PROFITABILITY, PROBLEMS AND POSSIBLE SOLUTION OF BEAN CONTRACT FARMING IN BANGLADESH

Abstract

Contract farming may be solving production and marketing problems of many developing countries which gain importance. To investigate the profitability and problems of contract farming, 120 contract farmers and 180 non-contract farmers were randomly selected from Narsingdi district of Bangladesh. Descriptive statistics were used to analyze the data and conventional cost and revenue analysis were used to investigate the profitability of bean production. Result showed that bean contract farmers had 7.31 years of schooling whereas non-contract farmers had 2.75 years of schooling. Contract farmers got higher prices (Tk. 41.32) for their bean than for the non-contract farmers (Tk. 31.22). Net farm income of contract farmers was Tk. 789677.22/ha, whereas Tk. 457589.30/ha for non-contract farmers. Total 96.67% of contract farmers had verbal commitments with companies for the contract and only 3.33% of contract farmers had written document. Most of the farmers (82.5%) had marketing contract with different companies. 51.67% of contract farmers got cash support from the contract companies and 17.5% of contract farmers got training from different companies. 86.67% of the contract farmers were satisfied for their contract with different companies. Both contract and non-contract bean producing farmers mentioned their problems and they also suggested some solutions to solve their problems. Government monitoring and supervision are necessary to expand contract farming and to solve existing problems of contract farming in Bangladesh.