BEGUM A.A., MANOS B.
Abstract
Fertilizer policy has been an important policy issue during the past few years in Bangladesh, moving the political consensus in the direction of modernizing legislation as a first step towards changing the problematic situation of distribution and pricing of fertilizer. Several possibilities have been debated, especially the pricing of fertilizer. This paper aims to contribute to this policy discussion by simulating the impact that various policies based upon the price of fertilizer could have on agricultural production. Specifically, the study analyzes the economic, social and environmental implications of alternative fertilizer policies. The present research used a methodology of Weighted Goal Programming approach to estimate a utility function in the context in which farmers' behavior was not explained by the maximization of gross margin as a single objective but by a compromise between multiple objectives, such as the maximization of the total gross margin, the minimization of the variance of the total gross margin and the minimization of the labor. This methodology was applied to an agricultural region of Bangladesh. The most important criterion appeared to be the maximization of total gross margin and circumstantially the minimization of risk. The empirical results of this study show that a policy of increased price of fertilizer would have an enormous impact on farm income and employment.
Key words:
Bangladesh; fertilizer policy; agricultural production planning; weighted model of multiple programming; multicriteria analysis; utility function.