An Economic Analysis of Crop Diversification in Northern Bangladesh

Abstract

The strategy of practicing crop diversification (CD) has significant socio-economic and environmental implications for farm households in Bangladesh. Crop diversification contributes to food and nutrition intake for the households, employment generation for the rural people and sustainable management of available resources. Thus, the main objective of this study is to explore the state of CD and to investigate the determinants of CD in the study area. Moreover the study aims to analyze economic viability and profitability of CD in the context of northern Bangladesh. The study has measured the level of CD applying Entropy and Herfindahl indices. Tobit regression model has been used to identify the determinants of CD. Net return and benefit cost ratio (BCR) approaches have been employed to analyze the economic viability of CD. In addition, two-way ANOVA and independent sample t test have been carried out to compare the mean differences of some characteristics of the farms and farmers in the study area. Chi-square (χ2) test has also been used to test the association between CD and variations of districts and farm size. By random sampling technique, a total of 343 farms were selected from eight villages of four districts of which two from Rajshahi division and two from Rangpur division of northern Bangladesh. The study found that level of crop diversification in Bangladesh is very low, though it is increasing gradually with some fluctuations. Similarly, northern Bangladesh has made a remarkable progress in practicing crop diversification over the years. Most of the areas in northern Bangladesh produce varieties of crops like vegetables, pulses, spices, etc. including cereals. In the study area, on average, a farm produces 4.46 crops in a cropping year with maximum 17 crops. It is revealed that in the study area only one fourth of total farms are specialized which produce only rice and three fourths of total farms are diversified which produce multiple crops. Level of crop diversification in northern Bangladesh is higher compared to many other areas of Bangladesh. It is also found that likelihood of crop diversification increases with the increase in the household size, defragmentation of land, annual income of the farms and developed infrastructure. On the other hand, probability of diversification decreases with the increase of farm size, non-farm income of the family, irrigation intensity and training exposure. The study also found that growing non-rice crops like vegetables, pulses and spices, etc. offer higher profit than that of rice. Employment generation of non-rice crops like vegetables, spices etc. is also comparatively high. Considering all these aspects of crop production, it is found that economic viability of crop diversification is much higher than that of rice monoculture. As policy suggestions this study observes that government initiative towards increased practice of crop diversification is required. In this connection, government can extent supports for the farmers to increase aman production during the rainy season and cultivate non-rice crops during the Rabi season. In addition, to increase practice of crop diversification in Bangladesh, modernization of irrigation system, development of infrastructure, raising frequency of extension activities and specific training for the farmer, appropriate natural storage and processing techniques of perishable crops,are important.