Productivity and efficiency impacts of urea deep placement technology in modern rice production: An empirical analysis from Bangladesh

Rice is the most dominant field crop in Bangladesh covering 75% of the total cultivated area and consumes 80% of the total fertilizers alone. Nevertheless, the productivity of rice in Bangladesh remains one of the lowest in the world. Urea, the main source of nitrogen (N), plays a key role in rice production, is required in large amount, is the most limited nutrient and also suffers from heavy system losses when applied in the puddle field. A worldwide crisis of urea fertilizer in 2008 spurred the need to economize on its use with urgency. The Urea Deep Placement (UDP) technology is aimed at increasing N fertilizer use efficiency in rice production and thus holds the promise to economize on the use of a very important but finite resource (i.e., urea) while improving rice productivity. The present study econometrically measures the impact of recently introduced UDP technology on productivity and efficiency of modern rice cultivation at the farm-level in Bangladesh using a stochastic production frontier approach. Data were collected from Shimlagachi village in Sharsha upazilla (sub-district) of Jessore district, located 225 km southwest of capital Dhaka. A total of 100 farmers using UDP technology and another 100 farmers using conventional urea to produce rice in both Boro (dry winter) and Aman (monsoon) seasons were randomly selected. Detailed input-output data including socio-economic information of the farmers were collected through administering a pre-tested structured questionnaire. The survey was conducted during May-June 2013. Results reveal that net profit, productivity and technical efficiency are significantly higher for the farmers using UDP technology as compared with the conventional urea users. On average, productivity of UDP farmers is 13% higher (estimated at 7164 kg/ha and 5242 kg/ha for Boro and Aman seasons, respectively) than the conventional urea users. Profitability is also higher for UDP farmers (BCR estimated at 1.36 and 1.08 for Boro and Aman seasons, respectively) than the conventional urea users (BCR estimated at 1.17 and 0.99 for Boro and Aman seasons, respectively). Finally, technical efficiency is 12% higher (estimated at 0.93) for the UDP farmers. However, the relative gain from UDP technology adoption is significantly higher in Boro season as compared with Aman season. The key policy conclusion is that the UDP technology should be disseminated widely with urgency so that Bangladesh can improve its food security by significantly increasing rice productivity while at the same time economize on the use of N fertilizer nutrient.