AAPI Bulletin Vol 4, June 2011

AAPI NEWS BULLETIN Accelerating Agriculture Productivity Improvement (AAPI) Volume 4

A project supported by USAID in collaboration with DAE Notes from Chief of Party, AAPI

Inside this issue:

580,805 AAPI farmers use

2

Fertilizer Briquette Producers to Understand Cost and Revenue

3

Women Participation in Farming Beckons New Horizon

4

Inspiring Ratna

6

AAPI Events in July

7

Tips for Fertilizer Guti Producers

7

Guti urea in Boro Season

AAPI News Bulletin is a monthly publication of the AAPI project.

Subscriptions are free.

IFDC is a public international organization based in Alabama, USA. IFDC focuses on increasing and sustaining food security and agricultural productivity in developing countries.

Managing Editor: Ishrat Jahan Resident Representative IFDC Bangladesh Eurasia Division and Project Coordinator, AAPI Design and Layout: Syed Afzal Hossain Data Management Unit, AAPI

This is the fourth issue of the AAPI News Bulletin. Boro season is now over and the results of surveys are in.

Our target for Fertilizer Deep Placement (FDP) coverage was 166,759 ha and we accomplished 172,372 ha. This included 1,325 ha covered by our new product NPK Guti that was sold in 20 Upazilas in the old Improved Livelihood for Sidr-Affected Rice Farmers (ILSAFARM) districts where producers had received the necessary training and machine adjustments to make the new product.

Where it was applied, farmers are happy with the results.

Aus season is now in full swing and was proceeding as planned. However, just as this news letter was being

June 30, 2011

prepared, heavy rainfall and high tides have inundated large areas of our Upazilas in the southern districts. It is too early to know whether this will affect our crop. Up to June 15, we had 49,744 ha under FDP in the Barisal Zone.

In this issue, we look at our gender strategy and how we can increase women participation in agriculture.

We see how this is working in the story of Ratna, a young woman who is making a difference in her family and her community.

For our producers of FDP products, we have some useful advice on using marginal cost and marginal revenue to maximize profit. ***

The Signing of the Small Grant Agreement for Fertilizer Briquette Applicator Development with BUET On June 11, the Resident Representative of IFDC and AAPI Project Coordinator, Ishrat Jahan, signed an agreement with Dr AKM Masud, Head of the Department of Industrial and Production Engineering, Bangladesh University of Engineering and Technology to design and develop a new Guti applicator for use in farmer fields in Bangladesh. The small grant was awarded under AAPI project.

The views expressed in this bulletin do not necessarily reflect views of the United States Agency for International Development or the United States Government

AAPI NEWS BULLETIN AAPI News Bulletin Contact Persons: Ishrat Jahan Grahame D. Hunter Address: Dhaka Office: Road No. 62, House No. 4B, Apt-B2 Gulshan - 2, Dhaka -1212 Bangladesh Tel: 880-2-9894288 880-2-8817391 Fax: 880-2-8826109 Website: www.ifdc.org Barisal Office: “Zohora” 834 (New) Police Line Road Barisal Tel: 0431-2176566 AAPI Management: Ishrat Jahan, Project Coordinator; Grahame D. Hunter, Chief of Party; Md. Mofizul Islam, Sr. Agriculture Specialist; Dr. Shaharuk Ahmed Agriculture Specialist; Md. Mozammel Haque, Training Specialist; Mahmood Hussain, Training Specialist; Abul Hossain Mollah, Training Specialist, Dr. Md. Abdul Mazid Mia, Soil Scientist; Mainul Ahsan, Soil Scientist; Md. Nurul Islam, Market/Business Development Specialist; Ram Proshad Ghosh, Mechanical Engineer; Rubina Islam, Gender Specialist; Syed Afzal Mahmood Hossain, Senior Data Management Specialist; AFM Saleh Chowdhury, Chief Accountant; Bishnu Rup Chowdhury, Administrative and Procurement Officer

Volume 4 of the old ILSAFARM Upazilas.

8,099 farmers are using Guti in other crops such as vegetables, bananas and betel leaf. Altogether AAPI has 597,707 farmers using FDP products in agriculture production. Almost 8% are women farmers.

580,805 AAPI Farmers Use Guti Urea on 171,047 ha of Paddy Field in Boro Season AAPI routinely monitors FDP coverage and Guti production through weekly reports from Field Monitoring Officers. This is then confirmed at the end of the season through a Block Survey. The Block Survey data is collected by the Field Monitoring Officers and verified by the SubAssistant Agriculture Officers of Department of Agricultural Extension (DAE). The Block Survey data has now been tabulated.

The data has established that 580,805 farmers have used Guti urea on 171,047 hectares of paddy field in Boro Season. 8,803 farmers also used NPK Guti on 1,325 hectares. This was the first year that NPK Guti has been available for commercial supply

Area of FDP Cover by AAPI Districts Total Boro Area (Ha)

Total UDP Area (Ha)

% of Area under UDP

Mymensingh

271,981

53,338

20%

Sherpur

96,347

18,356

19%

Gopalganj

77,877

16,809

22%

Barisal

46,329

19,963

43%

639

Madaripur

44,872

20,685

46%

54

Bagerhat

35,145

11,519

33%

33

Shariatpur

32,527

17,279

53%

359

Pirojpur

19,186

7,100

37%

64

Jhalokathi

9,107

4,353

48%

111

Patuakhali

2,246

1,446

64%

50

333

199

60%

15

635,950

171,047

27%

1,325

District

Barguna Total

Total NPK Guti Area (Ha)

Farmers Adopting FDP Technology for Boro 2011 in AAPI Districts District

Total Guti Urea User

Total NPK Guti User

Total FDP Farmers

Total Male FDP Farme rs

Total Female FDP Farmers

468

FDP User in Other Crops 1,184

Bagerhat

37,218

Barguna

1,003

Barisal

Total Farme rs in the Upazila

% of Farme rs Using FDP

38,870

35,795

-

65

1,068

857

2,073

160,051

24%

211

121,431

1%

71,275

3,360

342

74,977

71,335

3,102

277,538

27%

Gopalganj

53,889

-

223

54,113

49,065

4,984

217,111

25%

Jhalokathi

15,208

882

2,504

18,594

17,462

1,023

109,000

17%

Madaripur

63,579

1,217

131

64,927

Mymensingh

178,353

-

591

178,944

60,871

4,054

177,474

37%

161,529

17,075

874,637

20%

Patuakhali

5,974

-

54

6,028

5,275

743

227,039

3%

Pirojpur

18,806

195

2,632

21,633

20,537

1,092

204,219

11%

Shariatpur

59,113

2,681

97

61,891

59,073

3,054

191,223

32%

Sherpur

76,387

-

276

76,663

69,016

7,985

256,050

30%

Total

580,805

8,803

8,099

597,707

550,815

45,396

2,815,773

21%

2

AAPI NEWS BULLETIN

Volume 4 same. For example raw material cost, diesel/ electricity cost, labor cost, mobile bill, traveling expenses, promotional cost, packing expenses, machine maintenance costs are variable costs. But this does not mean a business will produce less because its variable cost is less. Here is the technique to which you as a fertilizer briquette producer should learn more about and apply to maximize your profits.

This Boro season was the first time the Bangladesh Agriculture Research Institute (BARI) applicator was rolled out, largely through the funding of DAE with training and support from AAPI. Twenty nine thousand farmers used the applicator to apply Guti urea.

Applicator Users during Boro Season District

Number of Guti applicator Users

Bagerhat

1,435

Barguna

18

Barisal

937

Gopalganj

1,638

Jhalokathi

157

Madaripur

218

Mymensingh

The marginal cost is a concept which is very important for you to know if you want to maximize profit. Marginal cost is the change in total cost that derives when quantity of fertilizer briquettes produced changes by one unit. That is, it is the cost of producing one extra ton of fertilizer briquette.

12,902

Similarly, another important concept relating to your profit is the revenue you earn by selling fertilizer briquettes. Your total revenue is the quantity (tons) of fertilizer briquettes sold multiplied by price at which you sell fertilizer briquettes. Marginal revenue is the increase in your revenue for producing an extra ton of fertilizer briquette. It differs from the selling price because it takes into account changes in the price.

This concept is important because you can determine the optimal production (most profitable) level of fertilizer briquettes. This occurs when your marginal revenue equals your marginal cost. In other words, your production level should reach that level as long as the extra revenue you are getting from selling an extra ton of fertilizer briquettes is greater than the extra cost of making it.

150

Patuakhali Pirojpur

38 969

Shariatpur Sherpur

10,546

Total

29,008

*** Fertilizer Briquette Producers to Understand Cost and Revenue Calculation Techniques for Profit Maximization A business (whether involved in Guti urea or Guti NPK production or any other venture) needs to maximize profit in order to grow. To achieve the goal a good business must apply the concept of marginal cost and marginal revenue calculations.

Marginal revenue of a business usually decreases as production increases and also that of a market, because lower prices are needed to achieve higher sales or demand respectively. This is because of competition in the market and to attract consumers to purchase from your shop as you are offering lowest price in the market.

Any business entity incurs two types of cost; fixed and variable costs. Fixed cost is that part of your total cost that stays the same regardless of whether you produce a lot, a little bit or even if you produce zero. Renting space for your fertilizer briquette machine and fixed income based salary within a limited period, interest on loan, depreciation on fixed assets are example of fixed costs. On the other hand, variable cost is that part of your total cost that varies as you produce more or less. Producing more adds to Variable Cost and producing less reduces the

A business can reduce cost per unit/cost per kg by adopting cost reduction techniques and/or by increasing production and sales, thus increasing profit. This is a very common practice in business.

However, increasing production may require the 3

AAPI NEWS BULLETIN Extra Production unit

Volume 4 TC

AC

MC

Assumed TR MR Selling Price/unit (AR) ----------------------------------In Taka--------------------------------------

Profit

1

30

30.0

30

35.0

35

35

5

2

55

27.5

25

32.5

65

30

10

3

77

25.7

22

31.0

93

28

16

4

97

24.2

20

29.0

116

23

19

5

116

23.2

19

27.6

138

22

22

6

134

22.3

18

26.0

156

18

22

7

151

21.6

17

24.3

170

14

19

8

168

21.0

17

22.8

182

12

14

9

184

20.4

16

21.4

193

11

9

10 200 20.0 16 20.3 203 10 Notes: TC=Total Cost, AC=Average Cost, MC=Marginal Cost, TR=Total Revenue, MR=Marginal Revenue; AR=Average Revenue.

3

ensure food security and alleviate poverty. Farm sector’s role has become even more important as the country’s population is rising, but arable land is declining. Volatility in food prices is a common global phenomenon when it is the poor who suffer the most. Therefore, the global community is also coming ahead with more investment.

business to sell additional product at a lower price.

The question is, can the business still make a profit? The marginal cost and marginal revenue calculation technique presented in the Table above is an example of how to determine the profitability of sales at a lower price.

It is clear from the above table that if you want to maximize profit your potential production level should be 6. That is Marginal Cost equals Marginal Revenue at level 6. Though profit at production level 5 is the same, the average cost or cost per unit will be higher compared to your marginal revenue. So, you still have scope to reduce the price and capture the market by producing more. Thus a business can manage production, sales and price by applying this technique.

In the context of Bangladesh, 85 percent of the country’s poor live in the rural areas who are mostly involved in farm activities. Around 50 percent of them are women who share the burden of poverty, but have limited access to and control of land, water resources, credit, skills, training and information. They are also burdened with housekeeping, child rearing and nursing of sick family members. They dominate the unpaid work force and the subsistence food production sector.

Thus their contribution to the economy is monumental but often overlooked.

Business owners should contact the AAPI Business Development Specialist for further discussion on this important concept.

While efforts are on to increase agricultural productivity, these underestimated human resources must be attended. AAPI Project of IFDC expects to address this by giving women access to skills and knowledge, encouraging their participation in development decisions at family and community level, and ensuring that they can share and utilize the benefits.

*** Women Participation in Farming Beckons New Horizon Agriculture is the backbone of the country’s economy. Its improvement is crucial both to 4

AAPI NEWS BULLETIN

Volume 4

As part of achieving these objectives, AAPI targeted to ensure participation of 20 percent women in the farm family and communities, generate acceptance of women’s participation in taking decisions on agricultural development, support women leaders to promote FDP, water management using alternate wetting and drying (AWD) and use of good seeds and ensure women’s equal access to benefits arising out of AAPI activities.

Attending the SAAOs Conference: The AAPI staff

attended the Sub-assistant Agriculture Officers’ (SAAO) conferences in many Upazilas to motivate them to ensure 20 percent women participation in all project activities.

Meetings with the UP Chairman and Members: At the time of field visits the AAPI staff conducted meetings with the Union Parishad (UP) and Upazila Chairmen and Members to discuss their responsibilities on increasing women participation in project activities and reminded them of their participation in Upazila level workshops.

During the Boro season that has just passed, at least 300 women were involved in 20 Guti urea blocks in the greater Mymensingh and Barisal regions where AAPI Project operates. Sixty-one women managed demonstration plots of Guti urea.

Besides, seven women purchased briquetteproducing machines before the Boro season this year. However, these results only came about by AAPI staff following a number of measures.

Distribution of Leaflets: AAPI distributed leaflets on

participation of women in farming among all stakeholders at the farmers’ training and workshops .

Mass Awareness Campaigns: AAPI highlighted the

role of women in all its promotional materials, workshops and motivational visits. AAPI has its own gender specialist who visited the fields, demonstrated how to place Guti urea and plant seedlings in lines.

Affirmative Action AAPI field staff purposefully selected the women farmers to ensure women are included in all its activities. Training them on application of Guti urea was one of the major tasks before the Boro season this year.

Media Advocacy and Publicity: The electronic and

print media have been encouraged to publicize the successes of the women farmers and entrepreneurs who can be role models to others.

Community Approach: AAPI staff visited families,

communities, religious leaders, local government institutions, attended workshops, training sessions of the farmers, explained to them the benefits of women participation in the farm activities. They also encouraged the male counterparts of the women to support their wives to go to the field and share the decisions they take for plantation or crop management. AAPI believes community support is critical for women participation. If male community leaders are comfortable with women participation, they will not only remove barriers, but also become advocates for women participation.

Conduct Post Training Follow-up Assessment: After

completion of the Boro season, the AAPI gender specialist is conducting an assessment of the trained women farmers to assess their involvement in AAPI technologies and lessons learned. This assessment is aimed at improving the effectiveness of the project objectives of engaging more and more women in farm activities and decision making.

Conclusion AAPI has already made calculation on Guti urea application and its benefits during the last Boro season. This has resulted in around 11-24 percent more yield than that of the fields where granular urea has been used. In the cases of women participating in the decision making process and working in the field activities, it has been found

Women to Women Approach: Women (and their

families) who are already active participants and beneficiaries are seen as advocates to promote gender balance. AAPI also sought these women’s support as farmers and entrepreneurs who can be role models for other women.

5

Volume 4

AAPI NEWS BULLETIN that labor cost has been reduced at a significant level. Many farmers said they are going to use Guti urea in all the three rice seasons – Aus, Aman and Boro. At the same time, when men and women share their struggles and joys together, it is likely that their relationship gets stronger.

Ratna, immediately adding that they took exactly 30 days of rest since then. There was no hurry to spread granular urea as they did in the previous years. The paddy plants were always green. There were no insects. Unlike other years, the weeds were also very thin. Her father alone was enough to root out the weeds, she said.

Those who once got the result of Guti urea use said such a change in farmers’ attitude and agricultural practice is expected to bring about a revolution in Bangladesh’s food productivity and poverty alleviation. *** Inspiring Ratna Ratna has always been involved in household and farm activities. But, she had a unique experience during this year’s Boro season. Her intellectual role in using a new agricultural technology in rice cultivation brought her family incredibly more yield of rice.

Ratna standing in front of a straw heave

“As briquettes are placed beneath the soil, the weeds found little food to grow. This has saved us labour cost too,” said Ratna, second among three children of her parents. It was a happy time when the paddy field started turning golden in April.

“On one acre of land, we got over 100 maunds of paddy. This is around 40 maunds more than that of last year’s Boro,” said eighteen-year old Ratna Akhter, sitting at their thatched house at Boilar block of Trishal, Mymensingh.

“My father, brother and I cut the total crop. We hired some laborers only to carry the paddy bundles home,” said Ratna. After an amazing yield of Boro, they decided using Guti urea in all the three rice seasons – Aus, Aman and Boro. They planted Indian variety rice known as Haizar during the current Aus season. The yield of Haizar last Aus season was 30 maunds an acre, but they are expecting 50 maunds this year for use of Guti urea.

Unlike most other young women of Bangladesh, Ratna herself went to the field, placed Guti urea and even advised her father Tajuddin just as she learned from a training session organized by the USAID-funded Accelerating Agricultural Productivity Improvement (AAPI) Project of International Fertilizer Development Centre (IFDC) before the Boro season.

Ratna’s father Tajuddin arranged the tilling of the land by tractors and levelling of the field. And, Ratna suggested he use Triple Super Phosphate (TSP) and Potash during levelling. After planting of the seedlings, she counted days, as she learned that the urea briquettes have to be placed in five to seven days after the plantation.

While it is usual for the rural women of Bangladesh to take part in the post harvest management, Ratna is an exception who not only took part in manual works, but also gave intellectual inputs to the farming. This student of Intermediate of Arts at Trishal Women’s College said, “Any knowledge is useful for life. The knowledge on farming is even more useful because my family is much more benefited by the agriculture now than before for the use of Guti urea.”

“Abba [father] and I placed the Guti urea.

Sometimes when my father mistakenly left rows, I corrected him. We took only three days to place the briquettes in the whole one acre field,” said 6

AAPI NEWS BULLETIN

Volume 4 3. Sales records for each day — Quantity of Guti urea sold, name of farmer.

Ratna’s mother Jamina Begum is even more proud of her daughter. “Ratna is a girl. So, what? If both the boy and girl can study and work together, what else is better for us?” she said.

4. Production records for each day — How many bags of Guti urea were produced with a running balance for month and year-to-date.

***

5. Inventory record with amount of Guti urea in stock and amount of prilled urea in stock with a running balance.

AAPI Events in July In the month of July, AAPI is concentrating its activities both for Aus and Aman paddy. In this month, following activities will be carried out.

6. Guti urea machine maintenance records.

[Each of the above records may be kept in a separate journal or a single journal with each type of record category well segregated for ease of reference and review. All entries should be dated.]

 719 batches of farmers’ training for Aman farmers  187 field demonstrations  8 field trials on NPK  3 motivational meetings with stakeholders  3 briquette producers technical training  2 small business management training  2 orientation training program of DAE field staff  2 extension staff training

 Build business linkages (backward and forward) to strengthen your competitive position. You should develop good business relations with the suppliers of the Guti urea machine and the suppliers of prilled urea. That will help prevent any “lost production” time due to lack of urea and mechanical breakdown of equipment. Also, build good linkages with DAE and organizations such as IFDC to get the benefit of joint promotion and training programs.

Tips for the Fertilizer Briquette Producers ( Continuing from previous volume)

 Put great emphasis on financial management to protect your assets, control costs, and accurately record the returns that you are getting from your Guti urea enterprise.

Good Business Management is Important to Success in Guti Urea Supply  Record keeping provides the foundation for good planning and overall business management. You should give much attention to keeping good records on a daily basis. That would include, at a minimum, the following types of records:

 Know the total cost of your business operations — the total cost of doing business.

Recordkeeping will give you the information that you need to understand the total cost of doing business. This is key to making a profit and fair return on your investment. Many entrepreneurs fail because they do not know the total costs of the business and thus do not recover all of their costs.

1. Financial records daily costs by category — e.g., rent, utilities, Guti machine maintenance, promotion, fuel for Guti machine, taxes, labor, etc.

***

2. Cash flow record — Record daily cash received, cash paid to others, and a running balance amount.

7

AAPI NEWS BULLETIN

Volume 4

8