Benefit Cost Ratio


Benefit Cost Ratio (BCR):
Benefit Cost Ratio helps to justify whether the production of a crop is economical or not. It varies from place to place and with management practices adopted. Here Benefit Cost Ratio is calculated using the information provided by a banana farmer named Md. Elias Gasu from Kamardaha, Gabindaganj, Gaibandha. His Benefit Cost Ratio is as follows:

Input cost:





Sl. No.
Item
Amount
Rate
Cost
01
Ploughing
03
200
600
02
Sucker
400
4
1600
03
Irrigation
04
200
800
04
Fertilizer
-
-
5000
05
Insecticide
-
-
1500
06
Bamboo(stacking)
-
-
3000
07
Marketing Cost
-
-
2000
08
Total input cost


14500

Overhead cost:


1.      13.5% interest of working principal(14500 tk.) for cropping season(10months):1632 tk.
2.      13.5% interest of land value(250000 tk.) for cropping season(10months): 28125 tk.
3.      Miscellaneous cost 5% of working principal(14500 tk.) for cropping season(10months): 605 tk.


Total cost= Input cost+ Overhead cost
      =14500+ (1632+28125+ 605)
               =44862 tk.
Total output:
400 bunches @ 150 tk. /bunch =60000 tk.

Now BCR= Total output/ Total cost
                   =60000/44862
                   =1.34
BCR 1.34 implies that if the cost is 1 tk. Then the return will be 1.34 tk. that means net return will be 34%.

## Here BCR is counted for 1 bigha (33decimal) of land.

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