Journal of Agricultural Economics and Rural Development

JAERD

Vol. 2(2), pp. 026-031, July, 2015. www.premierpublishers.org, ISSN: 2167-0477

Research Article

Cost-effectiveness and resource use efficiency of sweet

potato in Bangladesh
1*

Md. Tanvir Ahmed, 2Sudhir Chandra Nath, 3S.S.R.M. Mahe Alam Sorwar, 4Md. Harun -ORRashid
1*,2,3,4

Seed and Agro Enterprise, BRAC, Bangladesh.

th

In Bangladesh sweet potato is the 4 most important source of carbohydrate after rice, wheat
and potato. The study was conducted to determine the profitability and resources use efficiency
of sweet potato (Ipomoea batatas Poir) in Bangladesh. This study also aimed to find the factors
affecting gross return of sweet potato production. A total of 100 farmers were selected from the
study area through stratified random sampling technique and face to face interview was
conducted to collect primary data. The cost and return analysis indicated that per hectare net
return from sweet potato was 82,758.93 BDT (Bangladesh Taka). Benefit cost ratio (BCR) was
found 1.97. Labor and vine cost accounted for the 48% and 28% of the total cost, respectively.
Cobb-Douglas production function was used to determine the factors affecting gross return of
sweet potato. The result showed that farm size, cost of vine, cost of land preparation and cost of
labor have positive impact on gross return. Sweet potato cultivation is more sensitive to the
output price which can be compensated by increasing yield. Resource use efficiency analysis
revealed that farmers are not efficient in using resources in sweet potato production. Vine, land
preparation, fertilizer and labor were underused and therefore increase the use of these
resources can maximize profit in sweet potato production in Bangladesh.
Keywords: Cost-effectiveness, resource use efficiency, sensitivity analysis, sweet potato production

INTRODUCTION
Sweet potato (Ipomoea batatas Poir) is one of the
important root crops in many parts of Asia, Africa and
Latin America. Because of its versatility and adaptability,
sweet potato ranks as the worlds seventh most important
food crop after wheat, rice, maize, potato, barley, and
cassava (Zuraida, 2003). The crop is highly nutritious and
provides generous quantities of vitamin A, vitamin C,
Beta carotene and Iron. It is also suitable to be grown in
the tropical areas where the large portion of the worlds
poor people lives. Besides ensuring the food security of
the human being, sweet potato is also used as animal
feed in many countries. Sweet potato requires few inputs
and can be planted in erosion prone areas to protect
farmland as it spreads to cover the soil (Kassali, 2011).
Sweet potato is also called disaster combating crop as it
grows very faster without much cultural management
even in the disaster affected areas. In developing
countries, sweet potato ranks as the fifth most important

food crop on a fresh-weight basis after rice, wheat maize

and cassava. It is also considered as a food crop that can
be used to alleviate the food shortage and overcome the
hunger (Anonymous, 2009).
th
In Bangladesh sweet potato is the 4 most important
source of carbohydrate after rice, wheat and potato.
Sweet potato plays a significant role in increasing food
security and income for the poor farmers of Bangladesh.
Sweet potato is mainly grown in the marginal land of
Bangladesh during the period of October to February. It is
consumed in different forms mainly boiled, fries and
roasted. Sometimes it is also eaten as vegetable in curry.

Corresponding Author: Md. Tanvir Ahmed, Seed and

Agro
Enterprise,
BRAC,
Bangladesh.
Email:
tanvir4344@yahoo.com, tanvir.am@brac.net, Phone
Number: +88029881265 Ext 3346.

Cost-effectiveness and resource use efficiency of sweet potato in Bangladesh

Ahmed et al.

026

The leaves and tender shoots of sweet potato are also

consumed as vegetables. The leaf contains, on dry mater
basis about 8% starch, 4% sugar, 27% protein and
vitamins and therefore they are very nutritious (Ohajianya
et al. 2014). Sweet potato is extensively grown in all the
districts of Bangladesh particularly by the side of rivers
and in the char land. In 2009-10, about 0.31 million metric
tons of sweet potatoes were produced from 31.1
thousand ha of land in Bangladesh (BBS, 2010).
Bangladesh ranks 23 in the world in terms of sweet
potato production in 2011 (FAOSTAT, 2012).
Profitability of a crop depends on yield, price of the
product, and cost of inputs as well. Any variation in any of
the above factors obviously will change the profitability. It
is changed over time, place and management level
(Begum et al., 2011). Mostly, farmers cultivate traditional
varieties of sweet potato in Bangladesh which are good in
taste but gives very low yield. Sweet potato gets very less
importance in terms of input use and management
practices by the farmers. Traditionally farmer uses very
fewer inputs specially irrigation, fertilizers and pesticides
to cultivate sweet potato. Bangladesh Agricultural
Research Institute (BARI) has developed 9 High Yielding
Varieties (HYV) of sweet potato having potential yield of
35 tons per hectare. But the average national yield of
sweet potato is around 18-20 tons per hectare only. It has
become an important issue to determine the costeffectiveness and resource utilization efficiency of sweet
potato. This study may help the policy maker of the
country to take necessary action regarding the expansion
and resource utilization of sweet potato cultivation.
Though there are huge potential of sweet potato to
address the food security of Bangladesh but there are
limited number of study found on sweet potato production
and its resource utilization efficiency. This study aims to
determine the productivity, profitability and resource use
efficiency of sweet potato in two districts of Bangladesh.

MATERIALS AND METHODS

The study was carried out during January 2013 to August
2013 in two major sweet potato growing districts of
Bangladesh
namely
Jamalpur
and
Netrokona.
Shorisabari and Sadar upazila (Sub-district) were
purposively selected for the study from Jamalpur and
Netrokona district, respectively. Stratified random
sampling technique was used to identify the sample
farmers. Not all farmers from the study area cultivate
sweet potato. Hence, they were stratified into two groups;
sweet potato cultivars and non-sweet potato cultivars.
Sample farmers were randomly selected from the sweet
potato cultivar group. A total of 100 farmers that is 50
from each district were taken for the study. A
questionnaire was prepared for collecting information

from the sample farmers. Primary data were taken

regarding the socio-economic characteristics of sample
farmers, input used in sweet potato cultivation, cost of
different inputs, prices of output and yield of sweet potato
through field survey. Descriptive statistics (mean,
average, percentage etc.) and tabular analysis was done
to analyze the data. Profitability of sweet potato was
examined on the basis of gross return, net return and
benefit cost ratio (BCR). Cobb-Douglas form of
production function was used to determine the effects of
key variables to the production of sweet potato. Statistical
software (STATA 12) was used to do the regression
analysis. The Cobb-Douglas production function model is
as follows:
b1

b2

b3

b4

b5

b6

Y = aX1 X2 X3 X4 X5 X6

b7

X7

eui

................... (1)

The function was transformed into the following double

log or log linear form;
ln Y = ln a + b1ln X1 + b2ln X2 + b3ln X3 + b4ln X4 + b5ln X5
+ b6ln X6 + b7ln X7 + Ui
Where,
Y = Gross return (BDT/ha)
X1 = Age of farmer (years)
X2 = Experience of sweet potato cultivation (years)
X3 = Farm size (ha)
X4 = Cost of vine/planting materials (BDT/ha)
X5 = Cost of land preparation (BDT/ha)
X6= Cost of fertilizer (BDT/ha)
X7 = Cost of labor (BDT/ha)
a = Intercept
b1, b2, b3, b4, b5, b6, b7, = Production coefficient of the
respective variable inputs
Ui = Error term
Calculation of resource use efficiency: To accomplish
the objective of profit maximization for efficient allocation
of resources, one should use more of the variable
resource so long as the value of the added production is
greater than the cost of the added amount of the
resource used in producing it. The standard way to
examine such efficiency is to compare marginal value
product (MVPs) with marginal factor costs (MFCS) of
each variable input. Resource use efficiency of an input is
calculated using the basic economic formula;
MVP/MFC=1
The resource is considered to be efficiently used as well
as profit will be maximized when the ratio of MVP to
factor MFC approaches one, if in other words MVP and
MFC for each input are equal. If the ratio is greater than
1, the resource is underused and the gross return could
be increased by using more of the resource and if it is

Cost-effectiveness and resource use efficiency of sweet potato in Bangladesh

J. Agric. Econ. Rural Devel.

027

Table 1. Socioeconomic Characteristics of respondents

Items

Frequency

Percentage (%)

Mean

Age (years)
17-30

18

18.18

43 (12.86)

31-40

33

33.33

41-50

24

24.24

51-60

12

12.12

61 and above

12

12.12

99 (one value missing)

100

Illiterate

51

51

Primary (Class I-V)

33

33

Secondary (Class VI-X)

12

12

Higher Secondary (HSC) >

100

100

48

48

11-15

22

22

16-20

17

17

21-25

26>

Total
Average Family size (person/household)

100

100

Total
Literacy level

Total
Experience
(Years)
1-10

of

Sweet potato

N/A

farming
13.5 (9.36)

5.24 (1.89)

Farm Size distribution (Decimal)

Land less farmer (0-50)

30

30

Marginal farmer (51-100)

26

26

Small farmer (101-200)

25

25

Medium farmer (201-400)

15

15

Large farmer (401>

Total

100

100

Yes

11

11

No

89

89

Yes

No

96

96

131.66 (110.46)

Irrigation use
N/A

Chemical use

less than 1, the resource is overused and the excess use

of resource should be decreased to minimize the loss
(Taru, 2008).
When marginal physical product is measured in monetary
term then it is called Marginal Value Product (MVP). But
in this model, MVP is estimated in terms of an additional
BDT invested on individual inputs. According to Dhawan
and Bansal (1977), the useful estimate of MVP is
obtained by taking the geometric mean of the resources
(xi) as well as the gross return. MVP is calculated by

N/A

multiplying the coefficient of a given resource with the

ratio of the geometric mean (GM) of gross return to the
GM of the given resource. Thus;
MVP (xi) =bi. (Y / Xi)
Where
bi = Regression co-efficient
Y = Mean value (GM) of gross return in BDT
Xi = Mean value (GM) of different resources in BDT

Cost-effectiveness and resource use efficiency of sweet potato in Bangladesh

Ahmed et al.

028

Table 2. Per hectare cost and return of sweet potato production

Item
Vine/Planting materials
Land preparation
Irrigation
Fertilizer
Chemical (Pesticides/Insecticides)
Labor
Interest on operating capital (12%
for the period of 4 months)
Total cost
Yield (Kg)
Unit price (BDT/Kg)
Gross return (GR)
Net return (NR)
Benefit cost ratio (BCR)

Mean Value (BDT)

23366.10
8907.37
304.77
7913.77
29.91
41117.09
3265.56

Percentage (%)
27.52
10.49
0.36
9.32
0.04
48.43
3.85

84904.57
23,126
7.25
167663.5
82758.93
1.97

100.00

Source: Field survey and Authors calculation, 2013; 1 USD = 80 BDT

i= (1, 2, 3..n)
GM = Geometric mean
The equation can also be written as;
dY/dXi = bi. (Y / Xi)
Where, dY/dXi = slope of the production function =
Marginal Value Product (MVP)
Since, all the inputs and outputs were expressed in
monetary terms, the acquisition cost of the inputs was
taken as one BDT. The criteria used here to assess the
resource allocation efficiency are to test the MVPs
against MFC (Heady and Dhillon, 1988).

RESULTS AND DISCUSSION

Socioeconomic characteristics of the respondents
Socio-economic characteristics of the farmers are
important in influencing farm decision making and
production planning. In this present study the
socioeconomic characteristics found are not homogenous
(Table 1). Most of the sweet potato farmers belonged to
the age group 31-40 and 41-50 years. The average age
of the sweet potato farmer was 43 years. 51% of the
farmers were found illiterate while 33% have only primary
education, which may hinder the effectiveness of any
extension of modern sweet potato production
technologies (Kassali, 2011). The average experience of
sweet potato cultivation is 13.5 years, indicates the
knowledge of sweet potato production techniques by the
producers. Average family size was found is 5.24. The
average farm size was about 132 decimal (0.50 ha). But,
30% of the respondent farmers have less than 50
decimal of land and they are considered as land less
farmer. More than 80% of the farmers having land size
less than 1 hectare, making sweet potato production a

small scale enterprise. On the other hand only 11% of the

respondent farmers used irrigation while only 4 % applied
chemical, which indicates poor cultural management and
ignorance of modern technology. The results imply that
more extension efforts are needed for adaption of
improved cultural practice of sweet potato.
Cost and return analysis
A farm earns profit when its net return is above its total
costs that means when the benefit cost ratio (BCR) is
greater than 1. Profitability is the main aim of any farm
(Majumder et al., 2009). During harvest period the
average price of sweet potato was 7.25 BDT per Kg. The
average yield was 23,126 Kg/ha (23.12 tons/ha). The
Gross return was found to be BDT 167,663.5 per hectare
while the total cost was 84,904.57 BDT/ha. Hence the
average net return of sweet potato production was
82,758.93 BDT/ha, indicating sweet potato production is
profitable (Table 2). Almost same amount of gross return
from sweet potato was found by Begum et al. (2011) in
her study. Labor cost accounted for 48.4 % of the total
cost followed by vine/planting materials cost (27.5%).
Irrigation and Chemical cost accounted for only a minimal
of 0.36 % and 0.04 %, respectively. This is because,
there are only 11% and 4 % farmer used irrigation and
chemical, respectively to produce sweet potato. The
BCR, on full cost basis, was found 1.97 which indicates
that sweet potato production is economically profitable in
the study area and generates almost double return of the
total investment.
Sensitivity analysis
Cost, yield and output price can affects the profitability of
sweet potato production. This study found that profitability
is more sensitive to the change in yield and output price

Cost-effectiveness and resource use efficiency of sweet potato in Bangladesh

J. Agric. Econ. Rural Devel.

029

Table 3. Relative effect of change of total cost, yield, output price and input cost on the
profitability

Changes
Total cost (Increased by 10%)
Yield (decreased by 10%)
Output Price decreased by 10%
Labor cost increased by 10%
Vine/planting materials cost increased by 10%

Change in Profitability (%)

Total Profit decreased by 10.25%
Profit decreased by 20.26%
Profitability decreased by 20.26%
Profitability decreased by 4.97%
Profitability decreased by 2.82%

Table 4. OLS estimates of sweet potato production using the Cobb-Douglas function

Variables
Constant
Age
Year of experience
Farm size
Cost of vine
Cost of land preparation
Cost of fertilizer
Cost of labor
R-square

Coefficient
1.358046
0.2545247**
0.0381298
0.1648272***
0.3743613***
0.2221695***
0.1195006**
0.2994011***
0.65

Adjusted R-square
F-value
Return to scale

0.62
20.80***
1.47

t- ratio
1.05
2.37
0.88
3.27
8.82
3.12
2.39
3.10

P-value
0.298
0.020
0.380
0.002
0.000
0.003
0.019
0.002

*** Significant at 1% level, ** Significant at 5% level

Table 5. MVPs of inputs/resources in production function

Resources
Gross return
Vine/Planting materials
Land preparation
Fertilizer
Labor

Geometric mean (BDT)

167663.56
23366.10
8907.37
7913.77
41117.09

of sweet potato (Table 3). If output price decreased by

10%, the profitability will be decreased by more than
20%, on the other hand if yield is decreased by 10%,
profitability will also goes down by 20.26%. A 10%
increase in labor and vine/planting materials cost would
results 4.97% and 2.82% reduction in profit, respectively.
While a 10% increase in total cost will reduce the total
profit by 10.25%. Sweet potato farmers would likely be
more affected by output price and cost of labor which can
be compensated by increasing yield (Kassali, 2011).
Sweet potato production function
In order to estimate the effects of various factors for the
production of sweet potato a log-linear (Cobb-Douglas)
production function model was chosen, because of its
best fit. The estimated Cobb-Douglas production function
shows an F value of 20.80 which is significant at 1% level
(Table 4). The value of the Adjusted R-square is 0.62
indicates that 62% of variability of gross return can be
explained by the explanatory variables used in the model.

Co-efficient

MVP

0.3743613
0.2221695
0.1195006
0.2994011

2.686231
4.1819
2.531776
1.220871

Farm size, cost of vine, cost of land preparation and cost

of labor were found highly significant at 1% level and
have positive impact on gross return while age of the
farmer and cost of fertilizer were found significant at 5%
level. We did not use the irrigation cost and the chemical
cost as explanatory variable in the model, because only
11% and 04% of the respondent farmers used irrigation
and chemical, respectively to produce sweet potato. The
summation of all the production co-efficient indicates
returns to scale. We found returns to scale of 1.47 (>1)
which means that production function exhibit increasing
return to scale. The increasing return to scale indicates
that the current scale of sweet potato production is
insignificant and there is room to increase the productivity
through an increase in scale (Kassali, 2011).
Resource use efficiency
Resource use efficiency means how efficiently farmer can
use his resources in production process. It is important to
ensure efficient use of resources, because resources are

Cost-effectiveness and resource use efficiency of sweet potato in Bangladesh

Ahmed et al.

030

Table 6. Analysis of resource use efficiency

Resources
Vine/Planting materials
Land preparation
Fertilizer
Labor

MVP
2.686231
4.1819
2.531776
1.220871

always limited (Majumder et al., 2009). For calculating

resource use efficiency this study considers four factors
which are vine/planting materials, land preparation,
fertilizer and labor. The estimated MVP of different
resources for sweet potato is presented in Table 5.
MFC is the price of per unit of resources. In this study
MFCs for all resources expressed in terms of additional
BDT, in calculating the ratio of MVP to MFC. The
efficiency ratio for given resources is greater than 1,
hence all the resources were underutilized (Table 6).
That means the sample farmers used less inputs than the
optimal. There is scope for the farmer to increase the use
of all selected resources to maximize gross return.

CONCLUSION AND RECOMMENDATION

Sweet potato production is a profitable venture for the
farmers. This study found that famers are getting almost
double return than the cost of sweet potato production.
The profitability of sweet potato production is more
sensitive to the market price of output during the
harvesting period. Farmer can compensate the risk of low
market price of output by increasing the yield. Farmers
are using mostly traditional variety of sweet potato and
getting yield around 23 tons per hectare. But the potential
yield of high yielding variety of sweet potato is around 35
tons per hectare. Moreover farmers are not using their
resources efficiently. Vine/planting materials, land
preparation, fertilizer and labor are underused in the
study area. The profitability as well as the gross return
can be increased by applying more resources until it
reaches to the optimum level. Again, farmers are very
ignorant of using irrigation and chemicals which also
leads to lower yield of sweet potato. From the result of
the study it is recommended that farmer should use high
yielding variety of sweet potato and optimize the resource
use in sweet potato production.
ACKNOWLEDGEMENT
The Author is very much grateful to International Fund for
Agricultural Development (IFAD) and International Potato
Centre (CIP) for granting fund to undertake this research.

MFC
1
1
1
1

Efficiency Ratio
2.686231
4.1819
2.531776
1.220871

Conclusion
Underutilize
Underutilize
Underutilize
Underutilize

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Cost-effectiveness and resource use efficiency of sweet potato in Bangladesh

J. Agric. Econ. Rural Devel.

supplement during rice storage, J. Lubang Pertanian,

22(4): 150-155.
Accepted 06 July, 2015
Citation: Ahmed MT, Nath SC, Sorwar MA, Rashid MH
(2015). Cost-effectiveness and resource use efficiency of
sweet potato in Bangladesh. Journal of Agricultural
Economics and Rural Development, 2(2): 026-031.

Copyright: 2015. Ahmed et al. This is an open-access

article distributed under the terms of the Creative
Commons Attribution License, which permits unrestricted
use, distribution, and reproduction in any medium,
provided the original author and source are cited.

Cost-effectiveness and resource use efficiency of sweet potato in Bangladesh

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