Assessment of cost-benefit parameters of conservation agricultural machinery for custom hires entrepreneurship in the southern region of Bangladesh

Mohammad Abdul Mottalib, Mohammed Ayub Hossain, Mohammad Israil Hossain, Mohammad Nurul Amin, Mohammad Monjurul Alam, Chayan Kumer Saha

Abstract


This paper presents, assessment of cost-benefit parameters of conservation agricultural machinery for custom hires entrepreneurship development in southern region of Bangladesh. The key principles of the study were to determine the economic parameters for developing a CA (conservation agriculture) machine custom hire entrepreneurship and effective schedules for CA machine operation. Field experiments were conducted at Dumuria, Wazirpur, Subarnachar and Kolapara Upazila (Sub-district) of Khulna, Barishal, Noakhali and Patuakhali districts, respectively in the southern region of Bangladesh in the years 2017 and 2018. Two villages in each Upazila were selected for this study. Primary data was collected from these field experiments. Secondary data from various sources were used in this section of research. Annual operating costs were calculated and project financial profitability was determined by four on farm financial measurement techniques namely, benefit-cost ratio (BCR), net present value (NPV), internal rate of return (IRR), payback period (PBP). The total cost of operation of a CA machine was found US$32 per hectare. Annual savings for replacement and a profit margin for the entrepreneur, the rent-out charge of the CA machine was estimated as US$67 per hectare of machine operation. Considering 15% interest rate, the NPV of CA machine in exiting condition was US$2561.The NPV indicates that CA machinery is considered financially sound and the project is said financially viable because IRR (139%) of CA machine was greater that the bank interest rate (14%). The benefit-cost ratio of machine was found 1.41, which was profitable venture for an entrepreneur. The break-even use of the CA machine was estimated 1.70 ha of machine operation. Therefore, the owners of CA machine or local service providers (LSPs) can start this business right now which will be highly profitable venture for an entrepreneur.


Keywords


Benefit cost ratio, CA machine, entrepreneur, operating cost, payback period

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