FINANCIAL ANALYSIS AND FACTORS DETERMINING THE PROFITABILITY OF CHILLI FARMING IN BOGURA DISTRICT

Abstract

The purpose of this research is to ascertain the profitability of chilli production and to identify the variables impacting it in Bihar and Namuja villages of Shibpur Upazila in Bogura district. Primary data were collected from 100 farmers from the study area. The sample farmers were selected through purposive sampling technique. The major findings of this study revealed that production of chilli were profitable. The logarithmic cobb-douglas production function was used to measure the factors determining the profitability of chilli production. Variable cost, fixed cost and gross return of production of chilli were BDT 103372, BDT 23668.6 and BDT 252347 respectively. The benefitcost ratio (BCR) was determined to be 1.98, implying that a taka investment in chilli

production generates

BDT 1.98. The inputs like cost of irrigation, manure, DAP and MoP played a significant role in determining the level of profit earned from chilli cultivation among the ten explanatory factors in the study area. The coefficient of cost of irrigation was 1.393 which indicates that if the farmer increases the cost of irrigation by BDT 1, net return may be increased by BDT 1.393 while each of the other inputs remains unchanged. On the other hand, if the farmer increase the cost of manure, DAP and MoP by BDT 1 net return may be decreased by BDT 0.292, 0.458, and 1.386 respectively while each of the other inputs remains unchanged. The study also identified inadequate extension service, lack of technical knowledge and credit facility as major production problem and lack of source of information and finance as major marketing constraints. Finally, the study gave necessary recommendations to improve the overall economic condition of the farmers through chilli production.