Technological Change in MV Paddy Production in Bangladesh: An Empirical Analysis of the Application of Traditional and Granular Urea

Asia-Pacific Journal of Rural Development Vol. XXIII, No. 2, December 2013 Technological Change in MV Paddy Production in Bangladesh: An Empirical Analysis of the Application of Traditional and Granular Urea Basanta Kumar Barmon* Abstract The application of modified granular urea in modern variety (MV) paddy production is becoming increasingly getting popular in Bangladesh. The aim of the present study is to estimate the impacts of technologically modified granular urea on MV paddy production in Bangladesh. Primary data were used and collected randomly through a comprehensive questionnaire. The findings of the study indicated that comparatively and significantly less amount of granular urea was required in per hectare MV boro and aman paddy production than traditional urea. However, the yield (production per hectare) of MV boro and aman paddy was significantly higher in the application of granular urea than traditional urea in MV paddy cultivation. Moreover, pesticide cost of per hectare MV paddy cultivation was also significantly less in farms that used granular urea than in farms that used traditional urea. As a result, on an average, production cost of per hectare MV boro and aman paddy cultivation was comparatively less due to the application of granular urea than traditional urea. Consequently, net profit was significantly higher for MV paddy farms which used granular urea than farms which used traditional urea. The results of Cobb-Douglas production function, marginal value of products (MVPs) and marginal factor cost (MFC) ratio tests showed that the farmers did not use input resources efficiently and optimally in MV boro and aman paddy cultivation in the application of both granular urea and traditional urea. The farmers had an ample opportunity to get optimal (maximum) level of output using optimal level of scarce inputs in granular urea as well as in traditional urea used MV in paddy cultivation. The technological change in MV boro and MV aman paddy have brought about 10.64% and 7.62%, respectively, productivity difference between the method of the application of granular urea and traditional normal urea. The major component of this productivity difference was due to the application of granular urea in MV boro materials and aman paddy cultivation which contributed to 9.29% and 5.23%, respectively. Therefore, it could be concluded that the granular urea had significant impact on MV paddy production in Bangladesh. Introduction Bangladesh is an agricultural country with scarcity of land. The country's population density is one of the highest compared to other nations of the world. In contrast to the nation's immense population, there is only about 11.53 million hectares of cultivable land (BBS 2012). Being the single largest contributor towards the production sector of the economy, agriculture generates approximately 20.24% to the total gross domestic product (GDP) and accommodates about 48.1% of the total labour force of the country (BBS 2012). In addition, factors such as population growth, industrialisation and other infrastructural developments have become the prime elements towards visualising a declination in cultivable land area. More specifically, the persistent declination in cultivable land portrays a declining trend of per capita land availability from 0.13 hectare * Associate Professor, Department of Economics, East West University, A/2 Jaharul Islam City, Aftabnagar, Dhaka-1212, Bangladesh. Email: bkbarmon@yahoo.com 59 Barmon to 0.06 hectare during the past few decades (1960 to 2000); unfortunately, this trend is still continuing (Hossain et al. 2006, Quasem 2011). The population growth has declined rapidly from 2.17% to 1.5% per year over the last four decades; however, the nation's population is still growing at a rate of two million people every year (BBS 2012). This indicates that the supply of rice production needs to be increased by applying more and more sophisticated and advanced technological inputs in MV paddy production to meet the high demands of the growing population. Bangladesh has already made a remarkable progress in sustaining rice production over the last three decades through the adoption of modern varieties (MV) of paddy, despite the declining availability of arable land. Rice is the dominant staple crop in Bangladesh. The crucial role of rice in Bangladesh's economy is manifested in terms of area, production and consumption. About three-fourth of the total cultivated area is devoted to the production of rice and a large number of farmers' families (13 million) are engaged in rice production. About 80 per cent of the total fertiliser (domestic production and imported) is used in the rice crop production (Balcombe et al. 2007, Bangladesh Bank 2010). The government of Bangladesh has been trying to emphasise on the agriculture sector and has provided many subsidies in key inputs like fertilisers and irrigation. Although substantial advancement has taken place in the food grain production, its productivity is still lower compared to many neighbouring countries. This deviation may be attributed mainly to low use of technological inputs. Ignorance of farmers and non acquaintance of farmers with the modern technologies are other factors that results in low per unit productivity. Thus, many farmers do not operate at a potential level. Although Bangladesh has excellent cultivable land, the yield per acre of rice is one of the lowest among the rice producing countries of the world (Balcombe et al. 2007). The yield is low because the technique of production is still outdated in many areas. However, introduction of the MVs of rice in Bangladesh has already created a remarkably good impact in the economy and this phenomenon has given a good amount of confidence to the farmers. Now-a-days they have become used to looking for the MVs for as many crops as possible. There are some national and international organisations and researchers who have conducted research regarding the impacts of MV paddy farming on household income, labour demand, poverty alleviation and food self-efficiency in South Asia. Some literatures concluded that the green revolution has significantly increased rural household income and reduced poverty and created inequality of income distribution through MV paddy and wheat production in Asia (Hossain 1988, David and Otsuka 1994, Huang et al. 2005, Rosegrant and Evenson 1992, Hossain et al. 2000, Datta et al. 2004, Saleth 1991, Selvarajan and Subramanian 1981). Some literatures also summarised that technological progress in MV rice cultivation is crucial for sustaining food security in Bangladesh (Asaduzzaman 1979, Hossain et al. 1994, Hossain et al. 2006). Also a large number of research works have been conducted on the influencing socio-economic factors of the adoption of HYV paddy (Bera and Kelly 1990, Rahman and Thapa 1999, Rahman 2002) and estimation of technical efficiency of MV paddy production in Bangladesh (Coelli et al. 2002). The growth of rice output remains a central concern and has very limited 60 Technological Change in MV... potential to expand cultivation of the arable land for paddy and use of irrigation (Alauddin and Hossain 2001, Hossain 2002). The quantitative analysis of agricultural production systems has become an important step in the formulation of agricultural policy. In general, the adoption of new or improved method of agricultural crop cultivation can shift the production function. In other words, production can be increased with new technology by using same quantities of resources that were used in old technology by using fewer quantities of inputs. The recent breakthrough in rice cultivation, through the application of granular urea in MV paddy, lacks proper consideration and feasible implementation in reality. Furthermore, the impact of the application of technologically advanced modified granular urea on MV paddy production in Bangladesh has been paid less attention. Therefore, the present study compares and contrasts the input costs, inputs use and returns of paddy cultivation in the method of the application of granular urea and traditional normal urea. Moreover, this study also decomposes the contribution of resources to the productivity differences between the two methods of paddy cultivation. The findings of the present study are expected to be helpful benchmark information for economists, researchers, as well as policy makers and will provide useful information for the further development of MV paddy farming in Bangladesh. Methodology of the Study Sources of Data To compare the economics of MV paddy production with the method of granular urea and traditional urea and quantifying the contribution of technology and inputs into the estimated productivity differences due to the application of granular urea, Shimlagachi village in Sharsha upazilla of Jessore district was selected. This village was purposively selected because the farmers in these villages have adopted the use of granular urea along with traditional urea in MV paddy production. Initially, a detailed list of farmers who used granular urea and conventional traditional urea in MV paddy production was collected from the upazilla agriculture office. Primary data were used in this study. The information on various inputs and outputs of MV paddy production and the socioeconomic information of farmers were collected through comprehensive questionnaire. A total of 200 farmers were randomly selected from the study village of which 100 farmers used traditional urea and another 100 farmers used granular urea in their MV boro and aman paddy cultivation. Analytical Framework Profitability Analysis The estimation of profit of MV paddy cultivation under the method of the application of granular urea and traditional urea is as follows: = å P .Q 1 1 + å P2 .Q2 - å Pxi . X i - TFC 61 Barmon Where, = Profit for the advanced technology (granular urea) /normal practice under study; P1=Per unit price of the crop (paddy) grown; Q1=Quantity of output (paddy) obtained; P2=Per unit price of by-product (straw); Q2=Quantity of by-product obtained (straw); Pxi= Per unit price of the ith (variable) input, Xi= Quantity of the ith input used for the crop, and TFC = Total fixed cost. The miscellaneous expenditure in the model will include the expenditure on land revenue and rent, interest on working and fixed capital and depreciation. Resource Use Efficiency The resource use efficiency will be assessed by comparing marginal value product (MVP) with factor cost of the resources. The marginal product (MP) will be estimated from the parameters of Cobb-Douglas production function and the geometric mean levels of the output and input. Neo-classical theory states that the resources would be efficiently used in agricultural production farming where marginal value product (MVP) is equal to their marginal factor cost (MFC) under perfect competition market. In general, the producers would choose the input levels that maximise the economic profit (TR-TC). The marginal value product (MVP) of an input would be estimated, the coefficient of production elasticity is multiplied by the output-input ratio of the geometric mean level, which can be shown in the following formula. The marginal value products (MVPs) of various capital inputs were compared with their respective prices. If MVP of an input is higher than the MFC (market price of that input), then increase in input in production system raise output that increases profit. If MVPs of inputs are negative, then there are possibilities of reduction of these inputs and so the production is carried out in the second stage of production function and the marginal productivities of these inputs become negative. On the other hand, positive MVPs represent the possibility of further increase in inputs to raise output as well as profit. If the input resources are efficiently used then profit will be maximised in MV boro and aman paddy where the ratio of MVP to MFC will tend to be 1 (one) or in other words MVP and MFC for each inputs will be equal. In order to test the resource use efficiency in MV boro and aman paddy production the ratio of marginal value product (MVP) to the marginal factor cost (MFC) for each input is compared and tested for its equality to 1; i.e., (Gujarati 1965). 62 Technological Change in MV... Decomposition Analysis Solow (1957) developed decomposition analysis to evaluate the effects of technological change on output growth in US agriculture. Bisaliah (1977) extended the framework of decomposition analysis to examine the impact of technological change in Indian agriculture. Recently the farmers in India are practicing a new technologically advanced MV rice cultivation system which is known as System of Rice Intensification (SRI). Basavaraja et al. (2008) used this decomposition analysis to examine the impact of technological change in rice cultivation in India. In this study, the output decomposition analysis model as developed by Bisaliah (1977), is used to measure the contributions of technology and resource use differentials to the total productivity differences between the application of granular urea (new practice of granular urea) and traditional urea (traditional practice of urea) in MV paddy cultivation. It was observed from various studies that introduction of technology has significantly enhanced land productivity (Balakrishna 2012, Kiresur et al. 2011). It is expected that the technology of the method of granular urea in MV paddy cultivation will result in changes in input-use pattern, which in turn will affect the land productivity. Hence, increase in land productivity in MV paddy is not only due to adoption of the granular urea method but also due to the changes in use of factors in production. The following output decomposition model was used in this study. The Cobb-Douglas production function in logarithmic form for MV paddy production is: ln Y = A + b1 ln X 1 + b2 ln X 2 + b3 ln X 3 + b4 ln X 4 + b5 ln X 5 + b6 ln X 6 + b7 ln X 7 + ui .......( 1) Where, Y = Output in kg/ha, X1 = Seeds (kg/ha) X2 = Land reparation cost (taka/ha) X3 = Irrigation cost (taka/ha) X4 = Cost of pesticides (taka/ha) X5 = Urea (kg/ha) X6 = Cost of other fertilisers (taka/ha) X7 = Human labour (man-day/ha) U = Error term The difference in the natural logarithms of MV paddy output between the methods of the application of granular urea (new practice of granular urea) and traditional urea (traditional practice of urea) may be written as 7 [ln YGN - ln YTU ] = [ln AGN - ln ATU ] + å [bGU ln X GU i - bTU i ln X TU i ] .......... ( 2 ) i =1 Where, 'GN' and 'TU' represent the production functions of MV paddy under the methods of the application of granular urea (new practice of granular urea) and traditional urea (traditional practice of urea) in MV paddy production, respectively. Adding and subtracting in the above equation and rearranging the terms yields the following decomposition model: 7 7 [ln YGN - ln YTU ] = [ln AGN - ln ATU ] + å [bGU - bTU i ] ln X TU i + å bGU i [ln X GU i - ln X TU i ] i =1 i =1 63 ......( 3) Barmon The above model was involved in decomposing the logarithmic ratio of per hectare productivity of MV paddy under the methods of the application of granular urea (new practice of granular urea) and traditional urea (traditional practice of urea). This is approximately a measure of percentage change in per hectare output between the two methods - the application of granular urea (new practice of granular urea) and traditional urea (traditional practice of urea). The left hand side of the equation (3) indicates the difference in the per hectare productivity of MV paddy production in the method of the application of granular urea and traditional urea methods, while the right hand side decomposes the difference in productivity into changes due to technology as well as input use. The first bracketed expression on the right hand side is a measure of percentage change in output due to a shift in scale parameter of production function (neutral technology). The second bracketed expression is the difference between output elasticities each weighted by natural logarithms of the volume of that input used under the traditional urea method, a measure of change in output due to shift in slope parameters (output elasticities) of the production function (non-neutral technology). The third bracketed expression is the natural logarithms of the ratio of each input of the method of the application of granular urea to traditional urea methods, each weighted by output elasticity of that input. This expression is a measure of change in output due to differences in the per hectare quantities of inputs used and the given output elasticity of these inputs under the method of the application of granular urea technology in MV paddy cultivation. To examine whether the parameters of the production functions defining the two methods of MV paddy production are different, which is an essential component of decomposition analysis, intercept and slope dummies will be introduced into the log linear production function, which is specified as follows. ln Y = ln A + b1 ln X 1 + b2 ln X 2 + b3 ln X 3 + b4 ln X 4 + b5 ln X 5 + b6 ln X 6 + cD + d1[ D1 ln X 1 ] + d 2 [ D2 ln X 2 ] + d 3 [ D3 ln X 3 ] + d 4 [ D4 ln X 4 ] + d 5 [ D5 ln X 5 ] + d 6 [ D6 ln X 6 ] + d 7 [ D7 ln X 7 ] + ui D =Intercept dummy which takes value '1' if it is the method of granular urea in MV paddy cultivation and value '0' otherwise. D1lnX1, D2lnX2, D3lnX3, D4lnX4, D5lnX5, D6lnX6 and D7lnX7 are slope dummies of X1, X2, X3, X4, X5, X6 and X7 respectively taking value '1' if it is the method of granular urea in MV paddy cultivation and value '0' otherwise. Bangladesh's Scenario of MV Paddy Production MV Paddy Production System in Bangladesh Currently three different types of paddy are being produced in Bangladesh in three distinct seasons: aus (April to August), transplanting aman (T. aman) (August to December), and boro (January to April). Among them, aus and T. aman paddy are produced in rain fed water and MV boro paddy is produced in irrigated water (ground water or rivers and canals). Modern varieties of paddy were introduced in Bangladesh for the boro and aus season in 1967 and aman season in 1970 (Hossain et al. 2000). In 2011, only 45.78% of the area was irrigated under MV paddy production in Bangladesh, (BBS 64 Technological Change in MV... 2011). Irrigation and chemical fertilisers are not used for local aus and T. aman paddy production because the paddy fields go under water. Farmers transplant MV boro paddy from mid-January to mid-February and harvest them from mid-April to mid-May. Farmers usually use chemical fertilisers, pesticides, and irrigation for boro paddy production. Along with paddy crops, farmers also cultivate oil seeds, potato, and vegetables in a comparatively higher land during the winter season. Production and Application of Granular Urea in MV Paddy Production in Bangladesh A sophisticated machine is used to transform the normal urea into granular urea in Bangladesh which is called "Brequater". The Agricultural Ministry of Bangladesh has provided Brequater for the transformation of normal urea in every upazilla. The farmers in the locality go to the upazilla agricultural office to transform the normal urea into granular urea. Usually farmers subsequently place a piece of granular urea in the mid point of four plants of each column and row of MV paddy cultivation. The farmers in the study area use it only once during paddy cultivation. On the other hand, the farmers top dress the traditional normal urea 3-4 times during the paddy cultivation. Results and Discussions Inputs used in MV Paddy Production Seeds, irrigation, chemical fertiliser and land preparation equipment are the main inputs of MV paddy production since the introduction of the green revolution. As most of the agricultural cultivable land has already been used in crop cultivation, mainly in MV paddy production, the farmers are trying to increase the maximum level of output by using the method of trial and error for the available scarce inputs and technologies that were already adopted in MV paddy cultivation in Bangladesh. Recently the farmers are using granular urea, as one of the major inputs instead of traditional urea, for MV paddy production in some parts of Bangladesh. As the present study wants to estimate the impacts of granular urea in MV boro and aman paddy production, the comparison between main inputs used in MV boro and aman paddy production under the two production practices that used granular and traditional urea in Bangladesh are discussed in this section. Chemical Fertiliser Farmers use various types of chemical fertilisers to enhance the soil fertility that will assist in producing maximum rice yield. The farmers' practice of inorganic fertiliser management varied widely across and within the villages, as did the cropping patterns and seasons, soil textures, and geographical areas. Chemical fertilisers such as urea, triple super phosphate (TSP), muriate of potash (MP), gypsum and zinc sulfate are commonly used in MV paddy production in Bangladesh. The main inputs used in per hectare MV boro and aman paddy production under two practices (method of the application of granular urea and traditional urea) are presented in Table 1 and Table 2. Tables 1 and 2 show that on an average, the farmers used only 164 kg and 124 kg of granular urea in per hectare MV boro and aman paddy cultivation respectively, whereas 319 kg and 247 kg of traditional urea was used in MV boro and aman paddy cultivation. 65 Barmon In other words, the farmers used half of the granular urea compared to traditional urea in per hectare MV boro and aman paddy cultivation. However, the sampled farmers used other chemical fertilisers such as triple super phosphate (TSP), murate of potash (MP), zypsum and zinc in similar proportions in per hectare MV paddy cultivation. The amount of chemical fertiliser used in paddy production per hectare also varied significantly within the same farming system. In the study villages the farmers usually use comparatively less amount of chemical fertilisers in aman paddy than in boro paddy cultivation. Table 1. Inputs used in per hectare MV Boro paddy production under two practices Particulars Granular urea Normal urea Ratio (i) Urea (kg) 163.8 318.7 0.51 (ii) TSP (kg) 140.6 141.5 0.99 (iii) MP (kg) 125.3 112.9 1.11 (iv) Gypsum (kg) 112.8 108.7 1.04 10.4 10.9 0.96 113.4 95.6 1.19 3.7 20.0 0.18 64.6 57.4 1.13 19.0 23.0 0.83 7164.0 6475.0 1.11 A. Inputs used in MV paddy production: Chemical fertiliser: (v) Zinc (kg) Hired labour: (vi) Hired male labour (man-day) (vii) Hired female labour (man-day) Family supplied labour: (viii) Family supplied male labour (man-day) (ix) Family supplied female labour (man-day) B. Boro paddy production (kg) Source: Field Survey, 2013. Notes (i) Average farm size was 0.98 ha and 0.91 ha for normal urea and granular urea users MV paddy producers. (ii) 1US$=83.60 Taka, May, 2013. Labour Input The utilisation of labour in agricultural sectors depends on many factors, such as cropping patterns, cropping intensity, irrigation, and other intensive agricultural activities (Suryawanshi and Kapase 1985). The green revolution has changed the agricultural land and labour productivity, and it has had considerable impact on labour demand and/or employment in developing countries. The adoption of new technology has substantially increased total agricultural employment and has significantly contributed to the household income by increasing labour demand in developing countries (Estudillo and Otsuka 1999). The diffusion of modern technology has increased the size of the labour market by increasing the demand for hired labour in Bangladesh (Hossain et al. 1990). However, Alauddin and Tisdell (1995) argued that modern agricultural technology increased labour demand four-fold from the 1960s to the 1980s in the dry season but the labour demand was stagnant in the wet season. The employment-generating effects of modern agricultural technology have slowed down in recent years in Bangladesh. The green revolution has increased labor absorption at its early stage but the labour absorption decreased in most developing countries after the adoption of the new labour-saving chemical and mechanical innovations (Jayasuriya and Chand 1986). 66 Technological Change in MV... Table 2. Inputs Used in per hectare MV Aman Paddy Production Under Two Practices Particulars Granular urea Normal urea Ratio (i) Urea (kg) 123.6 246.5 0.50 (ii) TSP (kg) 103.1 113.0 0.91 (iii) MP (kg) 93.2 90.9 1.02 (iv) Gypsum (kg) 78.5 73.3 1.07 5.6 5.8 0.97 A. Inputs used in MV paddy production: Chemical fertiliser: (v) Zinc (kg) Hired labour: (vi) Hired male labour (man-day) (vii) Hired female labour (man-day) 109.7 92.7 1.18 2.8 23.3 0.12 66.4 57.2 1.16 Family supplied labour: (viii) Family supplied male labour (man-day) (ix) Family supplied female labour (man-day) B. Aman paddy production (kg) 17.7 23.1 0.76 5242.0 4865.0 1.08 Source: Field Survey, 2013. Notes: (i) Average farm size was 0.98 ha and 0.91 ha for normal urea and granular urea users MV paddy producers. (ii) 1US$=83.60 Taka, May, 2013. The temporarily hired and family supplied male and female labour used in MV boro and aman paddy cultivation is also shown in Tables 1 and 2. These two tables show that the farmers, who used granular urea instead of traditional urea, used comparatively higher temporarily hired and family supplied male labour (man-day) in both per hectare boro and aman paddy cultivation. The main reason was that the application of granular urea is a more labour-intensive technology than the application of the method of top dressing traditional urea in paddy production. However, the farmers, who used granular urea instead of traditional urea, used less temporarily hired and family supplied labour in both boro and aman paddy cultivation. Yield of MV Paddy Production The yield produced per production of MV boro and aman paddy is also shown in Tables 1 and 2. It appears from tables that per hectare yield of both MV boro and aman paddy production using the method of application of granular urea was significantly higher than the method of application of traditional urea. It is interesting to note that yield production per hectare varied significantly within and between the two practicing methods in the study areas. Cost and Return of MV Paddy Production The cost of and returns from MV boro and aman paddy production under the method of application of granular and traditional urea are discussed in this section. Per Hectare Cost of MV Paddy The cost of items associated with the MV paddy cultivation includes the cost of seed, irrigation, pesticides, land preparation (bullock and power tiller), hired labour and chemical 67 Barmon fertilisers. Gross return from MV paddy farming includes revenue from paddy and byproduct straw. Total cost includes the variable costs and fixed costs. The opportunity costs of home supplied seeds, family supplied labourers (both male and female) and selfowned land was calculated based on the current market price in the locality. The per hectare costs, gross revenue, and profit of MV boro and aman paddy farming are presented in Tables 3 and 4. The tables show that per hectare production cost of MV boro paddy cultivation was almost same in both practices but the cost of urea and pesticides were different. The main reason for this was that compared to the method of application of traditional urea, half urea was used in MV boro paddy cultivation using the method of the application of granular urea. So, the cost of urea was also less in the method of granular urea compared to traditional urea. Another reason may be that during the application of granular urea in paddy cultivation the soils moved more topsy-turvy than during the application of the method of traditional urea. As a result, the insects fly to other paddy fields. Therefore, it is assumed that based on this hypothetical concept the farmers used comparatively less amount of pesticides in MV boro paddy production using the method of the application of granular urea than the method of the application of traditional urea. Most probably this was also the reason for the requirement of comparatively more hired labour in the method of the application of granular urea than traditional urea in MV paddy production. Table 3. Costs and Returns of per hectare Boro Paddy Production Under Two Practices Particulars A. Variable costs of MV paddy production: (i) Seedling cost Granular urea Normal urea (Taka) (Taka) Ratio 1873.6 1874.6 1.00 22888.7 22581.8 1.01 2416.9 3574.0 0.68 (iv) Urea 3599.6 6425.0 0.56 (v) TSP 3082.6 3109.4 0.99 (vi) MP 1894.5 1682.9 1.13 663.2 637.9 1.04 1593.2 1707.2 0.93 22679.1 19116.3 1.19 88.0 2488.1 0.04 12660.5 11481.8 1.10 2946.8 3205.5 0.92 (ii) Irrigation cost (iii) Pesticides cost Chemical fertilisers: (vii) Gypsum (viii) Zinc Labours (ix) Hired male labour (x) Hired female labour B. Opportunity cost/Fixed cost (xi) Family supplied male labour (xii) Family supplied female labour (xiii) Opportunity cost of land C. Total costs (variable and fixed costs) (A+B) 29,824.2 29,836.7 1.00 106,211 107,721 0.99 Revenue from paddy production (i) Paddy (ii) By-product of paddy D. Total revenue (i)+(ii) E. Net profit (D-C) 131345.9 112453.8 1.17 11491.1 10494.5 1.09 142,837 122,948 0.86 36,626 15,227 0.42 Source: Field Survey, 2013. Notes: (i) Average farm size was 0.98 ha and 0.91 ha for normal urea and granular urea users MV paddy producers. (ii) 1US$=83.60 Taka, May, 2013. Per Hectare Return of MV Paddy Gross revenue is calculated by multiplying the total volume of production of enterprises with the farm-gate price. Net profit is calculated by subtracting total production cost (fixed and variable costs) from gross revenue. As mentioned earlier that on average, per 68 Technological Change in MV... hectare production of MV boro paddy was higher using the method of application of granular urea compared to the method of application of traditional urea, the revenue was also higher in the practice of granular urea than traditional urea (Table 3). As average total cost of per hectare boro paddy production was same for the two adopted practices, net profit of per hectare MV boro paddy was also higher (2.41 times) in the method of application of granular urea than traditional urea. Similarly, on an average the total cost was almost same in case of MV aman paddy cultivation using both the method of application of granular and traditional urea (Table 4). However, the cost of urea and pesticides was comparatively less in the method of application of granular urea than the traditional urea like in the case of MV boro production. However, it is interesting to see that the per hectare production cost of aman paddy cultivation was higher than total revenue under the method of application of traditional urea. As a result, the net profit of per hectare aman paddy cultivation using traditional urea is negative whereas net profit of per hectare aman paddy using granular urea is positive. In other words, in the study area the farmers earned positive and negative profit of the cultivation for per hectare MV aman paddy using the method of application of granular urea and the method of traditional urea respectively. Table 4. Costs and Returns of per hectare Aman Paddy Production Under Two Practices Particulars Granular urea Normal urea (Taka) (Taka) (i) Seedling cost 1437.2 1604.8 (ii) Irrigation cost 7758.0 6410.8 1.21 (iii) Pesticides cost 2239.5 2998.4 0.75 A. Variable costs of MV paddy production: Ratio 0.90 Chemical fertilisers: (iv) Urea 2691.6 4954.2 0.54 (v) TSP 2269.1 2475.2 0.92 (vi) MP 1.04 1408.9 1356.9 (vii) Gypsum 601.4 379.6 1.58 (viii) Zinc 610.5 636.4 0.96 22095.0 18547.5 1.19 49.8 3002.8 0.02 13477.3 11436.8 1.18 2490.7 3261.1 0.76 28,333.0 28,344.9 1.00 85,462 85,409 1.00 (i) Paddy 79280.0 71815.7 1.10 (ii) By-product of paddy 10866.7 10861.6 1.00 90,146.8 82,677.3 1.09 4,684.8 -2,731.9 -1.71 Labours: (ix) Hired male labour (x) Hired female labour B. Opportunity costs/Fixed costs: (xi) Family supplied male labour (xii) Family supplied female labour (xiii) Opportunity cost of land C. Total costs (variable and fixed costs) (A+B) Revenue from paddy production D. Total revenue (i)+(ii) E. Net profit (D-C) Source: Field Survey, 2013. Notes: (i) Average farm size was 0.98 ha and 0.91 ha for normal urea and granular urea users MV paddy producers. (ii) 1US$=83.60 Taka, May, 2013. Efficiency Measure and Resource Use Efficiency of MV Paddy Production The estimation of the efficiency measures and resource use efficiency of MV boro and aman paddy production under the method of application of granular urea and the traditional urea in the Cobb-Douglas production function, and marginal value product (MVP) and marginal factor cost (MFC) are briefly discussed in this section. 69 Barmon Summary Statistics of Inputs and Output of Cobb-Douglas Model The descriptive statistics of value of the key variables in the Cobb-Douglas production are presented in Table 5. The inputs and outputs of MV paddy production under the practices of granular and traditional urea were calculated in terms of monetary unit instead of quantitative units mainly because the present study estimates the resource use efficiency based on the coefficients of Cobb-Douglas production function. Table 5: Summary Statistics of the Sampled Variables in per hectare MV Boro and Aman Paddy Production in Jessore District Granular urea using MV paddy production farm Name of varables Paddy grain (kg) (Y) Seed (kg) (X1) Mean Normal urea using MV paddy production farm SD Min Max Mean SD Min Max : Boro 7164.65*** 462.13 6287.27 9281.21 6475.89*** 630.68 4790.30 8976.6 : Aman 5242.09*** 570.92 4191.52 7484.85 4871.14*** 382.64 3892.12 5987.88 36.34*** 3.92 11.22 37.42 35.40*** 6.44 11.22 44.91 : Aman 36.90*** 1.92 29.94 37.42 39.82*** 6.23 29.94 39.54 8233.33 : Boro Land preparation (taka) (X2) : Boro 6145.06*** 609.2 3742.42 7484.85 6115.12*** 898.33 3368.18 : Aman 5774.56*** 1012.41 3742.42 6736.36 5936.23*** 1167.41 2993.94 8981.82 Irrigation cost (taka) (X3) : Boro 22888.67*** 4969.7 8981.82 29939.39 22581.79*** 5764.5 8981.82 29939.39 : Aman 7758.05*** 7264.01 2245.46 74848.48 6410.77*** 1787.03 2993.94 9730.30 Pesticide cost (taka) (X4) : Boro 2416.86*** 1427.49 748.48 6736.36 3574.02*** 1930.1 1496.97 14969.7 : Aman 2239.47*** 1124.8 748.48 5613.64 2998.43*** 1363.96 748.45 7484.85 Urea (kg) (X5) : Boro 163.77*** 7.7 127.24 189.12 318.70*** 67.9 134.72 449.09 Other fertiliser (taka) (X6) Labour (man-day) (X7) : Aman 124.47*** 5.28 89.82 127.24 246.48*** 61.56 112.27 374.24 : Boro 7285.49*** 970.4 3547.82 9730.30 7180.07*** 1132.92 4490.91 10553.64 : Aman 5207.70*** 1549.7 2799.33 14932.27 5201.90*** 1031.41 2769.39 7559.7 : Boro 195*** 35.0 103 270 185*** 30.0 124 258 : Aman 192*** 36.0 75 243 185*** 26.0 126 286 Notes (i) The figures in parentheses indicates the information of MV aman paddy production (ii) Sample size of both MV boro and aman paddy production was 100. (iii) *** denotes significant at 1% level. The table reveals that considerable variation exists among the farmers in terms of production practices. The input and output data were obtained on per hectare basis in the farm survey. The average per hectare production (Y) of MV boro paddy under the practices of granular and traditional urea was about 7,164 kg and 6,475 kg, respectively and it significantly varied among the farms. On the other hand, the average yield that used granular and traditional urea for MV aman paddy production was about 5,242 kg and 4,871 kg, respectively and it also significantly varied among the farms. The average use of paddy seed (X1) per hecatre for boro and aman paddy cultivation was almost same in both practices and widely varied among the farms. The mean land preparation cost (X2) of MV boro and aman paddy cultivation was almost same in both practices even though a wide variation exists among the farms. The main reason was that the farmers almost used same modes of cultivator (power tiller) for plowing the paddy fields. 70 Technological Change in MV... Irrigation and pesticides are the main inputs for MV paddy cultivation. Cost of pesticides is an important input for MV boro and aman paddy production. The mean irrigation cost (X3) per hectare for both MV boro and aman paddy cultivation under the practice of granular urea was significantly smaller than the practice of traditional urea and it widely varied among the farms. The mean pesticide cost (X4) per hectare for MV boro and aman paddy production under the practice of granular urea was significantly less than under the method of application of traditional urea and it significantly varied among the farms. The causes of comparatively less pesticide cost in the method of granular urea have been discussed earlier. Chemical fertilisers such as urea, TSP, MP, gypsum, Zn are also the main inputs of MV paddy production. As the present study estimates the impact of granular urea on MV paddy cultivation, we have separated the cost of urea from the costs of other chemical fertilisers-TSP, MP, gypsum, and Zn. The mean usage of urea (X5) was significantly smaller in MV boro and aman paddy cultivation under the practice of granular urea than traditional urea and a wide variation exists among the farms. The main reason was that a comparatively small amount of granular urea than traditional urea is required to produce MV paddy. The mean cost of other fertilisers (X6) was also smaller in MV paddy cultivation under the method of granular urea than traditional urea. The average number of human labour (X7) per hectare for MV paddy production under the practice of granular urea was also relatively smaller than the practice of traditional urea. Productivity and Decomposition Analysis In order to test the difference in the structural relationship in the parameters defining the production functions for the two methods, the log-linear Cobb-Douglas production with both intercept and slope dummies was estimated by the ordinary least square (OLS) method. The empirical results of the Cobb-Douglas production of MV boro paddy cultivation under the method of the application of granular urea and traditional normal urea are presented in Table 6. The estimated production function explained about 71 per cent variation in MV boro paddy output due to variation in all the resources put together showing a good fit of the model. The intercept dummy and slope dummies of pesticides and granular urea were significantly different from zero, indicating that the production parameters of pesticides and urea in the methods of the application of granular urea and traditional urea in MV paddy production were not same. However, all other parameters were also not same in the two production functions but they were not statistically significant. The positive estimate of intercept dummy implied that the output of the method of the application of granular urea was significantly higher than that in the traditional method for a given level of resources. Table 6 also shows that the elasticity coefficients of the production with respect to each input under the method of granular urea were comparatively higher than the traditional urea method in MV paddy production. For decomposing the productivity difference between the method of the application of granular urea and traditional urea in MV boro paddy cultivation, the parameters of the per hectare production functions and the mean levels of input use for the two methods were also estimated separately. The estimates provided in Table 6 shows that 71 and 78 per cent of variation in paddy output, respectively, in the method of the application of 71 Barmon granulation urea and traditional urea were explained by the independent variables. The intercept term in the case of granular urea was significantly higher than that for the traditional urea in MV boro paddy cultivation. This virtually signified that there was an upward shift in production function due to technological advancement change associated in the method of granular urea in MV boro paddy cultivation. The production elasticity coefficient granular urea was negative (-0.269) for MV boro paddy production under the method of the application of granular urea and it was statistically significant at 1% level and on the other hand, it was negative (-0.053) and it was statistically insignificant for MV boro paddy cultivation in the application of traditional urea. This indicates that farmers used excess urea in per hectare MV boro paddy production under the method of granular urea. In other words, the farmers have an opportunity to produce same amount of MV boro paddy using less amount of granular urea compared to the method of traditional urea in the study area. Table 6. Estimated Production Functions of MV Boro Paddy with Intercept and Slope Dummies Particulars Intercerpt Seeds (taka) Land preparation (taka) Irrigation (taka) Pesticides (taka) Urea (kg) Other fertiliser cost (taka) Labour (man-day) Pooled 8.240*** (0.747) -0.154*** (0.033) 0.083** (0.042) 0.0304 (0.0245) -0.017 (0.019) -0.053 (0.031)* 0.102 (0.052)** -0.078* (0.049) Production elasticity Granular urea 9.425*** (0.902) -0.131*** (0.038) -0.029 (0.058) 0.071*** (0.026) 0.027* (0.0154) -0.269*** (0.159) 0.052 (0.063) 0.032 (0.0388) Normal urea 8.241*** (0.851) -0.154*** (0.037) 0.083* (0.049) 0.0304 (0.028) -0.017 (0.022) -0.053 (0.038) 0.102* (0.060) -0.078 (0.058) Dummy: 1.1855*** (0.510) 0.0232 Seeds (taka) (0.056) -0.111 Land preparation (taka) (0.0824) 0.044** Pesticides (taka) (0.025) 0.0405 Irrigation (taka) (0.039) -0.236*** Urea (kg) (0.1055) -0.050 Other fertiliser cost (taka) (0.093) 0.110 Labour (man-day) (0.067) 2 0.73 0.71 R F-value 12.82 4.23*** Notes (i) Figures in parentheses are stadard errors. (ii) ***, ** and * indicate significant at 1%, 5% and 10%, respectively. Intercerpt 72 0.78 6.17*** Technological Change in MV... The production elasticity coefficient of irrigation was positive and statistically significant at 1% level for the method of the application of granular urea in MV paddy production. On the other hand, the production elasticity coefficient of seeds was also negative (statistically significant at 1% level) and other fertiliser cost was positive (statistically significant 10%) for the method of traditional urea in MV paddy cultivation. The major contribution to output came from the combined effects of granular urea and irrigation for the method of the application of granular urea in MV boro paddy production. Table 7. Estimated Production Functions of MV Aman Paddy with Intercept and Slope Dummies Particulars Intercerpt Seeds (taka) Land preparation (taka) Irrigation (taka) Pesticides (taka) Urea (kg) Other fertiliser cost (taka) Labour (man-day) Pooled 6.824*** (0.725) -0.0163 (0.0398) 0.136*** (0.054) -0.0145 (0.0280) 0.0605*** (0.0211) -0.0492 (0.0418) 0.0509 (0454) 0.0039 (0.0669) Production elasticity Granular urea 8.480*** (1.072) 0.159 (0.183) 0.00004 (0.0001) -0.0445** (0.0229) 0.0714*** (0.0247) -0.449** (0.227) 0.113*** 0.0465 0.101* (0.0569) Normal urea 6.824*** (0.626) -0.0163 0.0344 0.1367*** (0.0474) -0.0145 (0.0242) 0.0605*** (0.0182) -0.0492 (0.0361) 0.0509 (0.0392) 0.0039 (0.0578) Dummy: 1.503 (1.199) 0.175 Seeds (taka) (0.168) -0.1212* Land preparation (taka) (0.0748) 0.0099 Pesticides (taka) (0.0304) -0.0304 Irrigation (taka) (0.034) -0.392** Urea (kg) (0.201) 0.0653 Other fertiliser cost (taka) (0.0616) 0.0963 Labour (man-day) (0.084) 2 0.35 0.28 R F-value 6.70*** 5.08*** Notes (i) Figures in parentheses are stadard errors. (ii) ***, ** and * indicate significant at 1%, 5% and 10%, respectively. Intercerpt 0.22 3.82*** The estimated parameters of the linear type Cobb-Douglas production function of MV aman paddy are shown in Table 7. The production elasticity coefficients of irrigation (0.0445) and urea (-0.449) were negative and pesticides cost (0.0714), other fertiliser cost (0.113) and labour (0.101) were positive and all the elasticity coefficients were statistically significant for the method of the application of granular urea of MV aman 73 Barmon paddy production. This indicates that the farmers also used excess urea along irrigation cost for MV aman paddy like MV boro production under the method of the application granular urea in MV aman paddy cultivation. In other words, the farmers could produce same amount MV aman paddy using less amount of granular urea. On the other hand, the land preparation cost (0.1367) and pesticide cost (0.0605) were positive and they were statistically significant for MV aman paddy under the method of the application of traditional urea. The coefficient of urea was negative but it was not statistically insignificant for MV aman paddy cultivation. This indicates that the farmers of MV aman paddy cultivation also used slightly excess urea but it had not significant impact on MV aman paddy cultivation in the method on traditional urea. Intensification of Resource use Efficiency of MV Paddy Production The marginal value products (MVPs) of various capital inputs were worked out at the geometric mean (GM) levels for the method of application of the granular urea and the traditional urea in MV boro and aman paddy cultivation and were compared with their respective prices. Marginal factor cost (MFC) of all inputs is expressed in terms of an additional taka spent for providing individual inputs in Cobb-Douglas production. Therefore, to calculate the ratio of MVP to MFC the denominator would be one and consequently the ratio would be equal to their MVP of an input in the production process. The marginal value product (MVP) and the ratio of MVP to MFC of MV boro and aman paddy cultivation under the method of application of granular urea and the traditional urea are presented in Tables 8 and 9. The figures in Tables 8 and 9 show that none of the marginal value products (MVPs) of inputs was equal to one, indicating that the sampled farmers in the study area failed to show their efficiency in using the resources both in the method of application of granular and traditional urea used for MV boro and aman paddy cultivation. The MVP and MFC ratios of seed cost (-25.83) and granular urea (-11.77) (significant at 1% level) were negative and greater than one which indicates that the farmer who used granular urea applied significantly excessive granular urea along with seed cost for MV boro paddy cultivation in the short-run keeping the use of other resources at a constant level. Similar conclusions were also made on MV aman paddy cultivation in the method of application granular urea. However, in case of farmers who use granular urea, the ratio of MVP to MFC for labour (1.18) was positive and greater than unity which indicates that the farmers who used granular urea did not utilise the opportunity of fully using the inputs in MV boro paddy cultivation. So, there was a little opportunity for the farmers to increase production by using labour input. However, the ratio of labour (-2.13) was negative and greater than one for MV aman paddy production, indicating that the farmer who used traditional normal urea in MV boro paddy used excessive labour. In other words, the farmers could have an opportunity to produce same amount of paddy using less number of laborers. Nevertheless, MVP-MFC ratios for irrigation, pesticide cost, land preparation and other fertilisers cost were positive and less than one indicating that profit could be maximised in the short-run by using less quantity of these resources for MV boro paddy cultivation who used granular urea. Similar conclusions were also made in MV boro cultivation except land preparation cost using traditional normal urea. 74 Technological Change in MV... Table 8. Resource Use Efficiency in Cobb-Douglas Production for Both Granular and Normal Urea Use in Boro Paddy Cultivation Granular urea Name of variables Seed (X1) Land preparation cost (X2) Irrigation cost (X3) Pesticide cost (X4) Urea (X5) Normal urea Coefficients MPV MVP/MFC Coefficients MPV MVP/MFC -0.131*** -25.827 -25.827 -0.154*** -21.878 -21.878 -0.029 -0.034 -0.034 0.083* 0.075 0.075 0.071*** 0.022 0.022 0.0304 0.021 0.021 0.027* 0.080 0.080 -0.017 -0.040 -0.040 -0.269*** -11.768 -11.768 -0.053 -2.232 -2.232 Other fertiliser cost (X6) 0.052 0.051 0.051 0.102* 0.103 0.103 Labour (X7) 0.032 1.176 1.167 -0.078 -2.130 -2.130 Notes: (i) MVP=Marginal value product, MFC=Marginal factor cost, MFC=1 for each inputs (ii) ***, ** and * indicate statisticaly significant at 1%, 5% and 10%, respectively. The ratios of MVP to MFC for MV aman paddy cultivation under the method of the application of granular and traditional normal urea are presented in Table 9. In case of granular urea user farmers for MV aman paddy cultivation, the MVP and MFC ratios of seed costs (29.09), and labour (3.54) were positive and greater than unity and they were statistically significant, indicating that the farmers had ample opportunity to increase MV aman paddy production to increase these two inputs in cultivation in the short-run keeping the use of other resources at a constant level in the study area. On the other hand, the ratio of granular urea (-9.124) was negative but greater than unity which indicated that excessive use of granular urea had gone beyond the economic optima. In other words, the farmers who used granular urea could produce same level of output of MV aman paddy using fewer amounts of granular use only. The ratios of irrigation cost (0.013) was negative while it were positive for pesticide cost (0.134) and other fertiliser cost (0.102) which indicated that there were no greater opportunity of increasing production by increasing more or less use of pesticides, irrigation and other fertiliser cost inputs in MV aman paddy production in the study area. Table 9: Resource Use Efficiency in Cobb-Douglas Production for Both Granular and Normal Urea Use in Aman Paddy Cultivation Granular urea Name of variables Normal urea Coefficients MPV MVP/MFC Coefficients MPV MVP/MFC 0.159 29.087 29.087 -0.0163 -1.994 -1.994 0.00004 0.000 0.000 0.1367*** 0.112 0.112 Irrigation cost (X3) -0.0445** -0.013 -0.013 -0.0145 -0.011 -0.011 Pesticide cost (X4) Seed (X1) Land preparation cost (X2) 0.0714*** 0.129 0.129 0.0605*** 0.098 0.098 Urea (X5) -0.449** -9.124 9.124 -0.0492 -0.972 -0.972 Other fertiliser cost (X6) 0.113*** 0.102 0.102 0.0509 0.048 0.048 0.101* 3.535 3.535 0.0039 0.103 0.103 Labour (X 7) Notes: (i) MVP=Marginal value product, MFC=Marginal factor cost, MFC=1 for each inputs (ii) ***, ** and * indicate statistically significant at 1%, 5% and 10%, respectively. On the other hand, in case of farmers who use traditional urea in MV aman paddy cultivation, the ratios of seed cost (-1.99) were negative but greater than unity which indicated that the farmers had an opportunity to use fewer amount of seeds input to get maximum output of MV aman paddy cultivation. The ratios of irrigation (-0.011) and urea cost (-0.972) were negative, however, it were positive for land preparation cost 75 Barmon (0.112), pesticide cost (0.098), other fertiliser cost (0.048) and labour (0.103) but less than unity. This implied that the farmers had no ample opportunity to reduce these inputs to maintain the same level of MV aman paddy production. Therefore, it may be concluded that the farmers did not efficiently and optimally use the input resources in both the methods of application of the granular urea and the traditional urea in MV boro and aman paddy cultivation and this hindered the generation of maximum level of output of paddy grain in the study area. Productivity Difference Analysis Using the decomposition model, the productivity difference between the method of the application granular urea and the method traditional normal urea was decomposed into its constituent sources and the results are presented in Table 10. The results of the decomposition analysis revealed that there was not much discrepancy between the observed difference and the estimated difference both for MV boro (10.64% and 11.43%) and MV aman (7.62% and 8.87%) under the method of the application of granular urea and traditional urea, respectively. It can further be inferred that between technological and input use differentials, which together contributed to the total productivity difference of the order of 10.64% for MV boro and 7.67% for MV aman paddy whereas it were 9.29% and 5.23% MV boro and MV aman paddy. This implied that MV boro and aman paddy productivity could be increased by 9.29% and 5.23%, respectively, if the farmers could use granular urea instead of traditional normal urea along with the same level of resource use that used in the traditional normal urea in MV boro and aman paddy cultivation. An increase in productivity exclusively from technological improvement is brought about through a shift in the scale and/or slope parameters of the production function. The contributions of differences in inputs use between the method of the application granular urea and traditional normal urea in MV boro and aman paddy cultivation to the productivity difference were meager at 4.56% and 3.66%, respectively. The larger quantity of urea used in MV boro and aman paddy under the method of the application of granular urea has helped to increased yield of paddy by 18.85% and 15.53% instead in the method of traditional urea in MV paddy cultivation. Similarly, the other main inputs like other chemical fertilisers and irrigation to increase MV paddy yield under the method of the application granular urea in MV paddy cultivation. This implied that the farmers who applied granular urea instead of traditional normal urea in MV boro and aman paddy cultivation obtained higher output by spending slightly more on these inputs in the same production environment in the study area. Table 10: Decomposition of Output Difference Between the Method of Granular Urea and Normal Urea in MV Paddy Cultivation Source of difference Observed difference in output [lnYGU-lnYTU] 76 Boro paddy cultivation Percent contribution 10.64 Aman paddy cultivation Percent contribution 7.62 Technological Change in MV... Source of contribution Due to difference in technology 7 [ln AGU - ln ATU ] + å [bGUi - bTU i ] ln X GUi 9.29 5.23 2.13 0.22 1.26 -2.44 -18.85 2.76 1.84 4.56 11.43 -2.31 -0.25 3.45 -3.54 -15.53 0.023 0.043 3.66 8.87 i =1 Due to difference in input use 7 åb GU i [ln X GUi - ln X TU i ] i =1 Seed (X1) Land preparation cost (X2) Irrigation cost (X3) Pesticide cost (X4) Urea (X5) Other fertiliser cost (X 6) Labour (X 7) Due to all inputs Estimated difference in output Conclusions and Policy Options Rice is the main staple food of the people in Bangladesh. The government of Bangladesh has been trying to achieve food self-sufficiency using the scarce input resources efficiently and optimally in production processes using our limited land resources to meet the continuous increase in food demand resulting from a resonating increase in population growth. In this regard the farmers are always trying to use trial and error technique to use the inputs efficiently in paddy cultivation. Granular urea is one such trial and error technique of modified urea that is being used recently in MV paddy cultivation in Bangladesh. The findings of the study indicated that the farmers used half of the granular urea compared to traditional urea in per hectare MV paddy cultivation. However, other chemical fertilisers such as triple super phosphate (TSP), murate of potash (MP), zypsum and zinc were used in more or less similar proportions in per hectare of MV paddy cultivation. The amount of chemical fertiliser used in paddy production per hectare of MV paddy cultivation also varied significantly within the same farming system. The farmers used comparatively more temporarily hired and family supplied male labour in both per hectare of MV boro and aman paddy cultivation that used granular urea instead of traditional urea. Per hectare production cost of MV boro and aman paddy cultivation were significantly lower in case of the method of application of granular urea than the application of traditional urea. As yield of MV boro and aman paddy was significantly higher in farms that used granular instead of traditional normal urea, the revenue as well as net profit was 77 Barmon also higher for the farmers who used granular urea instead of traditional urea. As a result, the farmers who used granular urea earned household income that is more than three times higher than the farmers who used traditional urea in MV boro and aman paddy cultivation in the study area. The results of the Cobb-Douglas production function show that granular urea had significant negative impact on boro while positive impact on aman paddy production. On the other hand, traditional urea had significant positive impact on boro and negative impact on aman paddy cultivation in the study area. These results indicated that the farmers could produce same level of output (paddy grain) from MV boro paddy cultivation using comparatively fewer amount of granular urea that was not possible using traditional urea. The results of the ratios of MVP to MFC showed that none of the marginal value products (MVPs) of inputs was equal to one, indicating that the farmers did not optimally use the input resources in both the methods of application of the granular urea and the traditional urea in MV boro and aman paddy cultivation and this hindered the generation of maximum level of output of paddy grain in the study area. The technological change in MV boro and MV aman paddy have brought about 10.64% and 7.62%, respectively, productivity difference between the method of the application of granular urea and traditional normal urea. 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