2008. An Economic Study of Alternative Rice and Vegetables Production in a Selected Area of Mymensingh District. M.S. Thesis, Department of Agricultural Economics, BAU, Mymensingh, Bangladesh.