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Profits, supply and HYV adoption in Bangladesh

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  • Sanzidur Rahman
  • Bhavani Shankar

Abstract

The adoption of HYVs (High Yielding Varieties), for increased farm profitability, and the accelerated supply of cereals are important objectives for Bangladesh agriculture. In this paper, we have investigated the manner in which price and non-price factor affect these three criteria, based upon a model of rational variety choice. The model is empirically implemented using translog profit functions and a switching regression framework, and applied to a cross-sectional farm-level dataset of Bangladeshi farms for the 1996 crop year. Results indicate that rice prices, land availability, irrigation, rural infrastructure, labour wages and prices of animal power services are important factors, while fertilizer price plays a marginal role. Given these results, the policy of liberalization of agricultural inputs (particularly fertilizers) and reforms to maintain high rice prices during harvest seasons appear sound since these allow producers to receive rice prices close to world levels without burdening the government with input subsidies. Result also shows that educated Bangladeshi farmers substitute their time inputs away from agriculture, resulting in lower HYV adoption, farm profitability and rice supply.

Suggested Citation

  • Sanzidur Rahman & Bhavani Shankar, 2009. "Profits, supply and HYV adoption in Bangladesh," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 14(1), pages 73-89.
    • Handle: RePEc:taf:rjapxx:v:14:y:2009:i:1:p:73-89
    DOI: 10.1080/13547860802661538
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    1. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119, Decembrie.
    2. James J. Heckman, 1976. "Introduction to "Annals of Economic and Social Measurement, Volume 5, number 4"," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 4, National Bureau of Economic Research, Inc.
    3. Ahmed, Raisuddin & Hossain, Mahabub, 1990. "Developmental impact of rural infrastructure in Bangladesh:," Research reports 83, International Food Policy Research Institute (IFPRI).
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    Cited by:

    1. Asaduzzaman, M. & Anik, Asif Reza, 2017. "Determinants of Adoption of Rice Yield Gap Minimisation Technology in Bangladesh," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 40(1-2), pages 73-96, March-Jun.
    2. Assefa, Yared & Yadav, Sudhir & Mondal, Manoranjan K. & Bhattacharya, Jayanta & Parvin, Rokhsana & Sarker, Shilpi R. & Rahman, Mahabubur & Sutradhar, Asish & Prasad, P.V. Vara & Bhandari, Humnath & Sh, 2021. "Crop diversification in rice-based systems in the polders of Bangladesh: Yield stability, profitability, and associated risk," Agricultural Systems, Elsevier, vol. 187(C).

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