COMPARATIVE ADVANTAGE IN BANGLADESH CROP PRODUCTION

This study uses data from 1996/97 through 1998/99 to examine the relativeefficiency of production of crops in Bangladesh and their comparative advantage ininternational trade as measured by net economic profitability (the profitability usingeconomic, rather than financial costs and prices), and the domestic resource cost ratio,(the amount of value of non-tradable domestic resources used in production divided bythe value of tradable products).The economic profitability analysis demonstrates that Bangladesh has acomparative advantage in domestic production of rice for import substitution. However,at the export parity price, economic profitability of rice is generally less than economicprofitability of many non-rice crops, implying that Bangladesh has more profitableoptions other than production for rice export.Several non-cereal crops, including vegetables, potatoes and onions have financialand economic returns that are as high as or higher than those of High Yielding Variety(HYV) rice. The relatively minor role in cropping systems of these crops despite theirhigher returns, can largely be attributed to high price risks associated with marketing,suggesting the need for further development of agro-processing industries, ruralinfrastructure, and marketing networks.