AAPI Newsletter Vol 6, August 2011

AAPI NEWS BULLETIN Accelerating Agriculture Productivity Improvement (AAPI) Volume 6

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

Inside this issue:

Briquette Machine Improves Family’s Livelihood

3

Universities Re-Design Guti Applicator Prototypes

4

Importance of Break-Even Analysis for Fertilizer Briquette Producers

5

Motivational Meetings Encourage Participation of Women

6

AAPI Events in September Aman Planting and Care

7 7

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

As this sixth edition goes to print, the rain continues to fall while Aus farmers struggle to harvest their crops and Aman farmers wait for the floods to subside. This is the bane of farming. In early Aus, the rainfall was low, causing delays in planting and, in some cases, farmers preferred to go for an early Aman. Now as the Aus crop ripens, the fields are inundated.

Yields and grain quality will be affected, not to mention the difficulty in harvesting in deep water, threshing, transport, drying and storing. Our Agriculture Specialists, Mr Mofizul Islam and Dr Shaharuk Ahmed have prepared some tips on care of the Aman crop and how you can deal with the impact of the floods.

The project is also feeling the brunt of Mother Nature and we have lost some demonstrations to flood. This is not detrimental overall as we have more than 200 demos established.

Our site selections and geographic spread gives us a degree of assurance that all will not be lost by one weather event.

In this edition we have a feature on the Mahilara village in Gournadi upazila, Barisal district prepared by one of our Training Specialists, Mahmood Hussain. This is the home of Sheema Begum, a businesswoman that started with us in ILSAFARM days and her story is told in this

August 31, 2011

edition. For the business people, Nurul Islam, AAPI Business Management Specialist, has an article on break-even analysis. As always, we are striving to increase the participation of women in our project activities. Rubina Islam, AAPI Gender Specialist, has an article on motivational meetings as a tool to get community support for participation of women. *** Mahilara: A Leader in Urea Deep Placement Technology Mahilara, in Gournadi upazilla, is the first village to introduce urea deep placement (UDP) technology in southern Bangladesh. Mahilara has a population of 7,200 of which 1,617 are farm families. The proven UDP technology was formally launched in Mahilara by the Honorable Agriculture Minister Matia Chowdhury and U.S. Ambassador James F. Moriarty in 2009. The main crop in Mahilara is paddy (high yielding and hybrid varieties) planted on 400 hectares (ha) during Boro season. Lesser amounts are planted during Aus and Aman seasons. Other crops are jute, vegetables and betel leaf, which is a cash crop.

With funding from the U.S. Agency for International Development (USAID), IFDC began UDP promotional activities with members

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 6 of the Mahilara Integrated Crop Management (ICM) club. Md Sirajul Islam, sub-assistant agriculture officer (SAAO) for the Department of Agricultural Extension (DAE), was instrumental in this work. A local Mahilara entrepreneur, Sheema Begum, became the first woman to purchase a briquette machine through IFDC’s Improved Livelihood for Sidr -Affected Rice Farmers (ILSAFARM) project. The ILSAFARM project (2008–2010) and now the Accelerating Agriculture Productivity Improvement (AAPI) project (2010–2015) have taught farmers about UDP and conducted field demonstrations and trials, workshops and farmer field days. In addition to Sheema Begum, four other entrepreneurs in Gournadi upazila have purchased briquette machines and participated in technical and business management training to build profitable businesses and ensure a steady supply of fertilizer briquettes to farmers. The DAE, ICM club and the private briquette entrepreneurs are now strong advocates of UDP technology,

placing Mahilara at the forefront in the adoption of UDP. Today farmers are using UDP mainly in paddy but also in some vegetable and betel leaf crops. Data provided by the DAE reveal that the area in Mahilara under UDP has grown from 12 ha in 2008/09 to 70 ha in 2009/10 and 200 ha of high yielding varieties of paddy in Boro 2010/11. In 2008/09 there were only 50 farmers using UDP and today there are 950.

In addition to urea briquettes, some farmers are also starting to use nitrogen/phosphorus/potassium (NPK) briquettes as promoted by the AAPI project. Farmers are reporting as much as 20 to 25 percent increases in yield and less production costs, resulting in more income and improved lifestyles. There has also been an increased adoption of line sowing, associated with UDP adoption.

Meanwhile, the business of Sheema Begum, whose shop is located in Mahilara bazaar, has grown. To date she has produced and sold 350 metric

Honorable Minister of Agriculture Mrs. Matia Chowdhury, MP, explaining benefit of UDP over prilled urea to former US Ambassador the Honorable James F. Moriarty 2

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Volume 6 from Padakhep, a non-governmental organization, to increase their successful poultry enterprise. In addition, they leased a pond for fish culture.

tons of urea briquettes and has been maintaining a regular supply not only to Gournadi farmers but also to farmers in neighboring upazilas.

It is evident that Mahilara is moving steadily toward full adoption of UDP technology. The SAAO and the UDP farmers predict that all farmers will use UDP in Mahilara within two years, especially with the support provided by the AAPI project. For long-term sustainability of the technology, the farmers, their ICM club, DAE and private entrepreneurs are working to ensure product promotion and supply. *** Briquette Machine Improves Family’s Livelihood [Sheema Begum became a successful businesswoman after receiving a machine that produces Guti urea from IFDC’s Improved Livelihood for Sidr-Affected Rice Farmers (ILSAFARM) project. Sheema and her husband are now busy producing Guti urea and providing advisory services to others. In addition to expanding cultivation of crops using Guti urea, the couple works to increase their income from raising cattle, betel-leaf gardening and fish culture. At the same time, Sheema efficiently manages a household of three school-age children.]

Sheema Begum and her husband producing Guti urea in their shop

Sheema received some money from her brothers and took out a loan to build a house. Jamal became manager of an irrigation scheme; under his supervision, 50 acres of land were cultivated in the first year and extended to 200 acres soon after.

Thirty-two-year-old Sheema Begum was born in Chaokathi village of Agoiljhara upazila. Sheema and her husband, Jamal Sarker, have two sons and one daughter.

The devastating Cyclone Sidr of 2007 shook the family. Their new house was damaged. The two betel-leaf orchards were completely destroyed.

The fish were lost. Sheema had Aman paddy on 1.4 acres of sharecropped land, and all of it was destroyed. The cattle barn was damaged. Her poultry enterprise had 600 chickens; only 100 chickens survived.

Following their marriage in 1995, Jamal traveled to Brunei to invest in a new business opportunity. He worked there for about nine years but lost all of his money when the business failed.

Upon Jamal’s return to Bangladesh, his father gave each of his sons a small portion of land.

Altogether, Jamal and Sheema owned about 0.75 acres. They leased additional land to sharecrop and began farming with enthusiasm. They planted a betel-leaf orchard, which became very successful. Sheema bought a dairy cow and began to raise chickens. They borrowed money

“After the devastating Sidr, we were in the same situation as when Jamal came back from Brunei,” Sheema said. “We had to struggle both physically and mentally to improve our situation.”

Sheema and her husband learned about Guti urea in 2008 from Mofizul Islam, ILSAFARM senior 3

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Volume 6 After getting the briquette machine, Sheema’s life became busier, and she and her husband are working together to run their business. This has given her more courage and freedom in all decision-making processes in her family. Sheema and her husband hope that the government will help smallholder farmers access Guti.

agriculture specialist, and local agriculture officers. “We knew that Guti urea was available in Bangladesh, but we did not have any idea how to use it,” Sheema said. “Later in 2009, the local DAE officer and the ILSAFARM field-monitoring officer visited and requested to conduct a demonstration plot on 10 decimals of land [onetenth of an acre]. We did it and got very good results.”

With benefits from the briquette machine and also from the harvest of paddy cultivation, Sheema and Jamal have repaid some loans and invested in other income-generating activities such as raising poultry and cattle and betel-leaf gardening.

Sheema and her husband began to attend ILSAFARM training sessions, exchange visits and field days. She also placed Guti on her own land in 2009 and 2010. In the 2009 Boro season, Sheema got 100 maunds of paddy on one acre of mortgaged land. Sheema kept half for family consumption and sold half for Tk. 25,000 (about US $356), which she used to pay a portion of their loans. In the 2010 Aus season, Sheema used Guti urea on two acres of land (both owned and mortgaged). Both Sheema and Jamal motivated the land owners under their irrigation scheme to use Guti urea. The number of farmers using Guti increased each day.

Sheema and her husband hope to build a brickstructured house in the future and to provide a good education for their three children. “If all farmers use Guti urea in their crop fields, the yield will increase,” said Sheema. “Everyone will receive a good yield with low cost; then the whole country will benefit as well as my family.” *** Universities Re-Design Guti Fertilizer Applicator Prototypes

In March 2009, Sheema and Jamal received a briquette-making machine from the ILSAFARM project after paying a small percentage of the machine’s cost. They rented a shop/briquette machine factory in Mahilara bazaar. Their machine produced 20 tons of Guti urea in both the 2009 Aus and Aman seasons. In the 2009 and 2010 Boro seasons, the machine produced 215 tons. In the 2010 Aus season, about 10 tons of Guti were produced and sold. Day-by-day, the number of customers expanded; many customers even came from outside Gournadi.

A more efficient applicator for Guti fertilizer use is expected to be ready soon.

Authorities at Bangladesh Agricultural University (BAU), Mymensingh, and Bangladesh University of Engineering and Technology (BUET) expressed optimism after designing new applicator prototypes.

As members of the local Integrated Crop Management (ICM) club, both Sheema and Jamal regularly discuss the benefits of Guti urea with farmers and provide advisory services. They promote Guti and their briquette factory through local television and newspaper advertisements and through leaflets provided by ILSAFARM.

The Accelerating Agriculture Productivity Improvement (AAPI) project signed two separate small grant agreements with BAU and BUET early this year. BUET authorities said they were confident that they can develop a better performing applicator weighing 6-7 kilograms. They are in the final stages of design and fabrication of an applicator for testing. The prototype should be ready soon.

The present agriculture minister of Bangladesh, Matia Chowdhury, has even visited Sheema’s plot and cut the paddy. She also visited her briquette machine factory. Local people now call Sheema’s plot of land “the Minister’s Plot.” A U.S. ambassador and other foreigners have also visited her to discuss Guti fertilizer.

BAU authorities said they prepared an applicator that can be easily operated and handled by the farmers with a very low rate of missing and double -dropping. They are now conducting field tests at various locations and will demonstrate the applicator’s capabilities to IFDC upon completion.

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Volume 6

AAPI NEWS BULLETIN A light-weight effective Guti applicator will help to make the dissemination of Guti fertilizer technology more widespread.

2) per month because the rent is fixed. If the producer produces 2 kg of Guti urea in a month, the margin will be Tk. 4 = (2 x 2). The rent will remain at Tk. 100 and the loss will reduce to Tk. 96 = (rent Tk. 100 - margin Tk. 4). Thus with an increase in production, the margin will also increase. So, when the business produces 50 kg of Guti urea, it reaches the break-even point.

*** Importance of Break-Even Analysis for Fertilizer Briquette Producers “Break-even” analysis is an important business planning tool that is useful in understanding cost/ volume/profit relationships in a business. The break-even point is that level of sales at which the business neither makes a profit nor experiences loss. In a break-even situation, the total sales revenue a company realizes is equal to the total costs it incurs. If a business is not operating above the break-even point, it will not survive in the long -term. In this situation, the owner must immediately evaluate the business and make appropriate changes.

Details

Tk.

Margin of 50 kg @ Tk. 2/kg Less: Rent (Fixed) No No profit, profit, no no loss loss (Break-even (Break-even point) point)

100 100 00

If the business wants to make Tk. 2 as profit, it will need to produce 51 kg. In 51 kg of production, the margin will be Tk. 102 = (51 x 2) and after paying Tk. 100 as rent, the profit will be Tk. 2 = (102100).

When the production reaches 100 kg, the profit will be:

In order to calculate the break-even point in business, the owner must have a full understanding of the cost structure of the business and be able to estimate the portion of costs that are “fixed” costs and the costs that are “variable” costs. Fixed costs are costs that do not vary with an increase or decrease in production. In other words, fixed costs are costs that will be incurred regardless of production or sales levels. Examples include: employee salaries, rent, interest on loans, depreciation on machinery, etc. Variable costs are those costs that vary proportionately with an increase or decrease in production or sales.

Examples include: raw material costs, labor costs, fuel costs, repairs and maintenance of machinery, etc. The simple example below illustrates the break-even point calculation for a Guti urea briquette machine owner.

Details Margin of 100 kg @ Tk. 2 Less: Rent (fixed)

Tk. 200 100

Profit

100

The break-even point can be calculated using the formula: Fixed cost Break-even unit (kg) = ------------------------------------Selling price/kg-Variable cost/kg 100 = -----------------------------------22- 20 = 50 kg

Assume that the selling price of the Guti urea is Tk. 22 per kilogram (/kg) and the variable cost of the Guti urea is Tk. 20/kg, leaving a margin of Tk. 2. = (22-20). If the rent on the shed that houses the Guti urea machine costs Tk. 100 per month and if the producer produces only 1 kg of Guti urea in a month, the margin will be Tk. 2 = (1 x 2). If the rent remains at Tk. 100, then the business will incur a loss of Tk. 98 = (rent Tk. 100 - margin Tk.

Break-even sales Tk. = Break-even unit x Selling price = 50 kg x Tk. 22 = Tk. 1,100

The break-even point is very important because it helps entrepreneurs to determine how many units must be produced and sold to at least earn enough to cover the cost of production.

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Volume 6 For 1,000 kg of Guti production, the profit will be Tk. 1,000 = (Sales Tk. 22,000 then total cost is Tk. 21,000). It is important to remember that in the long-term, Guti urea dealers must cover all costs involved in running their businesses. Tools such as break-even analysis are useful in understanding the cost/volume/profit relationships at a given point in time.

Break-even-point is shown graphically:

*** Motivational Meetings Encourage Participation of Women There is a perception that men are the farmers and women play only a “supportive” role as farmers’ wives. However, in a world that is experiencing rapid change, the composition and structure of the rural household is also changing. Gender roles and responsibilities are undergoing rapid transformations, typically with women becoming more active in agriculture in pursuit of household food security. With the exception of land preparation, today’s women are involved in all other stages of rice production, from seedbed preparation to harvesting to post-harvest activities.

Women farmers are even more directly involved in winter season farming: cultivating pulses, groundnuts and vegetables as well as homestead gardening.

When an entrepreneur calculates the break-even point, she/he needs to divide the total cost into fixed and variable costs.

Before calculating the break-even point, the entrepreneur should prepare a table as follows: (Example: 1,000 kg (20 bags) production in a month) Cost Item

Fixed cost Variable (Tk.) cost (Tk.)

Prilled urea cost 1000 kg @ Tk. 19.50

-

19,500

Diesel cost 2.5 ltr @ Tk. 48

-

120

Labor cost for making Guti urea Tk. 19/bag

-

380

Rent

500

-

Interest on loan

400

-

Depreciation

100

-

1,000

20,000

Total

The AAPI project encourages women to upgrade their knowledge and skills through continuous training and motivational activities. In the 2011 Boro season, the AAPI block survey estimated that there were 597,707 farmers using fertilizer deep placement (FDP) products across the 11 project districts. Of that number, 45,396 (8 percent) were women farmers. During this period, the project trained 82,182 farmers. Of these, 18,757 (23 percent) were women.

Note: Variable cost per kg Tk. 20 = (Tk. 20000/1000 units) and selling price has been fixed at Tk. 22.

Fixed cost Break-even unit (kg) = -------------------------------------Selling price/kg-Variable cost/kg

How do we increase the number of women participating in project activities? Informal motivational meetings are proving to be an effective tool.

1,000 = -------------------------------------22- 20 = 500 kg

Women’s participation in AAPI activities noticeably increases following the project’s motivational meetings with the community’s social, political and religious leaders, other respected farmers and family members, especially

Break-even sales Tk. = Break-even unit x Selling price = 500 kg x Tk. 22 = Tk.11,000 6

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husbands. These meetings are informal affairs to explain the activities and invite women to participate. They serve to build trust between the people and the project. The longer the project works within the community, the greater will be the participation of women.

Aman Planting and Care The planting for Aman season is expected to be completed by mid-September. Some fields are already green. Now is the time to take care of the crop.

Those who use Guti fertilizer will witness fewer weeds and insects in the fields because the urea deep placement technology produces stronger, healthier plants. However, if there are still weeds and insects, farmers must act quickly to control the infestation.

The monsoon is already very active this year. As we go to print, many fields are flooding. It will be necessary to manage local water flow to ensure fields are not left under water. Unfortunately, this is not always possible and damage can occur.

Women farmers harvesting paddy in demonstration plot in Ujirpur, Barisal

As the flood recedes, it is important to take stock of the situation. Gaps where weak plants have died can be filled using a few tillers from healthy hills.

Most women farmers are involved in post-harvest activities. However, we find that in the upazilas with a longer project presence, there is a growing involvement of women in the decision-making process and surrounding adoption of FDP technology. This is expressed either through direct actions or by giving suggestions and advice on line sowing and the deep placement process to their husbands, other family members and neighbors.

If the field is completely lost, farmers can replant with a later variety such as Br-22 or Br-23. These can be transplanted up to mid-October. If you are preparing a new seedbed, we recommend that you apply a small amount of urea to hasten the growth of the seedlings, allowing an earlier transplantation. Remember to apply Guti urea in this later crop because it will produce vigorous plants and higher yields.

The lesson here is that the project can use the local community leaders and family members to invite women’s participation. Their participation is then not only coming from an external influence but also from internal approval. This gives the women more confidence not only to participate but to actively engage in farming decisions and management.

Later in the season, we may see the rains cease.

Those farmers who planted Aman seedlings in July and survived the flood will see the plants start to initiate flowering by the end of September and early October. No one should go into the field during the pollination stage.

*** AAPI Events in September 2011

Ensuring adequate water in the field during this panicle initiation stage is very important. For the late-planted varieties, this is even more critical.

Lack of moisture at this stage will result in a serious decrease in yield. Irrigation for up to 20 days after panicle initiation should be anticipated.

In the month of September, AAPI is concentrating its activities for Aman paddy. In this month, the following activities will be carried out.  57 batches of farmers’ training for Aman farmers  3 briquette producers technical training  2 small business management training

*** 7

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