Posted on 19th Oct 2024 12:04:17 PM Marketing
1.1 INTRODUCTION
The crop sector is of strategic importance to Bangladesh, as in most other low-income countries. It is the source of staple food for 130 million people and the major means of livelihood of 13 million farm households in the country.
The impact of paddy market on overall standard of living is significant. So, the price of paddy should be stabilized. But ironically, since independence, the price of paddy is increasing at a high rate. Seasonal fluctuation is one of the reasons for the elasticity of the price of paddy. Farmers often bear their production cost of paddy in credit. So, in the harvesting season farmers sell the paddy with comparatively lower price for the payment of credit. More over natural calamity, instability of international fuel market, fertilizer and electricity crisis are also very important causes in the raise of the price of paddy.
The poor often compare their income with the price of rice. If the paddy market can be controlled then rice market can be controlled automatically. The increasing rate of price of paddy causes a huge number of miseries.
The first need of man is to satisfy the hunger. After spending money for food then the poor think about the fulfillment of other requirements. And the staple food in Bangladesh is rice. The price of paddy is directly related with the paddy market. The price of paddy is increasing more rapidly than the income of the poor. Moreover, farmers do not earn huge profit by cultivating paddy. This is because the production cost of cultivation paddy is increasing rapidly. Some time it also happened that farmers purchase paddy in a high rate in the off season of paddy.
Since Independence, the Government of Bangladesh has attempted to reduce variability of paddy prices, and especially to prevent sharp increases in price. For ensuring food security for all households the government of Bangladesh undertakes several activities, including open market sales of food grain to limit food grain price increases, targeting food distribution to poor households, providing emergency relief after natural disasters, and procuring food grain to support producer prices and incomes.
1.2 PROBLEM DEFINITION OF THE STUDY
This report has been prepared to fulfill as a partial requirement of the MBA program as an Internship research study project held by the department of marketing, University of Rajshahi. This course is the internship program, which is designed to equip the students with knowledge about the real life-working environment and to develop their work-related skills. At the end of the course, students need to submit a written report.
The supervisors help the students to choose a topic to work with, with the help of the supervisor the student finds out the various problems of the. field of research. These help them in defining problem areas and ascertain a report topic. I am doing my internship program on price escalation of rice in Bangladesh. The title of my report is “An analysis of price escalation of paddy in Bangladesh’’
Paddy price is increasing day by day. But it should not increase in rapidly. So, what is the trend of price escalation of paddy over year to year it should be known so that the policy maker can make food policy appropriately? More over in harvesting season the supply of paddy is higher than any time. So, is there any seasonal variation in price of paddy? If yes, then what is the impact of it?
Profit form cultivation of paddy is differ from place to place due to the cost of factors of production is also differ from place to place. But it also be keep balance. So, what is the factors influencing in the cost of production it also be known and the difference cost in various places be determined. In this study I tried to solve the above mention problem.
1.3 JUSTIFICATION OF THE STUDY
Bangladesh is the fourth largest country in producing paddy in all over the world. In 2000-2001 Bangladesh was the second largest country in producing paddy. The total cultivable land area of Bangladesh is 2 cores 1 lack 57 thousand acres from which the average flood affected area is 1 core acre. But the above mention information shows that Bangladesh has got the very fertile land to cultivate paddy.
Moreover rice is the staple food in Bangladesh. But the paddy market is not stable in Bangladesh. Now a days cost of production in cultivation of paddy is very high than that of before. So, the price of rice is also high. But the poor farmers do not get high margin as they bound to sell their paddy just after harvesting.
This paper is discussed about the trend of price escalation of paddy and also discussed about the seasonal variation of price of paddy. If the impact of seasonal variation of the price of paddy can be reduced then it will be ensured that the poor farmers will be benefited. This paper also identified the factors of cultivation of paddy and their impact on cost of cultivation. By identifying the factors and their impact on cost of cultivation this paper recommended a guideline to prepare a food policy. For keeping the price level at a tolerate level and determining the subsidiary sector factor of production should be analyzed properly. If the If the year-to-year price changes and the impact seasonal variation are reduced then government can ensure food for every household and the stability of price of paddy will be ensured. This study will help to how to make the stable price of paddy.
1.4 LIMITATIONS OF THE STUDY
Research study is a continuing process and it is also complicated one. This is my first research project. So it is very much easy that obviously I have some lack of experience which can be said as the limitations of this study. After all, I have tried my level best to do better performance. But despite of employing all the possible sort of efforts in making this study a better one, there are some limitations is inescapable. They may be:
• Lack of knowledge and skill: For conducting the research project there need vast knowledge and experience about the research. As this is my first research definitely I have no experience and less skill. So, there is a possibility error occurrence in the research.
• Lack of time: Preparing a research involves huge works such as reading research papers and finding the lacks, preparing research proposal, data collection, data analysis, research writing etc it need huge time. But I prepared this paper besides the academic classes and examinations and thus I got very few time for the research. So, there is a possibility of error occurrence here.
• Insufficient data: One of the prerequisite of a successful research is that its data must be relevant and sufficient. For preparing the secular trend it need as much yearly data as possible. But I got 14 years data. If I got more data then the research may be more fruitful.
• Lack of money: To operate this study, there was no available money. So, I could not able to collect sufficient data from the source.
1.5 OBJECTIVE OF THE STUDY
The main objective of this research paper is to describe the instability of paddy market and its solution. Moreover the objectives of this research are:
• Interpret and evaluate the changes occurring in the price of paddy.
• Isolate and measure the impact of seasonal pattern in the time series.
• Describe and evaluate the current market situation of paddy.
• Determining and evaluating the cost of paddy cultivation.
1.6 RESEARCH METHODOLOGY
This research paper is fully depends on the secondary data. For the purpose of conducting this research I collected secondary data from various secondary sources. The majority portion of the data is collected from Bangladesh Agriculture Marketing Department. Moreover, data are also collected from various agricultural magazine, newspaper, journal and internet. This research paper is a quantity research.
For determining the long term changes occurring in the price of paddy I used least square method. This method has got almost universal acceptance for fitting straight lines to numerical data. A straight line would provide a fair description of the relation between two variables, we are encountered with the problem of finding out a mathematical equation of the line which would provide the best possible fit to our observed data and would thereby best possible prediction. The basic assumption of the least square method is that the sum of the squares of the deviation or distance of individual points from the fitted line should be minimum.
For measuring the seasonal fluctuation of price of paddy I used the ratio-to-moving average method. The ratio-to-moving average method is the best of all method for measuring seasonal variation and also the most widely used method in practical work. This method allows more flexibility when the trend is non-linear. Under the method moving averages there turns to be little chance of confusing seasonal variation with trend. The ratio-to-moving average method is recommended for all practical purposes.
ABSTRACT
Price stabilization is an important though somewhat ambiguous policy objective of the government of Bangladesh. To meet its overall objective of ensuring food security for all households, the Government of Bangladesh undertakes several activities: it intervenes in markets to stabilize prices, targets food distribution to poor households and provides emergency relief after natural disasters. This paper provides measures of the variability of domestic and examines the government intervention in paddy markets. The analysis shows that the relatively high degree of price stability achieved in recent years was due in large part to private sector imports that stabilized markets following major production shortfalls. Domestic rice procurement contributed relatively little to raising domestic producer prices at harvest time, involved only a small percentage of farmers, and incurred excessive costs following successful harvests because of procurement prices set far in excess of market prices.
CONTENTS
CHAPTER 1: INTRODUCTION
1.1 Introduction
1.2 Problem Definition of this Study
1.3 Justification of this Study
1.4 Limitations of this study
1.5 Objectives of this Study
1.6 Research Methodology
CHAPTER 2: PRESENT SITUATION ANALYSIS
2.1 Present Market Analysis
2.2 Price Stabilization through International Trade
2.3 Unit Cost of Production and Prices
2.4 Factors behind the Difference in Unit Costs
2.5 Comparative Advantage in Crop Production
CHAPTER 3: DATA ANALYSIS
3.1 Trend Analysis of Paddy Price in Bangladesh
3.2 Seasonal Fluctuation Analysis of Paddy Price in Bangladesh
3.3 Analysis of Paddy Production Cost and Profit of Paddy in Bangladesh
CHAPTER 4: FINDINGS & RECOMMENDATION
4.1 Findings of the Study
4.2 Recommendation
4.3 Conclusion
CHAPTER 5: BIBLIOGRAPHY
5.1 Reference
LIST OF FIGURES & CHARTS
1. National Wholesale Price of Paddy.
2. Effect of a Production Shortfall.
3. Trend Value & Year-to-Year Change of Price of Aman.
4. Trend Value & Year-to-Year Change of Price of Ause.
5. Trend Value & Year-to-Year Change of Price of Boro.
6. Seasonal Index of Price of Aman.
7. Average Cost of Production & Total Profit of Paddy Cultivation in Some Important Districts in 2005.
8. Comparism of Cost of Production between Aman & Boro.
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