Economic Impact and Returns on Investment of Rice Research and Extension in Bangladesh: An Economic Surplus Approach
Abstract
This study quantifies the impact and returns on investment from rice breeding research and extension in Bangladesh from 1971 to 2022 with an economic surplus model and project evaluation techniques. This study aimed to assess the financial impact and effectiveness of public investments in rice breeding research and extension, providing insights for future policy and funding decisions. The novelty of this study lies in its comprehensive evaluation over 51 years, applying both closed and open economic perspectives to capture a broader range of benefits and potential savings. Results indicate that rice breeding research generated social benefits for Taka of 3751.78 billion in a closed economy and 3601.01 billion in an open economy, saving $104.96 billion in foreign exchange. The investment yielded an estimated net present value (NPV) of Taka 3,538.76 million, an internal rate of return (IRR) of 68%, and a benefit-cost ratio (BCR) of 20. These findings underscore the need for increased public support for agricultural research in Bangladesh. However, benefits are primarily accrued to consumers, with producers facing losses due to the assumptions of a small open economy and lower demand elasticity relative to supply. The study recommends increased investments in public rice research institutes for R&D and extension programs to improve food sufficiency.
Keywords: rice research and extension, economic surplus model, improved rice varieties, Monte Carlo simulation, Bangladesh.
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