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Cecep E ffendi

Mahabub Hossain
Executive Director, BRAC
Editorial Assistant
Fahima Bintee Jamal
Jayant K Routray
Professor and Academic Senate Chair
Regional and Rural Development Planning
Asian Institute of Technology, Thailand
Hossein Shahbaz
Director (Pilot Projects)
CIRDAP
Qazi K holiquzzaman Ahmad
Chairman, Palli K arma-Sahayak Foundation (PK SF)
Member of the 2007 Nobel Peace Prize winning UN I PCC team
Mohammed Far ashuddin
Founder President and Vice-Chancellor, East West University
Former Governor, Bangladesh Bank
Volume XXIII July 2013 Number 1
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Cecep Effendi,
Volume XXI I I July 2013 Number 1
I SSN 1018-5291
CI RDAP 2013
Household Level Food Security, Food Crop Agriculture, and Rural
Development: Empirical Evidence from Moneragala District of
Sri Lanka
Rupananda Widanage
Impact of Trade Liberalisation on Food Economy of Bangladesh: A
Multi Market Modelling Approach
Abu Hayat Md. Saiful Islam
Demand-driven Governance: A Contextual Agenda of Development
Narayan Bahadur Thapa
Technical Efficiency and Total Factor Productivity of MV Paddy
Production under Different Farming Systems in Bangladesh
Basanta Kumar Barmon
The Role of Forests in Food Security of Sub-Saharan Africa in 21
st

Century
J. A. Soaga
Assessment of the Effectiveness of Lake Chad Research Institute
Adopted Villages Scheme in the Dissemination of Improved Farm
Technologies in Borno State, Nigeria
S. B. Mustapha, M.M. Gwary, H.S. Nuhu and P.A. Samaila
A Case Study on the Present Status and Potentiality of Shrimp
Farming in Bangladesh
Mohammad Chhiddikur Rahman and M. Harun-Ar Rashid
Concept Note
Forest Carbon Concepts, Markets and Standards for SAARC
Ram A. Sharma
Book Review
Islamic Microfinance: A Tool for Poverty Alleviation
Empirical Study Using Different Models
Grassroots NGOs by Women for Women: The Driving Force of
Development in India
1
19
47
59
79
89
97
111
119
121
Volume XXI I I July 2013 Number 1
Articles Pages
CONT E NT S
1
Asia-Pacific Journal of Rural Development
Vol. XXIII, No. 1, July 2013
Household Level Food Security, Food Crop Agriculture,
and Rural Development: Empirical Evidence from
Moneragala District of Sri Lanka
Rupananda Widanage
*
Abstract
This paper analyses the supply side of food security problem using household level data in
Moneragala district, Sri Lanka. The estimated household level production function shows that
promoting the level of education of farming households, provision of agricultural credit facilities,
converting small-scale family farms into large-scale agricultural farms, expansion of capital intensive
production techniques and technological progress in food crop production are some of the major
factors which increase household level food production. These are distributional issues related to the
supply side of household level food security. According to the empirical estimates, the output elasticity
with respect to each explanatory variable is smaller than one. This indicates that the current extensive
agricultural practices are not appropriate for increasing food crop production in the district.
Considering these research findings, policy makers should consider both efficiency and distributional
issues in policy implementation for improving the food security status of farming households.
Introduction
Food security both at the national and household levels is an essential condition for
improving the economic and nutritional wellbeing of the people in a country. The causes
of food insecurity at the household level and possible policy alternatives in achieving
household level food security have been the most debated issues in the recent literature of
food and resource economics (Timmer 2000; FAO 2003; Widanage 2008). The
complexity of household level food security problem creates difficulties for policy
makers to identify potential policy alternatives for solving the problem. The vagueness of
existing definitions of food security leads policy makers to follow inconsistent food
security policies (Maxwell 1996; FAO 2003). Although there are numerous definitions of
what is meant by food security, they are not clear and distinct. Food and Agricultural
Organisation (FAO) defined food security as "a situation that exists when all people at all
times have physical, social, and economic access to sufficient, safe, and nutritious food
that meets their dietary needs and food preferences for an active and healthy life". Since
this definition touches many aspects of food security, it appears to be a very
comprehensive definition of food security (FAO 2003). Despite the comprehensiveness,
this food security definition cannot be used either to measure the household level food
security or to formulate policies for improving the food security status of farming
households. Food insecurity which is the opposite of the above situation is caused by
unavailability of food, insufficient purchasing power, inappropriate distribution, and
inadequate consumption of food at the household level (Sen 1981; FAO 2003; Zezza and
*
Research Assistant, School of Resource and Environmental Management, Simon Fraser University, 8888
University Drive, Burnaby, BC, Canada. E-mail: rwa11@sfu.ca or wrupananda65@yahoo.ca
Asia-Pacific Journal of Rural Development
Vol. XXIII, No. 1, July 2013
2
Tasciotti 2010). Food insecurity may be also chronic, seasonal or transitory and therefore,
would be necessary to address using both short-term and long-term policy prescriptions
(Timmer 2000; Heyman et al. 2005; Widanage 2008).
As food security involves different aspects, there are several measures or indicators used
for quantifying food security. However, none of these single indicators are able to analyse
all the aspects of food security problem. A use of vague definitions and different
measures for analysing food security has led to vague and inconsistent food security
policies. These inconsistent food security policies do not address the correct issues
associated with national and household levels of food insecurity (Maxwell 1996; Timmer
2000; Barichello 2000). Therefore, it is important to apply precious and quantitative
measures to identify clear and consistent policies for improving the food security status
of farming households. This paper aims to analyse the supply side factors of food security
problem using the self-sufficiency ratio. The self-sufficiency ratio can be used to measure
the household level food security. The objective of this paper is to fill the current
knowledge gaps in the literature of food and resource economics through measuring the
household level food security quantitatively and identifying potential policy strategies for
improving the food security status of farming households in Moneragala district.
This paper makes three contributions to the Sri Lankan food security literature. First, this
paper measures the household level food security using self-sufficiency ratio and
discusses the importance and limitations of it as an indicator of measuring the household
level food security and identifying policies for improving the household level food
security. Thus, the study will make a significant shift from the food security studies that
analysed food security status in developing countries, including Sri Lanka, from macro or
national level perspective. Second, many previous studies of food security focused on
urban consumers and therefore, policy implications derived from such studies have urban
bias (Edirisinghe 1982; Shan and Braun 1987; Shan 1988; Cudjoe et al. 2010). Those
studies recommended policies that lead to keep food prices at a low level through
increasing food supply by domestic production or import. Furthermore, such studies
neglected the role of farming households as net food buyers in the food market. A
disregard of farmers in food security analysis led to the implementation of food security
policies which are not consistent with improving the food security of farming households
(Ellis 1992; Widanage 2006). This paper includes farming households as net buyers in the
food security analysis and examines the household level food security from the supply
side perspective. Therefore, this paper differs from the conventional Sri Lankan food
security studies that focused only on the demand side of food security and presented
urban biased food security policies (Shan 1988; Kelegama 2000). Third, this paper
provides policy implications for improving the household level food security in
Moneragala district based on the supply side factors, which are linked to food security.
The paper also helps to clarify the vagueness and inconsistency associated with food
security policies in developing countries including Sri Lanka. Furthermore, policy makers
can use these research findings to formulate a rural development strategy that will
eventually improve the food security status of farming households in Moneragala district,
Sri Lanka.
Widanage
3
To make such contributions to the food security literature in Sri Lanka, this paper is
structured as follows: a brief description about the food crop agriculture and household
level food security in Sri Lanka, a conceptual framework of the study describing the data
collection methods and research design of the study, an empirical analysis of the study,
policy implications of the study and finally, a conclusion of the study.
Food Crop Agriculture and Household Level Food Security in
Sri Lanka
As shown in many studies, the Sri Lankan agricultural sector is divided into two sub-
sectors based on criteria like size of land holdings, market orientation, and agronomic
practices and techniques. Researchers used different terms to describe the distinction
between the two sectors (Karunatilake 1987; Ratnayake 1992; Nakamura et al. 1997). The
plantation sector vs. peasant sector, the modern sector vs. traditional sector, export sector
vs. subsistence sector, and export agriculture vs. domestic agriculture are some of the
terms that were used by various researchers to differentiate these two distinct agricultural
sectors (Ratnayake 1992; Nakamura et al. 1997).The domestic agricultural sector produces
paddy and other subsidiary food crops (i.e. vegetables, grains, and fruits) mainly for home
consumption and domestic market requirements. It also remains as a small-scale operation
in the rural areas of Sri Lanka and provides employment opportunities for unskilled labour
force. The domestic agriculture or food crop agriculture has a close association with rural
poverty and food security problem (World Bank 2003; Widanage 2010). This paper
considers the role of domestic or food crop agriculture in determining the status of
household level food security in Moneragala district of Sri Lanka.
According to economic theories, the development of agriculture contributes in a number
of ways to the overall national economic growth and development (Lewis 1954; Hwa
1988; Todaro 1996). In particular, the development of the food crop sector in a particular
country leads to low food prices and therefore low wages in the economy. A low wage
bill would augment the possibilities for the expansion of industrial profits and
accumulation of capital stock (Sirinivasan 1985; Timmer 2000). An accumulation of
capital stock encourages national economic growth in the long-run. Since independence
in 1948, successive governments in Sri Lanka were guided by this type of
conceptualisation, as well as by the demand of electoral politics. The country placed
major emphasis on the promotion of her agricultural sector within their economic
development policies and strategies (Karunatilake 1986; Lakshman 1997). However, as
the statistical evidence presented below shows, the Sri Lankan agricultural sector has
recorded only a slow growth rate over time. For example, the real agricultural growth rate
was around 1.8 per cent during the l990's and the first half of 2000's (Widanage 2006).
According to the Central Bank of Sri Lanka the annual growth rate of agriculture is
around 1.9 per cent in 2009 (Central Bank of Sri Lanka 2010). The slow growth in the
agricultural sector over time dampened the high expectations of the role that agriculture
could play in achieving overall economic development and food security.
Since independence in 1948, Sri Lanka has been trying to increase domestic food
production, particularly rice and vegetables. Sri Lanka had produced only 38% of its
Household Level Food Security...
4
requirement of rice in 1953 when the population was 8 million. She achieved near self-
sufficiency in rice in 2002 when the population was 18.7 million. Food imports of Sri
Lanka constituted 11.4 per cent of total imports and 14.8 per cent of total export earnings
in 2002. Sri Lankan export in 2002 consisted of 19.9 per cent of agricultural exports and
77.3 per cent of manufactured exports. Food imports accounted for 74.6 per cent of
agricultural exports alone. These statistics show that Sri Lanka is in a fairly satisfactory
position with regard to the national level food security. Food availability at the national
level is a precondition for food security at the household level. But this does not ensure
that all people at all times have physical, social, and economic access to safe and
nutritious food. There is a considerable gap between the national level food security and
household level food security in Sri Lanka. The household level food insecurity in rural
areas of Sri Lanka is mainly caused by unequal distribution of productive assets and
inefficient allocation of resources in the domestic agricultural sector (Widanage 2008).
Domestic or food crop agriculture is the main livelihood of the majority of the population
and therefore development of this district depends on the development of domestic
agriculture (Senanayake 1999). Rain-fed and irrigated lands are equally important in
agricultural activities in the district. The major crops cultivated are cereals such as rice,
millet, maize, sorghum, grain legumes such as green gram, cowpea and soya bean and
vegetables and fruits to a limited extent (Senanayaka and Dissanayake 1999; Widanage
and Mensah 2002). The economy of Moneragala district is stagnant, and its per capita
income is low and its growth rate is less than 2 per cent. Agriculture is the main source of
employment for its population, with 75 per cent of the total labour force being employed
in the agricultural sector (Senanayake and Dissanayake 1999). Thus, there are very
limited opportunities for non-farm income-generating activities. The non-farm
employment activities that do exist are not sufficient to provide employment
opportunities to the educated labour force because of constraints related to capital, credit
and technical skills (Widanage and Mensah 2002; Widanage 2008; Widanage 2010).
According to theoretical and empirical evidence, the supply side of food security depends
on domestic production (Sen 1981; Timmer 2000; FAO 2003; FAO 2006). Food crop
agriculture in Moneragala district plays a substantial role in household level food
availability and income generation. Therefore, agricultural production has a substantial
impact on the food security status of farming households. As discussed previously, low
productivity and slow growth in the domestic agricultural sector are some of the major
causes associated with food security problem in Moneragala district (Widanage 2006;
Widanage 2008). In order to understand the supply side of food security, it is therefore
necessary to examine the productivity-determining factors of food crop agriculture in
Moneragala district. The conceptual framework in the next section helps to understand the
link between household level food production and the supply side of food security problem.
Widanage
5
Conceptual Frame Work: Household Level Food Security and
Supply Side Factors
As mentioned previously, food security cannot be measured using a single indicator
because it is linked to the social, economic, political, and cultural factors. Food security
also has both qualitative and quantitative aspects (Maxwell 1996; Timmer 2000; Heyman
et al. 2005). However, the food security problem of farming household can be analysed
using demand side and supply side approaches. A demand side approach to the food
security emphasises the importance of household income and food prices in determining
the household level food security. A supply side approach to the food security emphasises
the role of home production and imports (FAO 2003; Widanage 2006; Widanage 2010).
However, this paper does not consider the role of imports in determining household level
food security by increasing food availability. It only takes into account the role of
household agricultural production in improving the food security status of farming
households. According to the previous discussion, the household level food security in
Moneragala district is closely associated with low productivity and slow growth of
household level agricultural production (Widanage 2006; Widanage 2008). Therefore, an
increase in household level agricultural production creates direct and indirect impacts on
the status of food security. With respect to the direct impacts, it is necessary to analyse
the food security problem from the supply side perspective for identifying the causes of
low level of home grown food production.
The ratio of food self-sufficiency can be used to analyse the supply side factors of food
security of farming households in Moneragala district. This ratio can be calculated for a
farmer group or a particular household. Widanage (2006) used the following formulas for
calculating food self-sufficiency ratios (FSSR) for the study area and a particular
farming household :
The food self-sufficiency ratio can be applied to identify the supply side policies of
improving the food security status of farming households in Moneragala district. To
ensure the household level food security, the food self-sufficiency ratio should be
increased across the farming households in the district. However, there is no standard
value for the self-sufficiency ratio to determine the food security status of a particular
household (FAO 2003; Widanage 2008). According to equation (1) and (2), there should
be an increase in the numerator (i.e. the value of home production) for increasing the
ratio of self-sufficiency. This means that the supply side approach advocates for
increasing the level of home production as a strategy for improving the food security
status of farming households. Some researchers showed that self-sufficiency ratio is not a
sufficient indicator to measure the household level food security because it does not
FSSR for the study area = Total value of consumption of home production per month
Total value of total food expenditure per month
-------------------(1)
FSSR for a household= Mean value of consumption of home production per month
Mean value of total food expenditure per month
------------------(2)
Household Level Food Security...
6
consider the role of imports and household income in determining food security.
However, these researchers showed that self-sufficiency ratio may be important to
analyse food security in some cases where agricultural production contributes to the
household level income and food availability (Barichello 2000; FAO 2003).
My focus group interview revealed that the domestic agricultural sector in Moneragala
district records a slow growth over the last few decades. In addition, those interviews and
previous studies indicated that domestic agriculture is the major source of farm household
income. In case of Moneragala district, domestic agriculture plays a significant role for
improving the household level food availability and income (Senanayake and Disanayaka
1999; Widanage and Mensah 2002; Widanage 2008). Based on the empirical evidence
and my own field experience in the district, I believe that the food crop agriculture in
Moneragala district plays a significant role in improving food availability and household
income. In order to provide policy implications for improving the food security status of
farming households, it is therefore very important to identify the factors that determine
the household level agricultural production.
This paper uses the Cobb-Douglas production function to identify the farm household
characteristics and other institutional factors that determine the household level
agricultural production. According to micro-economic theory, the set of all combinations
of inputs and outputs that comprise technological methods of production is called a
production set. The function describing the boundary of this set is known as the
production function. Low productivity is a result of inefficiency in household level
agricultural production. Efficiency in production is defined in terms of the production
function relates to the level of output to the level of various inputs (Varian 1994; Gardner
and Rausser 2001).
The area under the production function assuming one output and one variable input in a
two-dimensional mode consists of a combination of the inputs and outputs that are
possible to choose from for production. Farmers cannot select points above the production
function and must take into consideration the nature of his farm and his own
characteristics, including educational level. The combinations of inputs and outputs along
the production function are considered efficient points because more output could not be
obtained without using more inputs. The combinations of inputs and outputs below the
production function are technically inefficient because more output could be obtained with
no more input. Technical inefficiency results from poorly combining available inputs.
Essentially, a farmer is said to be allocatively inefficient if the marginal product of his
input is not equal to the marginal cost of that input. Allocative inefficiency occurs when
inputs are utilised in the wrong proportions given input prices. This kind of inefficiency is
affected by changes in various factors associated with the growth of agricultural
production. The purpose of this paper is to identify the relative contributions of such
factors to the domestic agricultural sector and to determine the policy implications for
improving this sector, and by extension, food security in the Moneragala district.
The production function used in this study is based on two assumptions. First, all the
physical inputs of production (capital, labour, land fertiliser and so forth) are always taken
Widanage
7
into consideration. Second, the effects of agricultural extension or any other explanatory
variable on the agricultural production function is neutral, and can only modify this
function by a multiplicative scalar factor. In other words, the agricultural production
function in this study is linear and homogeneous (Chiang 1984; Gardner and Rausser
2001). Given these assumptions, the production function can be written as follows:
  Q=AF (X,Z,F) (3)
Where Q is the quantity of output, A is technological change, X is the vector of quantities
of variable inputs, Z is quantities of fixed inputs and E is the characteristics variables of
farm household members, which include location, education, age, sex, availability of
agricultural credit and extension services (Chiang 1984; Gardner and Rausser 2001).
The production function is further adjusted to fit the Cobb-Douglas form for the
empirical analysis and thus can be shown as follows:
(4)
The natural logarithms of both sides of the equation are considered and the error term U
i
,
representing factors which are not under the control of the producer, are included and are
assumed to be independent and identically distributed with mean zero and constant
variance (Gardner and Rausser 2001).
(5)
This equation is the basic form used for estimating parameters of the production function.
The and are the elasticity coefficients of production. They represent the
percentage changes in output in response to unit changes in the variable inputs and
household characteristic variables. For example, the elasticity coefficient related to
variable input is calculated as follows:
(6)
Equation (6) can be used to determine the responsiveness of household production with
respect to changes in variable inputs. The sign and magnitude of determines the nature of
impact of one unit change in variable inputs on the level of household production. These
elasticity coefficients can be used to conduct a policy analysis of food crop agriculture.
In case of Moneragala district, it is also important to examine what kind of production
method is used (i.e. extensive agricultural practices or intensive agricultural practices) for
improving the household level agricultural production. Previous studies showed that
domestic agriculture in Moneragala district is associated with high level inefficiency of
resource allocation (Senanayake and Disanayake 1999; Widanage and Mensah 2002).
The output elasticity with respect to each input variable will be used to identify the
efficient production method for increasing food crop production in the district. If the
value of output elasticity coefficient with respect to an individual input is greater than
one, a percentage increase in output will be greater than the percentage increase in such
Household Level Food Security...
8
input in the production process. Under such a condition, extensive agricultural practices
may be useful to increase the household level food production. If the output elasticity
with respect to a particular input is inelastic, the intensive agricultural practices are more
appropriate for increasing the household level food production.
In this paper, a production function is estimated using the Ordinary Least Squares
Method (OLS). The basic assumptions in this respect are that the independent variables
and the stochastic disturbance terms are not correlated, and the variance of the vector of
the latter equals to a scalar times an identity matrix (Gujarati, 1995; Wooldridge, 2006).
To estimate the production function, empirical data was collected from the household
questionnaire survey, which was conducted in Moneragala district of Sri Lanka. In the
next section, I will provide a brief description about the socio-economic profile of
Moneragala district and data collection methods.
Research Design and Methodology
Socio-economic Profile of Moneragala District
Moneragala District is situated in the Uva province of Sri Lanka. It covers 5600 square
kilometres, and is the second largest of the 25 administrative districts in the country.
Moneragala is divided into ten divisional secretariat divisions, with a Divisional Secretary,
who interacts with the general public, administrating each division. Furthermore, there are
319 Grama Niladari Divisions in Moneragala; the Grama Niladari Division is the lowest
level of public administration. There are nine river basins, of which six have large
irrigation development schemes covering the total area of the district, and 40 per cent of
the land is reserved and protected forest. The natural forest is declining rapidly and is
being replaced by annual cropping, mostly of the shifting type. Table 1 gives a brief
summary of demographic and socio-economic features of Moneragala District.
Table 1: Demographic and Socio--Economic Profile of Moneragala District and UVA Province
Variable Moneragala
District
Variable Moneragala
district(2006/07
estimates)
Moneragala
district
(2009/10
estimates)
Census of Population and
Housing (2011)
448194 Unemployment
rate (Uva province)

6.3 N/A
Population density per Km
2
(Census of Population &
Housing 2011)
81 persons Mean household
income per month
(Rs)
10,188 5605
Rural population

97.9% Gini coefficient 0.31 0.39
Literacy rate 75% Head count Index 33.2 14.5
Sources: Income and Expenditure Surveys 2006/07 and 2009/10, Dept. of Census and Statistics,
Sri Lanka Census of Population and Housing 2011, Dept. of Census and Statistics, Sri Lanka.
Economic and Social Statistics of Sri Lanka 2010, Central Bank of Sri Lanka.
Widanage
9
Data Collection and Selection of the Sample
The Divisional Secretariat (DS) divisions, Madulla and Siyabalanduwa, in Moneragala
district were selected for conducting the field survey. This study was a part of a large
survey that was conducted by a multidisciplinary team of researchers, attached to the
Development Studies Institute, University of Colombo. This research group includes
economists, anthropologists, political scientists, sociologists and health scientists. In this
large survey, the research group used Rapid Rural Appraisal method for getting the socio-
economic background of farming households in the district. The information obtained
from rapid rural appraisal survey helps the author to understand the farm household
characteristics and nature of the food security problem. In addition, authors used such
information to develop hypotheses and to design questions for the household survey and
focus group interviews.
Based on the information obtained from the Grama Niladaries, farming households were
selected for the survey. The random sampling method was used for selecting farming
households for the survey. During the fourth phase of fieldwork, the questionnaire survey
was conducted. Two research assistants collected data using the questionnaire survey and
the principle researcher himself conducted focus group interviews with different
categories of farmers, local level development officers, bank officers and agricultural
extension officers. One of the research assistants also helped the principle researcher with
this task. In addition, officers from the Integrated Rural Development Program (IRDP),
planning officers from the two Divisional Secretariat offices and the Deputy Director of
the Agricultural Department were also interviewed to procure more details on the causes
of food insecurity and the possible policy alternatives to this problem.
Primary data was collected through the household surveys conducted in the Madulla and
Siyabalanduwa divisions. A total of 200 households were interviewed in the field survey.
After the field survey three households were discarded from the sample due to lack of
their responses to the questionnaire. Information on related attributes, such as farmer's
income, total expenditure, food expenditure and its composition, cost of production, input
utilisation, sources of credit and nature of agricultural extension services, was collected
using household questionnaires. Primary data, collected through the field survey, were
employed in micro-level analysis. In this context, well-prepared questionnaires and face-
to-face interviews were carried out with farmers, local level development officers, bank
managers, bank officers, agricultural extension officers and the agricultural deputy
director in the Moneragala district. In the empirical literature, apart from the questionnaire
and face-to-face interviews, some other methods of data collection, namely postal surveys,
telephone surveys, and participatory or observatory approaches, have been used but each
method has its own limitations as well as benefits. Most of the farmers were quite happy
to respond to the well-prepared short-type questionnaire as it required only a little of their
time. Some farmers even enjoyed the discussions with the interviewers.
Before the questionnaire was administered to a larger sample, a pilot survey (pre-test)
was conducted. This helped to identify any ambiguities and problems related to the
questionnaire. It also ensured farmers' more frank responses to the questionnaire under
the headings of money, costs and time constraints. After the pilot survey, the final
questionnaire was constructed, considering the practical issues of the questions therein.
However, the interviewers were advised not to rigidly adhere to the questions in the
Household Level Food Security...
questionnaire but to be flexible and receptive to the farmers' willingness to respond in
their formal and informal discussions. The questionnaire was designed to collect the
information I needed in order to test the hypotheses on which this study is based. In
particular, hypotheses relating to the characteristics of the food security problem, the
demand and supply side of food security, and the possible policy alternatives for its
improvement have been tested using this information.
The questionnaire was divided into several parts. The first part was designed to collect
information on the socio-economic backgrounds of farming households in the study area.
The second part focused on collecting information about the household-level food
security situation of the farming community. The third part of the questionnaire involved
collecting consumption expenditure and income data that was needed to measure the food
security problem quantitatively. The fourth part was designed to collect data on the
agricultural practices of farming households, which was required to estimate the
production function in order to analyse the supply side of the food security problem.
The collected primary data was used for estimating the household level income function for
Moneragala district. Information from focus group interviews and secondary sources such as
Central Bank Annual reports, Household Income and Expenditure surveys, and consumer
finance survey was used to support the empirical estimates of the production function.
Empirical Analysis of Food Security in Moneragala District
As mentioned previously, food security problem of farming households in Moneragala
district is associated with slow growth of food crop production. To identify policies for
improving the food security of farming households, it is necessary to investigate the
factors that determine the household level food production. Therefore, my empirical
model examines the impacts of changes in inputs, household characteristics and other
socio-economic factors on determining the household level food production. The
estimated equation for the Cobb-Douglas version of the production function (2) can be
written as follows:
(7)
Where:
Q = Total weighted agricultural production per season (total production of major crops
such as rice, banana, manioc, and maize), in kilograms, during the last six months)
AGCRE  = Amount of agricultural credit per farming household (Rs.)
LLB  = Amount of labour (both family labour and hired labour hours) used in food crop
agriculture during the season
LCAP  = Amount of physical capital used for agricultural production (monetary value of
tractor hours + live stock + agricultural tools) per season
UNCULA  = Total cultivated land area per season (in acres) that is not explained by the
capital stock
LMED = Mean level of education of husband and wife (in years)
10
Widanage
11
The Ordinary Least Square method (OLS) was used to estimate the production function in
equation (7). The estimated production function is given in Table 2:
Table 2: Log Linear Production Function for the Study Area Dependent Variable
LTPRO = Log Value of Weighted Household Agricultural Production
In Table 2, the dependent variable of the model ln(Q) is the total physical agricultural
production of rice, manioc, banana and maize (in kilograms). However, there was a
problem with aggregating the gross agricultural production. Therefore, weight was used
for this determination at the farm level. First, the gross revenue of total farm production
was calculated, adding all the production from each farming household in the study area.
The market price of a kilogram of each agricultural product was used for calculating the
gross revenue of each agricultural commodity. Then, the weight for each commodity was
calculated using the following formulas :
The production from each household commodity is multiplied by the relevant weight and
added together to obtain the total agricultural production. This calculation allows us to
determine the aggregate output with respect to each household and the log value of this
variable, which is the dependent variable of the production function. The log values of all
the explanatory variables are regressed on the dependent variable to estimate the
parameters of the household production function.
Variable Coefficient Standard Error t-Statistics Probability
C 5.362 0.597 8.974 0.000
LAGCRE 0.140 0.073 1.918 0.056
UNLCULA 0.192 0.068 2.829 0.005
LMED 0.136 0.084 1.622 0.106
LCAP 0.069 0.022 3.227 0.001
LLBH -0.052 0.046 -1.133 0.258
R-squared 0.179 Log likelihood -141.773
Adjusted R-squared 0.158 F-statistic 8.331
Durbin-Watson stat 1.195 Prob(F-statistic) 0.000
Source: Field Survey Data, 2002
Total revenue of agricultural production
Total revenue of agricultural production
Total revenue of agricultural production
Total revenue of agricultural production
Total revenue from rice product
Total revenue from manioc
Weight for rice =
Weight for manioc =
Weight for corn =
Weight for banana =
Total revenue from corn production
Total revenue from banana production
Household Level Food Security...
12
Log linear production function was estimated to identify the factors that determine
agricultural productivity and their relative contribution to the growth of household food crop
production using the household level data for Moneragala district. In this model, we
regressed the log values of weighted total household food production on agricultural credit,
fertiliser usage, capital stock, labour, level of education of farming households, and
cultivated land area. According to the co-relation coefficient matrix, there is multicollinearity
between capital stock and cultivated land area in the estimated model. In addition, some of
the explanatory variables in the model are not statistically significant.
2
To remove the
multicollinearity of the model, the variable ULCULA was calculated by regressing LCULA
on LCAP. ULCULA represents portion of cultivated land area which is not explained by the
capital stock. The log linear production function was again estimated after adjusting for the
multicollinearity problem by taking ULCULA as an explanatory variable.
Equation (7) was used to estimate the log linear production function.The estimated
econometric results are given in Table 1. The co-relation co-efficient matrix shows that
there is no multicollinearity between explanatory variables in this model. The degree of
the multicollinearity between explanatory variables in this model is less than 0.5.The
heteroscedasticity of the model was tested using the White heteroscedasticity test without
cross terms. The value of LM statistic is 6.87 and p-value is 0.96. This test result provides
strong evidence for not rejecting the null hypothesis that indicates the error term of the
estimated model is homoscedastic. Therefore, the estimated production function is free
from heteroscedasticity problem.
Econometric tests were conducted to examine the statistical validity of the model. The
graph presented in Figure 1 shows the normality test of residuals. According to this
graph, there is a normal distribution for residuals in the model, ensuring a good
specification of the model.
Figure 1: Normality Test for Residuals of the Production Function
The CUMSUM test (see Figure 2) was also conducted to examine any instability of
parameters in the model. This test plots the cumulative sum together with the 5 per cent
0
5
10
15
20
-1.5 -1.0 -0.5 0.0 0.5 1.0
Series: Residuals
Sample 1 196
Observations 196
Mean 6.47E-15
Median 0.078932
Maximum 1.072698
Minimum -1.563446
Std. Dev. 0.491489
Skewness -0.447143
Kurtosis 2.782528
Jarque-Bera 6.917510
Probability 0.031469
2
The estimated production function and results of econometric test can be provided upon request.
Widanage
13
critical line. The results show that the cumulative sum appears inside the area between the
two critical lines. Figure 3 presents the results of the recursive coefficient test. The results
show that all the parameters of the estimated model are within the standard error bands,
indicating stability in the parameters of the estimated production function. The results
also reveal that there is no specification error in the estimated econometric model.
Figure 2: Stability of the Estimated Model: CUMSUM Residual Test
Figure 3: Recursive Coefficient Test of the Estimated Model
The Ramsey test is conducted in order to assess the specification errors of the model. "F"
statistic is used to test the statistical significance of the fitted terms in the regression
equation. According to the test, the null hypothesis (i.e. fitted terms in the regression is
zero) is not rejected at the level of significance 1%, 5%, or 10%. This result indicates that
there are no specification errors in the model.
-40
-20
0
20
40
20 40 60 80 100 120 140 160 180
CUSUM 5% Significance
-3
-2
-1
0
1
2
3
20 40 60 80 100 120 140 160 180
Recursive Residuals ± 2 S.E.
Household Level Food Security...
14
According to economic, statistics, and econometric criteria, the estimated production is
an accurate model for analysing the supply side factors of household level food security.
In the next section, the paper provides policy implications for improving the food security
status of farming households using the estimated econometric model.
Policy Implications for Improving Food Security
Agricultural credit, cultivated land area or farm size, mean level of education and capital
stock have positive relationships with the farm level agricultural production. All of these
variables, except education and agricultural credit, are statistically significant at the one
per cent level of significance; the education variable is significant at the ten per cent level
of significance and the agricultural credit variable is significant at the five per cent level.
These results indicate that promoting agricultural credit facilities, increasing farm size,
and increasing capital stock and the levels of education of farming households would lead
to improved productivity in agricultural production at the farm level. Therefore, such
factors ultimately lead to increase in the availability of food at the household level and
thereby improve food security. The findings of the empirical model also reveal the
importance of the above policy variables in formulating rural development policy for
improving food security status of farming households.
According to the estimated econometric model, labour hours allocated for agricultural
production has a negative relationship with total agricultural production, the coefficient
of which is not statistically significant. The negative coefficient of labour with respect to
the total agricultural production indicates the declining marginal productivity of labour in
the food crop agricultural sector of Moneragala district. This finding is consistent with
information from our field interviews conducted with farmers and regional level
development officers (Widanage 2006). They indicated that unskilled labour is the most
abundant factor of production in the food crop agricultural sector in the district. Thus,
there is a labour surplus in food crop agricultural sector in Moneragala district. This
structural rigidity of the labour market in Moneragala district led to a negative
relationship between labour and food crop production. This finding indicates the
importance of transferring labour surplus from the food crop agricultural sector into the
other productive sectors of the economy to improve the household level food production
and food availability.
The estimated econometric model also shows that promoting rural education facilities
would improve the level of education of farming households, which would help many
people find jobs in the non-farm sector. This strategy encourages the reduction of surplus
labour in the food crop agricultural sector and increases the marginal productivity of
labour due to the reduction of the land to man ratio. An increase in the marginal
productivity of labour increases the household level food production, and it leads to
improved food security status of farming households. In addition, a transfer of labour
surplus from agriculture to non-farm sector increases the farm household income and
thereby improves food security (Senanayake and Disanayaka 1999; Widanage 2010).
Widanage
15
Field survey data and focus group interviews show that many farming households in the
district operate as small-scale production units. In addition, there is an unequal distribution
of agricultural land holdings in Moneragala district (Widanage 2006; Widanage 2008).
The small-scale farm size prevents the economies of scale in food crop production. The
estimated econometric model shows that an increase in the cultivated land area or farm
size has a positive impact on agricultural production because large farms create economies
of scale. According to the estimated model, the relative contribution of farm size to
increasing agricultural production is higher than the other factors such as education and
agricultural credit. Therefore, it is important to promote large-scale farms for increasing
household food production and thereby improved food security.
Focus group interviews with farmers and regional level development officers revealed
that the lack of financial capital is a major constraint to engage in food crop agriculture in
the district (Widanage 2006). Low level of household income, lack of non-farm
employment opportunities, and seasonal unemployment are some of the major
characteristics of the vicious circle of poverty in Moneragala district (Widanage and
Mensah 2002; Widanage 2010). Due to the low level of income, many farming
households have to face a constraint of financial capital. The estimated econometric
model indicates that a provision of agricultural credit makes a positive contribution to
increase household level food crop production. Therefore, I argue that the allocation of
resources for improving financial capital stock of farming household plays an important
role for improving household level food availability and food security.
The intercept of the empirical model takes high value and it is statistically significant at
one per cent level of significance. In the Cobb-Douglass production function, the
intercept represents a technological progress. The highly significant intercept of the
production function indicates the positive impact of technological progress on household
level food production. This finding shows the importance of allocating resources for
technological progress in irrigation, infrastructure, research and development. A
technological progress in such sectors leads to increase in the household level of food
production and thereby improves food security status of farming households.
As shown in the conceptual framework, it is important to examine whether food crop
agricultural sector in Moneragala district should be based on the intensive agricultural
practices or extensive agricultural practices. According to the empirical model, the
estimated output elasticity coefficient with respect to each input variable is smaller than
one. This indicates that the impact of percentage increase in a particular input on food
crop production is proportionally smaller than the percentage increase in such input factor
in the production process. Inelastic output coefficient with respect to each inputs provides
very interesting insights for policy makers to choose appropriate cultivation practices.
The empirical findings of this study demonstrates the importance of choosing intensive
cultivation practices for increasing household level food crop production and thereby
improve the food security status of farming households.
Household Level Food Security...
16
Conclusion
This paper examines the household level food security problem from the supply side
perspective. Based on the food self-sufficiency ratio, the current food security literature
indicates that Sri Lanka is a food secure country from the national level perspective.
However, the food security status of farming households in Moneragala district is
significantly different from the national level food security. The gap between the national
and household level food security provides an interesting insight for policy makers on the
current unequal distribution of productive assets and inefficient allocation of scarce
resources in the food crop agricultural sector in rural areas of Sri Lanka. To examine the
inefficiency of resource allocation and unequal distribution of productive assets, this study
estimates a household level production function for the selected food crops in Moneragala
district. The empirical results of the study reveal that the lack of physical and financial
capital stock, small-scale farm operations, low level of education of farming households
and poor rural infrastructure facilities significantly contribute to the low level of food
production in the district. To improve the food security status of farming households, it is
necessary to improve agricultural credits, physical capital stock, farm size, level of
education, and agricultural infrastructure (i.e. irrigation and rural roads). The output
elasticity coefficient with respect to each input variable of the estimated production
function indicate that extensive agricultural practices are not appropriate for improving the
food crop agricultural sector in Moneragala district. Considering the findings of this study,
intensive agricultural practices may be useful to increase the level of food crop production
in the district rather than extensive agricultural practices. Therefore, policy makers should
incorporate asset distribution (i.e. provision of credit to poor farmers) and resource
allocation issues into the rural development strategy for improving the food security status
of farming households in the Moneragala district of Sri Lanka.
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Widanage
19
Asia-Pacific Journal of Rural Development
Vol. XXIII, No. 1, July 2013
Impact of Trade Liberalisation on Food Economy of
Bangladesh: A Multi Market Modelling Approach
**
Abu Hayat Md. Saiful Islam
*
Abstract
Bangladesh is characterised by its agro-based small open economy and is treated as one of the least
developed countries. The liberalisation of international agricultural trade has a great influence on
Bangladesh's food security and on the whole economy. The study measures the effect of policy shocks
on production, consumption and welfare distribution in the food sector of Bangladesh by using multi
market modelling technique. Through excel based multi market modelling, five scenarios were
analysed to know the welfare distribution as well as food security impact of price or policy shocks due
to liberalisation. The model represents important characteristics of agriculture in Bangladesh like
substitution and income effects. As agriculture is the main sector of Bangladesh's economy, the model
is extended to explicitly integrate some of the key important macroeconomic linkages and to establish
certain feedback effects between agriculture and the macro-economy. The results of the multi market
modelling in the of rice market are quite normal but for wheat market are quite ambiguous due to
higher cross price elasticity. It can be concluded from the study that higher import dependent
commodities (i.e. wheat) suffer welfare loss under free trade as well as in Doha round projection.
Introduction
Regardless of the recent reforms, world agricultural markets remain highly distorted by
governmental policies of different countries (Lloyd, Croser and Johanna 2009).
According to economic theory, the most fundamental and widely accepted proposition is
that free trade is more beneficial than protection. The propositions are based on the
argument that trade barriers distort the optimal allocation of national and world resources
which reduce output. On the other hand, economic freedom stimulates competition thus
ensuring economic growth (Bale and Greenshields 1978).
Historically, agriculture plays an important role in Bangladesh's economy-the so called
backbone of Bangladesh economy, although the contribution of the agriculture sector to
the GDP is declining. Nevertheless, more than 60 per cent of the country's labour forces
are employed at least part time in agriculture or full time. Moreover, agricultural growth
remains a development priority because agricultural production is endowed with decisive
linkages to develop the rest of the economy. Its performance has significant implication
*
Abu Hayat Md. Saiful Islam, Assistant Professor, Department of Agricultural Economics, Bangladesh
Agricultural University, Mymensing, 2202, Bangladesh. Tel: +880-91-55695/2710. Fax: +880-91-55810.
Email: saiful_bau_econ@yahoo.com or saiful@uni-bonn.de. Currently, PhD Fellow at the Center for
Development Research (ZEF) in the University of Bonn, Germany.
**
The article is derived from the author's masters thesis submitted to the Humboldt University of Berlin for the
fulfillment of the requirements of the joint academic degree of International Master of Science in Rural
Development (IMRD).
Asia-Pacific Journal of Rural Development
Vol. XXIII, No. 1, July 2013
20
for employment creation, food security and easing poverty. The crop sector is dominated
by the production of cereals, especially by rice, 70 per cent and about 80 per cent of value
added from crop production in 1973 and 1999 respectively comes from rice alone. Rice is
a prime source of livelihood in terms of providing food, income and employment of the
majority people of Bangladesh. About 77 per cent of the total cropped area in the country
is covered by rice alone. Historically, Bangladesh has been a net importer of rice,
although in some years only minimal quantities were imported. Rice plays a predominant
role in the country's agricultural sector, thus price and trade policies for rice greatly affect
the overall agricultural incentives in Bangladesh (Ahmed et al. 2007 and Hossain et al.
2003). Thus, any shift or structural change of agriculture, particularly in the rice sector
following the liberalisation of trade would make a larger impact on producer, consumer,
government revenue earnings, the balance of trade, rural employment and the welfare of
the majority of the people of Bangladesh, especially those poor small farmers in rural
areas of Bangladesh.
Different policies pursued by the different governments of Bangladesh, such as providing
food subsidies to the selected groups of consumers, price support, import tariff,
quantitative restrictions and quotas and input subsidies to the producers etc. continued up
to early 1980s. However, due to severe burden of government budget and continued
objection of donor organisations (e.g. IMF and World Bank) and with the re-emergence
of the neo-classical orthodoxy as the new development paradigm, Bangladesh started to
implement donor induced structural adjustment reforms (Rahman 1994; Bhattacharya and
Titumir 2001; Bhattacharya, Titumir and Rabbani 2001). Bangladesh launched a deep and
wide-ranging trade reform strategy in the early 1990s. This included substantial reduction
and rationalisation of tariffs, removal of quantitative restrictions, move from multiple to a
unified exchange rate system, convertible current account and an overall outward
orientation of trade policy regime. As a founding member of the WTO, Bangladesh has to
follow the rules and regulations which Uruguay Round (UR) as well as Doha Round
applied to agriculture. The potential benefits of the UR Agreements for Bangladesh
would come out from the trading regime in its present form and the potential trading
opportunities for both import substitution and export promotion in Bangladesh. However,
eventually, whether or not a country can take advantage of the new trading opportunities
would depend upon its comparative advantage, without subsidies and tariff or with
limited subsidies and tariff that are permitted for all trading partners by the rules
governing the new trading environment by WTO (Shahabuddin and Dorosh 2002).
Although trade liberalisation policy is followed in Bangladesh, there are still some
distortions. It is important to determine how such reforms would affect Bangladesh's food
sector and how it could be readied to face global competition.
In the globalised world of today, trade liberalisation has been the subject of a lot of
controversies among researchers, policy makers and society think tanks, particularly in
developing countries. Like in other developing economies, this is a matter of lively
debate (Osmani 2004) in Bangladesh also. As compared with the populist view,
informing this debate with a good analysis of the analytical and empirical foundations of
free trade over protection will facilitate more informed and fruitful debate on this major
subject. Thus, the objective of this study is to provide this analysis drawing on the
Saiful Islam
21
experience of the food sector of Bangladesh. The study is an attempt to know the welfare
effect of such policy measures in reference to the food sector of Bangladesh.
Specification of the Multi Market Modelling Approach for Food
Market in Bangladesh
Multi market modelling is an important tool for quantifying the effect of policy changes
on the performance of trade and welfare in the economy. The theory of multi market
modelling is already well established in different literatures such as Just, Hueth, and
Schmitz (1982, 2004); Jechlitschka et al. 2007; Sadoulet and de Janvry, 1995. It is widely
used in different countries by different researchers such as Karim and Kirschke, 2003;
Wongkhieo, 2007; Srinivasan and Jha, 2001; Goldin and Knudsen ,1990; Dixit et al.
1992; Hartmann et al. 1994; Karim, 2002; cited in Karim and Kirschke, 2003 and
Wongkhieo, 2007. In this study, in order to quantify the welfare effect of policy changes
in rice and wheat markets in Bangladesh, we used the simple excel based spread sheet
two (dual) market modelling approach that was developed by Jechlitschka et al. (2007)
and used by Karim and Kirschke, (2003); Wongkhieo, (2007). Dadakas et al. (2009)
mentioned that multi market modelling theory and methodology is especially useful for
those sectors which often produced under vertical or horizontal markets settings like
agricultural and industrial commodities. This model is a partial equilibrium approach
which considers closed economy for specific case without linkages with the rest of the
economy but still it has influence in practical application because it is analytically and
empirically simple to handle (Karim and Kirschke 2003; Brannlund and Kristrom 1996).
In our study, we developed the dual market model in case of rice and wheat markets in
Bangladesh. Both rice and wheat are important commodities in the food sector of
Bangladesh for food security of the country. Both the commodities are imported as well
as domestically produced in Bangladesh. Previously, protectionist price policy was
implemented for import substitution for both commodities but after 1990s, these sectors
more or less liberalised but not fully, still they have some sort of protection (Ahmed et al.
2007). The model is a standard static model assuming perfectly competitive markets,
homogeneity of the products and a small country case like Bangladesh. The model has
been implemented and solved by using Excel. The model takes into account different
significant characteristics of the food sector in Bangladesh like income and substitution
effects through own income and cross price elasticities. Suppose if the price of rice rises
due to a shortage in the domestic economy, its import requirements would be much less if
it is possible to substitute by wheat for it. The rice and wheat market in Bangladesh are
interdependent in nature. Thus, with the use of a multi-commodity setup through multi
market modelling, it is possible to accomplish a more realistic picture by capturing all the
effects of policy changes into those markets (Srinivasan and Jha 2001).
In our model, we assume the iso-elastic demand and supply functions are Cobb-Douglas
type which takes into account the demand and supply of each product as a function of
price of the product as well as own price, income and cross price elasticity of each
product. For estimation of the base year 2006
1
, the parameter of the demand and supply
functions are calibrated by using the elasticities from secondary sources. Jechlitschka et
1
Base year 2006 is the nominal average figure of the three years (2004, 2005 and 2006)
Impact of Trade Liberalisation...
22
al. (2007) mentioned that in multi market modelling the demand and supply functions
should reflect the real decision making behaviour of producers and consumers, they
should also be based on empirical information, but our estimation was based on
secondary sources. Although Jechlitschka et al. (2007) mentioned that for multi market
models, the microeconomic foundations are less obvious and more complex, to adjust the
calibration procedure and to satisfy the microeconomic theory, we imposed some
standard microeconomic requirements on the secondary sets of supply and demand
elasticities. These are: symmetry and homogeneity conditions applied on the supply side;
and symmetry, homogeneity and adding-up conditions on the demand side (see Kirschke
and Jechlitschka 2002; von Witzke et al. 2000; Wahl and Weber 2000; Weber 2000; cited
in Karim and Kirschke 2003; Jechlitschka et al. (2007). On the other hand, price linkage
equations in the model were developed by linking between the producer, consumer and
world market price to the protection or subsidisation policy. The model presents welfare
analysis to know the political objectives or the distributional impact of price or policy
shocks. In addition to that, one national food security indicator, the self-sufficiency ratios
have been incorporated in the model to get an overview of national food security
implication of any policy changes.
We use multi market modelling in case of rice and wheat market in Bangladesh to know
welfare effects under different policy scenarios. Bangladesh is a net importer of rice and
wheat. Our model is based on the assumptions of perfect competition in the market, that
means consumer and producer are price takers, homogeneity of the products, no intra-
industry trade and small country; domestic price change has no influence on world
market price. On the other hand, although Hicksian demand functions are more suited for
welfare assessment but it cannot be observed to calculate on such a basis. Thus in our
model, welfare evaluation is based on Marshallian demand functions (Jechlitschka et al.
2007).
The overall configuration of the model is shown by a flow-diagram in Figure 1. The
figure represents a graphical overview of the basic structure of the model. Lines and
arrows illustrate the direction of the linkages. At the middle of the Figure 1, the supply is
determined through producer prices. On the other hand, the demand depends on the
consumer prices, prices of competing products (which is incorporated in the model
through cross price elasticity) and per capita income (which are determined through
income elasticity). The producer and consumer prices are linked to the international/
world market prices and these prices are influenced by the government
intervention/policy in the domestic market (taxes or subsidies) and the changes in the
world market prices resulting from the implementation of the Doha Round policy.
Moreover, these supply and demand for the product affect the people who are engaged
with those (rice and wheat) sector by influencing total benefit, consumer and producer
surplus, welfare, government budget revenue or expenditure and foreign exchange as
well as overall food self sufficiency of the economy.
Saiful Islam
23
Fig. 1: Generic Structure of the Bangladesh Rice and Wheat Dual Market Model
(adapted after modification from Karim and Kirschke, 2003)
DOHA
Foreign
exchange
Government
budget
World market
price
Domestic policy
Domestic
producer price
Domestic
consumer price
Welfare
Income
Consumer
surplus
Producer
surplus
Supply
Rice and wheat
sector
Demand
Macro economy
Food self
sufficiency
Net trade
Impact of Trade Liberalisation...
24
Specification of the Equation of the Model
Supply and Demand Functions
We define the demand functions for rice and wheat as follows;
Where
                      qdr (i) - demand function for rice
                      qdw (ii) - demand function for wheat
                      qdr - quantity demanded for rice
                      qdw - quantity demanded for wheat
                      pdr - demand price of rice
                      pdw - demand price of wheat
                      rr- own price elasticity of demand for rice
                      ww- own price elasticity of demand for wheat
rw - cross-price elasticity of demand (of rice with respect to the price of the wheat)
wr - cross-price elasticity of demand (of wheat with respect to the price of the rice)
and - are income elasticity of demand for rice and wheat respectively as well as
supply functions are;
Where
In addition, in the case of multi market model, it applies to all supply and demand
functions which need to be calibrated, i.e. the relevant constants for the model equations
have to be determined. Thus, based on equations (i, ii, iii and iv), we define the supply
and demand constant equations as follows:
............................................ (iii)
.................................... (iv)
Saiful Islam
25
Other than these, we use protection and subsidy in the price linkage equation in the
demand and supply functions. So for estimating these protection and subsidy we use
these equations as follows:
where,
r - protection rate, s - producer subsidy rate, v - consumer subsidy rate, p
s
- supply
price, p
d
- demand price.
P
W
- world price
The above equations will also be used for estimating the consumer/demand and
producer/supply price in the supply and demand functions.
Welfare indicator estimation
The policy and price shocks have direct impact on welfare of different groups such as
producer, consumer as well as government. For estimating welfare for different groups
we use the following functions:
Consumer surplus (CS)     = Total benefit -Expenditure
Producer surplus (PS)     = Revenue- Cost
Government budget (GB)     = supply* (world price-supply price) - demand*
        (world price -demand price)
Total welfare (W)     = Total benefit -Cost + Foreign exchange or
        PS+CS+GB
Foreign exchange (FE)   = (supply-demand)*world price
Food self sufficiency (FS)   = Supply/demand
Data Requirement and Sources
The basic information needed for hoarding a multi (dual) market models are demand and
supply of rice, supply price, demand price, world market price, supply elasticity and
demand elasticity, cross price elasticity and income elasticity. The data used in the model
is based on 2006 which is the nominal average of 2004, 2005 and 2006. We assume free
trade situation in Bangladesh under baseline scenario. The supply price so called farm
gate price and demand price so called retail price are the same as world market price. CIF
price of rice and wheat considered as world market price or as boarder or reference price
for this study. The CIF price of rice and wheat were collected from BBS, foreign trade
statistics (2009). The demand and supply of rice and wheat data were collected from BER
(2009) and BBS, statistical yearbook (2007).The supply, demand, cross and income
Impact of Trade Liberalisation...
26
elasticity data were collected from different published international and national sources
which are mentioned in the Appendix Table A2. From that table we use the elasticity
estimated by Goletti (1993) cited in Shahabuddin and Zohir (1995), and Shahabuddin and
Zohir (1995), Rhaman and Yunus (1993) and Zohir et al. (2002). Most of these elasticities
are also used by Dorosh and Haggblade (1997) and Chowdhury et al. (2006), for
estimating multi market models in Bangladesh. That is why, we also use more or less the
same sources.
Different Scenario for Simulation
With the aim of achieving the objectives of the study, the impact of different policy
scenario (protection, free trade and world market price change) on welfare are simulated
under different conditions. The background idea of this simulation was that in Bangladesh
rice and wheat is imported and at the beginning it was highly protected but after the 1990s
due to structural adjustment policy and WTO regulation, it reduced its protection to a great
extent and is now more liberalised. On the other hand, other countries in the world are not
liberalised i.e. the world is not fully liberalised yet and in WTO there is a discussion of
Doha Round and after the success of the Doha Round, the world will be more liberalised
than before. Thus the study is simulated under the above different policy scenario in
Bangladesh and in the world to know the outcome and its implication for Bangladesh. The
scenarios developed for rice and wheat market are the following:
1. Base Line Scenario (B): The different scenarios developed are contrasted principally
to the baseline scenario. This is used as a reference point for subsequent scenario
analysis. The base line scenario developed on the basis of aggregate data for three
years (2004, 2005 and 2006) under production, consumption and assuming free trade
policy conditions prevailed in the base period (ie, Ps=Pd=Pw) and r, s, and v are zero,
means no policy incentive under this scenario. It is necessary to mention that in the last
couple of years there was great food crisis as well as financial crises in the whole
world specially the food crisis was extreme in developing countries like Bangladesh.
Other than this, the necessary data are also not available in some cases. That's why we
chose 2004, 2005, 2006 to get an actual and smooth scenario.
2. Doha Round Scenario (D): This scenario shows the possible effect of Doha Round
negotiation in Bangladesh by equalising the world price changes under Doha Round
projection with supply and demand price in Bangladesh (i.e. Pw under Doha Round
projection=Ps=Pd) and without any protection in Bangladesh (i.e. r=s=v=0). This
scenario shows the effect of Doha Round under base line scenario (B).
3. Higher Cost Scenario (C): With the aim of knowing the expected direct and indirect
impact of world trade liberalisation on Bangladesh food trade and food security, this
scenario is simulated under Simulation 5 of Scenario D. Thus, it showed the combined
effect of agricultural world market price changes (direct impact; Scenario D) and
higher cost of production (indirect impact) on Bangladesh food trade and food security.
The higher cost of production is simulated by a negative supply shift of 5 per cent as
like (Karim, 2002).
Saiful Islam
27
4. Productivity Shift Scenario (PS): Technological improvement is a recent and
continuous phenomenon. So to know this effect in the rice and wheat sector, we draw
this scenario under Simulation 5 of Scenario D. Under this Scenario, we shock the
supply by 10 per cent increasing the supply of rice and wheat under Simulation 5 of
Scenario D.
5. National Protection Policy Scenario (NP): As we know that Bangladesh is now (B)
more or less liberalised so under this scenario we illustrated the possible impact of
protection policy under the Scenario B. The aim of this scenario is to compare the
effect of protection over free trade situation.
Result of the Multi Market (Dual) Modelling Analysis
This section provides the results of the multi market model analysis under different
policy scenario as mentioned in the earlier section. The results of the five scenarios
analyses are presented sequentially below:
Base Line Scenario (B)
The base line scenario is developed by calibrating the model parameter by using the
nominal average data of the year 2004, 2005 and 2006. We assume the base line scenario
in Bangladesh under free trade situation (although there have been some policy
distortions but not so significant and since data about this policy distortions is difficult to
obtain) it makes the model easier to establish. The base line scenario represents
production, consumption and policy situation exists in the base period. The baseline
scenario is used as a reference point for subsequent scenario and on that basis we
compare and evaluate the effect of world price change under Doha Round, high cost of
production, supply shock and possible effect of rice and wheat protective policy in
Bangladesh. The base line scenario of the model after necessary micro-economic
adjustment is presented in Table 1, 2 and 3.
Table 1: Base Line Price, Production, Consumption and Benefit After Micro-
economic Adjustment
Table 2: Base Line Welfare and Food Security Indicators after Micro-economic
Adjustment
Market P
S
P
d
p
w
Supply Demand Item Cost
Total
benefit
M_R
15.31 15.31 15.31 25958.47 26834.80 - 3823.66 858466.29
M_W
11.11 11.11 11.11 988.10 3022.77 - 2856.28 80899.83
M_R
15.31 15.31 Calibration M_R 25958.47 26834.80 Income Income -
M_W
11.11 11.11 Calibration M_W 988.10 3022.77 444423.73 444423.7294 -
Market Welfare Revenue
Expenditure

Foreign
exchange
Govern-
ment
budget
Producer
surplus
Consumer
surplus
M_R 841226.01 397424.18 410840.79 -13416.61 0.00 393600.51 447625.50
Self-
sufficiency
ratio
of rice
Self-
sufficiency
ratio of
wheat
M_W 55438.41 10977.79 33582.94 -22605.15 0.00 8121.51 47316.89 0.97 0.33
Total
expenditure E:
444423.729
Impact of Trade Liberalisation...
Table 3: Base Line Calibrated Constant and Elasticities after Micro-economic
Adjustment
NB: M_R-Means Market of Rice and M_W-Means Market of Wheat
From the Table 1 it is evident that under base line situation the food sector of Bangladesh
is liberalised (P
S
=P
D
=P
W
, i.e., r=s=v=0) as we assume. From the supply and demand
quantity it is clear that Bangladesh is net importer of food but import of wheat is much
more than rice. These results are also supported by the self-sufficiency ratio (Table 2) as
in case of rice it is approaching to self sufficiency ratio but in case of wheat it's very low.
Under current policy scenario the welfare indicators (Table 2), producer surplus,
consumer surplus as well as total welfare for both commodities are positive. The
government budget is zero for both commodities due to free trade situation (i.e. no, r, s
and v imposed). The elasticity figures in Table 3 are sometimes a little bit strange
(according to expert assessment). The elasticity of supply for rice and wheat is 0.01 and
0.35 (i.e. positive) after necessary micro-economic adjustment. These mean that in the
short-run supply of rice and wheat is less responsive to price change, but wheat supply is
more responsive than rice supply. The cross elasticity of supply of rice and wheat is also
low and negative. So the cross price effect on supply of rice and wheat is low but in case
of wheat it is more than rice. The own price elasticity of demand for rice and wheat is
high. That indicates, demand is more responsive to change their own price (change in
opposite direction). The cross price elasticity of demand for rice and wheat, both are
positive, which indicates that rice and wheat are substitute products. The cross price
elasticity of demand for rice is very low, even near to zero in some studies, that means,
rice demand does not respond to price change of wheat. On the other hand, the cross price
elasticity of demand for wheat is very high. That indicates wheat demand responds a lot
due to price change in rice even more than own price of wheat itself. The income
elasticity of rice is very high, which indicates that rice demand increases a lot if income
increases and vice versa. However, the income elasticity of wheat is low and negative,
that means, if income increases than demand for wheat decreases and vice versa.
Doha Round Scenario (D)
Under this scenario, the impact of world market price increases as a result of Doha Round
implementation is simulated for Bangladesh's food sector. Multilateral trade liberalisation
(such as URAA and Doha Round implementation) impacted the individual country in two
distinct but interacting ways. These are: change in the world trade policy environment by
collective implementation of Doha Round policy by all member countries of WTO and
change in domestic policy of the country itself (Karim 2002). Bangladesh is one of the
founding members of WTO, so any policy changes in Bangladesh and other member
countries as a whole affect Bangladesh's economy. But as a LDC country, Bangladesh
fulfilled major regulations (reduction of tariff reduction, domestic support and export
subsidies) of Doha Round before it began. So, the possible effect of Doha Round would
28
Market Constants Elasticity of supply Elasticity of demand
c d M_R M_W M_R M_W
Income
elasticity
M_R 25877.73 0.23 0.01 -0.01 -1.14 0.01 1.13
M_W 1106.06 1642748.50 -0.35 0.35 1.73 -1.09 -0.65
Saiful Islam
29
be through the change of policy by other member countries of WTO. These are expressed
by the world market price changes. Thus, in this study, the possible effects of world
market price changes are simulated under baseline scenario. The possible change in world
market price of food due to Doha Round implementation is taken from the study by the
United States Department of Agriculture (USDA). By using global computable general
equilibrium models, USDA found that with full liberalisation under the Doha Round, the
world rice and wheat price would change by 10.1% and by 18.1% respectively
(Chowdhury et al. 2006). Since these values are too high, we disaggregated those values
throughout alternative sets of model simulation based on both the upper and lower
bounds (Chowdhury et al. 2006 also used the same source in a similar way in the case of
Bangladesh). Thus, we took the baseline scenario with upper and lower bounds of world
prices changes. We simulated the world price changes with six simulation scenarios under
baseline scenario, these are simulation-1, 10% increase in world price of rice only other
things remaining the same, Simulation-2, 5% increase in world price of rice only other
things remaining the same, Simulation-3, 18% increase in world price of wheat only
other things remaining the same, Simulation-4, 7% increase in world price of wheat only
other things remaining the same, Simulation-5, 10% and 18% increase in world price of
rice and wheat simultaneously and Simulation-6, 5% and 7% increase in world price of
rice and wheat simultaneously under baseline scenario. Here, we simulated possible Doha
Round price changes in different ways to see the impact on food sector in Bangladesh.
Here we assume that possible effect of Doha Round will vary depending on the
magnitude of price changes. That's why, we breakdown the possible price changes in
upper and lower bound (suppose the highest price changes are 10 and 18%, thus we
breakdown into 5 and 7% as lower bound) as well as we assume that only one market
price change effect will be different from simultaneous price changes in both market.
That's why we also try to show the individual market (suppose only rice market price
change effect on food sector e.g. Simulation 1) price change effect as well as
simultaneous (both rice and wheat market price change at the same time, i.e. Simulation 5
and 6) price change effect. All the simulated results are reported in Figures 2, 3, 4 & 5.
Production, Consumption and Trade Effects
The effect of Doha Round liberalisation is simulated under six scenarios in rice and
wheat market. The production, consumption and trade effect of simulation under six
scenarios in rice and wheat market are presented in Figures 2 &3.
Under Scenario 1, if rice price increases by 10%, supply of rice increases but not so much
because own price elasticity of rice is very low. On the other hand, supply in wheat
market is declining due to cross price effect in wheat market (as cross price elasticity is
-0.35). Demand for rice is declining, because of own price (price elasticity is Ed=-1.14)
effect and income effect
2
(as income elasticity IE=1.13). On the other hand, demand for
wheat is increasing due to substitution
3
and income effect
4
in the wheat market. The net
2
Due to price increases income decrease. Thus, if income decreases then demand decreases because income
elasticity of rice is 1.13.
3
As cross price elasticity of wheat is quite high (1.73), thus people shift to wheat when rice price increase as a
result wheat demand increases, this is called substitutions effect.
4
Due to price increase income decreases by the consumer. As income elasticity of wheat is -0.65 in wheat
market. Thus if income decrease then demand for wheat is increases. This is called income effect.
Impact of Trade Liberalisation...
30
trade in rice market is declining i.e. from import to export situation under this scenario
and for wheat net trade is increasing. These happen due to the supply and demand effects
in both markets that are already discussed earlier. Under simulation Scenario 2, the
results are more or less similar in direction like Scenario 1.
The result of simulation under 3 i.e 18% increase in wheat price leads to supply decline
in rice market (due to cross price effect) and increase in wheat market. The demand for
rice is increasing but not so much because cross price effect is very low. The demand for
wheat is decreasing due to own price effect as well as income effect in the wheat market.
As a result of supply and demand effects, net trade in rice market is increasing and in
wheat market, it is decreasing. The results of Simulation 4 indicate more or less similar
direction to the results of Simulation 3.
The Simulation 5 i.e. the simultaneous increase in price of rice and wheat 10% and 18%
respectively, indicates that supply decreases in rice market, this is due to cross price
effect. Although own price and cross price elasticity of supply of rice is same but the
magnitude of cross price change is more than own price change (i.e. 18%>10%) as a
result supply decline in rice market. On the other hand, supply of wheat is increasing.
This is due to strong own price effect. Although own price and cross price elasticity of
supply is same but own price change (18%) is greater than cross price (10%) change as a
result, supply of wheat is increasing. Demand for rice and wheat is decreasing. Demand
for rice is decreasing due to own price effect (Ed=-1.14) and income effect. Although
cross price effect (substitution effect) is positive but it is very low. Thus, the demand for
rice decreases due to combining effect of own price and income. On the other hand,
demand for wheat is also decreasing but not so much. This is due to high own price effect
(18%) (higher relative price change) compared to cross and income
5
effects. In line with
supply and demand effect, the net trade of rice and wheat decreases. That means in case
of rice it becomes exporter and net import decreases in case of wheat.
In Simulation 6, 5% and 7% increase in world price of rice and wheat, respectively shows
that supply of rice is decreasing and wheat is increasing but not so much. The supply of
rice is decreasing due to high cross price effect (i.e. 7%>5%) and supply of wheat is
increasing due to higher own price effect compared to cross price effect (i.e. 7%>5%).
Demand for rice is decreasing due to combined effect of own price as well as income (as
cross price effect is very low). On the other hand, demand for wheat is increasing because
combined effect of cross price and income is greater than own price effect. Thus,
according to supply and demand situations, net trade of rice and wheat is decreasing. Rice
becomes export from import situation and wheat import decreases.
5
In Bangladesh almost 80% of the people are farmers. Their main occupation is agriculture. Thus, at a time
they are producers and as well as consumers. So the income effect is quite ambiguous.
Saiful Islam
31
Welfare and Food Security Effects
Welfare indicators under different scenarios of Doha Round projections are shown in
Figures 4, 5 & 6. Under Simulation 1, we see in the rice market, producer surplus is
increasing, because supply as well as price is increasing. Consumer surplus is decreasing
because demand is decreasing as well as price is increasing and welfare is increasing as
increase in producer surplus is greater than decrease in consumer surplus. In line with
demand and supply, self-sufficiency ratio is increasing for rice. On the other hand,
producer surplus in wheat market is declining due to supply decreases and consumer
surplus is increasing due to demand increases by cross price effect. Thus, on the basis of
producer and consumer surplus as well as demand, supply and price, welfare in the wheat
market is increasing. But due to increase in demand and decrease in supply, self
sufficiency ratio for wheat is declining.
In Scenario 2, the rice market producer surplus is increasing and consumer surplus is
decreasing due to increase in rice price as well as supply increases and demand decreases
respectively. Welfare in the rice market is declining slightly. Although percentage
Figure 2: Production, Consumption and Trade Effect of World Price Change in Rice Market
Figure 3: Production, Consumption and Trade Effect of World Price Change in Wheat Market
Impact of Trade Liberalisation...
32
increase in producer surplus is more than percentage decrease in consumer surplus, the
amount of producer surplus is more than consumer surplus which leads to decrease in
welfare. As demand decreases and supply increases for rice, self sufficiency ratio is
increasing for rice. On the other hand, in wheat market, producer surplus is decreasing
and consumer surplus is increasing as well as welfare is increasing as like under Scenario
1, but here magnitude is little bit lower than that.
In Simulation 3, as supply decreases and demand increases, producer surplus is
decreasing and consumer surplus is increasing, respectively in the rice market. Welfare
and self-sufficiency ratio is decreasing in rice market on the basis of supply, demand and
price changes. On the other hand, in wheat market producer surplus is increasing and
consumer surplus is decreasing. Although the percentage increase in producer surplus is
greater than consumer surplus, the amount of consumer surplus is much bigger. That's
why, welfare in the wheat market is declining. As supply increases and demand
decreases, self-sufficiency ratio for wheat is increasing. In Simulation 4, the results are
more or less similar direction.
In Simulation 5, simultaneous increase in price of rice and wheat shows that in the rice
market, producer surplus is increasing due to supply increases as well as price increases
and consumer surplus is declining due to demand decreases and price increases. Thus,
welfare in the rice market is increasing slightly. On the other hand, in the wheat market,
similarly, producer surplus is increasing due to supply increases. Consumer surplus is
increasing although demand decreases and price increases. This is due to higher relative
price change in wheat market as well as substitution and income effects of price changes
in both markets. In this case, although demand decreases, total benefit is increasing, thus
consumer surplus as well as welfare is increasing in wheat market.
In Figure 4, due to higher relative price increase of wheat, demand may slightly decrease
(from d to d1) in wheat market but for income and substitution effect demand curve may
shift like in figure (Gg to Hh). Due to total benefit increases (in Figure 4 total benefit
HFd1>total benefit GEd) by higher relative price increase in wheat, the consumer surplus
(HFP1>GEP) as well as total welfare may increase in wheat market.
Y
H
G
Price
P
1
F
P E
O d
1
d g h X
Quantity demanded
Figure 4: Higher Relative Price Increase Effect on Wheat Market under Doha Round
Saiful Islam
33
In Simulation 6, the results are more or less similar but magnitudes of changes are small
due to small change in prices of both markets.
Figure 5: Welfare Effect of World Price Change in Rice Market
Figure 6: Welfare Effect of World Price Change in Wheat Market
Higher Cost Scenario (C)
In this scenario, the world market price changes due to Doha Round implementation and
the additional implication of the Doha Round such as, SPS measures and other non-tariff
barriers that induce additional cost for supply. This scenario may include the implication
of environmental and climate change that shocks the supply of food negatively; as we
know, Bangladesh is one of the highest climate change vulnerable countries in the world.
Production of rice and wheat needs lots of chemical fertilisers (N.P.K) as well as
pesticides and rice production in Bangladesh is more or less mono-cropping which can
lead to decline in soil fertility as well as water pollution. So, all these effects are covered
by this scenario as well. Here, we assume 5% supply reduction due to supply shock by
the additional implementation of Doha Round or by the environmental and climate
change effects. The simulated impact of supply shock is presented below on the basis of
production, consumption, trade, welfare and food security effects.
Production, Consumption and Trade Effect
Figures 7 & 8 presents the simulated effect of supply shock
6
and the world market price
change
7
of rice and wheat on Bangladesh food (rice and wheat) sector. From Figure 7, it
is evident that supply, demand as well as net trade (import) decreases in the rice market.
But the decrease in demand is much more than supply, as a result, net trade of rice
6
Supply schock (due to high cost) assume through 5% decline in supply.
7
World price changes assume the highest, i.e. 10% and 18% increase in world price of rice and wheat, respectively.
Impact of Trade Liberalisation...
34
becomes import to export situation. Wheat market in Figure 8 shows the similar direction
but the magnitude of decrease is very low than rice market. This is due to cross price
effect in supply as well as in demand.
Figure 7: Supply, Demand and Net Trade Effect in Rice Market under Scenario C
Figure 8: Supply, Demand and Net Trade Effect in Wheat Market under Scenario C
Welfare and Food Security Effects
The welfare and food security effect of supply shock and world price increase in the rice
and wheat market in Bangladesh (Figures 9 & 10). Producer surplus in the rice and wheat
markets are increasing. This is due to high price increases in both markets. Although
supply decreases due to supply shock and cross price effect, the own price increase effect
is (income effect) more than that, as a result, producer surplus increases in both markets.
The consumer surplus shown in Figure 9 for rice market decreases due to decrease in
demand and increase in price in that market. On the other hand, consumer surplus
increases in wheat market (Figure 10) due to increase in total benefit by substitution as
well as income effect in the wheat market
8
. The welfare in the rice market is declining
because consumer surplus declining is more than producer surplus increasing. On the
other hand, in wheat market, welfare is increasing as producer and consumer surpluses
are increasing. The self sufficiency ratio in both markets is increasing because decrease in
demand is more than decreases in supply in both markets. Increase in price effect is more
than supply shock, as a result, self-sufficiency ratio in both markets is increasing.
8
The situation is discussed elaborately in Figure 4.
Saiful Islam
35
Productivity Shift Scenario (PS)
The rice and wheat productivity can be shifted by changes in production technology
which affects their yields. Still, there is a lot of yield gap in rice (Ahmed 2000b) and
wheat (Morris et al. 1997) production which can be considerably decreased by using
currently available and future technologies, such as, quality seeds and chemical fertilisers
as well as an improved management practices, i.e. land preparation and on-farm irrigation
management (Shahabuddin and Dorosh, 2002). Thus, under this scenario we consider this
productivity shift by considering the positive supply shift 10% in line with price increases
due to Doha round. The results of this scenario analysis are presented in Figures 11, 12,
13 & 14.
Production, Consumption and Trade Effect
Here we extended the world price effects by adding 10% supply increase in both markets
due to technological and others improvement in farming practices. From Figures 11 & 12,
it is evident that supply increases in both markets compare to baseline situation which is
obvious. On the other hand, demand is declining in both markets due to increase in price
in both markets. The results of these supply and demand changes reflect in net trade
changes in both markets. In the case of rice, it is now import to export situation and
import is declining in case of wheat.
Figure 9: Welfare, Producer Surplus and Consumer Surplus in Rice Market under Scenario C
Figure 10: Welfare, Producer Surplus and Consumer Surplus in Wheat Market under Scenario C
Impact of Trade Liberalisation...
36
Welfare and Food Security Effects
The welfare effects of these scenarios are shown in Figures 13 & 14 in both markets.
Producer surplus in both markets (Figures 13 & 14) is increasing under this scenario,
because of increase in supply and price in both markets. But consumer surplus in rice
market is declining due to price increase and in wheat market it is increasing due to
substitution effect (comes from cross price) as well as income effect (comes from own
price effect). In line with the consumer and producer surplus, welfare in both markets is
increasing under this scenario compared to baseline. As we see in the table above,
demand is declining and supply is increasing in both markets so the self sufficiency ratio
is increasing in both markets which are quite obvious.
Figure 11: Supply, Demand and Net Trade Effect in Rice Market under Scenario PS
Figure 12: Supply, Demand and Net Trade Effect in Wheat Market Rice Market
under Scenario PS
Figure 13: Welfare, Producer Surplus and Consumer Surplus in Rice Market
under Scenario PS
Saiful Islam
37
National Protection Policy Scenario (NP)
In the Baseline Scenario, we assume that free trade prevails in rice and wheat markets in
Bangladesh. So, under this scenario, we try to see the effect of the rate of protection in
the welfare of the rice and wheat market over protection. The results of the effect of
protection under baseline scenario are presented in Figures 15 & 16 as well.
Effect of Protection in Both Markets on Rice Market under Baseline Scenario
The Figure 15 shows different levels of self-sufficiency, producer and consumer surplus,
government budget and welfare in the rice market with respect to different levels of
protection in both markets. From Figure 15, we see that due to implementation of tariff in
both markets, the rice market self sufficiency ratio increases. Although Bangladesh was
net importer in baseline situation, but now it becomes net exporter. As a result,
government budget becomes negative and it is increasing negatively i.e. due to export
subsidy, government budget became government expenditure instead of government
revenue. Producer surplus is increasing due to price as well as supply increases in rice
market. On the other hand, consumer surplus is declining due to demand decreases
followed by price increases with respect to the level of protection. We observed that
producer surplus (PS) is increasing but consumer surplus (CS) is declining and
government budget (B) is also negatively increasing, as a result, welfare (W) in the rice
market declining (as W=CS+PS+B). Almost all the figures show that the principal shape
of the functions is the same as with the single-market model, this may be due to the cross-
price effects which are almost near zero in the rice market.
Figure 14: Welfare, Producer Surplus and Consumer Surplus in Wheat Market
under Scenario PS
Figure 15: Implications of an Increase in the Protection Rate on Both Markets From
0 to 50% on Rice Market
Impact of Trade Liberalisation...
38
NB: In the figure, R-rate of protection SSR_R-self sufficiency ratio for rice CS_R-consumer
surplus for rice, PS_R-producer surplus for rice, W_R-welfare for rice, B_R- budget for rice.
Saiful Islam
39
Effect of Protection in Both Markets on Wheat Market under Baseline Scenario
Figure 16 shows the self-sufficiency ratio (ssr_w), producer (ps_w) and consumer surplus
(cs_w), government budget (b_w) and welfare in the wheat market with respect to
different levels of protection imposed in both markets. The self sufficiency ratio in wheat
market is declining due to the level of protection in both markets. This is due to the cross
elasticity of demand for wheat, as cross and own price elasticity of supply of wheat
9
are
same, but with opposite sign (i.e. +0.35 &-0.35). Thus one outweighed by the other
effect. So, supply of wheat does not increase due to price increase by imposing tariffs. On
the other hand, demand for wheat is increasing due to substitution effect (cross price
elasticity (1.73)> own price elasticity (-1.09) and income effect (due to price increase,
income decrease and thus demand increases because income elasticity is -0.65) in the
wheat market. As a result, the self sufficiency ratio is declining in the wheat market. The
producer surplus is increasing due to price increase although supply is more or less same
as discussed earlier. Similarly, consumer surplus is also increasing due to demand
increases by substitution and income effect that are already discussed earlier. The
government budget is increasing positively i.e. government revenue from import tariff.
Likewise, the welfare is increasing which is quite obvious due to increases in demand,
producer and consumer surplus and government revenue (W=PS+CS+B) as well.
9
The cross price elasticity of supply indicates rice and wheat are competitive crops and it competes with each
other for scarce resources e.g. land and water.
Figure 16: Implications of an Increase in the Protection Rate on Both Markets From
0 to 50% on Wheat Market
Impact of Trade Liberalisation...
40
Graphical Explanation of Welfare Increase in Wheat Market under
Different Levels of Protection
Income elasticity of wheat is -0.65 i.e. wheat is inferior goods. Nicholson and Snyder
(2008) argued that in case of inferior goods, substitution and income effect due to price
change is quite complicated. They also argued that, in this case, the combined effect of a
price change is indeterminate due to the opposite directions of income and substitution
effects and it is not possible to predict exactly the quantity chosen by the price changes.
In our cases it is really complicated because we change both markets' price
simultaneously and cross price elasticity for one is too high and for one is too small. In
Figure 17 (i) shows the own price effect, which shows that if price increases, demand
decreases (i.e. in figure d to d1) the second one (ii) shows the income effect (i.e. due to
Saiful Islam
41
price increase income decreases and this leads to increase in demand) as well as the
substitution effect (i.e. if both price increases than demand for wheat is increasing quite a
lot in wheat market due to higher substitution effect). In that case wheat is behaving like
a giffen (Nicholson and Snyder 2008). goods (i.e. as price increases demand increases).
Thus, combined positive effect of income and substitution effect is more than negative
own price effect which is shown in Figure 17 (iii). As a result, demand curve shifts
outward which leads to increase in demand for wheat that leads to welfare increase in
wheat market.
Figure 17: Explanation of Welfare Increase in Wheat Market under Different Level
of Protection in Both Markets
Conclusion and Policy Implications
The study applies multi market modelling approach to know the welfare implications of
different policy scenarios in the food sector of Bangladesh. We developed a dual market
model for the food sector in Bangladesh to analyse the implication of changing policy
scenarios. This technique is widely used nowadays for analysing the policies and
changing policy shocks that comes from URAA as well as Doha Round negotiation by
WTO. We considered five simulation scenarios to know the effects of policy change in
the food sector of Bangladesh. From the analysis, it can be concluded that world price
increases due to Doha Round implementation which would positively affect the rice
market but in the wheat market the result is quite ambiguous. It can also be concluded
that due to imposition of protection in both markets, rice market welfare is decreasing
which is quite obvious, but in the wheat market welfare is increasing due to cross price
and income effects which is ambiguous. The results are supported by the projection of
other studies that a higher import dependent country will be adversely affected by free
trade and Doha Round implementation (Goldin et al. 1993; Hamilton and Whalley 1995;
UNCTAD 1990; Francois et al. 1994; GATT 1994; Nguyen et al. 1993 and 1995; Schott
and Buurman 1994; cited in Warr and Ahammad 1997). Sadoulet and Janvry also gave
more or less similar argument about the effect of higher international price of cereals on
import dependent Asian countries like Bangladesh, where imports are competitive with
domestic production (see Sadoulet and de Janvry 1992)
1
(i) Own price effect  (ii) Income and substitution effect  (iii) Combined effect
Impact of Trade Liberalisation...
42
The result of the study shows the effect of agricultural liberalisation to different groups of
people in Bangladesh. The study gives necessary information on how to support or
improve the implementation of agricultural policy and to explore the policy
recommendations for enhancing productivity as well as welfare in the food sector of
Bangladesh. Keeping all these in view, the following policy implications can be identified
from the study:
i) Effect of Doha Round on the food sector in Bangladesh is dependent on the magnitude
of price changes because Bangladesh is a rice and wheat consuming country as well as
producing country but consumption is more than production. So it depends on import,
wheat import is much higher than rice. So if price increase is high enough, than it
negatively affects welfare in the food sector. Therefore, a policy intervention should give
more careful consideration in these respects.
ii) Similar to Doha Round, in the case of protection policy we see under protection in rice
market, welfare is decreasing but in wheat market it is increasing. Wheat is more import
dependent. Thus it can be concluded that a more import dependent country will lose
welfare due to trade liberalisation. Therefore, especially for wheat policy, intervention
should be given careful consideration.
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Impact of Trade Liberalisation...
46
Table A1. Original Elasticity Ssed for This Study Before micro-economic Adjustments
Elasticities of supply

Elasticities of demand

Market
Rice Market Wheat Market Rice Market Wheat Market
Income
elasticities
Rice market 0.5 -0.004 -0.56 0.01 0.39
Wheat market -0.08 0.61 2.05 -0.82 -0.44

Table A2. Review of Different Elasticity Estimates for Rice and Wheat
Income/expe
nditure
elasticity
Own
price/deman
d elasticity
Supply
elasticity
Cross price
elasticity of
demand
Cross price
elasticity
of supply
Authors
Estimating
methodology
Description
Ric
e
Whea
t
Rice
Wh
eat
Ric
e
Wh
eat
Rice
with
whe
at
Whe
at
with
rice
Rice
with
whea
t
Wh
eat
with
rice
Pitt (1983) Tobit demand
system
Low-
income
High-
income
1.19
0.94
-0.10
-0.24
-1.30
-0.83
-
0.72
-
0.06
0.01
1
0.00
3
1.061
1.079

Goletti (1993) Tobit demand
system
Entire
sample
Rural
Urban

0.39
*
0.15

-
0.44*
-0.01

-
0.56*
-0.59

-
0.82
*
-
1.06

0.01
*
-0.01

2.05*
2.35

Rahman and
Yunus (1993)
Supply response
through Nerlovian
model
Short run
Long run
0.50
*
2.86
0.6
1*
5.2
4

Zohir et al (2002) Modified version
of the McGuirk and
Mundlak (1991)
model of dynamic
supply response
and multistage
budgeting
framework for
demand
Short run
(rural, all
groups)
Long run
(Urban, all
groups)
0.41
0.27
-0.20
-0.65
0.06

0.1
5
-0.00 -
0.08
*
Dorosh and
Haggblade (1997)
AIDS model
estimate
Urban poor
Urban non-
poor
Rural
landless
Rural small
farm
Rural large
farm
0.51
0.08
0.36
0.37
0.22
0.06
0.14
0.17
-0.07
-0.84
-0.89
-0.44
-0.63
-0.62
-0.61
-
2.64
-
0.43
-
2.93
-
3.49
-
5.32
3.67
1.19
3.29
4.25
7.16

FAO (1991) Semi-log demand
system
Nation
Rural
Urban
0.37
0.61
0.14
-0.13
-0.41
-0.02
-0.42
-0.66
-0.19

-
0.62
-
0.68
-
0.40
0.05
0.05
0.05
0.75
1.09
0.42

Shahabuddin and
Zohir (1995)
Modified version
of the McGuirk and
Mundlak (1991)
model of dynamic
supply response
and multistage
budgeting
framework for
demand
0.062 -
0.004
*

Sources: Studies mentioned in the first column of the table. Also see Shahabuddin and Zohir (1995)
for review of elasticities.
NB: *Used for this studies to estimate multi market modelling also shows in table A1.
Saiful Islam
47
Asia-Pacific Journal of Rural Development
Vol. XXIII, No. 1, July 2013
Demand-driven Governance in Nepal: A Contextual
Agenda of Development
Narayan Bahadur Thapa*
Abstract
A demand based governance system addresses the will of the state to operate in an accountable,
transparent and responsive manner and promotes development-that is why Nepal has adopted this
concept in its policies. A broad exploration of governance and demand driven governance is made in
this study to highlight their ideological background and objectives. This paper explores the necessity
of a demand driven governance and some essential tools which will ensure it, such as decentralisation,
participatory planning, social mobilisation and accountability. The findings, based on the analysis of
activities in Nepal, support the notion that demand-driven governance intervention should capitalise
on what already exists; they also emphasise that empowering and engaging the citizens in
development affairs are integral to the holistic development of any country.
Introduction
Over the past two decades, Governance has become a central theme of development.
Many governments of poor countries are unable to exercise effective, accountable public
authority and are unable to deliver basic public goods and services to their citizens. This
is due to the lack of a demand based governance system.
A state should be responsible to its citizens whether they are organised or not. There
could be criteria for prioritisation, but citizens should not be discriminated by the state on
the basis of their social status, class, geographic location, developmental stage or any
other classifications.
Citizen-centric governance is an emerging concept. It is believed that citizen approach
improves service delivery with efficiency, fairness and responsiveness. This approach
strengthens the capacity of the citizen to create demand and voice their needs.
Decentralisation and, Participatory Planning System (PPS) contribute to promote the
demand driven governance. Basically, decentralisation and participatory planning is
concerned with governance which deals with involvement of concerned stake holders and
people and make decisions according to their available resources and needs. Whereas, the
demand is basically concerned with the claim by the people of their citizen's rights. The
citizen can raise the demand if they are empowered properly through appropriate
mechanisms. Social mobilisation could be an appropriate tool to empower the citizen
which is used in developed and developing countries according to their situation and need.
The social inclusion and demand-driven governance is reflected in the Three Year Interim
Plan of National Planning Commission of Nepal. This plan is based on provisions made
by the interim constitution for the development of rights, promotion of inclusive local
democracy and a policy of making the local bodies the subsidiary government
responsible and accountable for service delivery and local development works. The plan
* Ph D Scholar, Rural Development Department, Tribhuvan University, Kathmandu, Nepal.
Email: nnthapa@hotmail.com
Asia-Pacific Journal of Rural Development
Vol. XXIII, No. 1, July 2013
48
delineates a participatory planning system based on people's aspirations and local demand
through inclusion and mainstreaming disadvantaged groups in development.
Earlier development plans had also given emphasis on people's participation in
development and decision making process. Even during the ten years' conflict,
communities were involved in the planning and operation of services through community
based organisations in Nepal. Although there have been efforts to generate meaningful
participation of people, it has not been a remarkable progress in the absence of elected
people's representatives.
Governance
Governance can be defined as "the exercise of economic, political and administrative
authority to manage a country's affairs at all level's" (Birner, http://www.ied.ethz,ch/news.
29 Jan, 2011). That is, good governance signifies the competent management of resources
and affairs in a manner that is transparent, honest, accountable, equitable and responsive
to people's needs and problems.
Conceptually, governance is linked with the ideological triumph of neo-liberalism. The
theoretical roots of governance are located in 'neo-liberal' economic theories, especially
'new right ideology'. Government is 'redefined' in market paradigms by redrawing
boundaries of public administration. In the new dispensation, governance is an interface
between state, market, and civil society. The 'governance' discourse has its origin in, (1) the
new thrust towards neo-liberalist restraint on the 'state' along with the positing of 'market' as
a competing social authority and bringing in 'civil society' as a provider of local-level social
service, (2) the international funding authorities' (particularly, the World Bank) concern for
more accountable, transparent, open and participative rule, and (3) the newly, emergent
'globalisation' trend-a socio-economic integration of the world propelled by economic,
technological, and political considerations (Chakrabarty and Bhattacharya 2008, 21).
'Governance' is a classic word, referring to people who had authority over others, which in
centuries past meant mostly religious and political leaders in the community, but it could,
conceivably, also include leaders of other organisations. It fell out of common use after the
eighteenth century, more particularly after the French Revolution when much of what was
to become the modern administrative bureaucratic state evolved in Europe. Instead, the
word 'government' replaced it to describe leadership of the nation-state, with its political
arrangements heading a professional public service in an expanding public sector.
The revival of the term 'governance' dates back to the second half of the twentieth century,
when opposition arose to the Big Government, and were expressed: (1)
ideologically, by fears of a forthcoming return to serfdom, as epitomised by totalitarian
regimes; (2) politically, by mounting criticism of higher taxes and public expenditures; (3)
pragmatically, by the increasing practice of hiving out government activities to a melange
of non-governmental organisations; (4) socially, by complaints about the inadequacy of
public sector performance that was failing to live up to political promises and public
expectations; (5) globally, by increasing interdependence that poses challenges to existing
governmental arrangements; and (6) academically, by a shift from the static approach of
the positive paradigm focusing on objectivity to post-positivism that stresses complexity,
interconnections, interactions, and processes (Caiden, 2008, 105-106).
Thapa
49
The term 'governance' puts government in its proper place as only one of several social
institutions that alone or through mutual cooperation meets contemporary challenges.
Cleveland's analysis fits nicely into a future that would de-emphasise government, the
administrative state and public management, and strengthen institutional alternatives that
would play a more important part in public policy and the delivery of public goods and
services (Caiden 2008: 107).
Demand Driven Governance
By meaning, demand is a desire and ability to get and claim for something. In the sense
of governance, it is an act of asking especially with authority. Demand driven governance
is for bottom-up development in contrast to supply-driven development, which is more
centralised and guided. Demand-driven governance is a trend of decentralised
governance, which is a matter of concern to developing countries.
David Lier and H. Regmi have defined (Lier, Haug and Regmi 2009, 7) the demand-
driven governance as an approach to development, which places emphasis on the
following characteristics:
- A decentralised component of resource allocation and distribution;
- Substantial participation and co-determination from local actors and civil society
organisations;
- Alignment and coordination with political authorities and governance structures at a
local scale, or a future plan to establish such a relationship;
- A set of 'checks and balances' to ensure local transparency and allow community
constituencies to hold state and developmental systems accountable (bottom-up
accountability).
These characteristics are interrelated and interconnected with each other and emphasised
on to activate the local institutions and other local actors in the governance process by
introducing the principle of good governance. Such initiations can contribute to holding
accountable systems at all levels of the development system, which promote the basic
elements for demand driven governance.
The concept of demand-driven governance is like a slogan and combines different words
like community, demand, governance, development, democracy and others. The focus on
governance, however, suggests a demand for something less tangible, such as
accountability or transparency. (The demand side of good governance addresses the will
of the state to operate in an accountable, transparent and responsive manner) (Lier, Haug
and Regmi 2009, 6).
Osborne and Gaebler prescribes "Customer Driven Government to meeting the needs of
citizens" in their book Reinventing Government. The single best way to make public
service providers respond to the needs of their customers is to put resources in the
customers' hands and let them choose. When the citizens handle the resources, they can
choose the destination and route according to their needs. But at present, citizens are not
the customer. They are service-holders and service-deliverers. Therefore, the concept of
Osborne and Gaebler is seen as narrow in the present governance scenario.
Demand-driven Governance...
50
Limitations on Demand Driven Governance
An evaluation of the demand-driven approach by the UN's International Fund for
Agricultural Development (IFAD) revealed some challenges in the implementation of
these programmes on the ground (IFAD 2008). Firstly, community mobilisation was
effective as a strategy, but only succeeded in involving a small percentage of the
population. Secondly, the poorest communities struggled to participate, as they could not
afford to raise the small proportion of the investment costs, which the beneficiaries were
required to contribute. Thirdly, the approach was more successful in the area of social
investments, as opposed to income-generating projects, as the former issue was more
suitable for village-level mobilisation. Fourthly, without any strong linkages to
government structures, the different demand-driven initiatives were too scattered to create
synergy effects in terms of local economic development. In sum, the evaluation argued
for a higher level of coordination and alignment between donors, government structures
and community-based organisations. In other words, demand-driven development would
arguably be more successful if it contained a component of demand-driven governance
(Lier, Haug and Regmi 2009, 9).
If it is a short example of limited demand driven governance, it gives some sample
scenario which is a chunk of information for future guidance. Generally, community
members and citizens are still struggling for proper participation that can be termed as
meaningful participation. Basically, due to the poor linkages of government structures
and stake holders, scattered and irregular initiatives could not contribute perfectly.
Participatory Planning and Demand Driven Governance
In general, Participatory Planning Process is simply the involvement of a group of
directly benefitted people in all stages of the development planning cycle, including
identification, design implementation, monitoring, evaluation, benefit sharing,
maintenance and follow up. It is a dynamic level of mobilising people for development.
The participatory approach includes the active involvement or collaboration of all groups
including policy makers, officials and beneficiaries. It is an essential concept for
decentralised planning. Therefore, it is a people-centered democratic exercise for
development and is accepted as a fundamental point for demand driven governance and
local democracy.
Conceptually, participatory planning is closer to a governance approach that demands
active involvement of multi-stakeholders in affairs of common concerns. Participatory
planning fosters democratic values and cultures at local level. As people are involved as
active players, it helps to develop a high level of ownership in development activities and
increases transparency in planning and programming. It is a process-oriented approach,
which blends the expertise of planners with transcendental knowledge of local citizens. In
the process, both types of knowledge are combined and transformed into collective
action. It is a social learning process and helps to create enthusiasm in the community
that leads implementation to be effective and efficient. Participatory planning concept is
based on the philosophy that people in general have the following inherent aims:
- They seek knowledge to enable them to improve their own situation;
- They desire freedom, in which they can engage in productive activities;
- They wish to organise themselves in autonomous, social groupings in order to gain
access to services, to acquire social security and to exercise their rights.
Thapa
51
Participatory Local Planning
Participatory local planning is the involvement of a group of directly benefited people in all
stages of the development planning cycle that mobilises the local people in the development
process and ensures the active participation of beneficiaries and stakeholders. Therefore, local
planning is more political and participatory process than an isolated technical exercise.
In the holistic view, planning is an important part of democratic process in the governance
perspectives, which includes democratic process, local initiatives, community ownership and
sustainability. Local planning encourages people's participation in planning and implementation
of development program, and mobilises and uses local resources more effectively and
efficiently. Participatory local planning promotes the social inclusion process and enhances
community initiatives in finding creative solutions in local problems. Basically, it is a demand
driven planning process which builds the ownership of the people and stakeholders and gives
support to strengthen the democratic decentralisation and sustainable development. Therefore,
Participatory Local Planning process came into being as a new phenomena and pertinent part of
development (Thapa 2066, 99).
Community / Settlement Level
Ward Committees
VDC / Municipality
Village / Municipal Council
Illaka Level
Sectoral Plan Formulation
Committees
Cross-cutting Committees
Integrated Plan Formulation
Committee
District Development
Committee
District Council
Sectoral Ministry
National Planning Commission
Ministry of Finance
Parliament
Fig 1: Planning Process (Steps) in Nepal
Demand-driven Governance...
52
Planning paradigms have changed from a supply-driven or top down approach to a right based
bottom-up approach. Accordingly, power dimensions and relations have also changed. The
concept of planning is changing from public administration to governance rapidly. Rondinelli sees
planning and implementation as a pure political exercise. He argues: 'All plans are political
statements and all attempts to implement them are political acts" (cited in Adhikari 2006, 13). The
governance engagement with formal or informal groups of citizens, and or service oriented
organisations such as NGOs and cooperatives will be part of the strategy (Paudel and Chapagain
2008, 9). Responsive and representational governance must be established across all political
scales, and decentralisation is seen as a prerequisite for local accountability in development
programmes.
Local Self-Governance Act, 1999 (LSGA), Local Self-Governance Regulations, 1999
(LSGR) and Nepal Government's guidelines have made clear steps for bottom up
participatory planning. These steps of planning have been exercised over the past one and
a half decades (Law Book Management Board, 1999). Due to the absence of elected
representative at local level, it has hampered materialising steps smoothly. These steps
are an effective example of Participatory Planning Process in the South Asian region.
Definitely, this initiative has been contributing to demand driven planning system in
Nepal. In the absence of elected bodies in District Development Committees (DDCs),
Village Development Committees (VDCs) and Municipalities, the Government has made
some alternative provisions in Participatory Planning Process at VDC and Municipal
level that is shown in the following figure.
 
According to LSGA and LSGR, community and ward committees are very powerful for
participatory planning. Recently, to fulfill the gap of elected representative, "Ward
Citizen Forum" is active for Participatory Planning by creating the "Integrated Planning
Committee" (IPC) with inclusive representation.
Although, the local bodies have adopted planning process at local level, some practical
limitations exist at field level. Communities and civil society organisations have a high
capacity to generate demands, but the government's capacity to respond, plan, prioritise
and implement is limited. Therefore it is argued that building the capacity of governance
institutions is a crucial challenge.
Fig 2: Planning Process at Local Level in Nepal (Municipality and VDC)
Thapa
53
Social Mobilisation
Generally, social mobilisation is a dynamic, democratic and participatory process of
empowering the people, especially those who are poor and socially excluded. It is a
process that opens new possibilities in the society, generates mutual understandings and
social cohesion, contributes to the access of resources to uplift the society and acquire the
appropriate support and skills for economic development. It supports to involve all
sections of society and local stakeholders and helps to promote and strengthen the local
democracy. Thus, "Social Mobilisation has to be a value led process. It is not merely an
economist as or money led process" (Wignaraga and Subramanian 2009, 199). It is also a
process of mobilising people in developing their own institution for the common benefit
by creating social capital. Therefore, social mobilisation is found to be a very practical
strategy to bring stakeholders, particularly the citizens, into governance activities like
local planning.
Social mobilisation has been accepted as an effective means to facilitate, voice, demand
and influence citizens and to improve absorption capacity at the grassroots. It is a
movement in achieving development goals through self-reliant efforts. It takes into
account the felt needs of the people, embraces the critical principle of community
involvement and seeks to empower individuals and groups for action.
Social mobilisation is necessary for effective engagement of citizens in governance
process. It empowers the people and strengthens the capability of citizens whether in a
group or on a personal basis and contributes to create the voice or demands of citizens. It
strengthens the bargaining power and makes them capable for good negotiation. It also
supports downward and upward accountabilities of service providers and recipients.
Conceptually, social mobilisation empowers the citizen and community to attain the result
in a sequential way. Different inputs like opportunity to share in resource, involvement in
public activities, and equal political rights are essential to the citizen and community
members. These inputs create awareness of their role and create new ideas; people can then
expect and demand with state mechanism with effective and efficient voice of people. This
process contributes to make a responsible and accountable governance system and creates
conducive environment for response of demand and voice of citizen and community by
introducing the proper negotiation, which empowers the citizen and community in the right
direction. It helps to improve the access of citizens in the governance process and makes
the government more accountable for the betterment of people.
Osmani described the Participatory Governance as a social mobilisation which is an
essential element for citizen empowerment. The poor cannot in general be expected to
organise themselves entirely on their own without outside help because of illiteracy,
economic insecurity and a general lack of self-confidence. It is essential to make
conscious effort on social mobilisation with the help of change agents. As long as the
poor suffer from extreme economic insecurity, it is unlikely that they will be able to
exercise effective bargaining power even with the help of social mobilisation. The
process of social mobilisation must therefore be accompanied by measures to remove
extreme economic insecurities of the poor.
Social mobilisation is the main approach used by different projects directly or indirectly
to transfer project assets in Nepal. The processes of empowerment, building voice and
agency that should be an intrinsic part of the social mobilisation appears to be secondary
Demand-driven Governance...
54
and in some cases invisible. Mobilisation is contracted by projects to NGO service
providers who subcontract it to social mobilisers. As a consequence, when the contract
ends the social mobilisation ends. There is neither a career development for the social
mobiliser nor a continued support to the groups (Hobley and Bimala 2008, viii).
Training programmes that have been implemented with donor supported programmes like
DLGSP, RUPP, LGCDP include participatory planning, leadership promotion and social
inclusion. One of the most crucial factors in relation to the sustainability and legitimacy
of demand driven approaches in Nepal is the extent to which the programmes manage to
establish accountability and coordination with local governments and other structures
of governance.
Social mobilisation is a movement in achieving development goals through self-reliant
efforts. It takes into account the felt needs of the people, embraces the critical principle of
community involvement, and seeks to empower individuals and the groups for actions. It
helps in the successful transformation of society. Therefore, social mobilisation has been
accepted as an effective means to facilitate, voice, create demand and help for
accountable governance.
Accountability, Citizen's Voice and Demand Driven Governance
In a democracy, the state is the servant of the people. It performs many functions
essential for the welfare and development of its citizens and provides an array of essential
services many of which are 'public goods.' The state collects taxes from the people to
discharge its functions and is accountable to society for the proper use of the resources
entrusted to it. Periodic elections are seen as the ultimate leverage that citizens can use to
hold those wielding power in the name of the state accountable for their performance.
But, the dilemma is that while much happens between elections in terms of transactions
between the state and its citizens, there is little an individual citizen can do in the short
run if things go wrong in the discharge of functions or services by the state's agencies.
Waiting for the next election is of little help to a citizen who needs immediate corrective
action. The problem arises because the citizens have no 'exit' unlike the marketplace
where they can exit from one supplier of a good or service to another. When citizens have
no exit option, they can only vent their feelings through 'voice.' Voice may take the form
of protest, non-cooperation, or the rejection of political representatives through the ballot
process. Collective action in any of these forms can act as an instrument of
accountability, signaling to the authorities that they must listen to the people's voice and
take remedial action. Of these different forms of voice, the ballot process is the most
difficult to access because of the long time gap between elections. Other forms of
collective action (a form of voice) are more easily resorted to when people face problems
continually with the functioning of governments, especially with the delivery of services.
There is a growing literature on the use of voice as an aid to accountability and on the
evidence from numerous experiments based on this approach. Illustration of this trend is
the framework for accountability presented in World Development Report (WDR), 2004.
WDR uses the term 'client power' to denote the voice of the users of public services. It is
true that as customers of a service, citizens are clients. Nevertheless, it is important to
note that their role as citizens is larger and has more power than what a mere client can
command. Citizens, for example, have rights and avenues for action that may not always
be available to mere clients. The preference of this author, therefore, is to use the term
'citizens' voice (Paul 2008, 162).
Thapa
55
The World Development Report (WDR) framework refers to the long route and the short
route of accountability. Both operate in a circular fashion (see Fig. 3). Citizens/clients can
use voice to signal policy makers/ leaders on their needs and problems. The latter in turn
can hold service providers accountable for the delivery of services through a compact,
much like a contract, with explicit terms and obligations of a mutual kind. Service
providers then deliver services through their frontline workers and units that directly
interact with citizens. Accountability here is enforced through the use of voice that works
through the political process. In the short route, the linkage between citizens and
providers is more direct. Here, client voice directly impacts on the provider and
accountability is achieved through this direct pressure.
However, the big question is whether this framework can actually be made to work. The
logic is appealing. In a democratic setting, listening to the people or responding to their
collective voice seems desirable and feasible. But are there barriers that can derail or
weaken these linkages (Fig. 3 provides some answers) (Paul 2008, 164).
Figure 3 illustrates the kinds of barriers that can break the neat relationships and
influences implied in the above figure. It highlights two sets of barriers, one that could
weaken the power of voice and the other that can render the compact ineffective. Voice,
for example, will not work when citizens/clients do not have the necessary information or
knowledge to make it effective. This can happen when people have limited knowledge in
a specific area and are, therefore, unable to digest new information and make use of it.
Even if they are educated, but have no access to information, then again, the outcome will
be no different. Thus, governments can create barriers to voice by denying people
knowledge about their rights and entitlements and standards and norms pertaining to
services. Even when such information is available, if citizens do not have a sufficient
background for understanding this information, it can potentially act as a barrier to voice.
The poor often tend to suffer from this handicap (Paul 2008, 164-165).
The State
Politicians Policy makers
Collusion
corruption
Barriers to
Information
Collection Action
Providers
Frontline Organisation
Barriers to
Information
Collection Action
Citizen/Client

Nonpoor Poor
Voice
Compact
Client power
Long route of accountability
Short route
Service
MANAGEMENT
Coalitions/inclusion
Source: WDR: 2004 (Cited in Paul, 2008: 164).
Figure-3: Linkages in Accountability
Demand-driven Governance...
56
There are equally important barriers to collective actions as a form of voice. Collective
actions call for time, organisational skills, and resources. It requires capacity to identify
key issues and knowledge about possible remedies. The poor, typically, are weak in terms
of these capabilities. When they are struggling to survive, they may not have the ability or
the incentives to invest in collective action. It is the reason why intermediary organisations
(such as NGOs) enter the scene and organise the poor and marginalised communities.
Collective action is easier to organise for the better-off sections of society. Nevertheless, it
is an uphill task even for them because of the 'free rider' problem and the indifferent
attitude of many middle-class citizens who seek easy exits. It is not uncommon, for
example, for people to pay a bribe to get their work done (Paul 2008, 164-65).
The client can hold the provider directly accountable, without any intermediaries, in short
route of accountability. In long route of accountability, citizens expect politicians and
policy makers to ensure the services. Voice and compact together became the long route.
Although, both short and long route of accountability need to work together. (World Bank
2004, 162) Paul has borrowed this conceptual framework from the World Development
Report, 2004 (WB) that was based on the Tanzanian experience. Here, he has linked the
barriers in the figure with some moderations. Conceptually, it clears the basic process of
accountability in service delivery.
There are some relevant examples of Nepal, which are as follows:-
· The Proverty Alleviation Fund (PAF) implements the demand driven community
proposals of physical infrastructures to improve the people's livelihood. The
communities and community organisations are empowered through social mobilisation
to create the voice and demand of community members (PAF 2010: 2, 8).
· Local people are providing their voluntary labour contribution in Community Forestry
in Nepal. Federation of Community Forest Users has a strong network of user groups
that works as pressure group to promote good governance within community forestry
programme. Thus, community forestry in Nepal has contributed in building a
democratic demand of users from bottom to top level (Koji 2009: 43, 44). However,
there are different federation networks which are obviously elite and hunt for the
fulfillment of their interest. It is a challenge to address the demand and voice of poor
people which are really users of community forestry.
· Recently, Local Governance and Community Development Programme in Nepal
(LGCDP) started the intervention on "empowerment of citizens and community for
active engagement with local governments and strengthening downward
accountability" (LGCDP 2008: 14). Communities and community organisations
participate actively in local governance processes through social mobilisation, which
promotes effective demand and voice of citizen and community.
Conclusion
Demand-driven governance model must be context-specific. It should be flexible and
must emphasise on the facilitation of community-local state relations from the beginning.
Thapa
57
Demand-driven governance intervention should capitalise on what exists. Demand-driven
governance must include targeted representation of minorities and women and, possibly,
alternative forms of community organisation that foster reconciliation between factions of
the society.
Social mobilisation envisaged empowering citizens from all sections of the society. The
strategy for social mobilisation and community empowerment should be multi-track,
where various efforts take place with an aim to enable and mobilise people from different
sections of the society to actively participate in and contribute to improve service
delivery to citizens, which is complemented by enabling and facilitating citizens' voices
and scrutiny of duty bearers' activities. Citizen empowerment strategy encourages
citizens' participation in governance and development affairs. Accordingly, it provides
relevant information, offers men and women of different class and creeds appropriate
space to voice their demands and give ideas, and engages citizens in the management of
public affairs. Information dissemination through different media (electronic and print),
organising events (public auditing, debates and dialogue) regularly or more frequently,
and instituting appropriate structures and processes (inclusive consultative mechanisms
and participatory processes) are also the measures for empowering the communities.
Engagement of Citizen Groups or Local Organisations in Local Governance Affairs is
also the main contribution of social mobilisation. It improves scope of qualitative citizen
engagement in local governance aspects and enhances public service delivery. The
envisaged situation is that the citizens are empowered, skilled, and have necessary
mechanisms to participate meaningfully in the delivery of public services by local
authorities and public service agencies. The participation will be in aspects such as
planning, feedback, monitoring, and implementation.
Working on the demand side of governance equation is an effective way of achieving
good governance. There is no doubt that supply side, inter-alias, building institutional
infrastructure, promotion of education, developing innovative techniques, reforming
administration and ensuring impartial accountability should also be considered. Both
supply and demand side endeavors must be combined for governance outcomes. Supply
side plays the catalyst role to produce reliable and creative demands which supports to
strengthen the citizen-state relationship in the right direction.
References:
Adhikari, Damodar. 2006. 'Towards Local Democracy In Nepal: Power and Participation in
District Development Planning.' Ph.D Dissertation submitted to the University of
Dortmund, and published by Spring Centre, Faculty of Spatial Planning, University of
Dortmund (Germany).
Birner, Regina. 2008). Strengthening Governance for Rural Development in Developing
Countries. The International Food Policy Research Institute. (http:
www.ied.eth,ch/news....pdf. accessed in 29 Jan, 2011).
Caiden, Gerald E. 2008. "The Repositioning of Public Governance", In The Governance
Discourse, edited by Bidyut Chakrabarty, and Mohit Bhattacharya. 103-131. New Delhi:
Oxford University Press.
Demand-driven Governance...
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Chakrabarty, Bidyut and Mohit Bhattacharya, (ed.) 2008. The Governance Discourse. New
Delhi: Oxford university Press.
Hobley, Mary and Rai Paudyal Bimala. 2008. 'Study of Income Generating Activities in
Kapilvastu and Ramechhhap Districts, Nepal.' An Unpublished Report Submitted To
Swiss Agency for Development and Cooperation, Nepal.
Koji, Tarakawa. 2009. 'Community Foresty: A viable means of poverty Reduction in Nepal'.
An unpublished Ph D Dissertation Literature Review, Faculty of Humanities and Social
science, Tribhuwan University, Nepal.
Law Book Management Board, 1999. Local Self-governance Act. Kathmandu: Law Books
Management Board, Ministry of Law and Justice.
Law Book Management Board. 1999. Local Self-governance Regulation. Kathmandu: Law
Books Management Board, Ministry of Law and Justice.
Lier David, Marit Haug and Hari Regmi. 2009. Demand-driven Governance: An Analysis of
the Intervention of International Agencies. Norwegian Institute for Urban and Regional
Research, Guastadalleen 21, Oslo.
Local Governance and Community Development Program Co-ordination Unit. 2008. 'Local
Governance and Community Development Program (LGCDP) Program Document 2008.'
Lalitpur, Nepal: LGCDP Programme Co-ordination Unit.
Paudel, Lokendra P. and Y. Chapagain. 2008. 'Study on Social Mobilisation/Community
Empowerment Strategy and DLGSP Exit Strategy.' DLGSP, Kathmandu, Nepal.
Paul, Samuel. 2008. "Auditing for Social Change". In The Governance Discourse, edited by
Bidyut Chakarabarty and Mohit Bhattacharya. 160-178.New Delhi: Oxford University
Press.
Poverty Alleviation Fund. 2010. 'Annual progress Report (2009/2010)' An unpublished Report
submitted to Poverty Alleviation Fund, Nepal
Thapa, Narayan B. 2066. "Local Planning Process: Nepalese and Indian Experiences,"
SWASHASAN (The Journal of Self-Governance and Rural Development). Lalitpur:
Ministry of Local Development, 33 (Fagun 2066): 97-106.
Wingnaraja, Ponna and Madhu Subramanian. 2009. "An Illustrative Case Study of
Experiential Learning and Deep Immersion Training". In Economic Democracy Through
Pro-poor Growth, edited by Wingnaraja Ponna, Sushil Sirivardana andAkmal Hussain.
127-129. New Delhi: SAGE Publications.
World Bank. 2004. 'World Development Report 2004.' Washington, D.C: The World Bank.
Thapa
59
Asia-Pacific Journal of Rural Development
Vol. XXIII, No. 1, July 2013
Technical Efficiency and Total Factor Productivity of MV
Paddy Production under Different Farming Systems
in Bangladesh
Basanta Kumar Barmon
*
Abstract
The present study attempts to estimate the technical efficiency (TE) and total factor productivity (TFP)
of modern variety (MV) boro paddy under Rice-prawn Gher (RPG) farming and MV boro and aman
paddy under year-round modern variety (YRMV) paddy farming system in Bangladesh. Primary data
were used in this study. Two contrasting villages were specifically selected: Bilpabla village of Khulna
district for rice-prawn gher (RPG) farming and Chanchra village of Jessore district for year-round
modern variety (YRMV) of paddy farming. 90 RPG farmers and 100 YRMV paddy farmers were
randomly selected and information was collected on inputs and outputs of paddy production as well as
the socio-economic characteristics of the selected farmers of both types of farming. The findings of the
study show that farmers who produce MV boro paddy under YRMV paddy farming were technically
more efficient than their counterparts who carried out RPG farming as well as aman paddy
production. The main reason was that MV boro paddy is the main crop/enterprise in YRMV paddy
farming, and prawn and fishes are the main outputs of RPG farming. Farmers in RPG farming
produce MV paddy mainly for home consumption. It is also evident that the socio-economic
characteristics of farmers have significant effects on the technical efficiency of both types of farming.
Introduction
Rice-prawn Gher (RPG) farming is an indigenously adopted technology which combines
aquaculture and agriculture. The term 'rice-prawn gher' refers to a modification of paddy
field that has been used for prawn and modern variety (MV) paddy cultivation. The mid
field (locally known as chatal) of gher is surrounded by high wide dikes and canals that
lie in the periphery of the dikes. The whole land of gher is filled up with rain-water from
June to December and resemble a pond. During this time, farmers cultivate prawn
(Macrobrachium rosenbergii) and carp fishes. The entire land becomes dry naturally
from January to April except canals. The canals retain sufficient water for MV boro
paddy during this time.
Prior to the RPG farming, the southwest region experienced a period of severe
environmental change during the 1960s and 1980s because of the construction of
embankments and polders that caused permanent waterlogging and increased saline
intrusion. As a result, farmers were not able to produce any agricultural crops (Kendrick
1994). After the introduction of RPG farming system, the cropping patterns have
changed. Now the farmers are producing prawn and modern varieties of paddy in the
RPG farming system throughout the year.
*
Associate Professor, Department of Economics, East West University, Dhaka, Bangladesh.
Email address: bkbarmon@yahoo.com
Asia-Pacific Journal of Rural Development
Vol. XXIII, No. 1, July 2013
60
There are a few studies that focus on the impacts of RPG farming on labour demand
(Barmon et al. 2004) and household income (Barmon et al. 2004a; 2004b), and the
impact of shrimp gher farming on the environment (Asaduzamman et al. 1998; Nijera
Kori 1996; and Bhattacharya et al. 1999) and ecology (Datta 2001) in the coastal region
of Bangladesh. However, the technical efficiency (TE) and total factor productivity (TFP)
for MV boro paddy production between RPG and YRMV paddy farming has not been
analysed explicitly. Therefore, the present study estimates the TE and TFP of MV boro
paddy under RPG farming and MV boro and aman paddy under year-round modern
variety (YRMV) paddy farming in Bangladesh. The present study also estimates
inefficiency effects of MV boro paddy and aman production under RPG and YRMV
paddy farming system.
Crop Calendar of the Study Villages
The crop calendar of the study villages is delineated in Figure 1. Prawn and carp fishes
are the main output of rice-prawn gher (RPG) farming system. Along with prawn and
fishes, farmers cultivate MV boro paddy on the mid field and vegetables on the dikes of
the gher mainly for home consumption. The production period of prawn and fish starts
from May/June to December/January, MV boro paddy from the end of January to end of
April and vegetable throughout the year (Barmon et al. 2008).
Farmers cultivate MV boro and aman paddy under YRMV paddy farming throughout the
year in Chanchra village of Jessore district. MV boro paddy is produced from January to
April followed by local variety aman paddy during July to December (Barmon et al. 2008).
Methodology of the Study
Farm Survey and Data Collection
To estimate the TE and TFP of MV boro paddy and aman paddy, two contrasting villages
were selected (Fig. 2). RPG farming system is followed in Bilpabla in Khulna and YRMV
paddy farming is common in Chanchra village in Jessore district. The Bilpabla village was
selected specifically because the people have vast experience of RPG farming system like
Figure 1. Cropping calendar of the study villages
Jan Feb Mar April May June July Aug Sep Oct Nov Dec
RPG Farming:
Prawn
Fish
MV boro paddy
Vegetables
YRMV paddy farming
MV aman paddy
MV boro paddy
Source: Field survey 2010.
Notes: indicates the period up until the sowing paddy, and releasing of prawn and fish is carried out.
indicates harvesting time starts.
Crops
Months
Barmon
61
other parts of Khulna district and they directly or indirectly depend on various gher-
farming activities for their daily livelihood. On the other hand, Chanchra village located in
Jessore district was selected because the farmers cultivate MV boro and aman paddy
throughout the year. Moreover, Jessore district is adjacent to Khulna district. 90 RPG
farmers and 100 YRMV paddy farmers were randomly selected. The farm survey was
carried out during the month of October 2010 based on the agricultural cropping year 2009.
India
M
y
a
n
m
a
r

Figure 2. Study areas
Rajshahi
India
India
Sylhet
Bay of Bengal
Bilpabla village
Khulna
Farm survey areas:
India
Dhaka
C
h
i
t
t
a
g
o
n
g
Jessore
Bagerhat
Bilpabla village –Rice-prawn gher (RPG) farming
First introduction place of rice-prawn gher farming
Chanchra village- MV boro and aman paddy farming
Chanchra village
Technical Efficiency and Total Factor...
62
Variables Measurement
Farm land
Farmland is the main input for any agricultural crop production. The farmland input was
measured in terms of hectare. As usual, about 60% land of gher plot is used for MV boro
paddy production under RPG farming system and 100% of farm land is used for MV
boro and aman paddy production under YRMV paddy farming.
Human labour
Human labour includes both male and female labour used in MV boro paddy production
in a crop calendar year. Two types of human labour is used in MV boro paddy
production- hired and family labour. The labour input was calculated in terms of work
hours of male and female labour employed for different farm operations. In this study,
labour was measured in terms of adult man-days of eight hours. The measurements of
hired and family labour are as follows:
Hired labour - The existing wage rate of hired labour both for male and female was
considered in MV paddy production in RPG farming of Bilpabla village and YRMV boro
and aman paddy farming of Chanchra village. As the two farming systems were different
in terms of management as well as located in different places, the wage rate was different.
The wage rate both for hired male and female was higher in MV paddy production under
RPG farming system than YRMV paddy farming system.
Family labour - In both villages the family supplies male and female labour for the
various activities of paddy production. However, the family members were not engaged
in full time like other hired labours. Moreover, the family labour works in their paddy
fields on part-time basis. Sometimes, they work only 2-3 hours a day for farm operations.
In addition, sometimes, the efficiency of family labour's work is equal to that of hired
labour. The difference in the efficiency of labour has been taken into account by
converting family labour into hired adult man-days. The opportunity cost of family
labour is converted into male labour based on the market price of daily wage of male and
female labour in 2007-08. The opportunity cost of family male and female varied from
Tk. 80-110, 50-80, 60-80, 40-60 and Tk. 60-90, 40-60, for MV boro paddy production
under RGP farming, MV boro and aman for YRMV paddy farming systems, respectively.
Other inputs
The other main inputs such as chemical fertiliser, irrigation, pesticides and seedling costs
were considered according to the existing market price in 2008-09 both for RPG and
YRMV paddy farming.
Output variable
The main output of MV paddy farming was paddy grain considered in terms of volume
(kg) both for RPG and YRMV paddy farming.
Barmon
63
Summary Statistics of Inputs and Output of Production Frontier Models
The descriptive statistics of value of the key variables in the production frontier function
(technical efficiency) and inefficiency models are presented in Table 1. The input and
output data were obtained on a per farm basis in the farm survey. After collecting data,
the inputs and output data were converted into per hectare basis to estimate the TE of MV
boro paddy and aman paddy under RPG and YRMV paddy farming. The average yield of
MV boro paddy under RPG paddy farming was 5,236 kg and it varies between 4,609 kg
to 5,926kg. On the other hand, the average yields of per ha MV boro paddy and aman
paddy under YRMV paddy farming was 4,790 kg and 4,029 kg, respectively, which
deviated from 329 kg and 380 kg. Thus, the average yield of MV boro paddy RPG
farming was higher than YRMV paddy farming mainly due to the introduction of new
variety of MV paddy.
The seedling cost (Tk. 1,743) per ha MV boro paddy production under RPG farming was
higher than MV boro paddy (Tk. 1,540) and aman paddy (Tk. 1,155) production under
YRMV paddy farming. The seedling cost per ha aman paddy production was relatively
lower because aman paddy is the secondary crops in YRMV paddy farming.
The land preparation cost of MV boro paddy (Tk. 2,209) and aman paddy (Tk. 2,068)
production under YRMV paddy farming was comparatively higher than MV boro paddy
(Tk. 1,208) production under RPG farming. The main reason is that after the prawn
harvesting in December-January months, the mid field of gher plot is clayed with
sufficient water for planting of MV boro paddy that was possible in YRMV paddy
farming. At least 2-3 ploughs are required for plantation of seedlings of MV boro and
aman paddy in YRMV paddy farming.
Irrigation and chemical fertilisers are main inputs for MV boro paddy production. The
irrigation cost (Tk. 5,439) and fertiliser cost (Tk. 5,795) of per ha MV boro paddy
production under YRMV were significantly higher than MV boro paddy production in
YRMV paddy farming mainly because of physical construction of RPG farming as well
as management system except for aman paddy in YRMV farming. Water for irrigation of
MV boro paddy production is available in canals of RPG farming during paddy
production (Barmon et al. 2008). The leftover feeds of prawn production and algae and
fungi in the bottom make the soil fertile for paddy production (Barmon et al. 2007). On
the other hand, aman paddy in YRMV paddy farming is mainly produced in rainy season
(June-October). During this time, the paddy field goes under water, as a result, no
irrigation and fertilisers were required. The farmers use irrigation in comparatively
upland farms and use chemical fertilisers as top dressing when required.
Pesticides cost is also an important input for MV boro paddy production. The pesticides
cost of per ha MV boro paddy production under YRMV paddy farming was not
significantly higher than RPG farming. However, the pesticides cost of per ha MV boro
paddy was lower than aman paddy production in YRMV paddy farming.
Summary Statistics of Effects of Inefficiency Models
In describing how the inefficiency effects in the stochastic frontier production function
vary across different farmers, the variables used are farm size, age of farmer, formal
Technical Efficiency and Total Factor...
64
education of farmer, family size, change in canal (dummy variable), weeding and
ploughing for MV boro paddy production in RPG. On the other hand, farm size, age of
farmer, formal education of farmer, and family size were considered for inclusion in the
inefficiency model for the inefficiency model for MV boro paddy and aman paddy in
YRMV paddy farming. Therefore, the summary statistics of variables in the inefficiency
models of MV boro paddy and aman paddy were the same in YRMV paddy farming
because MV boro and aman paddy are being produced in the same paddy field
throughout the year.

Particulars Measurement Mean Standard Dev. Minimum Maximum
Seedling (taka/ha) 1743.4 570.1 494 2963
Land preparation (taka/ha) 1204 407.1 494 2469
Irrigation (taka/ha) 1723.9 754.3 0 4321
Pesticides (taka/ha) 1615 2078 686 20576
Fertiliser (taka/ha) 1587 1067 138 6996
Labor (man-day/ha) 101.57 34.33 49 257
Output (kg/ha) 5236.5 326.6 4609 5926
Seedling (taka/ha) 1540.9 701.4 214 4489
Land preparation (taka/ha) 2209.4 305.9 723 2715
Irrigation (taka/ha) 5439 2902 3741 10475
Pesticides (taka/ha) 2039.5 394 1151 2993
Fertiliser (taka/ha) 5795 1792 1667 13281
Labor (man-day/ha) 135.18 28.97 76 215
Output (kg/ha) 4790.5 329 4190 5686
Seedling (taka/ha) 1155.4 546.1 211 2993
Land preparation (taka/ha) 2068.7 348 811 3029
Irrigation (taka/ha) 206.4 309 0 998
Pesticides (taka/ha) 1575.1 334.1 112 2432
Fertiliser (taka/ha) 2050.1 663.1 641 4489
Labor (man-day/ha) 4028.7 380.4 2514 5387
Output (kg/ha) 4028.7 380.4 2514 5387
Source: Field Survey 2010.
Note: Sample size of RPG and YRMV paddy farmers was 90 and 100, respectively.
MV Boro Paddy Production : (RPG Farming)
MV Boro Paddy Production : (YRMV Farming)
Aman Paddy Production : (YRMV Farming)
Table 1. Descriptive Statistics of Inputs and Output of MV Boro Paddy and Aman
Paddy Production Under RPG and YRMV Paddy Farming System
Barmon
65
The summary statistics of the variables that affects production frontier (inefficiency
models) are also presented in Table 2. The average farm size (about 0.63ha) of YRMV
paddy farming was higher than RPG farming (about 0.51 ha). The average age of the
sampled famers (about 46 years) in YRMV paddy farming was also higher than RPG
farming (about 41 years). However, the average formal education (years) of farmers in
RPG farmers was higher than YRMV paddy farming, although the family size was same
for farmers in both farming systems.
Analytical Techniques and Model Specifications
The basic stochastic frontier model was first proposed by Aigner, Lovell and Schmidt
(1977) and Mueesen and van den Broeck (1977) and applied these models in the analysis
of panel and cross-sectional data on producers. Following the researchers, Bauer (1990),
Battese (1992), Bravo-Ureta and Pinheiro (1993), Battese and Coelli (1992, 1995), Coelli
and Battese (1886), and Coelli (1995) have also used these models in various agricultural
production sectors. Some models have been proposed in which technical inefficiency
effects are incorporated with stochastic frontier production functions and some stochastic
frontier production function models are separated with technical inefficiency effects
(Khumbakar, Ghosh and McGuckin 1991; Huang and Liu 1994; Battese and Coelli 1995).
Technical Efficiency of MV Paddy Production under RPG Farming System
The present study estimates the stochastic production frontier for MV boro paddy
production under RPG farming, and MV boro paddy and aman paddy under YR paddy
farming. The stochastic frontier production function model for MV boro paddy under
RPG farming is defined by:
Particulars Measurement Mean Standard Dev. Minimum Maximum
Farm size (ha) 0.5098 0.4299 0.10 3.04
Age (Year) 41.23 14.13 20 76
Education (Year) 6.344 3.685 0 15
Family size (No.) 4.356 1.239 2 7
Change in canals Dummy 0.3444 0.4778 0 1
Weeding (No.) 1.0444 0.7631 0 3
Ploughing (No.) 1.0444 1 0 2
Farm size (ha) 0.6345 0.5322 0.13 3.07
Age (Year) 45.97 9.397 25 67
Education (Year) 4.79 4.736 0 16
Family size (No.) 4.3 0.9587 3 8
Source: Field survey 2010.
Note: Sample size of RPG and YRMV paddy farmers was 90 and 100, respectively.
Technical inefficiency effects: MV boro paddy production (RPG farming)
Technical inefficiency effects: MV boro and aman paddy production (YRMV farming)
Table 2. Summary Statistics of Variables in Inefficiency Models of MV Boro Paddy
and Aman Paddy Production under RPG and YRMV Farming System
Technical Efficiency and Total Factor...
.............................................................. (1)
66
Where the subscript i indicates the ith farmer in the sample ( i= 1, 2,………90)
ln represents the natural logarithm (i.e., logarithm to base e)
Y
i
= Output MV boro paddy (kg/ha)
X
1i
= Land preparation cost (tk/ha)
X
2i
= Seedling cost (tk/ha)
X
3i
= Irrigation cost (tk/ha)
X
4i
= Pesticides cost (tk/ha)
X
5i
= Chemical fertiliser cost (tk/ha)
X
6i
= Labour cost (man-day; which is equal to 8 working hour per day)
Where,
Z
1
= Farm size (ha),
Z
2
= Age of the farmer (year),
Z
3
= Education of head of the farm household (year),
Z
4
= Family size (number),
Z
5
= Weeding (number of weeding during the production period),
D = Dummy variable (dummy, 1 if the farmer change position of canals after few years,
0 otherwise) used as explanatory variables.
The model for the technical inefficiency effects, defined by equation (2), denotes that the
technical inefficiency effects in the stochastic frontier (1) are a function of the farm size,
age of the farmer, formal education of farmers, family size, weeding, and dummy
variable (dummy, 1 if the farmer change position of canals after few years, 0 otherwise).
Technical Efficiency of MV Paddy Production under YRMV Farming System
The farmers in YRMV farming system use same types of inputs that the farmers in RPG
farming used to produce MV boro paddy. As a result, the TE models of MV boro paddy
and aman paddy are same to the efficiency model of MV boro paddy in RPG farming
system. However, the inefficiency effects of MV boro paddy and aman paddy production
are not the same like MV boro paddy production in RPG farming. The technical
inefficiency model, is defined by:
Barmon
67
The model for the technical inefficiency effects, defined by equation (2), denotes that the
technical inefficiency effects in the stochastic frontier (1) are a function of the farm size,
age of the farmer, formal education of farmers and family size.
Farm size (Z
1
) is an indicator of wealth of farmers that positively affect the crop yield as
well as technical inefficiency (Polseon and Spencer 1991; Ransom et al. 2003). A
farmer's age (Z
2
) can either generate or erode confidence in crop production. In other
words, with more experience, a farmer can become more or less risk-averse when making
decisions regarding input use in MV paddy production. Some studies found that younger
farmers are more informative about farm production and they easily bear production risk
(Kedebe et al. 1990; Polseon and Spencer 1991). The contradictory results were also
found (Adesina et al. 1995; Ransom et al. 2003). Thus, the expected sign on farmer's age
may be positive or negative in the empirical model. Education increases farmers' ability
and knowledge about crop production. An educated farmer is more informative and bears
all types of production risk. Therefore, the expected sign on education (Z
3
) in the
empirical model is positive.
Large family size (Z
4
) or households are able to provide the necessary labour for timely
land preparation, weeding, and harvesting. Moreover, the family labourers easily involve
in spraying insecticide, topdressing of fertiliser and irrigation activities that affects the
paddy production yield. Thus it is hypothesised that family size (Z
4
) has positive affect
on TE. Weeding (Z
5
) is also important for high paddy yield. In RPG farming system,
some farmers do not weed the paddy field at all or sometimes weed 1-2 times during the
whole MV boro paddy production cycle. To see the impact of the number of weeding
(Z
5
) on yield as well as TFP, weeding (Z
5
) is included in the empirical model and the
expected sign on weeding (Z
5
) is positive. Plough (Z
6
) is an important factor that affects
the MV boro paddy yield widely in RPG farming system. In RPG farming system, some
do not plough the mid field of gher during transplanting. If the farmer ploughs the mid
paddy field of gher before transplanting, then all algae and weeds go down under soils
that compose all and it is used as fertiliser. Therefore, the number of plough (Z
6
) is
included in the empirical model and the expected sign is positive.
A dummy variable (D) is included in the empirical model to evaluate the change in the
position of canals on paddy yield as well as TE. As mentioned earlier, under the physical
construction of RPG farming, the mid paddy fields are surrounded by canals. Recently
some farmers are changing the position of canal for soil fertility for good prawn
Technical Efficiency and Total Factor...
production as well as paddy production. As usual, prawn like hard soils in water rather
than clay soils because clay soils create many unhygienic materials as well as gases. The
farmers believe that these unhygienic materials and gases hinder the growth of prawn or
sometimes create diseases for prawn. Even though the farmers clean and wash the canals
every year routinely, the old canals are not suitable for good prawn production. Due to this
belief, some farmers are changing canals after years of prawn production cycle. Therefore
it is hypothesised that the change in the position of canals has significant positive effects
on TE of MV boro paddy production in RPG farming system and are regression
coefficients in the empirical model.
The maximum-likelihood estimates of the parameters of the frontier model (1) and
inefficiency models (2) and (3) are simultaneously estimated by using the program,
FRONTIER Version 4.1 (Coelli 1994), which estimates the variance parameters in terms
of the parameterisation:
The TE of production of the ith farmer in the appropriate data set, given the level of his
inputs, is defined by
The TE of farmer lies between zero to one and is inversely related to the level of the
technical inefficiency effect.
The stochastic frontier output can be derived from the TE and observed output. In other
words, the stochastic frontier output is the ratio of observed output (Yi) to technical
efficiency (TEi) that can be expressed as
The yield gap is the difference between stochastic frontier output and observed output.
Therefore, the yield gap of paddy production is defined as
68

...............................(8)
*
i i
Y Y gap Yield - =
Barmon
69
Analytical Method of Total Factor Productivity (TFP)
Analysis of TFP measures the increase in total output which is not accounted for by increases
in total inputs. Total Factor Productivity (TFP) is the ratio of aggregate output to the aggregate
input. The TFP can be measured using the following formula
Where, i indicates MV boro, MV boro and aman paddy under RPG and YRMV paddy
farming, respectively.
Y indicates the aggregated output index per farm in terms of value and X indicates the
aggregated input index per farm in terms of value. The ideal Fisher quantity indexes were
used to aggregate inputs and output. As most agricultural enterprises have wide range of
inputs and outputs, the different types of inputs and outputs cannot be simply added. To
calculate TFP, it requires the means of wide range of inputs and output quantities adding
together into measures of total inputs and outputs. The index number theory is used to
overcome these problems. The present study used cross-sectional farm survey data of
both MV paddy production under RPG and YRMV paddy farming system. Baseline or
base year is needed to calculate TFP. As the present study used cross-sectional farm data
to calculate TFP of MV paddy production between two farming system, the arithmetic
mean of MV boro paddy production under RPG farming system was used as baseline.
Empirical Results
Estimation of Frontier Production Models
The estimates of the parameters of the production frontier are presented in Table 3. The
coefficients of the input variables in the production function are called elasticities of
mean with respect to the different inputs for the Cobb-Douglas model. It is evident from
the table that the elasticity of production frontier (best practice) with respect to seedling
cost for MV boro paddy under RPG and YRMV paddy farming were -0.66, and
respectively -0.16 and both were statistically significant at 1% level. These indicate that,
if the seedling cost was to be increased by one per cent, then the total production of MV
boro paddy is estimated to decrease by 0.66 per cent for RPG farming and 0.16 per cent
for YRMV farming, respectively. In other words, the farmers tended to plant too much
panicle, which resulted in overcrowding the plants that hamper the optimal production.
On the other hand, the elasticity of seedling cost of aman paddy production was only -
0.067 and it was not statistically significant.
The elasticities of land preparation costs for MV boro paddy under RPG farming and MV
boro and aman paddy under YRMV paddy farming were 0.52, 0.45 and 0.27 respectively,
those were statistically significant at 5% and 1% level. Thus, if the land preparation costs
were to increase by one per cent then the mean production of MV boro and aman paddy
is estimated to increase by 0.52, 0.45 and 0.27 per cent for best-practice paddy production
under RPG and YRMV paddy farming, respectively.

i
i
i
X
Y
TFP =
Technical Efficiency and Total Factor...
70
The elasticity of irrigation cost for MV boro paddy production under RPG farming was
0.63 (statistically significant at 10% level) and MV boro paddy and aman paddy were
0.54 (statistically significant at 5% level) and 0.15 for YRMV paddy farming,
respectively. As irrigation is the main input for MV paddy production, therefore,
irrigation has significant impacts on the best-practice of MV boro paddy production
under both types of farming. On the other hand, aman paddy is being produced in the
month of June-October (rainy season in Bangladesh). Usually, irrigation is not required to
produce aman paddy in a normal production environment in YRMV paddy farming.
Thus, irrigation has no significant impact on aman paddy production like MV boro paddy
production.
The elasticities of the cost of pesticides was estimated to be positive values and it was
0.35 (statistically significant at 10% level) for MV boro paddy in RPG farming and were
0.67 (statistically significant at 1% level) and 0.07, respectively, for MV boro and aman
paddy in YRMV paddy farming. This indicates that if the total cost of pesticides used
were to increase by one per cent, then the mean production of MV boro paddy is
estimated to increase by about 0.35 per cent in RPG farming and 0.67 per cent and 0.07
per cent, respectively, for MV boro paddy and aman paddy production in YRMV
paddy farming in best-practice production environment.
As mentioned earlier that chemical fertilisers is also an important input for MV paddy
production and it has significant impacts on best-practice MV paddy production. The
elasticity of fertiliser cost for MV boro paddy production under RPG farming was 0.17
(not statistically significant), and 0.45 (statistically significant at 1% level) and 0.08 for
MV boro paddy and aman paddy production under YRMV paddy farming, respectively.
This implies that if the amount of chemical fertilisers used is increased by one per cent
then the MV boro paddy production to increase by only 0.17 per cent in RPG farming,
and 0.45 per cent and 0.08 per cent for MV boro paddy and aman paddy production in
YRMV paddy farming. As leftover feeds of prawn production and algae and fungi that
grow on the bottom of the gher plot make land fertile, so fertiliser has no statistically
significant impact on MV boro paddy production in RPG farming. Similarly, aman paddy
is a rain-fed crop in YRMV farming, thus, fertiliser has no statistical significant impact
on best-practice paddy production.
The elasticities of labour for MV boro paddy was 0.24 for RPG farming and 0.65
(statistically significant at 1% level) and 0.13 for MV boro paddy and aman paddy,
respectively, in YRMV paddy farming. This implies that the labour input has also
significant positive impacts on paddy production in best-practice environment.

Barmon
71
Estimation of Technical Inefficiency Models
The maximum-likelihood estimates for the coefficients of the inefficiency models are
presented in Table 4. It appears from the table that the estimated coefficients for the age
of farmers in the inefficiency models are positive for both groups of farmers, which
indicate that the younger farmers are more technically efficient in paddy production than
the older farmers, irrespective of whether the farmers are in the RPG and YRMV paddy
farming. The coefficient of education is negative for both farmers (statistically significant
at 1% level), which indicates that farmers with greater years of formal schooling tend to
be more technically efficient both for the RPG and YRMV paddy farming. This implies
that the farmers with more formal education respond more readily to using the new
technology and produce closer to the frontier output. The coefficient of family size is
negative for the farmers in both the types of RPG and YRMV paddy farming. This
indicates that farmers with more family members are more technically efficient than
Table 3. Maximum Likelihood Estimates for Parameters of Cobb-Douglas Stochastic
Frontier Productions for MV Boro Paddy under RPG Farming and MV Boro
and Aman Paddy under YRMV Paddy Farming
Source: Field Survey 2010.
Notes: (i) Smaple size of RPG and YRMV paddy farmers is 90 and 100, respectively.
(ii) ***, ** and * indicate 1%, 5% and 10% level of significance, respectively.
(iii) The figures in parentheses indicate standard errors of the estimates.
(iv) Na indicates Not Applicable.
Technical Efficiency and Total Factor...
RPG farming
MV Boro paddy MV Boro paddy Aman paddy
Stochastic frontier
-4.76*** -2.39*** -10.23***
(0.67) (1.02) (2.24)
-0.66*** -0.16*** -0.067
(0.23) (0.08) (0.55)
0.52** 0.45** 0.27*
(0.29) (0.24) (0.15)
0.63* 0.54** 0.15
(0.27) (0.33) (0.38)
0.35* 0.67*** 0.07
(0.22) (0.26) (0.67)
0.17 0.45*** 0.08
(1.23) (0.18) (0.67)
0.24 0.65*** 0.13
(0.28) (0.32) (0.16)
Labor (lnX
6
)
Pesticides (lnX
4
)
Fertilizer (lnX
5
)
Constant
Seedling (lnX
1
)
Land preparation (lnX
2
)
Irrigation (lnX
3
)
Variables Paramerters
YRMV paddy farming
72
those with a small family. It is probable that the family supplied labour (both male and
female) ensures better care of the paddy fields than hired labours.
The coefficient of farm size is positive for MV boro paddy and aman paddy in RPG and
YRMV paddy farming, however, the coefficient is only statistically significant for MV
boro paddy production under YRMV paddy farming, which indicates that the farmers with
small farm size is more efficient than large farm size. The coefficient of weeding in MV
boro paddy production in YRMV paddy farming is negative and statistically significant at
1% level, which indicates that if the farmers weed paddy fields frequently, then the
producer would be expected to the frontier output. On the other hand, the frequent
weeding is not required to produce MV boro paddy in RPG mainly because of the farming
system and management, and aman is a rain-fed paddy in YRMV paddy farming.
Table 4. Maximum Likelihood Estimates for Parameters of Inefficiency Models of
Productions for MV Boro Paddy under RPG Farming and MV Boro and
Aman Paddy under YRMV Paddy Farming
Source: Field Survey 2010.
Barmon
73
The coefficient of change in canal is negative and statistically significant at 1% level,
which indicates that if the farmers change the canals of the gher plots, then the output of
MV boro paddy would be more efficient in RPG farming. The main reason is that the
change in canals makes the topsy-turvy of soil in the gher plots that makes the soil fertile
and consequently this system helps to produce paddy efficiently.
The y-parameter associated with the variance of the technical inefficiency effects in the
stochastic production frontiers are presented in Table 4 and these are 0.65, 0.89 and 0.86,
respectively, for MV boro paddy under RPG farming and MV boro and aman paddy under
YRMV paddy farming and all the coefficients are statistically significant at 1% level. These
results indicate that technical inefficiency effects are significant components of the total
variability of MV boro and aman paddy production in RPG and YRMV paddy farming.
Estimation of Yield Gap of Paddy Production
The mean frontier outputs, defined by equation are estimated for MV boro paddy and
aman paddy under RPG and YRMV paddy farming, using the corresponding stochastic
frontier models. The mean frontier output for MV boro paddy under RPG farming was
6,785 kg and MV boro paddy and aman paddy were 6134 kg and 4,879 kg respectively.
The estimation of average actual yield, expected yield, yield gap and per cent (%)
increase of paddy production of MV boro paddy and aman paddy production under RPG
and YRMV paddy farming are presented in Table 5. It is shown in Table 5 that both the
farmers in RPG and YRMV paddy farming have produced less about 28% of the
expected yield of MV boro paddy production. On the other hand, the farmers also have
produced less about 32% of the expected yield of aman paddy in YRMV paddy farming.
Thus it may be concluded that the farmers are not fully technically efficient in MV boro
paddy as well as aman paddy under the RPG and YRMV paddy farming.
Estimation of Technical Efficiency of Paddy Production
The TE of the sampled farmers for MV boro paddy and aman paddy production under
RPG and YRMV paddy farming are presented in Table 6. The table shows that the
predicted technical efficiencies for the farmers under RPG farming range from 0.60 to
0.98, with the mean TE estimated to be about 0.79. For the farmers under YRMV paddy
farming, the technical efficiencies ranged from 0.67 to 0.98, with the mean estimated to be
0.88 for MV boro paddy production, and the mean technical efficiencies for aman paddy
Table 5. Yield gap of MV Boro and Aman Paddy Production under RPG and YRMV
Paddy Farming
Actual yield Expected yield Yield gap
RPG farming
Boro paddy 5,236 6,786 1,550 29.6
YRMV farming
Boro paddy 4,790 6,134 1,344 28.05
Aman paddy 4,028 4,879 851 21.12
Source: Field Survey 2010.
(kg/ha)
Farming % increased
Technical Efficiency and Total Factor...
74
production estimated to be 0.73 that varies from 0.60 to 0.96 under YRMV paddy farming.
Thus it may be concluded that on an average, the farmers in YRMV paddy farming have
higher TE for MV boro paddy production than the farmers in RPG farming as well as the
counterpart of its aman paddy production.
Frequency Distribution of Technical Efficiency of Paddy Production
The frequency distribution of the predicted technical efficiencies of the farmers in RPG
and YRMV paddy farming are delineated in Figure 3. It is clear from the figure that the
distribution of technical efficiencies for farmers who produce MV boro paddy under
YRMV paddy farming is closely clustered near 1.0, indicating very high technical
efficiencies of the farmers in YRMV than RPG farming. However, the farmers who
produce MV boro paddy under RPG farming and aman paddy production under YRMV
paddy farming, the distribution has a much greater spread of values 0.60 to 0.98.
Estimation of Total Factor Productivity for Paddy Production
The analysis of TFP for MV boro and aman paddy production under RPG and YRMV
paddy farming system is presented in Table 5. The figures in the table show that on an
Particulars Mean Standard Deviation Minimum Maximum
MV boro paddy: 0.785 0.099 0.60 0.98
MV boro paddy: 0.8812 0.06572 0.67 0.98
Aman paddy 0.7312 0.08774 0.60 0.96
Source: Field Survey 2010.
Note: Sample size of RPG and YRMV paddy farmers was 90 and 100, respectively.
Table 6. Summary Statistics of Technical Efficiency (TE) of MV Boro and Aman
Paddy Production under RPG and YRMV Farming System
RPG farming
YRMV farming
Barmon
Figure 3. Frequency Distribution of Technical Effciencies of Paddy Production under
RPG and YRMV Paddy Farming
75
average, the mean TFP for MV boro paddy was 0.88 but widely varies from 0.33 to 1.71
and 0.73 ranges from 0.19 to 1.22, respectively, for RPG and YRMV paddy farming
system. The mean TFP for MV aman paddy was 0.78 that lies from 0.32 to 1.23 under
YRMV paddy farming. On an average, the TFP for MV boro paddy production under RPG
farming system is higher than YRMV paddy farming. The values of coefficient of variation
(CV) indicated that the TFP of MV paddy production widely varied within the farms
between RPG and YRMV paddy farming systems. The main reasons were that prawn is the
main output for RPG system and is produced for export to earn foreign currency, while MV
boro paddy is produced for own family consumption throughout the year. Moreover, MV
boro paddy is not a profitable enterprise like prawn. As a result, farmers in RPG farming
system, do not engage seriously in paddy production like prawn production. Similar
experiences were also found in YRMV paddy farming village. As paddy is not a profitable
enterprise, the farmers in YRMV paddy farming village engage in other farm activities like
fish culture throughout the year and produce paddy only for family home consumption.
Some rich farmers in terms of large farm size maintain the paddy enterprise with hired
labours. As a result, the TFP was positively related with farm size.
Conclusions and Policy Options
Rice-prawn Gher (RPG) farming system is an indigenous agricultural technology solely
developed by farmers since mid 1980s. Under RPG farming, farmers produce prawn,
carp fishes and MV boro paddy. On the other hand, under year-round modern variety
(YRMV) paddy farming, farmers cultivate MV boro and aman paddy throughout the
year. The study estimates stochastic frontier production function for farmers in RPG and
YRMV paddy farming for MV boro and aman paddy production. The findings of the
study indicate that on an average, the farmers in YRMV paddy farming have higher TE
for MV boro paddy production (ranged from 0.67 to 0.98, with the mean estimated to be
0.88) than the farmers in RPG farming for MV boro paddy production (range from 0.60
to 0.98, with the mean TE estimated to be about 0.79) as well as the counterpart of its
aman paddy production (average 0.73 that varies from 0.60 to 0.96).
Further, the results indicate that the technical inefficiencies of production of farmers are
significantly related to the various explanatory variables such as age of the farmer, formal
education of farmers, family size, and change in canal for RPG farming and farm size,
age, education, family size and weeding for YRMV paddy farming. If these relationships
are not accounted for in the frontier modeling then conclusions may be inappropriate
concerning the nature of the frontier production.

Table 7. Descriptive Statistics of Total Fator Productivity (TFP) for Paddy Production
Paddy Production Mean SD Minimum Maximum CV (%)
Boro (RPG farming) 0.880 0.334 0.315 1.711 38%
Boro (YRMV paddy farming) 0.730 0.185 0.344 1.215 25%
Aman (YRMV paddy farming) 0.776 0.222 0.320 1.233 29%
Source: Field survey 2010.
Note: SD and CV indicate standard deviation and co-efficient of variation, respectively.
Technical Efficiency and Total Factor...
76
The empirical results also show that both the farmers in RPG and YRMV paddy farming
have produced less than 28% of the expected yield of MV boro paddy production. On the
other hand, the farmers also have produced less, about 32% of the expected yield of aman
paddy in YRMV paddy farming
The total factor productivity for MV boro paddy production was higher in RPG farming
system compared to MV boro and aman paddy under YRMV paddy farming system. The
TFP varied widely within the farms between the two farming systems.
Therefore, it could be concluded that the results of this empirical analysis are an
indication of the means by which some productivity and efficiency gains can be achieved
both in the MV boro and aman paddy under RPG and YRMV paddy farming system in
Bangladesh.
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Barmon
79
Asia-Pacific Journal of Rural Development
Vol. XXIII, No. 1, July 2013
The Role of Forests in Food Security of
Sub-Saharan Africa in 21
st
Century
J. A. Soaga*
Abstract
This paper examines the role of forests in the food basket of sub-Saharan Africa (SSA) due to the
exploding population, inefficient resource utilisation and low levels of income. The index of economic
development expressed through income per head is low and could not be compared with any country
in the northern hemisphere. The problem is now further compounded with increasing rates of
deforestation and environmental degradation through the rising population that depends on the
forests. Available data indicated that SSA countries contributed to 7.1% of forest loss, followed by
Latin America- 7.0%, East Asia and the Pacific-1.6%. In fact, forest loss is highest in developing
countries with SSA countries in the forefront with excessive release of carbon dioxide contributing to
environmental degradation through increase in GHGs. Consequently, with global warming, it was
predicted that rice yields would fall by 2-5% and general cereal products would decrease by 9-12%.
The effect will be rising food prices and malnutrition. The world population is predicted to be over 8
billion by 2050 with West Africa recording 142% rise and mid-Africa 193%, leading to malnutrition
expressed as micronutrient deficiency, growth failure and impaired cognitive development in SSA
countries. The low production capacity of local agriculture requires a 60% rise in production capacity
to accommodate the rising population and this is not realisable with the current level of technology.
Therefore, forest foods would play a major role in assisting the local agriculture to provide food and
contribute to the food basket in developing countries. Therefor, failure to carry out proper
conservation of available forest resources in these countries will inevitably lead to the manifestation of
major economic catastrophes.
Introduction
Food is a basic necessity of life required by people all over the world. However, the
income elasticity of demand for food in Africa is elastic for balanced diets. Consequently,
increase in aggregate income for a country is regarded as an index of good income per
head which is translated into development especially if the aggregate income growth is
faster than the population. However, rising population and a shortage of natural resources
or inefficiency hinder development. Accordingly, Lipsey (1983) reported that growth in
per capital real income depends on the difference between growth rates of real national
income and of population. Therefore population control is critical to the development of
any country. However, if population is left to nature there will be famine, pestilence and
plague. IUCN (1992) reported that population growth in developing countries contributed
to agricultural stagnation relative to population size. Furthermore, developing countries
have been unable to adapt their traditional agricultural land-use and wood-use practices
fast enough to respond to the pressure of more people. Table 1 shows a profile on Nigeria
with malnutrition level of 27.3% and population under poverty of 66%.
*
Department of Forestry and Wildlife Management, Federal University of Agriculture, Abeokuta, Ogun State,
Nigeria. Email : saogaj@yahoo.com
Asia-Pacific Journal of Rural Development
Vol. XXIII, No. 1, July 2013
80
Accordingly, PRB (1990) noted that the present general 2.9% population growth rate in
Africa cannot be fed or accommodated by African economies that may not grow more
than 3 - 4% per annum. However, the percentage of food insecurity in third world
countries varies with Gabon recording the highest with 79% of the population not having
enough food.
The strong linkages between forest, trees, food security and the people cannot but be
appreciated. Striving to meet food requirement for healthy growth and a growing
population in developing countries have manifested into starvation and hunger. However,
the roles of forests in food security have not been properly documented. FAO (2005)
reported that forests play a critical role in sustaining the health of the environment by
mitigating climate change, conserving biological diversity, sustaining and enhancing land
productivity and providing low-cost and renewable energy. Despite the importance of
forests, the forest cover in sub-Sahara Africa has been diminishing steadily since the
1980s. FAO (2007) reported that 11.7% of total estimated African forestry spreading
across 649.9 million ha is located in West Africa which is declining steadily on an annual
basis. Thus, the rising population and declining forests threaten the survival base of man.
Accordingly, PRB (2003) observed that the population in developing countries would
treble by 2050 with the addition of over 80 million people annually. This condition
requires a 60% increase in production capacity of local agriculture, which may not be
realisable. Several in-country studies in developing countries established the fact that
population rises faster than food production capability of most agricultural systems all
over the world. PRB (2003) noted that global food production by 2010-2015 will
decrease with consequential food deficits in most SSA countries. Therefore, studies such
as FAO (1995), Johnson (1996) and Oyewole (2002) have established that malnutrition as
a food security problem is caused mostly by food inadequacy and loss due to spoilage in
most countries of the world. Over 15 years ago, FAO (2005) estimated that about 54%
child mortality was associated with malnutrition due to low energy and nutrient density
and low bioavailability of nutrients, yet even now, the situation remains the same.
Therefore, there have never been food surpluses or more appropriately, there was non-
existence of food most times in SSA countries. In fact, the situation in SSA countries
Population 126.9 million
Population growth 2.4% annually
Life expectancy at birth 46.8 years
Fertility rate 5.3 children
Mortality rate, infants (per 1000 / mi birth) 84.4 children
Mortality rate, under 5 years (per 1000 births) 153 children
Malnutrition (% children under 5 years) 27.3%
Population under poverty 66%
Maternal mortality (1 per 10.000 birth) 10%
Table 1: Profile on Nigeria with Malnutrition Level
Source: World Bank 2002.
Soaga
81
would worsen with the impact of global warming. UNPF (1998) reported that climatic
changes complicate the food picture (deficit) considerably. Overall temperature rises with
patterns of rainfall distorted, crop diseases increase across regions and vary according to
severity. Several studies have indicated a future rise in carbon (iv) oxide level, which may
almost double by the middle of 21
st
century with major effect on crops (Adedire 2002;
Falade et al. 2010; Djoghlaf and Meka 2010). It was estimated that rice yields would fall
by 2 - 5% or below, maize yields by 15 - 24% and general cereals product could drop by
9 - 12%. The effect would be rising food prices, while the population would be unable to
afford food staples. The low income population of over 1.3 billion people in developing
countries living on less than a dollar per day (World Bank 2009a) would suffer due to the
inability to afford food staples. Consequently, climate change would negatively impact
agriculture by reducing the period of rainy season while increasing dry season period
(Batiano and Buekert 2001).
Accordingly, FAO (1995) estimated that by year 2060, the number of people at risk of
hunger in developing countries would be 640 million. Climate change would push the
number to 823 million and this would mean more dependence on other sources of food
apart from agriculture. Consequently, FAO (2005) noted that in Africa, an estimated 15
million people were expected to go hungry in drought affected countries without food
aid. Therefore, the significance of this paper is to discuss the relevance of forest foods in
food security in 21
st
century in sub Saharan Africa.
Local Forest Enterprises
A wide range of local forest enterprises were identified by FAO (1999). These enterprises
could be broadly classified into two major groups: (a) gathering and collection and (b)
craft activities. Both gathering and craft activities contribute to the food basket. However,
the characteristics of local forest enterprises have not enabled the society to identify their
contribution to food security. These enterprises are characterised by small size, low
capital intensity, limited managerial skills of practitioners and rural location bias among
others. Despite the short-comings, a vast range of food items were gathered and collected
or processed.
Local forest enterprises have developed and thrived on the diversity of forest resources
across the globe. Ola-Adams (1992) stated that the forest ecosystem provides sustainable
resources of soil, wood, animals, fruit and other commodities as well as clean, fresh and
unpolluted water and air. The richness of the forest flora is not limited to its trees, but
comprises of many thousands of species belonging to hundreds of genera. Various forest
activities at the local level, from gathering to processing, depend on the potential resource
base of the forest (Okojie 1997; Spore 1992; Nwoboshi 1983). There is good reason then
to expect that the value of certain diverse resources will systematically increase over time.
Gathering activities is often seasonally undertaken during agricultural slack period when
there is an acute demand for cash with labour availability or at periods when particular
products come into fruition (Wiggins and Holt 2000). Craft activities requiring
processing are undertaken almost throughout the year along with farming activities.
The Role of Forests in...
82
Gathering, collection and craft products have diverse uses. Some are consumed at
subsistence level and excess is sold in the market. Falconer (1990) showed that collection
activities could be supplementary but can at the margin be an important benefit to the
poor. Wiggins and Holt (2000) observed that rising demand for products of local forest
enterprises at commercial level in urban markets is recently occurring. Consequently,
gathered forest products include leaves, fruits and mushrooms among others. Craft items
include baskets, tool handles and nut processing among other things. Gathered, collected
and craft items are non-timber or non-wood component products of the forest that
contribute to the socio-economic importance of the people.
Nutritional problems further encouraged the growth of local forest enterprises to supply
varying forest foods for nutritional balance. The importance of forest foods was
highlighted by Denton and Ojeifo (1993) and Powell et al. (2011) which reported on the
contribution of forest plant foods to household nutrition and as dietary supplement in
Nigeria as well as an important safety net in times of food insecurity.
Forests Food
Food is a required input (energy and nutrition) for people all over the world. Food
materials therefore enhance livelihoods and contribute to food security when all people at
all times have physical and economic access to sufficient, safe and nutritious food to
meet dietary needs and food preferences for an active and healthy life (World Food
Summit, 1996). Forest foods are consumed by the poorest majority for their nutritional
value and as supplement to cultivated food. FAO (1999) categorised food items extracted
from the forest as illustrated below.
Source: FAO 1999. Feeding the Cities. Paper to the 101st Inter Parliamentary Conference, Brussels.
Falconer (1990) reported that tree products from forests and agroforests were important
in times of food insecurity. According to Poulsen (1982), forest food goes beyond tree
products, they include insects, bushmeat, beverages, fish, food from mangrove
vegetation, foliage, fruits, gum (where consumed as food), honey, vegetables from forest
floor including rhizomes. Therefore, there are varieties in forest foods. In Nigeria,
Forest Foods
Wine from palms
Toddy
Wrapping food
Plates
Honey
Nuts
Leafy
vegetables
Fruits
Seeds
Spices
Flavourings
Bushmeat
Palm oils
Beverages
Leaves
Soaga
83
Adekunle (1998) reported on the consumption of forest foods in Area J4 (forest reserve)
in Ogun State. Forest foods are consumed daily to enhance the flavor of staples such as
wild leaves and snack foods. Forest foods' consumption increases during hunger season
when staple food supplies are poor. This is mostly before harvest time. For example
Triumfetta rhomboidea leaves are consumed in Cameroon as emergency foods in an
average of 19 out of 20 meals. The fruits of Pachylobus edulis is common in sauces
which accompany main meals (Denton and Ojeifor 1993). Treculia Africana fruit is
consumed as a staple food in Nigeria, while the fruits of Pentaclethra macrophylla and
Dacryodes edulis are used as food supplements. The processed fruits of Irvingia
gabonensis, Mucuna sloanei and Parkia biglobosa are used as sauce and condiments and
the leaves of Pterocarpus spp, Myrianthus arboreus, Vernonia amygdalina, Gnetum spp
and Ceiba pentandra are consumed as vegetables (Okafor 1993a). Powell et al. (2011)
reported that individuals consuming forest foods in Tanzania had higher dietary diversity
and also had more nutrient dense diets. These statistics pointed to an aspect of resource
evaluation for forest foods and food security. Therefore, neither large quantity of output
nor high cash value is necessarily required for forest foods to qualify as important for the
well-being of the people. The human nutrition aspect of forest foods showed their
significance in resource evaluation rather than purely trade statistics.
The significance of local forest enterprises is to promote the extraction and create market
niches for disposal of forest foods. With increasing recognition of local forest enterprises,
more markets are created and more products commercialised, thereby reflecting the
socio-economic importance of the products. Forest foods achieve a nearly perfect balance
in nutrition when consumed by the populace.
Forestry and Food Demand
Forest activities, indirectly regarded as non-farm activities, have assumed importance in
the rural economy of developing countries such as Nigeria and are of growing
significance to rural landless poor and the ever rising population. The diverse forest
resources produce marketable products, particularly hunted animals (duiker, pangolin,
monkey, tapir, deer, primates and grass-cutter) and gathered foods (fruits and nuts) and
other commodities for household consumption. Various studies have established the fact
that food is in short supply in most developing countries (Shane 1989; ACC/SN 1996;
Powell et al. 2011). The World food summit (1996) noted that 170 million people are
underweight and 208 million children stunted. Accordingly, Sherman and Hungate (1979)
reported that food was at no time enough to feed the world's rising population.
Furthermore, the world food budget indicated that 2/3 of the world population would live
in developing countries with nutritionally inadequate diets, while 1/3 people would live
in developed countries with good diets. Yet developing countries are faced with famine,
which indicates non-existence of food most of the time. Shane (1989) observed over
twenty years ago that in poor countries such as Chad, Kenya, and Togo and other
developing countries, there is major food production shortfalls. Countries such as
Uganda, Nepal, Congo, Ethiopia, Bangladesh, Peru, and Sierra-Leone have serious food
deficits and are dependent on food aid. These countries are classified as food crisis
countries where the rate of food demand growth outstripped the productive capabilities of
The Role of Forests in...
84
domestic agriculture. Van Crowder et al. (1998) identified the factors limiting food
production as degradation of land, water, energy and biological resources. The effect of
these factors continue unabated with over 800 million people declared chronically
hungry. Table 2 below shows forest activities and food aided in production. Ola-Adams
(1992) reported on the nutrient composition of edible plants extracted in Nigeria from
forest reserve for nutritional balance. This study indicated the significance and relevance
of forest foods to the populace in modern day society. Population pressure and food
requirement therefore place a high demand on forest foods through gathering, collection
and craft work and thus contribute to food security.
Table 2: Forest Activities and Food Aided in Production
Source: FAO 1999. *Soaga 2001.
Other sources have equally confirmed the relevance of forest foods in 21
st
century in
SSA and other tropical countries (Arnolds 1995; Adekunle 1998 ; Nasi et al. 2011).
ACC/SN (1996), maintained that reducing malnutrition is an important issue that does
not require political will but political choice in a democratic world to ensure good
nutrition and health of the population. This is in line with the Copenhagen Declaration of
Social Development in 1995 to provide food for poverty stricken people in Africa, Asia
and Latin America in particular. This is because nutrition affects poverty and malnutrition
has damaging physical and mental consequences for people, households and
communities. It reduces individual productivity and child cognitive development.
Malnutrition thus hinders the economic and human development of a nation as currently
witnessed in developing countries. Therefore, forest foods have an important role to play
in reducing malnutrition and the risk of chronic diseases in SSA countries.
World Bank (2009a) reported that almost one billion people worldwide are trapped in
abject poverty- a condition where life is characterised by malnutrition, illiteracy, disease,
high infant mortality and low life expectancy-is beneath any reasonable definition of
human decency. Various studies have indicated child malnutrition as an index of poverty
and underfeeding in developing countries (FAO 1996 and WD/ISDR 2002).
Forest Activities Food Type
Palm wine tapping Beverage drink
Firewood collection Local bakery and fish smoking
Charcoal making Snacks such as maize and yam roasting
Basket weaving *Agricultural food transportation and cow milk processing (Yoruba: Wara), fish
harvest (cropping)
Cane weaving *Food items movement and Cow milk processing (Yoruba: Wara) Fish harvest
(cropping)
Gathering Nuts, seeds, fruits, leaves
Palm kernel crushing Palm kernel oil for cooking and medicinal use
Local gin processing Beverage drink
Traditional medicine *Food additives & condiments
Canoe production *Protein-fish harvesting (cropping)
Spice collection *Food spices
Honey collection *Honey
Soaga
85
The importance of the above statement is the fact that domestic agriculture could not
meet the food requirement of the rising population in quantity and variety for a good food
mix. With an estimated annual population growth rate of 3.2% in Nigeria, Nepal - 2.5%,
Pakistan - 2.9% and population explosion in other developing countries with per capital
food production of 0.5% (World Bank 2009a) there is no doubt that a large proportion of
the population would remain under-fed except there are supplements such as food aid or
more reliably, forest foods. However, with proper forest conservation forest food provides
both quantity and quality. Fungi in the forests provide amino acids, fruits provide
vitamins and micronutrients, animals provide fat and oils and a host of other minerals
necessary for physical wellbeing.
Forests in Food Security
For decades, only a few conservation efforts were adopted to reverse the high rate of
deforestation in tropical forest areas and consequently, not much was achieved. The
tropical forest formation represents the area in which SSA countries are located.
Oguntade and Awolala (2010) reported that tens of millions of tropical forests are
destroyed annually. These forests harbour more species than all other ecosystems
combined. Tropical forests provide livelihoods for millions of the world's poorest and
marginalised people. Apart from food from the forest, the medicinal value of the forest
could not be over-emphasised; there are drugs for cancer, malaria, glaucoma, Leukemia
and other diseases. Despite the significance of tropical forests, they are vanishing faster
than any other natural system. FAO (2006) and CIA (2005) reported that after the 1992
Earth Summit in Rio over 500 million acres of the forest have been cleared or burned. In
view of this, hunger and starvation manifested strongly in the poor countries due to
decreasing forest resources and a rising population with inadequate food. Therefore, forest
conservation should be a major focus in developing countries. The government and the
people must work towards ensuring a continuous supply of goods and services from the
forest. However, failure to recognise the major value of forest foods in the food basket in
developing countries would mean increasing hunger and starvation with poverty through
increasing deforestation. Perhaps, it could be stated that the 18
th
century Malthusian
hypothesis may grow beyond 21
st
century in developing countries if the current rate of
forest cover loss is sustained. FAO (2003a) estimated Africa's total forest cover to be
649.9 million ha representing 21.8% of total land area and 16.8% of global forest cover.
In sub-Sahara Africa alone about 479,808 ha (7.1% of world forest) was lost between
1990 and 2005, it was the fastest rate of forest loss in the world. This was followed by
Latin America (7.0%) and East Asia and the Pacific (1.6%) (World Bank,2009a).
Conclusion
The current high rate of deforestation was never considered as a factor capable of
promoting hunger and starvation in developing countries. However, rising population
with shortages of natural resources on a broader scale eventually became a major factor.
In the 21
st
century, hunger and starvation has manifested heavily in developing countries
especially in countries located within tropical forest formation that had the earlier notion
that the forest was inexhaustible. Present conditions of exploding population, combined
with high rates of deforestation could further worsen the poverty level of the population.
The Role of Forests in...
86
Recommendations to improve the welfare of the people and ensure a healthy environment
should therefore include the need to improve on the statistical data on productivity, and
the uses and consumption of forest foods in developing countries. This will ensure an
understanding of the demand for forest foods and the potential of adequate supply
through better management. Also, marketing channels for forest foods must be properly
developed while the cultivation of forest foods outside forest reserves under agro-
forestry, especially in rural communities, must be promoted. Furthermore, local farmers
should be encouraged to participate extensively in forest foods production through
various forms of land use practices with research support in terms of abundance,
distribution, ecology, propagation and reproduction. Finally, rural populace and other
forest dependent communities should be encouraged to be stake holders in conservation
efforts for sustainable forest exploitation.
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Soaga
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Asia-Pacific Journal of Rural Development
Vol. XXIII, No. 1, July 2013
Assessment of the Effectiveness of Lake Chad Research
Institute Adopted Villages Scheme in the Dissemination of
Improved Farm Technologies in Borno State, Nigeria
S. B. Mustapha, M.M. Gwary, H.S. Nuhu, and P.A. Samaila*
Abstract
This study assessed the effectiveness of "Adopted Villages Scheme" as an approach to improved
technology dissemination among beneficiaries in Borno State, Nigeria. Structured interview schedules
were used to obtain information from all the 30 participants from Dalori and Dusuman, which are
adopted villages of Lake Chad Research Institute (LCRI) in Maiduguri. The data collected were
analysed using descriptive (frequencies percentages and mean scores) and inferential statistics (chi-
square analysis). The results showed that there was high awareness (more than 80%) of improved
technologies by respondents. Findings also revealed that most (70%) of the respondents became aware
of improved farm technologies on monthly basis. The level of participation of respondents in the trial
of improved technologies being disseminated was high in both the high yielding and early maturing
millet varieties. Result and method demonstration was the most effective techniques used in
disseminating improved farm technologies to the respondents. The result equally indicated that
result/method demonstration and farmer field school were statistically significant. Lack of finance was
the major problem affecting the effectiveness of the scheme. It was recommended that loan
disbursement under the scheme and basic inputs such as fertiliser, chemicals and implements, be
made adequate and at subsidised rates to the beneficiaries.
Introduction
Information dissemination is a critical tool for promoting national development. In view
of this the Federal Government of Nigeria designed several institutions and programmes
to implement policies geared towards efficient and effective information dissemination in
the country (Adekunle et al. 2002). Among such are the Agricultural Extension, Research
and Liaison Services (AERLS), the extension services of the Agricultural Development
Projects (ADPs), Ministries of Agriculture at both State and Federal levels, Media Forum
for Agriculture, Cooperative Extension Centres (CEC) of Universities and the public
enlightenment units of the Agricultural Research Institutes, to ensure that farmers become
aware and adopt agricultural innovations relevant to their situations (Ozowa 1995). Over
the years, deliberate yet ineffective efforts have been made by these institutions to bring
about agricultural development without much to show for it (Ozowa 1995). The failure
can be attributed to the transformation approach to agricultural information
dissemination. A major constraint to agricultural information dissemination is the
inadequacy of existing programmes- some of these programmes are conceived without
well thought out plans and are prepared in a hurry without the farmers whose attitudes are
to be changed making any inputs (Ozowa 1995).
*
Department of Agricultural Economics andExtension Services, University of Maiduguri, Nigeria
E-mail: shettimabulama@yahoo.com, Mobile Phone: 07060573884
Asia-Pacific Journal of Rural Development
Vol. XXIII, No. 1, July 2013
90
One of the thrusts of extension is to convey farm information and research findings to
resource-poor farmers (Ani 2007). The spread of farm information and subsequent
adoption by farmers is the primary responsibility of extension service all over the world.
However, agricultural extension systems are poorly managed and lack essential resources
to adequately take research findings to rural farmers (Babaleye 2000). To-date, efforts by
extension systems to transfer technologies to farmers have not yielded tangible results
(Babaleye 2000). Thus, farmers seldom feel the impact of agricultural innovations either
because they have no access to such vital information or because it is poorly
disseminated.
The primary responsibility of Lake Chad Research Institute (LCRI), like other research
institutes in the country, is the development of improved technologies in their mandate
areas and crops to solve the major production constraints faced by farmers (LCRI 2009).
The LCRI is located in Maiduguri, the Borno State Capital in the North - East Geological
zone of Nigeria. The institute's mandate includes, genetic improvement of millet, wheat,
barley, and sorghum as well as identifying the problem of all agricultural extension
services. LCRI actively collaborates with the Faculty of Agriculture, University of
Maiduguri and Institute of Agricultural Research (IAR) Ahmadu Bello University (ABU)
Zaria in executing its mandate.
A major challenge to addressing food security problem in Nigeria is the inaccessibility of
small holder farmers to improved technologies emanating from the National Agricultural
Research Institutes (NARIs), (Gwary 2008). To centre these challenges and facilitate the
dissemination of improved technologies, in 1996 under the World Bank Assisted
Programme of National Agricultural Research Project (NARP), the "Adopted Villages
Scheme" was introduced to the National Agricultural Research Institutes (NARIs) in
Nigeria and the Agricultural Research Council of Nigeria (ARCN 2008). Most research
institutes identified the villages during the NARP era but subsequently after NARP when
the funds dwindled, they were unable to carry out activities in these adopted villages. The
ARCN in 2008 issued a directive to the NARIs to re-implement the Adopted Villages
Scheme with a renewed vigour to help in the early evaluation and dissemination of
improved technologies emanating from the research institutes (IAR&T, 2009). Each
Institute/College of Agriculture is expected to identify two communities/schools not more
than twenty kilometers away from its official location within their mandate areas.
Furthermore, the institute will select farmers where the farms or fields will be used as
'show room' for the communities of the impact of the technologies they are promoting.
The selected communities are to help in the early evaluation and dissemination of the
technologies generated by a particular research institute in its mandate crops.
In line with the directive, the LCRI identified and established the "Adopted Villages
Scheme" in two locations in Dalori and Dusuman communities in Jere and Konduga local
government area (LGA) respectively as a new approach in the dissemination of improved
technologies to farmers. The objectives of establishment and management of the adopted
villages are:
Mustapha et al.
91
· Provision of opportunity for community entry and confidence building;
· Facilitation activities;
· Training and empowerment activities;
· Development activities;
· Promotional and extension activities; and
· Establishment and management of outreach centres/secondary schools.
However, since the establishment of the adopted villages scheme in Borno State, there
has not been any empirical study into the effectiveness of the "Adopted Village Scheme"
in dissemination of improved farm technologies among the beneficiaries. This study was
therefore designed to provide empirical information on the perceived effectiveness of the
Adopted Villages Scheme in dissemination of improved farm technologies among
beneficiaries in Borno State.
Objectives of the Study
The broad objective of the study was to assess the effectiveness of the 'Adopted Villages
Scheme' in dissemination of improved farm technologies among beneficiaries in Borno
State. The specific objectives were to:
i. Determine the level of awareness of improved farm technologies among the scheme
beneficiaries;
ii. Determine the beneficiaries' level of participation in the trial of improved technologies
being disseminated;
iii. Assess the perceived level of effectiveness of the methods of dissemination of
improved farm technologies by the beneficiaries; and
iv. Ascertain the problems affecting the effective performance of the Adopted Villages
Scheme.
Hypotheses of the Study
There were no significant differences between extension methods and their level of
effectiveness of the "Adoption Villages Scheme" among beneficiaries in the study area.
Methodology
The study was conducted in Dalori and Dusuman Villages of Konduga and Jere Local
Government Areas respectively of Borno State. Both Konduga and Jere LGAs share
boundaries with Maiduguri, the state capital. The study area has a land area of 7,850 km
2

(Borno State Ministry of Land and Survey 2006). The area is located on latitude 11
0
15
1

North and longitude 15
0
East of the equator (Adesina 2008). The area has a population of
367,768 people (NPC 2006).
Both Dalori and Dusuman Villages are within a 20 km radius from the Borno state
capital, Maiduguri (LCRI 2009). Both villages are within the mandate area of LCRI and
Assessment of the Effectiveness...
92
are also into mass production of the mandate commodity of the research institute, this
qualifies them to be adopted villages of LCRI in line with the directive of the Agricultural
Research Council of Nigeria (ARCN 2008).
Primary data were mainly used for the study. The primary data were collected using a
structured interview schedule. This was because most of the respondents cannot read or
write. A trained enumerator was used for this purpose who understands the local language
of the people. Secondary information was collected from reports and records of textbooks,
LCRI and through oral discussions with the staff of the Extension Department, LCRI.
The sample frames for the study were the beneficiaries of the 'Adopted Villages Scheme'
in both Dalori and Dusuman villages of Konduga and Jere LGAs respectively. The
sample frame obtained from LCRI was used as the sample size. All the 30 beneficiaries
of the Adopted Villages Scheme in both villages were intentionally selected for the study.
The list of the beneficiaries was obtained from Lake Chad Research Institute, Maiduguri.
The data collected were subjected to analysis using descriptive statistical tools.
Descriptive statistics such as frequency distribution and percentages were used to
organise the data while Likert-type rating scale was used to compute the mean scores of
the degree of effectiveness of the adopted village scheme; in dissemination of the
improved technologies the Likert - type rating scale used were high effectiveness (3
points), medium effectiveness (2 points) and low effectiveness (1 point).
The scores obtained by respondents on questionnaire items were weighted in order to get
their mean score. Weighted score refers to the respondents' scores against each
questionnaire item multiplied by the scores under each Likert scale point. The products
were added up together on each column in order to find out the average (mean score)
using the number of respondents involved. The computation of the mean score was
explicitly expressed as follows:
Where
V1 = Value of Column 1
F2 = Value of Column 2
V3 = Value of Column 3
F1 = Frequency of respondents in Column 1
F2 = Frequency of respondents in Column 2
F3 = Frequency of respondents in Column 3
................................................(i)
Mustapha et al.
x
=
93
The mean scores obtained were interpreted as follows:
Mean Score Range Interpretation
< 1.55 Low effectiveness
1.56-2.55 Medium effectiveness
> 2.56 High effectiveness
Results and Discussions
Awareness of Improved Farm Technologies by Respondents
The improved farm technologies studied include high yielding millet variety, early maturing
millet variety, recommended fertiliser application, recommended weeding, recommended
spacing and recommended chemical application as presented in Table 1.
Table 1 shows that the majority (not less than 80%) of the respondents were aware of all the
improved farm technologies under the Adopted Village Scheme. The high level of awareness to
improved technologies from the scheme could be attributed to high mobilisation of the
beneficiaries and the variety of methods used by LCRI in dissemination of the technologies.
Edeoghon et al, (2008) reported the significance of awareness of improved farm technologies by
farmers adding that non awareness would lead to non-usage of the improved farm technologies.
Table 1: Distribution of Respondents Based on Their Awareness of Improved Farm
Technologies Introduced Through the Adopted Villages Scheme (N=30).
Source: Field Survey 2010
* multiple response exists; hence total frequency and percentages are more than 30 and 100 respectively.
This is in line with the assertion by Ani (2007) that a variety of methods used in teaching leads
to increased awareness and subsequent adoption. The implication could be that, the
beneficiaries could have increased productivity which would consequently improve their
living standards.
Respondents' Participation in Trial of Improved Farm Technologies
Table 2 shows the level of participation of respondents in dissemination of improved farm
technologies. Table 2 also shows that respondents' participation in the trial of improved farm
technologies of high yielding and early maturing millet varieties were high with mean scores
of 2.83 and 2.60 respectively. There was medium participation in trial for fertiliser application,
weeding and spacing as compared to chemical application which was low. The high level of
participation in trial in high yielding and early maturing millet varieties could be attributed to
common interest developed by farmers on these technologies. While the low participation
recorded in chemical application was not connected with their associated costs to the
respondents in the study area. Farmers' participation in research and extension have been
found to be effective in ensuring uptake of new technologies, promoting farmer to farmer
extension and positive attitudes to innovation (Gwary 2008).
Variables Frequency*  Percentage (%)*
High yielding millet variety 30  100
Early maturing millet variety 30  100
Recommended fertiliser application  27  90.0
Recommended weeding  24  80.0
Recommended spacing  25  83.3
Recommended chemicals application  27  90.0
Assessment of the Effectiveness...
94
Table 2: Distribution of Respondents Based on Their Level of Participation in Trial
of Improved Farm Technologies (n=30)
Variables Mean score Interpretation
High yielding millet variety 2.83 High
Early maturing millet variety 2.60 High
Recommended fertilizer application 2.40 Medium
Recommended weeding 1.83 Medium
Recommended spacing 2.30 Medium
Recommended chemicals application 1.53 Low
Source: Field Survey 2010
Level of Effectiveness of Methods of Dissemination Under the Scheme as
Perceived by the Respondents
Table 3 shows the methods used in dissemination of improved farm technologies to
respondents and the perceived effectiveness of the methods by mean scores. Table 3
revealed that the result/method demonstration and farmer field school were highly
effective with mean scores of 2.93 and 2.83 respectively in dissemination of improved
farm technologies under the scheme. Lecture/speech and group discussion were
moderately effective in dissemination of improved farm technologies to the respondents.
Result and method demonstration in terms of effectiveness was in line with what
Ephraim (2009) posited that if effectively planned and carried out, result and method
demonstration are the most effective methods of teaching. Therefore, it could be implied
that the methods used by the scheme in dissemination of improved farm technologies
were effective in the study area.
Table 3: Distribution of Respondents Based on Perceived Effectiveness of the
Methods of Dissemination by the Scheme.
Variables Mean score Interpretation
Result/method demonstration 2.93 High
Farmer field school 2.83 High
Group discussion 1.90 Medium
Lecture/speech 1.76 Medium
Source: Field Survey 2010.
Problems Affecting the Effective Performance of the 'Adopted Villages Scheme'
Perceived problems and their level in affecting the performance of the scheme by the respondents
were determined and presented in Table 4. It is pertinent from the table that lack of finance was the
major problem (x=2.96) affecting the effective performance of the 'Adopted Villages Scheme'.
Inadequacy of inputs as a problem was perceived to be medium (x=1.96), which indicates that once
there is finance, inputs can be obtained. Poor participation by beneficiaries (x=1.16) was lowly
perceived as a problem probably because the time of activities under the scheme is convenient to
most of the beneficiaries. The low level of education of beneficiaries (x=1.93) is found to be
medium problem to the effective performance of the scheme. The finding was in agreement with
Mustapha et al.
95
that of ARCN (2008) which reported that most of the "Adopted Villages Scheme" of Research
Institutes in Nigeria were unable to carry out their activities as a result of dwindled funding.
Table 4: Distribution of Respondents' Perceived Problems Affecting the Effective
Performance of the Scheme.
Variables Mean score Interpretation
Lack of finance 2.96 High
Inadequacy of inputs 1.96 Medium
Low level of education of beneficiaries 1.93 Medium
Poor participation by beneficiaries 1.16 Low
Source: Field Survey 2010.
Relationship Between Extension Methods Used and Level of Effectiveness of the
Adopted Villages' Scheme
Table 5 shows the association of extension methods and their level of effectiveness of the "Adopted
Villages Scheme" among respondents in the study area. The result indicates that results/methods
demonstration (X2 calculated; 9.800 > p-value; 5.991) and farmer field school (X2 calculated;
6.812 > P-value; 5.991). Hence, the methods could effectively disseminate improved farm
technologies under the "Adopted Villages Scheme". However, the table indicates that
lecture/speech and group discussion were found to be statistically insignificant; X2 calculated
(2.600 and 1.400) > P - value (5.991 and 5.991) respectively, implying that they could be less
effective in the dissemination of improved farm technologies under the "Adopted Village Scheme
in the study area.
Table 5: Chi-square Results Between Extension Methods and Their Level of
Effectiveness of the "Adopted Village Scheme"
Extension method X
2
calculated P-Value Decision
Result / Method Demonstration 9.800 5.991 SS
Farmer Field School 6.812 5.991 SS
Lecture / Speech 2.600 5.991 NS
Group Discussion 1.400 5.991 NS
Source: Field Survey 2010.
X
2
= Chi-square Statistics
SS = Statically Significant at P 0.05
NS = Statistically Insignificant ay P 0.0
Conclusion and Recommendations
The 'Adopted Villages Scheme' was found to be effective in dissemination of improved farm
technologies among beneficiaries in Borno State. This was because of the high level of
awareness and involvement of farmers in dissemination of the technologies. The result shows
that result/method demonstration and farmer field school were significantly effective in the
dissemination of farm technologies under the "Adopted Village Scheme". However,
lecture/speech and group discussion were found to be statistically not significant. Lack of finance
was the major problem affecting the effective performance of the "Adopted Village Scheme".
On the bases of the findings of the study, the following recommendations are proffered:
i. Provision for loan disbursement should be made under the scheme so as to empower
the beneficiaries to adopt and disseminate improved technologies in the study area;
Assessment of the Effectiveness...
96
ii. Basic inputs such as fertiliser, insecticides, herbicides, seeds, tractors, etc should be
made adequate and at subsidised rates to enable beneficiaries to take advantage of
technology complimentarily since most agricultural-based technologies are multi-
component packages;
iii. The scheme should work with women groups as part of the guidelines given by ARCN
in order to ensure family empowerment;
iv. LCRI must see to it that the technologies developed are not only economically viable,
technologically feasible, socially acceptable, ecologically adaptable but also culturally
compatible to the existing agricultural practices of the farmers.
References
Adekunle, A. A., J. E. Onyibe, O. M. Ogunyinka, Z. E. Omenesa, S. J. Auta and A. U.
Kuyello. 2002. 'Agricultural Information Dissemination: An Audience Survey in Kano
State.' Information and Communication Support for Agricultural Growth in Nigeria (ICS-
NIGERIA), © IITA, Ibadan, Nigeria.
Agricultural Research Council of Nigeria, ARCN. 2008. 'Implementation of the Adopted
Villages and Agricultural Research Outreach Centres (AROCs) by the National
Agricultural Research Institutes (NARIs) and Federal Colleges of Agricultures (FCAs).'
Draft Document.
Ani, A. O. 2007. Agricultural Extension: A Pathway for Sustainable Agricultural
Development. Loud Books Apani Publications, Ibadan.
Babaleye, T. 2000. 'Disseminating Information on New Crops in Africa,' Agbati Village,
Alakia, P. O. Box 6869, Agodi, Ibadan Nigeria.
Borno State Ministry of Land and Survey. 2006. 'Land Survey Report.' Maiduguri, Nigeria.
Edeoghon, C.O., M.T Ajayi, and T.O. Ugboya. 2008. 'Awareness and Use of Sustainable
Agricultural Practices by Arabic Group Farmers in Ikpoba Okha Local Government Area
of Edo State, Nigeria.' Journal of Sustainable Development in Agriculture and
Environment 3 (2): 55-63.
Egbule, P. E. and E.M.C. Njoku. 2001. http:iiwww.ii2-dev. De/englisch/ publikationen/ Ewb-
ausgbaben/. 56-2001.
Ephraim, B. 2009. 'Extension Methodologies,' In Specialized Training Course on Crop
Production Enterprises for Unemployed Agricultural Advisory Service Providers, Lake
Chad Research Institute, Maiduguri.
Gwary, M.M. 2008. 'Evaluation of the Effectiveness of the Participatory Research and Extension
Approach in Promoting Sustainable Agriculture in Borno State, Nigeria.' PhD Thesis,
Department of Agricultural Economics and Extension, University of Maiduguri of Maiduguri.
Institute for Agricultural Research and Training, IAR&T. 2009. 'IAR&T Adopted Villages.'
www.ARCN.org. accessed on 11/02/2010.
LCRI. 2009. Introducing Lake Chad Research Institute, Revised Edition. Maiduguri. LCRI Brochure.
National Population Commission (NPC). 2006. 'Provisional Population Census', National
Population Commission, Abuja, Nigeria.
Ozowa V. N. 1995. 'Information Needs of Small Scale Farmers in Africa: The Nigerian
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Information Specialists 40 (1).
Mustapha et al.
97
Asia-Pacific Journal of Rural Development
Vol. XXIII, No. 1, July 2013
A Case Study on the Present Status and Potentiality of
Shrimp Farming in Bangladesh
Mohammad Chhiddikur Rahman* and M. Harun-Ar Rashid**
Abstract
Shrimp and prawn together represent the second largest exportable items contributing to foreign
exchange earnings of Bangladesh. Shrimp farming has a significant impact on the environment and
economy. However, in our country, farmers practice traditional method of shrimp/prawn farming and
productivity of shrimp is very low (300-400 kg/ha) compared to the other shrimp producing countries
of the world (Islam and Mahmud 2011). One of the major causes of poor productivity is the extensive
or traditional method of farming (90 per cent of total farms), whereas developed countries brought
their farms under intensive or semi-intensive methods of farming. However, it is possible to increase
shrimp/prawn productivity more than 500-600 kg/ha through traditional organic system of farming
(Jatiya Matsa Saptaha 2010). This study shows that Bangladesh has great potentiality to increase
productivity of shrimp and prawn by introducing intensive and semi-intensive methods of farming.
Introduction
The economy of Bangladesh mainly depends on the agriculture sector, readymade
garments (RMG), fisheries, hides and skins. Shrimp export and cultivation in Bangladesh
has undergone rapid expansion over the last two decades. Shrimp and prawn together
represent the second largest exportable items contributing to the foreign exchange
earnings of Bangladesh. Between 1983 and 2003 the volume of shrimp and prawn
cultivated in inland aquaculture has increased more than 14 times (DoF 1985-2004). Over
the same period, the area of ponds dedicated to shrimp and prawn production has more
than trebled. In 2003, the Department of Fisheries estimated that there were
approximately 203,071 hectares of coastal shrimp farms producing an average of 75,167
tonnes of shrimp annually and an average of 370 kg/ha/year.
Shrimp is a particularly valuable export crop generating substantial revenues and foreign
exchange; earning in excess of US$360 million annually and accounting for 4.9 per cent
of exports in 2004. Not only does this crop earn valuable foreign exchange, but the sector
also employs significant numbers of rural workers and provides a livelihood for
households throughout Bangladesh. The contribution series of upstream and downstream
activities related to shrimp/prawn culture vary, such as harvesting, culture, processing and
exporting (Barmon et al. 2004). The shrimp/ prawn industry consists of distinct sub-
sectors such as shrimp/ prawn gher, shrimp hatcheries or post larvae (PL) collection, feed
processing mills and shrimp/ prawn processing and exporting plants. All these sub-sectors
are linked together and constitute a horizontal integration of activities that create
independent employment opportunities for males and females. The Bangladesh Shrimp
and Fish Foundation estimate that there are over 600,000 people employed directly in
shrimp aquaculture who support approximately 3.5 million dependents.
* MS in Production Economics, Bangladesh Agricultural University, Mymensingh-2202
** Professor, Department of Agricultural Economics, Bangladesh Agricultural University, Mymensingh-2202
98
Despite the rapid growth of Bangladeshi shrimp cultivation, the global frozen fish and
seafood market continues to be dominated by Thailand, Indonesia, China and Ecuador.
Significant innovations in production and processing in these countries have increased
the value added associated with their exports and the market share that they command.
Unfortunately, the same is not true for Bangladesh. Innovations in both production and
processing have yet to be secured. Furthermore, stricter import requirements and
compliance regulations in importing countries have meant that Bangladesh must invest in
improving the safety and quality of their fish and seafood exports to avoid products being
detained and rejected at the point of entry into foreign markets. A recent IFPRI (2003)
report notes that: "The only way Bangladesh can improve its export position in the
shrimp market is to improve the safety and quality of its exports."
It is clear that Bangladesh has the potential to increase production, raise productivity,
upgrade processing facilities, and draw further land into shrimp cultivation. Yet,
significant challenges remain to ensure that shipments meet the standards set by the
importing nations. Additionally, if growth in the industry is to benefit the poor and
ameliorate inequality then attention must be paid to the terms and conditions of
employment and production, and the social and environmental impact of activities in this
sector. The main objective of this study is therefore, to determine the present status and
potentiality of shrimp/prawn farming.
Status and Potentiality of Shrimp
Present Status of Shrimp in Bangladesh
Shrimp production in Bangladesh has been extended to the southern part of the country
for its biological advantages. The shrimp farms are established in Chittagong, Barisal,
Khulna and Dhaka divisions of the country. About 246198.00 hectares of the country has
come under shrimp production during 2009-10 and the total production was 155866.00
tonnes, therefore, the productivity of shrimp is 633 kg/ha (Jatiya Matsa Saptaha 2010).
Shrimp production is the second largest export sector of Bangladesh after readymade
garments. In FY2003-04 shrimp exports amounted to Tk. 2152.77 crore which was 5.71 per
cent of total exports. The share of shrimp export in total export income from fish and fish
Rahman et al.
99
products is almost 91 per cent (2003). More than 2 million people are engaged in upstream
and downstream activities related to shrimp industry in the country - in harvesting, culture,
processing, exporting and other ancillary activities. During the period between 2000 to
2010, production of shrimp increased from 29.713 tonnes to 109 tonnes (Table 1) but
contribution on total export has been decreased from 5.77% to 2.75% (BBS 2010).
Table 1: Export of Fish and Fish Products from Bangladesh
Source: BBS 2010.
Potentiality of Shrimp in Bangladesh
Farmed shrimp has become a significant factor in world shrimp markets over the past five
to six years. Worldwide farmed shrimp production has risen significantly since 1985,
from 213,000 tonnes to 931,788 tonnes in 1995, although it has since declined slightly.
The market for shrimp has grown in most parts of the world, and demand is likely to
remain high, assuming that major markets continue to have overall economic growth.
However, the current downturn in the Southeast Asian and Japanese economies has
affected price, and prices may settle at a level somewhat lower than in recent years, at
least in the short to medium term. Nonetheless, shrimp remains a high-value product with
a very large international market. It is expected that any future growth in the market and
shortfall from capture fisheries will be covered by increased aquaculture production.
It is agreed that shrimp farming plays an important role in the economy of Bangladesh.
But per hectare production is very low and ranges between 250-500 kg whereas in other
Asian countries, per unit production is much higher compared to Bangladesh.
% Of
Total
Export
Earnings
Export of Shrimp
Year
Quantity
(tonne)
Value
(Cr. Taka)
Total Earnings from
Export of Fish
Product
Value (Cr. Taka)
% of Shrimp to
Total Fish Product
Export Earnings
2000-01 29.713 1885.15 2032.75 92.739
2001-02 30.209 1447.76 1637.14 88.432
2002-03 36.864 1719.88 1941.59 88.581
2003-04 42.943 2152.77 2363.47 91.085
2004-05 46.533 2281.59 2571.72 88.719
2005-06 49.317 2698.35 3029.84 89.059
2006-07 53.361 2992.33 3352.89 89.246
2007-08 68.52 3055 3777 80.884
2008-09 75 2409 3201 75.258
2009-10 109 2580 3079 83.793
5.77
4.76
5.10
5.71
5.90
4.56
4.90
3.90
2.99
2.75
A Case Study on the Present...
100
During 1999-2000 the value of shrimp product was US$ 199,901 in Bangladesh but it was
US$ 2,125,384 in Thailand (Table 3). During 1996, only 10% shrimp farms were under
semi-intensive method and none was under intensive method of farming. Whereas, 20% of
the Australian farms practiced the semi-intensive method while 80% followed the intensive
method. At the same period Thailand practiced 15% as semi-intensive and 80% as intensive
method. The productivity of Australia and Thailand were 4250 kg/ha and 2285 kg/ha
Intensive
Country
No. of
farms
Total
area (ha)
Production
(head-on,
MT)
Productivity
(MT/ha)
Extensive
Semi-
Intensive
Costa Rica 4 800 1000 1.25 0% 100% 0%
Ecuador 1200 130000 120000 0.923 60% 40% 0%
Honduras 55 12000 10000 0.833 5% 95% 0%
Mexico 240 14000 12000 0.8571 25% 65% 10%
Nicaragua 20 4000 3000 0.75 0% 100% 0%
Peru 40 3000 5000 1.667 5% 90% 5%
USA 30 700 1300 1.857 0% 80% 20%
Venezuela 7 800 2000 2.5 0% 100% 0%
Australia 33 400 1700 4.25 0% 20% 80%
Bangladesh 13000 140000 35000 0.25 90% 10% 0%
China 6000 120000 80000 0.667 10% 85% 5%
India 10000 200000 70000 0.35 60% 35% 5%
Indonesia 60000 350000 90000 0.257 70% 15% 15%
Malaysia 400 4000 4000 1.00 40% 50% 10%
Philippines 1000 60000 4000 0.067 40% 40% 20%
Sri Lanka 900 2500 2000 0.8 10% 20% 70%
Thailand 16000 70000 160000 2.286 5% 15% 80%
Vietnam 2000 200000 30000 0.15 80% 15% 5%
Source: Rosenberry 1996.
Table 2: Overview Of Shrimp Farming in Major Producing Nations: 1996
Figure 1: Productivity of Prawn in Major Producing Nations.
Rahman et al.
101
respectively whereas in Bangladesh, per hectare production was 250 kg only (Table 2). So
it is possible to increase productivity of shrimp even 15 to 20 times more than present
status by introducing semi-intensive/intensive culture and improved technology.
Table 3: The Top 10 Farmed Shrimp/Prawn Producing Countries by Volume and
Value in 2000
Recently many countries of the world have introduced organic system of shrimp culture
to meet the consumer's demand and save the environment. It is possible to increase
shrimp/prawn productivity more than 500-600 kg/ha through traditional organic system
of farming (Jatiya Matsa Saptaha 2010). Extensive shrimp/prawn culture requires vast
amounts of land and Bangladesh is a densely populated small country. So, vertical
integration is more suitable than horizontal one. Although it has a serious impact on
environment, intensive/semi-intensive culture should be introduced to boost up the
productivity of shrimp/prawn.
Country Production (M Ton) Value (‘000 US$)
Thailand
China
Indonesia
India
299,700
217,994
138,023
52,771
2,125,384
1,307,964
847,429
393,938
Vietnam 69,433 319,392
Philippines
Bangladesh
41,811
58,183
271,385
199,901
Brazil 25,000 175,000
Colombia
Sri Lanka
11,390
6,970
91,120
78,342
Source: FAO 2001
Figure 2: Top Shrimp Producing Countries.
A Case Study on the Present...
102
Impact Shrimp Farming in Bangladesh
Environmental and Ecological Impact
a. Impact on the Environment
The agricultural land has been degraded since the introduction of shrimp gher farming in
Bangladesh. Shrimp gher farming has other negative environmental impacts including
mangrove deforestation, salinisation of soil and water, depletion of wild shrimp and fish
larvae stocks, coastal water pollution, loss of agricultural land and salt intrusion has
caused many problems such as loss in crop production, fresh water crisis, gastro-
intestinal diseases, loss of green vegetables, fodder etc. More than 30% of the net
cultivable land of Bangladesh is located in the coastal areas and are not being utilised for
agricultural production mainly because of salinity problems. Paddy yield has also been
reduced because of soil salinity problems (Chowdhury et al. 2006).
b. Impact on Ecology
The shrimp gher farming system has also significant negative impacts on the ecology in
Bangladesh like in other shrimp production countries. The ecological effect of acid sulphate
destroys food resources, displaces biota, releases toxic levels of aluminum, precipitates iron
(which harms vegetation and microhabitat) and alters physical and chemical properties of
water. Loss of biodiversity due to shrimp production is also of real concern. Fry is the main
input of shrimp gher farming that is collected from the sea and rivers. When the harvesters
collect wild post larvae (PL) from seas, a large number of finfish and other fries of fish are
caught, most of which perish. Their study found out that about 1340 other fries are caught
during the collection of a single prawn PL (Williams and Khan 2001).
c. Impact on Livestock
The impact of shrimp gher farming is unambiguous. Livestock has decreased mainly due to
absence of grazing land and unavailability of fodder crop (Williams and Khan 2001).
Livestock and poultry in rice-prawn farming areas have increased compared to shrimp gher
farming areas. Before rice-prawn gher farming had started, landlords or rich farmers had a
large number of cows, and buffaloes and hired local boys to take care of the cows but most
of the small, landless and marginal landowners had no cows or sometimes a few of them
(Barmon et al. 2003). Livestock was not equally distributed among the people. Now, more
or less, the people are rearing more than two to three cows for milk and cow-dung. Instead
of unavailable grazing fields, the gher farm owners and even landless farmers collect feed
(grass) from the embankments and store by-product of paddy (straw) for cattle feed. The
farmers use the stored straw in the rainy season when feed is not available.
Economic Impact
a. Impact on Agriculture and Household Income
Both the shrimp and rice-prawn gher farming systems have significant impacts on
agricultural and household income in Bangladesh. The average income from shrimp gher
farming system is several times higher compared to other agricultural farming systems in
Bangladesh. Income from year-round only shrimp and year-round rice-shrimp farming are
Rahman et al.
103
two times and 2.5 times higher, respectively, than that of year-round rice farming system in
coastal Bangladesh (Islam 2003). However, contradictory results are also found in the
shrimp gher farming system in the coastal areas of Bangladesh (Patwary 2000). The shrimp
gher farming system has increased income for rural women in terms of fry collection from
the river and sea. It is estimated that about 73% of the income from fry collection comes
from female fry collectors (BCAS 2001). On the other hand, the farmers of rice-prawn gher
farming system have gained more agricultural income as well as household income
compared to traditional and modern variety (MV) paddy in southwest Bangladesh. The
agricultural income of rice-prawn gher farming system is seventeen times higher than that
of MV paddy farming, and the household income of rice-prawn gher farmers is double
compared to other rural peoples of Bangladesh (Barmon et al. 2004).
b. Impact on Employment
Both shrimp and rice-prawn gher farming systems have created employment
opportunities for female and male workers in southwest Bangladesh. About 840,000
workers were employed in shrimp farm-related work, which was estimated to be about 79
person-days per hectare per year (Frankenberger 2002). Among them, 285,000 persons
were involved in PL collection from the wild (BCAS 2001). The rice-prawn gher farming
system has created more employment opportunity compared to MV paddy farming both
for male and female labourers. The rice-prawn gher farming system is a labour intensive
enterprise compared to paddy farming. Per unit labour use in gher farming was higher
than per unit boro and local aman paddy production. The income of gher farmers has
increased due to a high demand for hired labour in gher farming systems. The gher
farming system also plays a pivotal role in absorbing the surplus labour force in the rural
areas (Barmon et al. 2004).
c. Impact on Landholding Patterns and Land Tenure Systems
The shrimp farming system has significant impacts on landholding patterns and the land
tenurial system in Southwest Bangladesh. Marginal and small farmers are exploited by
the politically and financially strong large farmers. Marginal and small farmers have to
sell their small agricultural farmland very cheaply. Sometimes the strong farmers capture
nearby farmers' small plots without any payments or sometimes they pay a very small
amount of money as land rent. As a result, small and marginal farmers are deprived of
conventional farming. Therefore, the small and marginal farmers are diminishing from
the agricultural sectors mainly due to the introduction of shrimp farming and the
involvement of large numbers of so called politicians and large farmers. A large number
of small and marginal farmers have already migrated to other places for employment and
better living. The rice-prawn gher farming system has redistributed the landholding
patterns due to the participation of marginal and landless farmers. Some marginal and
landless farmers have become small landowners after the successful operation of rice
prawn gher farming (Barmon et al. 2006).
Materials and Methods
Description of the Study Area
Southwest Bangladesh is primarily a flood plain landmass (between 21.5
0
and 23.91
0
N
latitude and 88.55
0
and 90.35
0
E longitude) bounded by India in the west and the Bay of
Bengal in the south. The deltaic landscape of this region is a primarily low (< 10 m above
A Case Study on the Present...
104
asl), flat and fertile plain. The coastal plain is partly sandy and saline that varies from 1 to
15 km in width. Tropical to sub-tropical monsoon climate characterises the region. Three
distinct seasons - summer (March-May), rainy (June-October) and winter (November-
February) - are characteristics of the region. The mean annual temperature is 26
0
C (Min.
19
0
C and Max. 32
0
C). The annual average rainfall of the study area is 1800±268 mm
ranging from 1400 to 2600. The annual average relative humidity of the region is 78 per
cent (Kabir and Webb 2010).
Map 2 : Study Area
Rahman et al.
105
About 2 years ago, shrimp (Bagda) farming was practiced in that area. After realising the
negative impacts of year-round saline water shrimp farming on environment, health,
housing and livestock, people have shifted to the rice-cum-prawn farming. Now they are
cultivating Aman rice (some cases Boro), vegetables and rearing livestock's besides
prawn culture.
Sampling Design
The study area was Chalna Pawrasava of Dacope Upazila in Khulna District. A reasonable
size of sample to achieve the objectives of the study was considered. A purposive
sampling technique was followed in this study. Therefore, 200 farmers were selected
randomly (100 from Chalna 100 from Pankhali Union) to fulfill the objective of the study.
Data Collection
Data on shrimp farm management practices were collected from a face to face interview
with the head of each sample household by the researcher himself. The questionnaire
contained mostly open-ended guiding questions covering the major aspects of shrimp
farm management practices.
Data Analysis
Data on shrimp farm management practices were mainly analysed using descriptive
statistics such as mean, median and per cent. Activity budget was used to analyse the
profitability of shrimp/prawn farming.
Activity budget is the most common method of determining and comparing the
profitability of different farm households and technologies. Profit is defined as the
difference between the total revenue and total cost. To determine per hectare profitability
for each of the selected shrimp/prawn farming from the view point of individual farmers,
the following algebraic equation was followed:
Where,
= Net returns from shrimp/prawn (Tk/ha);
Qy = Total quantity of (shrimp/prawn) outputs (kg/ha);
Py = Per unit prices of the shrimp/prawn (Tk/kg);
Qb = Total quantity of the concerned byproduct (kg/ha);
Pb = Per unit prices of the relevant byproduct (Tk/kg);
Xi = Quantity of the concerned ith inputs;
Pxi = Per unit price of the relevant ith inputs;
TFC = Total fixed cost involved in production;
i = 1, 2, 3,…, n (number of inputs).
A Case Study on the Present...
Present Status of Selected Shrimp Farmers
Table 4: Per Hectare Costs and Returns of Prawn Culture to the Selected Farms
106
Source: Field Survey 2012
Items of costs/ returns

Quantity/ ha
Per unit price
(Tk)
Costs/Returns
(Tk/ha)
Percentages
of total
A. Gross Returns
Golda 545.00 kg 745.00/kg 406,025.00 91.03
Other fish 400.00 kg 100.00/kg 40,000.00 8.97
Total Returns - - 446,025.00 100.00
B. Gross Costs
C. Variable costs
Post larva 9889 pieces 4.00/piece 39556.00 18.80
Hired labour 225 man-day 250/ man-day 56250.00 26.73
Feed 1136 kg 25/kg 28400.00 13.50
Lime 115 kg 12/kg 1380.00 0.66
Urea 15 kg 20/kg 300.00 0.14
TSP 8 kg 22/kg 176.00 0.08
Other fish fry - - 5836.00 2.77
Total 131,898.00 62.68
D. Fixed costs
Family labour 301 Man-day 250/man-day 75250.00 35.76
Interest on operating
capital
@10% 3297.00
1.57
Total 78,547.00 37.32
E. Total costs 210,445.00 100
F. Gross Margin (A-C) 314,127.00
G. Net Return (A-E) 235,580.00
H. BCR (undiscounted) 2.12
Rahman et al.
107
Source: Field Survey 2012
Source: Field Survey 2012
Table 6: Sources of Household Income
Table 5: Per Hectare Costs and Returns of T. Aman Paddy Culture to the Selected Farms
Items of costs/ returns
Total
Quantity/ha
Per unit price
(Tk)
Costs/Returns
(Tk/ha)
Percentages of
total
A. Gross Returns
Main product (Paddy) 3497 kg 15.00 52,455.00 90.07
By-product (Straw) n.a - 5,782.00 9.93
Total returns - - 58,237.00 100.00
B. Gross Costs
C. Variable Costs
Seedlings n.a - 3,744.00 11.29
Power tiller 2 times 10.00/decimal 4,940.00 14.90
Hired labour 45 Man-day 250/Man-day 11,250.00 33.93
Urea 105 kg 20/kg 2,100.00 6.33
TSP 65 kg 22/kg 1,430.00 4.31
MoP 16 kg 15/kg 240.00 0.72
Gypsum - - 55.00 0.17
Fertilizers cost - - 3,825.00 11.54
Manure - - 631.00 1.90
Insecticides n.a - 1,346.00 4.06
Total - - 25,736.00 77.63
D. Fixed Costs
Family labour 28 Man-day 250/Man-day 7,000.00 21.11
Interest on OC - @10% 418.00 1.26
Total - - 7,418.00 22.37
E. Total costs - - 33,154.00 100.00
F. Gross Margin (A-C) - 32,501.00 -
G. Net Return (A-E) - 25,083.00 -
H. Undiscounted BCR
- 1.76
-
Amount (Tk.)
Sources of household income Head-ender farms % of total
Golda culture 235580.00 83.40
Paddy farming 25,083.00 8.88
Fish culture 10000.00 3.54
Vegetables production 4230.00 1.50
Cattle rearing 4196.00 1.49
Goat rearing 714.00 0.25
Poultry and duck rearing 1457.00 0.52
Small business 1214.00 0.43
Total 282474.00 100.00
A Case Study on the Present...
108
Result and Discussion
Recently a survey has been undertaken to detect the socioeconomic impact of sluice gate
and salinity control on the coastal area. A good number of positive impacts have been
identified. The farming system is very profitable compared to only local Aman paddy.
After the introduction of salinity control farming in southwest Bangladesh, the cropping
patterns have changed. Farmers are cultivating more paddy, vegetables and rearing cattle
besides prawn culture. However, productivity is very low compared to world status.
The farmers of the study area practice rice-cum-prawn farming system. Although salinity
is not fully controlled the productivity of T. Aman paddy is 3497 kg/ha and it shares 8.88
per cent of their annual household income. However, Golda has the largest share (83.40
per cent) to the annual household income (Tables 5 and 6). The farmers of the study area
do not follow the semi-intensive/intensive method of prawn culture. As a result the
productivity of prawn is lower (545 kg/ha) than the other shrimp producing nations. In
Thailand and Australia the productivity of shrimp is 2285 kg/ha and 4250 kg/ha
respectively (Table 3). Both the countries have almost 90% of their farms under
intensive culture.
Conclusion and Recommendation
It is clear that Bangladesh has a great potential for shrimp culture. There are about
217877 ha for shrimp/prawn culture (BBS 2010). The present average yield is only 633
kg/ha but there is enough scope to increase yield of shrimp up to 4000 kg/ha/year by
introducing semi-intensive/intensive culture, proper management and improved
technology.
Folowing are some recommendations:
· Policy implication may bring all the farms under semi-intensive/intensive method of
farming for the development of rice-cum-prawn farming in Southwest Bangladesh to
boost up national productivity and foreign currency.
· Extension workers can introduce soil tolerant varieties of paddy at Boro season.
· The impact of shrimp/prawn on environment and the potentiality and profitability of
organic farming should be emphasised.
Rahman et al.
109
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Dialogue, Environmental Consequences of Export Oriented Shrimp Culture in
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Bangladesh.
Aftabuzzaman. 2010. 'Organic Aquaculture System of Fish and Shrimp Farming in the
Coastal Area.' Jatiya Matsa Saptaha.
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Agricultural and Household Income in Bangladesh: A Case Study of Khulna District.'
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Erie, USA.
Barmon, B.K., T. Kondo and F. Osanami. 2006. 'Economic Evaluation of Rice-Prawn Gher
Farming System on Soil Fertility for Modern Variety (MV) Paddy Production in
Bangladesh.' Contributed paper prepared for presentation at the International Association
of Agricultural Economists Conference, Gold Coast, Australia.
BBS. 2010. 'Statistical Yearbooks', Bangladesh Bureau of Statistics, Government of
Bangladesh, Dhaka.
BCAS (Bangladesh Centre for Advanced Studies).2001. 'Fry Collectors Livelihood Study',
Feasibility Study for the Shrimp Component of the Fourth Fisheries Project (FFP). The
DoF, Bangladesh and DFID, UK.
Chowdhury, M.A., G. Shivakoti and M. Salequzzaman. 2006. 'A Conceptual Framework for
the Sustainability Assessment Procedures of the Shrimp Aquaculture Industry in
Bangladesh,' International Journal of Agricultural Resource, Governance and Ecology, 5(
2/3): 162-184.
Department of Fisheries DoF. 2010. Jatiya Matsa Saptaha,.
DOF. (2000, 2001, 2002, 2003). 'Shrimp Resources Statistics.' Central Shrimp Cell,
Department of Fisheries, Government of Bangladesh, Dhaka.
Food and Agriculture Organization FAO. 2001. 'Aquaculture Statistics.'
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Future Prospects in Relation to Wild Fry Collection Ban', Tango International Inc,
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Bangladesh,', In Environmental and Socioeconomic Impacts of Shrimp Aquaculture in
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BRAC Centre, Dhaka, Bangladesh, Bangladesh Agricultural University, Mymensigh,
Bangladesh, 5 March, p 101.
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Islam, M.S. and Y. Mahmud. 2011. 'Mixed Culture Technique of Golda and Mono-sex Tilapia
in the Coastal Region.' Bangladesh Fisheries Research Institute (BFRI). Shrimp Research
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111
Asia-Pacific Journal of Rural Development
Vol. XXIII, No. 1, July 2013
Concept Note
Forest Carbon Concepts, Markets and Standards for
SAARC
Ram A. Sharma
*
Abstract
Given her favourable and enabling environment, Bangladesh is a good case for forests and wetlands
restoration and conservation in gainful partnerships with local communities, who depend on
neighbouring natural resources for meeting their subsistence needs including conservation-linked
livelihoods. Being a densely populated delta with a predominantly natural resources-based economy,
the country's vulnerability to climate change is very high. Natural resources including cultivable land,
forests and wetlands are being degraded mainly due to heavy biotic pressure brought by the huge
population which is concentrated in a comparatively small geographic area. The forests in general
and the coastal mangroves in particular are ensuring substantial sequestration and storage of carbon.
But avoiding the release of carbon dioxide resulting through deforestation and forests degradation is
even more important as nearly one-third of the total carbon is released globally due to deforestation
activities that are currently occurring in many developing countries including Bangladesh. In addition
to afforestation and reforestation, avoided deforestation and forests degradation is, therefore, included
as a third category of forest-based activity, qualified for conservation financing under international
compliance and voluntary markets. Reduction of Emissions from Deforestation and Forests
Degradation (REDD+) is one such emerging mechanism that is particularly suitable for the country's
forests including the Sundarbans mangroves. Avoided deforestation offers an excellent opportunity for
achieving national environmental goals by mitigating Greenhouse Gas emissions while conserving
biodiversity and alleviating rural poverty locally. But a number of important policy and operational
interventions as identified in this paper are needed to be put in place both at the government and civil
society levels.
Introduction
All the eight SAARC (South Asian Association for Regional Cooperation) countries
(Bangladesh, Nepal, Bhutan, India, Maldives, Sri Lanka, Pakistan and Afghanistan) are
low-carbon emitting countries mainly due to their predominantly agrarian economy with
low level of industrialisation, but since they are located in a densely populated natural
disaster prone region, their vulnerability to climate changes is very high; for instance, a
sea-level rise of 1-2 meters would inundate a substantial area of coastal countries
including Bangladesh, Maldives, Sri Lanka, India and Pakistan, thereby adversely
affecting a large portion of the poor coastal population. The per capita carbon dioxide
(CO
2
) emission in the SAARC counties (estimated to be as 0.2 ton/year in Bangladesh,
for instance) is much lower when compared to 15-20 ton/year in some developed
countries. However, the consumption of fossil fuels in the SAARC countries is growing
*
Deputy Chief of Party, Integrated Protected Area Co-Management Project, Forest Department, Bon Bhavan,
Dhaka, Bangladesh. Presently Forestry Consultant, Haryana, India. E-mail: sharma_or@hotmail.com
Asia-Pacific Journal of Rural Development
Vol. XXIII, No. 1, July 2013
112
fast and motor traffic in big cities such as Dhaka, Kathmandu and Delhi is increasingly
causing environmental pollution. Natural resources including forests are getting severely
degraded mainly due to heavy biotic interference brought by the huge population,
concentrated in a comparatively small geographic area. The forests, including man-made
plantations in general and the mangrove forests in particular, are ensuring substantial
sequestration and storage of carbon dioxide. But avoiding the release of carbon dioxide
resulting through deforestation and forests degradation is even more important as nearly
one-third of the total carbon is released due to global deforestation activities that are
currently occurring in the SAARC countries. In addition to afforestation and
reforestation, avoided deforestation and forests degradation is, therefore, being included
as a third category of forest-based activity qualified for conservation financing under
compliance and voluntary markets. Reduction of Emissions from Deforestation and
Forests Degradation (REDD+) is one such emerging mechanism that is particularly
suitable for the forests of SAARC countries.
Carbon Forestry
The neglect of existing natural forests due to lack of funding and inadequate management
resulted in natural forests degradation in many SAARC countries. Anthropogenic
pressures including increased commercial extraction of forest produce, brought by
manifold increase in human population, led to widespread shrinkage and deforestation of
natural forests. Considering the deforestation that took place earlier, the governments of
most of the SAARC countries promulgated wildlife acts and gazetted some natural
forests as Wildlife Sanctuaries and National Parks mainly to conserve dwindling wildlife
and degraded forests. The people-oriented Forestry Policies which were enacted by most
of the SAARC countries inter-alia emphasised peoples' gainful participation in the
sustainable management of forests. Accordingly, the emphasis of forests management
during 80s and 90s gradually shifted from timber production to meeting bona fide
consumption needs of local people. As a result, community forestry and social forestry
were included in the revised Forest Acts to implement the policy recommendations.
Global warming has adversely affected earth's climate, with significant consequences for
natural resources including water, soil, forests and air. Land Use, Land Use Change and
Forestry (LULUCF) sector has been identified as an important land-based sector that
mitigates climate change as defined in the Climate Conventions. Forestry, broadly
included under LULUCF sector, provides low cost mitigation opportunities to combat
climate change either by increasing the removal of greenhouse gases (GHGs) from the
atmosphere through forests/plantations as carbon sinks or by reducing GHG emissions
through avoided deforestation and forests degradation. Till now only reforestation and
afforestation are two eligible activities under the Article 12 for non-Annex-I countries
such as the SAARC countries. Avoided deforestation and forest degradation have now
been focused as per the decision taken in the Bali Conference 2008, Copenhagen 2009
and Cancun 2010.
By conserving forests and developing plantations, landscape degradation can be halted,
biodiversity and water conserved in situ, and community biomass needs met by utilising
Concept Note
113
surplus labour. Besides, sustainable forest management opportunities would have
significant potential to transfer investment funds and technology, and upgrade
institutional capacity of Forest Department (FD) field staff and local community
organisations for biodiversity conservation, forests landscape restoration and bio-energy.
The revenue generated by carbon forests trade will help re-vegetate the degraded
landscape through insitu biodiversity conservation. The role of forests in the carbon cycle
is vital as they account for approximately 80% of the CO
2
exchanged between land and
atmosphere through the process of photosynthesis. As trees grow, the carbon is stored in
the biomass by converting CO
2
and water (by using solar energy) into sugars and oxygen
(released through the leaves). Forests also release CO
2
during the process of respiration.
However, a forest that is growing (i.e. increasing in biomass) will absorb more CO
2
than
it releases. So the sequestration and storage potential depends on growing and sustaining
forests.
In addition, sustainable forest management in densely populated regions such as the
Indian subcontinent would have high socio-environmental benefits for local communities,
who are mainly subsistence farmers and labourers. So the development and sustainable
management of forest carbon sinks will benefit local community by contributing to
poverty alleviation through their enhanced income generation and better quality of life.
There is substantial economic potential for the mitigation of global GHG emissions over
the coming decades, that could offset the projected growth of global emissions or reduce
emissions below current levels.
Although climate change, as a public good, is global in its causes and consequences, its
adverse impacts are being borne unequally in different regions and communities.
Riparian countries such as Bangladesh, Sri Lanka and Maldives, very near to sea level,
with a large coastal population and dependent on neighbouring biodiversity, are being
particularly affected adversely. Avoided deforestation offers an excellent opportunity for
achieving global environmental goals by mitigating GHG emissions while conserving
biodiversity and alleviating rural poverty locally. Greening of the country through
community conservation activities necessary for reducing deforestation also will result in
empowering local communities, thereby contributing in improved environmental
governance. Many of the community activities helpful in reducing forest degradation are
in fact labour intensive, cost effective, efficient and equitable with large employment and
income gains expected to accrue to neighbouring poor communities. In the process, local
surplus labour resources will be utilised in restoring the degraded forest landscape of the
SAARC countries and also will generate substantial carbon credits.
Avoiding deforestation and forests degradation is in line with the poverty reduction
strategies of the governments of most of the SAARC countries. Scaling up flows of
carbon finance to developing countries to support effective policies and programs for
reducing emissions would accelerate the transition to a low-carbon economy. Avoided
deforestation will sequester GHG emissions, and generate global environmental benefits
and would conserve biodiversity and alleviate rural poverty locally.
Forest Carbon Concepts...
114
Sustainable Conservation Financing: Developing appropriate conservation financing
mechanisms and frameworks is necessary for carrying out forests-based climate change
mitigation and adaptation activities. Suitable incentives need to be worked out and paid to
the communities and countries which are able to protect their forests beyond an agreed
cut off period. Similarly, conserving forests on a progressive sustained yield basis should
be well compensated through financial incentives that can be ploughed back in forest
restoration, achieved by employing co-management initiatives/activities. As the carbon
credit market develops in Bangladesh, it may be necessary to develop a National REDD+
Trust Fund exclusively for addressing forests-based climate change mitigation and
adaptation issues.
Forests protection: In a densely populous and poor country such as Bangladesh,
effective protection of dispersed and mosaic forests is not possible without gainful
partnerships of the local community. Climate change mitigation from forest conservation
is important in addition to controlling deforestation. Such a co-management initiative has
proved successful as evident from the IPAC and the Nishorgo Network of the Bangladesh
Government. This is a good example, proving that conservation of forests is necessary for
the forests landscape restoration by involving local community. The forests under
community protection can be sustainably co-managed locally by sharing benefits accrued
as a result of enhanced forest productivity. It should be possible to equitably distribute
forest-based benefits to participating community as naturally regenerating forests would
require canopy opening through silvicultral interventions, thereby providing yield as a
byproduct. As regenerating forests (either through natural regeneration and/or aided
regeneration) sequestrate more carbon than mature standing forests, it may be necessary
to take recourse of silvicultural thinning by following selection system for encouraging
natural regeneration in mature forests.
Temporal Assessment of Deforestation and Forests Degradation: International
negotiations on forest reference levels, agreed levels for transition point, long-term
responsibility, definitions, incentives, etc. are continuing in response to the decisions
taken in the Copenhegan and Cancun COP conferences in view of the Bali decision that
refers to incremental changes and enhancement of stocks linked to sustainable forest
management and conservation in line with the additionality principle. National baselines
and emission reference levels, forest stock changes and time series analyses will be
required for assessing historical trends of de-generating and/or re-generating forests.
Forests under conservation and sustainable management will need to be assessed,
inventorised and accounted for at the national and sub-national levels using Inter-
governmental Panel on Climate Change (IPCC) guidelines in order to be assigned REDD
credits for carbon trading. Monitoring of forests carbon stocks and assessing leakage and
permanence would be required regularly. Access to remote sensing technology will be
helpful but needs to be supplemented by ground truthing to be conducted regularly both
at national and local levels.
Increment of carbon stock can be assessed by using scientific data collected from the
identified permanent and temporary sample plots. Technology transfer, particularly from
relevant tropical countries, would be helpful in carrying out not only national inventory
Concept Note
115
and carbon credit assessments but also sustainable management of natural forests that
have degraded severely due to lack of resources. The country does not currently have a
regular forests inventory mechanism and so developing national forests inventory
institutions (e.g. RIMS can be updated as Forest Survey Wing within the Forest
Department) for objectively assessing baseline scenarios and emission reference levels
are necessary.
Forest Carbon Assessment: It is important to develop an appropriate methodology for
objectively assessing enhancement of forest carbon stocks as a consequence of
conservation and sustainable management of natural forests in Bangladesh. Forest carbon
assessment methods as approved by the Clean Development Mechanism (CDM)
Executive Board would require updating in view of local forests' situation. Chunoti
forests carbon project (FD 2008) and Collaborative REDD+IFM Sundarbans Project (FD
2011) have included some of these adaptations for assessing forests' carbon pools (above-
ground carbon, on-ground carbon and below-ground carbon and forest soil carbon).
Scientific data showing the increment of carbon stocks in PAs and natural forests will be
required. More work is, therefore, required, particularly for the temporal assessment of
natural forests stocking that will include an accurate assessment of deforestation/forests
degradation rates. Suitable modalities and procedures for transparent and verifiable
assessment of forest changes need to be developed by the Forest Department. This also
will require developing a suitable common strategy, approach and modality for assessing
positive and negative forests' changes over a period of time.
The overall aims of the program are to achieve, through avoided deforestation and
degradation, and improved forest management activities in the Sundarbans Reserve
Forest (SRF), carbon sequestration with livelihoods improvements through community
participation in forestry activities as well as conservation of flora and fauna species
through measures including habitat protection and improvement. The emissions
reductions will be achieved through avoided deforestation along the frontier borders of
the (SRF) and avoided forest degradation in selected forest areas subjected to mosaic
deforestation and forest degradation. Improved forest management through conversion of
logged forests including protecting logged or degraded forests from further logging will
help reduce GHG emissions. CRISP has three objectives, which are to achieve the
following:
i. Climate: to mitigate greenhouse gases through both emissions reductions and
enhanced removals of carbon dioxide from the atmosphere. That is, to slow or reverse
documented deforestation and forest degradation, and generate higher carbon
intensities per hectare across more hectares through improved forest management.
ii. Community: to assist the communities living within the 10 km zone of influence
(hereafter referred to as the reference region or interface landscape zone) upon the
project area by providing alternative livelihood options and conservation-linked value
chain development to reduce forest dependency for daily needs and to ensure
awareness raising and education facilities for adults and children to increase
motivation about the importance of forests as well as the carbon reserve for climate
change mitigation and adaptation.
Forest Carbon Concepts...
116
iii. Biodiversity: to conserve the habitat for several Red List endangered species,
including Royal Bengal tiger (Panthera tigris tigris), Irrawaddy river dolphin
(Orcaella brevirostris), crab-eating macaque (Macaca fascicularis), and other
important species of bird, fish, reptile, and other wildlife.
Monitoring of both project parameters and carbon sequestered will be conducted in order
to gauge the effectiveness and impacts of project activities, to measure forest carbon; and
to inform any adjustments needed to ensure the efficacy of methodologies,
implementation activities, or the monitoring plan itself. Key aspects of the project to be
monitored include: project boundaries, forest protection, forest management, carbon
stock changes and leakage. It is envisioned that the CMCs, together with the FD, will
play a central role in participatory monitoring, with assistance from relevant NGOs in the
areas of administrative, managerial, and financial monitoring.
Several aspects of the project will be monitored to ensure that project activities are
successfully carried out and adhere to conservation principles. Regarding the boundaries
of the SRF, although they are clearly defined in the field and on maps as per GoB
notification, periodic monitoring of the boundaries of the project areas will be conducted.
This will be accomplished through the use of appropriate technologies, such as remote
sensing with assistance from the FD's Resources Information Management System
(RIMS) unit, as well as through monitoring and ground-truthing in the field. Maps will be
updated regularly to ensure that monitoring is based on the most current situation. The
capacity of institutions such as the CMCs and the FD to understand and utilise monitoring
technologies and techniques will be strengthened through targeted trainings primarily
during the first three to five years of the project, with follow-up trainings as necessary.
Measuring of soil carbon as well as below and above-ground carbon and biomass will be
carried out through permanent sample plots determined by systematic random sampling
as developed during the initial field inventory. The dominant pools of biomass and carbon
stock (i.e. trees) will be measured every five years, along with periodic independent
verification. Measurement of pools that comprise a less significant portion of the overall
carbon stock or that are likely to change more slowly, such as soil carbon, may be
measured less frequently, for instance, every ten years. Best practices such as remote
sensing and field methods will be employed to inform the land use categorisations that
are used in measuring and monitoring changes in biomass and carbon. Similar to the case
of the project parameters, carbon stock monitoring will be carried out largely by the
CMCs through the CPGs, with the FD providing guidance on field inventory protocols.
To ensure they are equipped with the necessary knowledge and skills for carbon stock
monitoring, NGOs and other relevant institutions, such as the FD's RIMS unit will be
brought in during the first three to five years to provide training-of-trainers to FD field
staff as well as the CPGs on the use of remote sensing and field inventory technologies.
Targeted follow-up training will be offered, particularly if the technologies used change.
Main elements of a feasible monitoring, reporting and verification (MRV) system will be
identified. Sundarbans' mangrove forests form an important bio-geographical zone (the
country's other such strata/zones include hill forests, sal forests, social forests and
homestead forests) and shall thus form a stratum when a national MRV system is
Concept Note
117
designed and implemented. Within the two Sundarbans Forest Divisions (East and West)
and four field Forest Ranges, sample plots (temporary and permanent) will be laid out by
estimating appropriate sampling design, sampling intensity, number and location of
sample plots on a grid, and the methodology adopted as above for establishing baseline is
recommended for application. A two year cycle inventory will be carried out in the
sample plots laid out as per the grid by marking them in the field. Forests of the
Sundarbans will be categorised in the following 4 categories:
· Dense forests (more than 70% crown density)
· Moderately dense forests (30-70% crown density)
· Open forests (10-70% crown density)
· Scrub forests (less than 10% crown density)
Carbon gain-loss method estimates net balance of additions to and removals from a carbon
stock (based on annual growth rates), whereas the carbon stock change method estimates
the difference in carbon stocks at two periods. As the temporal inventories for the SRF
provide time series data on growing stock, particularly for trees, the later method is suitable
for carbon monitoring and reporting. The following carbon pools will be estimated:
· Above-ground carbon (tree, sapling, seedling, bamboo, cane, crown foliage, branches)
· On-ground carbon (woody debris, dead trees, leaf litter, grass)
· Below-ground carbon (soils, roots)
Average carbon stock for each of the above-identified stratum will be estimated by
following the carbon inventory methods as described in the Inventory Manual (IPAC
2010). Species specific volume equations and specific gravity will be used in estimating
carbon stock. Historical deforestation and degradation rates will be assessed either by
employing temporal inventory data and/or temporal analyses of imageries such as
LANDSAT/IRS. Maps will be generated by using facilities at RIMS of FD and/or
SPARSO. Base maps of the LGED available at 1:50,000 scale will be helpful in
generating these maps. However, it is important to know that carbon inventory and
mapping pose some challenges as forests inventory are generally characterised by
uncertainty and data limitations. Emission factors are neither available for the country nor
for the Sundarbans. Land-use changes in Bangladesh are happening rather fast due to
heavy biotic pressure. RIMS of FD requires being equipped with the latest equipments
and technology, and manned with trained staff.
Conclusion
Given her favourable and enabling environment, Bangladesh is a good case for forests
restoration and conservation through gainful partnerships with local communities who
depend on neighboring forests for meeting their subsistence needs including livelihoods.
The country is particularly prone to negative consequences of global climate change that
need to be mitigated by protecting and conserving forests through REDD+ initiatives.
Forest Carbon Concepts...
118
The ongoing REDD+ program would go a long way in both climate change mitigation
and adaptation of local ecosystems and community. A number of important policies and
operational interventions are suggested which need to be put in place both at the
government and civil society levels.
References
FD. 2008. 'Chunoti Carbon Project'. Forest Department, Dhaka.
FD. 2010. 'Integrated Resources Management Plans for the Sundarbans'. Forest Department.
Dhaka
FD. 2011. 'Collaborative REDD+IFM Sundrabans Project (CRISP)'. Forest Department,
Dhaka.
IPAC. 2010. 'Sundarbans Forests Inventory Manual'. Integrated Protected Area Co-
Management Project. Dhaka.
Concept Note
119
Book Review
Islamic Microfinance: A Tool for Poverty Alleviation
Empirical Study Using Different Models
Author: Dr. Md. Mizanur Rahman
LAMBERT Academic Publishing, Germany
Year: 2011; Pp55
Price : USD 60.30
This book explicitly describes the experiences of the author as a researcher in Islamic
Bank Bangladesh limited (IBBL) which has launched an Islamic Micro-finance
programme namely Rural Development Scheme (RDS) in 1995.
Bangladesh is the birth-place of microfinance and this is a fact which is acknowledged all
over the world. In the early stages, microfinance was not known to the world properly and
it was thought that poverty reduction through microfinance was only a distant dream. Yet,
over time, it has proven to be the most successful method of poverty reduction as well as
empowerment. Apart from access to credit, institutions also provide capacity development
programmmes through training for employment generation for the poor people. However,
this involves interest charge from the mainstream microfinance institutions like Grameen
Bank, ASA, BRAC etc. Lack of business ethics in the business, self-interest and a desire
for profit only has been highlighted as major reasons behind poverty.
With this scenario as the backdrop of the Rural Development Scheme (RDS), IBBL has
taken up a micro investment programme for improvement of livelihood for the rural poor
with a holistic approach like 'micro credit plus'. This includes education, training, social
mobility, rural infrastructure with subsequent moral and business ethics for poverty
alleviation.
RDS are implemented with some 0.3 million of group members including 0.2 million
investment clients (94% female) in 5,622 villages under 116 branches. However, IBBC
planned to double the activities within 2010.
This study includes primary data (1020 clients, 34 branch managers, 170 elites under 34
branches in Bangladesh). Pre-tested structured questionnaires were used during January
to February 2007.
There are many studies to examine the impact of various microfinance programmes
which are not interest-free schemes. So, the research goal and objectives of this book is to
explore the gaps and to assess the impact from interest-free micro finance scheme of RDS
under IBBL. The two hypothesis of the book was that Islamic micro finance provides
a) significant impact on income, expenditure, employment, productivity and ethics
b) significant contribution on rural poor households' livelihood. This empirical study
attempts to understand how Islamic microfinance can be used to alleviate poverty and
maintain sustainable rural development in Bangladesh.
1.
120
The author used Ordinary Least Square (OLS) technique in assessing the impact of credit
on household income and expenditure. It was found that factors like borrowers' age,
investment, number of earning family members, ethics and morals played a significant
contribution to the household income. On the other hand, land size, number of earning
family members and family size were the key determinants of household expenditure.
The author also took the effort to assess the opinion of the borrowers about their well-
being under IBBL. The author observed that borrowers' livelihood would improve due to
duration of membership with the bank, number of earning family members, food
expenditure, health expenditure, ethics and morals.
However, the study did not take the time series to assess the long term impact over the
period. Also, the study did not include a comparison between the control group (non-
intervention of Islamic micro-finance) and the intervention area by RDS to assess the
impact through comparative study.
The study recommends that the micro-credit activities should have coverage of hardcore
poor and include more female headed households (widows and divorcees). According to
the study, strengthening proper monitoring and supervision mechanisms will ensure that
credit is properly used on Income Generating Works (IGAs). Also, investment should be
optimum and timely with proper duration of repayment. However, the researcher/writer
has recommended the set-up of autonomous dedicated institutions instead of working
under a mainstream bank. Micro finance centres per branch may provide the services of
school and health care from the bank's foundation. Donation and Zakat money may be
utilised for the purposes of achieving holistic approach.
It may be concluded that micro-investment programmes are useful to the beneficiaries by
achieving some positive impact, which may improve livelihoods. This method may also
be recommended for replication, considering the country context.
Book Review
121
Grassroots NGOs by Women for Women: The Driving
Force of Development in India
Author: Femida Handy, Meenaz Kassam, Suzanne Feeney and Bhagyashree Ranade
SAGE Publications, New Delhi
Year: 2010 (6
th
Printing), Pp 236
Price : Rs. 425
This book focuses on rural women's empowerment through activities (e.g. self-help
groups and micro-finance) that promote both development and empowerment of grass-
root non-governmental organisations in the city of Pune, Maharashtra, India. The
empirical studies mentioned in the book narrate the stories of the grassroots NGOs which
are women-centric and their 20 founding female leaders. These grass root NGOs were
very effective in creating knowledge based communities which could be useful for
various development partners like funding agencies as well as for social scientists.
This book is categorised in three parts which are a) the study of the women who had the
entrepreneurial role with the studying NGOs b) organisational structures of the grass-
root NGOs with feminist ideology of the founders and d) the social impacts of the 20
NGOs including two successful projects.
Chapter one includes the success stories of women entrepreneurs who are also founders
of the Sindhutai and Medha Samant (NGOs). They have succeeded simply by dint of
their hard work and entrepreneurial innovations against poverty for the poor women in
India. Chapter two explores evolving organisation structures, resource mobilisation and
management strategies of two NGOs namely, Swadhar and Nari Samata, in the context of
feminist ideology. Chapter three provides illustrations of several NGO programmes like
Chaitanya and Susamvad to review the synergies on women empowerment.
Based on first-hand observations spanning five years and interviews with 20 founders of
NGOs, this book explores the factors that motivate and facilitate women entrepreneurship
in the development sector. It examines the organisational structures that have evolved
based on feminist ideology and the services provided like self-help groups and micro-
finance.
The authors also discuss the social impact of these NGOs as engines behind development
and improving women's empowerment in micro-level, which collectively may play a
vital role in both urban and rural settings in countries like India. The participatory and
inclusive management style ensures ownership which may lead of sustainability of the
programmes.
These women-led NGOs may function as successful models in the future to development
partners around the world. However, the findings of the studies mentioned in the book
emphasised on further policy implications for betterment of the impacts of NGOs. They
2.
Grassroots NGOs by Women...
122
show how small NGOs are particularly effective in garnering support from the grass-
roots and in tapping the knowledge base of local communities. Overall, the authors found
that women entrepreneurs act as facilitators with a unique leadership style and that they
encourage community-based movements grounded in local issues. As a result, these
women-led NGOs are successfully changing the landscape of rural poverty in India while
ushering in sustainable development.
However, despite the small size of the sample which was limited to Pune, the book made
some policy proposals to governments and donors. In fact, NGOs perform better as
service deliverers to the disadvantaged groups than the government. Governments can
contribute in the increasing pool of entrepreneurs to expose the youth and women with
social problems. This also may encourage the government and donors to make inclusive
programmes which assist low caste women to receive education, training and
interpersonal skills to work and volunteer in NGOs. In fact, readers may be interested in
learning how women perform remarkably by overcoming the odds and difficulties which
they face because of their rural surroundings and socially inferior conditions which is
prevalent in this male-dominated region.
Reviewed by
David Hilton
Assistant Programme Officer
Pilot Projects Division
CIRDAP
Book Review
123
APJ OR D
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Syed, Shireen K amal. 1992. Women in Post-harvest Loss Prevention. Dhaka: Centre on
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Tamanga, A., N Shrestha., K . Sharma, and S. K athi. 1994. Case Studies of Women with
Abortion Experiences. K athmandu: I DS.
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Press.
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Findings from Developed Societies be Applied in Developing Societies? Asia-Pacific
Journal of Rural Development, Vol. I I , No. 2. Pp. 1-14.
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