Relative Profitability of Different Aged Betel Leaf Production at Farm Level in Some Selected Areas of Bangladesh

J. Bangladesh Agril. Univ. 3(1): 181-188, 2005 ISSN 1810-3030 Relative profitability of different aged betel leaf production at farm level in some selected areas of Bangladesh M.R.H. Mridha, H. Jahan and M.M. Murshed Department of Agricultural Economics, Bangladesh Agricultural University, Mymensingh Abstract This study was conducted to determine the profitability of betel leaf production in Bangladesh from the view point of different aged Boroj, i.e. new Boroj (1 to 5 years), mid-aged Boroj(6 to 15 years) and old Boroj (above 15 years). Three villages namely Maria, Chaubania and Raipara of Maria. union from Rajshahi district were selected purposively for the study and in total of 120 betel leaf growers were selected as samples by using stratified random sampling technique of which each stratum consisted of 40 betel leaf growers. Primary data were collected from the selected betel leaf growers during the period of January to June 2001. A simple cost and returns analysis was done to determine the profitability of betel leaf production. Further, Cobb-Douglas production function was used to determine the contributions of key inputs to betel leaf production using seven explanatory variables in the model. The annual costs of production of betel leaf per hectare were estimated at Tk. 2,67,260.40, 1,95,879.04 and Tk. 2,06,914.13 for new mid-aged and old Boroj, respectively and corresponding net returns per hectare were Tk. 4,25,625.28, 2,84,670.18 and Tk. 2,58,857.54, respectively The study revealed that betel leaf production was a profitable business. Further, betel leaf production in new Boroj was more profitable than those in mid-aged and old Boroj. Also the estimated R2 and F-value confirm significant use of inputs on betel leaf production and showed increasing returns to scale. ‘' Keywords: Profitability, Betel leaf, Cost & Return, Cobb-Douglas Introduction Betel Leaf (Piper betel L.) is the leaf of vine plant. This crop has been cultivated throughout Bangladesh for centuries and locally known as Pan. Chewing of betel leaf is preferred to the other chewing condiment not only due to its taste and flavour but also due to its various excellent medicinal properties. Betel leaf is a commercially viable crop and had substantial high market potentials in both domestic and foreign market (Ali and Rahman, 1987). There are a several varieties of betel leaf, which are cultivated, but only a few of them, such as Deshi, Bangla, Sanchi and Mitha are generally marketed by the growers. Betel leaf is cultivated in a vast area of Bangladesh. Total area and production of Oeteltleaf in Bangladesh are 15062.75 hectares and 78780 tones respectively in 1999-00 (BBS, 2000). Betel leaf is grown in almost all the districts of Bangladesh. But the districts of Kushtia, Barisal, Sylhet, Rajshahi, Chittagong, and Khulna deserve more attention for higher production of betel leaf than other districts. The government of Bangladesh has been pursuing a crop diversification strategy to reduce dependence on rice cultivation. The fifth five-year plan categorically emphasized the importance of crop diversification on valid agronomic, nutritional and economic reasons. Cultivation of horticultural crops, pulses, oilseeds, fodder and vegetables etc, is steamed in the plan documents (Planning Commission, 1997). But unfortunately, betel leaf, an important minor crop, has not been included in this programme. The climate and natural condition of Bangladesh are suitable for betel leaf production and the crop has great 182 Betel leaf production at farm level in some selected areas of Bangladesh export potential. In recent years, efforts have been made to develop export trade of non- traditional agricultural items like betel leaf, fruits and vegetables, etc. Bangladesh has achieved a remarkable progress in this regard. According to the EPB report she occupies 9th position in terms of the-number of her exportable items. She earned Tk.2,89,69 thousands in 2000-01 fiscal year (Bangladesh Bank, 2002). But a few studies had so far been done on the economics of betel leaf production at farmers level. The present study is thus designed to investigate the relative profitability of betel leaf production at different age and to determine the contribution of key inputs in the production process of betel leaf. Materials and Methods The study was conducted at three purposively selected villages namely Maria, Chaubania and Raipara of Maria union from Rajshahi district. A total of 120 farmers were selected from the study area by using stratified random sampling technique, of which each stratum contained 40 betel leaf growers. The strata were based on the age of betel leaf garden, i.e., new Boroj (1 to 5 years), mid- aged Boroj (6 years to 15 years) and old Boroj (above 15 years. The study covered a whole production year, i.e., January to December 2000 and the data were collected during the months of January to June, 2001 by survey method through a predesigned interview schedule. Both tabular and statistical techniques were used for the analysis of the data. Tabular techniques were applied with the help of averages, percentages, etc. to interpret the data Further, statistical techniques were used as a supplement to the tabular technique. Cobb- Douglas production function analysis was done to determine the effects of some selected inputs namely human labour, bamboo and bamboo sticks, oil cake, straw, insecticides and urea on betel leaf production. The fitted Cobb-Douglas production function was specified as follows: 1x2b2 x 3b3 x4bz tx 5 -x6ba x7 e The function was estimated by In 11= In a + 131 In x1 + In x21 + b3 In x3; +134 In x4ri-b5 In x5;+b6 In x6+137 In x7i+u1 Where, Y= Annual returns from betel leaf production (Tk./ha) a= Constant or intercept value = Cost of labour (Tk./ha) x2 = Cost of bamboo (Tk./ha) x3 = Cost of bamboo's stick (Tk./ha) x4 = Cost of oil cake (Tk./ha) x5 = Cost of straw (Tk.lha) x6 = Cost of insecticides (Tk./ha) x7= Cost of urea (Tk./ha) u1= Error terms i= 1, 2, 3 40 b1, b2, b3, b4, b5, b6, b7= Regression coefficients respective variable Mridha et a/. 183 Relative profitability of growing betel leaf was examined on the basis of gross margin and net return analysis. Gross margin analysis estimates the difference between total return and variable cost. The argument for using the gross margin analysis is that the farmers in general are more interested to know their returns over variable costs. On the,other hand, per hectare net return was arrived at by deducting all cost (variable and fixed) from gross return. Results and Discussion Costs of betel leaf production It was observed that, annual per hectare total costs of betel leaf production were estimated at Tk. 2,67,260.40, 1,95,879.04 and Tk. 2,06,914.13 for new Boroj, mid-aged Boroj and old Boroj, respectively (Table 1). It is also revealed from Table 1 that, the variable costs shared the major parts of the total costs. The per hectare variable costs of betel leaf production accounted for 71.14 percent for new Boroj , 72 percent form id-aged Boroj and 74.86 percent for old Boroj. The corresponding annual total fixed costs per hectare shared 28.86, 28.00 and 25.14 percent, respectively. Betel leaf is a labour intensive crop. As a result among the cost items, human labour cost was the largest single cost item of betel leaf production. Annual total per hectare human labour costs were estimated at Tk. 89,639.20, 65,047.20 and Tk. 81,050.00 which covered 38.35, 33.37 and 35.75 percent of total costs in new, mid-aged and old Boroj, respectively. Table 1. Per hectare costs for producing betel leaf of mid-aged Boroj in an area of Rajshahi district New-aged Boroj Mid-aged Boroj _ Old-aged Boroj Percent of Percent of ‘ Percent of Items . Total value Total value Total value gross gross gross (Taka.) (Taka.) (Taka.) expenses expenses expenses A. Variable cost 186061.97 - 69.62 141027.66 72.35 154904.54 68.32 Human labour (hired) 50434.80 18.87 50226.00 25.77 59246.80 26.13 Oilcake _ 35303.32 13.21 24466.05 12.55 20963.47 _ 9.25 Urea 6230.00 2.33 127.98 0.07 2434.74 1.07 TSP 2131.08 0.79 2231.32 1.14 2131.08 0.94 Fertilizers MP 1110.50 0.42 560.60 0.29 3115.30 1.37 Irrigation water 1981.59 0.74 ' 1408.99 0.71 92.83 0.04 Insecticides 2780.36 1.04 4429.32 2.26 3138.31 1.38 Bamboo 26463.94 9.90 19079.76 9.79 22032.20 9.72 Bamboo's sticks 37433.95 14.01 25515.10 13.09 15836.52 6.98 Straws 22192.43 8.31 12982.54 6.66 61772.00 27.24 B. Fixed cost 81198.43 30.38 53888.00 27.65 71840.79 31.68 Human labour -.39204.40 (Family supplied) 14.67 14821.20 7.60 21803.20 9.62 Interest on operating capital 12094.03 4.53 9166.80 4.70 20137.59 8.88 Land use cost 29900.00 11.19 29900.00 15.34 29900.00 13.19 C. Total gross ' expenses(A+B) 267260.4 100 194915.66 100 226745.33 100 Source: Mridha, 2001 184 Betel leaf production at farm level in some selected areas of Bangladesh Return from betel leaf production Gross return To calculate the gross _return from betel leaf production, it was essential to determine all the returns earned from selling betel leaves and other crops, which were grown in the betel leaf garden.

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