General Discussion
9.7 Profitability of STW irrigation business
The main operation cost of the STW irrigation technology or water selling business was fuel/electricity bill and driver salary. There was no metering system at all except few STW in the study area. Power development board (PDB) made electricity bill on an average based on motor
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horse power. The STW owner informed the investigator that this average bill was much higher than the metering system bill. For example, in metering system a farmer paid Tk. 15,000 in the last season for 5 HP motor, but in an average system for same HP motor the average bill was about Tk. 30,000, i.e. almost double. So they opined that metering system would be profitable for the STW owner. Again, some of the STW owners operated the machine by themselves. On the other hand, some of the STW owner hired the driver or the operator for operating the STW machine in Boro season (4-5 months) and all ancillary works is done by the driver (such as paddy harvesting, collection from the field and drying etc). For this STW owner had to be paid Tk. 30000 to 35000 as their salary. So, those STW owners hired driver, their total cost became about Tk. 65,000 to run a STW machine. On the other hand, ¼ share as an irrigation charge STW owner got about 100 maund paddy which is equal to 3700 Kg (1 maund=37 Kg) and during season the price of this paddy was Tk. 80000 (1 quintal@ Tk. 2162). That is total cost was about Tk. 65000 and total return was about Tk. 80000 at the end of the season. But here it is noticed that STW owner had to be invested about Tk. 40000 as investment cost of STW which average life span considered 10 years. So, it may be said that there was marginal profit for STW owner provided hired driver or operator. If STWs were operated by themselves, in other word if they did not hire driver then STW irrigation business would be reasonable profitable. It was reported from the field that due to requirement of food demand of the family and to make self employment and to be engaged themselves with the work, still farmers are doing this work as parental business.
For example one of the case studies may be cited here to understand / examine whatever the STW irrigation business was profitable or not. Mr. Md. Ajmat Ali, a STW owner of Kaijalipur mauza once upon a time he was 4 STW, but at present he has only one STW. Mr. Ali informed that in last Boro season (2017) he was a STW owner where command area was 40 Bigha (7.41 Bigha= 1 hectare) and his motor capacity was 10 HP. His total cost was Tk. 75300 (electricity bill was Tk. 47300 and driver salary was Tk. 28000). On the other hand, his total return was Tk.
75000 converting the Boro rice price in terms of money. That is total cost was Tk. 75300 and total return was about Tk. 75000 at the end of the season. It was observed from this case study that Mr. Ali did not get any net profit through this business. Mr. Ali opined that electricity bill was too much excess due to non-metering system. He also thought that the bill will be reduced to Tk. 35000 if it became metering system and in that case he could save Tk. 12300 and the business would become profitable little bit. Here it is clear that if STW owner performed as manager / driver / operator, then his business would become profitable. Mr. Ali also opined that without increasing of rice price, farmers both STW owner and water buyer could not sustain or survive themselves through STW irrigation business and Boro rice production respectively. He opined that the price of Boro rice should be increased at least Tk. 1200 per maund ( 1 maund= 37 Kg) or Tk. 3243 per quintal or Tk. 32430 per ton to make profitable STW irrigation business as well as Boro rice production.
111 9.8 Profitability of Boro rice production
From the Table 8.3 entitled “Production costs and returns of Boro rice per hectare in successive two years” under Chapter 8, it was observed that irrigated Boro rice production cost was increasing year to year. But return was increased little bit in terms of money. In the following year-wise cost and return of Boro rice per hectare are shown in Figure 9.3.
Figure 9.3: Year-wise Cost and return of Boro rice per hectare.
If we observed carefully the production costs and returns of Boro rice per hectare (Table 8.3 under Chapter 8) , we can see that there were mainly two types of cost involved viz 1) labor cost and 2) materials cost based on materials and non-materials. Labor cost includes different types of input cost such as land tillage, seedling, transplanting, weeding, application of fertilizer, pesticide and insecticide, harvesting, collection and drying of rice etc for Boro rice production.
On the other hand, materials cost includes of seed, fertilizer, pesticide and insecticide. Besides the labor cost and materials cost, irrigation charge is an important item for Boro rice production.
In our country as well as in my study area most of the farmers were marginal and tenant.
Marginal farmers cultivate Boro rice in rented land. He had to pay the land owners for a certain time (may be for season or may be for one or several years) at a fixed rate. On the other hand, tenant farmers cultivate Boro rice in other’s land also, but he had to pay half return or benefit to the land owner providing that land owner pay half of production cost to the tenant.
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Figure 9.4: A view of interview with a farmer by investigator
Farmers informed the investigator that those farmers who were growing Boro rice in their own land with family labour, in that case Boro rice production was higher profitable. Other wise Boro rice production was not profitable. They informed that production cost become higher than the total return if all input hired (specially labor and land). For example one of the case studies may be cited here. A farmer informed that to produce Boro rice per acre the total cost was Tk. 50000 and total return was 45 maund paddy (1maund=37 Kg) (after deduction ¼ share of irrigation charge) which was equal to 1665 Kg and during season the price of this paddy was Tk. 36000 (1 quintal @ Tk. 2162). That is total cost was Tk. 50000 and total return was Tk. 36000, that is Tk.
14000 was less than the production cost. So, it may be said that Boro rice production was not profitable in case of all input hired including labor and land.
If the farmer became tenant, then after deduction ¼ share of irrigation charge, the rice was divided into two parts of which one half got the land owner and the other half got the tenant. So, in above mentioned case studies, tenant and land owner got Tk. 18000 only for Boro season, but the cost of them each was Tk. 25000 which is more than the return. That means Boro rice production was not profitable in this system, especially for the land owner. It was reported that labor cost was 47% of total production cost of Boro rice (Table 8.3 under Chapter 8). So in this case study, labor cost was Tk. 23500 of which half paid by land owner and other half labor cost was adjusted by tenat farmer by devoted himself as a labor. He earned Tk. 18000 being invested
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Tk. 13250 as materials cost. In this way tenant farmer survive themselves in practical situation. It was reported that land owner was not interested to grow Boro rice in his land in this system; he wanted to lease his land to the marginal farmer for getting cash money. The farmers opined that the price of Boro rice should be increased at least Tk. 1200 per maund ( 1 maund= 37 Kg) or Tk.
3243 per quintal to make profitable the Boro rice production at present situation.