TECHNICAL EFFICIENCY AND PROFITABILITY OF ONION PRODUCTION IN SELECTED AREAS OF BANGLADESH

Abstract

The present study was designed to measure technical efficiency of onion farmers and to estimate the profitability of onion production in selected areas of four villages namely Vitbila and Bonkhola under Sujanagar upazila in Pabna district and Haturiya and Loskorkandhi under Faridpur Sadar upazila in Faridpur district. Primary data were collected from 150 farmers which constituted 75 farmers from each upazilas respectively. A random sampling was followed. Both tabular and statistical analyses were applied in this study. The major findings of the study reveal that onion production is profitable. Total cost of production was Tk. 40643.03 per hectare. Gross returns was Tk. 380423.04 and net returns was Tk. 174759.75. Per hectare yields of onion bulb was found 13704.00 kg. Per hectare human labour was used 362 man-days. Benefit Cost Ratio (BCR) was found to be 1.85 which implies that one taka investment in onion production generated Tk. 1.85. The Cobb-Douglas stochastic frontier production function was used for this study to measure technical efficiency of onion farmers. The coefficients of parameters like human labour, seed, fertilizers, insecticides and irrigation were positive where human labour, fertilizers and insecticides were highly significant and indicated positive effect on onion production. In the technical inefficiency effect model, experience, farm size, extension service and training have negative coefficients indicating that this helps in reducing technical inefficiency of onion farmers. The γ-parameter associated with the variance in the stochastic frontier model is to be estimated at 0.6818, indicates that inefficiency effects have a significant contribution in determining the level and variability of output of onion farms. The significant value of γ and σ indicates that there are significant technical inefficiency effects in the production of onion. The study revealed that a considerable improvement took place to increase household income of the farmers in the study area and to improve the socioeconomic conditions with the introduction of large-scale commercial onion production. The study also identified some problems and constraints faced by the onion farmers and suggested some recommendations to improve the present production situation so that per hectare yield of onion would possibly be increased.