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.