A COMPARATIVE PROFITABILITY ANALYSIS OF CREDIT AND NON-CREDIT USERS OF HYV BORO RICE CULTIVATION IN PAKUNDIA UPAZILA OF KISHOREGANJ DISTRICT

Abstract

Agricultural credit program is considered as the significant change-maker in the rural and subsistence agriculture sector of Bangladesh. Attainment of the agricultural credit program typically relies on the disbursement process, effective utilization as well as the profitability of the ultimate users. Therefore, an investigation was conducted at Pakundia Upazila under Kishoreganj district to assess the amount of requirement and disbursement situation of credit; evaluate the cost of getting credit and its utilization patterns; measure the profitability of credit borrowers and non-credit farmers; and find out the constraints of getting credit by different farm categories to get a detailed insight about successful attainment of the credit program on High Yield Variety (HYV) Boro rice cultivation. A total of 60 farmers were interviewed in 2019. Descriptive statistics as well as tabular analysis were used to analyze and interpret the data. The study revealed that borrower farmers used more inputs and attained more returns through higher yield than their counterparts. The yields of rice per hectare were 10697.04 kg and 8985.64 kg for the credit and non-credit user farmers, respectively. The gross returns and net returns were Tk. 230280.83 and Tk. 98290 respectively, for the credit user farmers and Tk. 194385.90 and Tk. 69809.29 respectively for non-credit user farmers. The undiscounted Benefit Cost Ratio (BCRs) were 2.68 and 1.74 according to variable cost basis and total cost basis respectively in case of credit user farmers and 2.47 and 1.56 for the non-credit user. The findings also revealed that on an average Bangladesh Krishi Bank (BKB) fulfilled 77 percent of the total credit requirement of Boro rice farmers in the study areas. Borrowers had to pay on an average Tk 12.18 percent for getting loans where small farmers had to pay the highest followed by medium and large farmers, respectively. Small, medium and large farmers used 48, 35 and 23 percent of borrowed money, respectively, for Boro rice production and the rest were used for family consumption and other purposes. Medium farmers were found to be more profitable followed by large and small borrower farmers, respectively. Insufficient amount of credit, higher non-interest cost of institutional credit as well as long and complex institutional procedure of loan disbursement was reported as main constraints by the borrowers. The study further reveals that credit could be judged as a vital player to increase higher yield through utilization of necessary production inputs and the inevitability of reformation of the current agricultural credit program to make it more user-friendly and an effective contrivance.