Impact of urea price change on the economic optimum level of N fertilizer use in HYV rice and its yield in Bangladesh

Abstract

The study estimates the impact of change in urea price on the economic optimum level of N fertilizer use in HYV rice and its yield in Bangladesh using a large set of experimental data of BRRIfrom 15 regions covering an 11 year period (2001–2011). Results revealed that the level of N fertilizer usedin experiments to increase HYV rice yield was far lower than the economic optimum level in Aman and Boro seasonsbut higher in Aus season. The discrepancy was highest for HYV Boro rice closely followed by HYV Aman rice. Simulation exercise revealed that an increase in real price of urea by 50% will exert a 4% reduction in optimum dose of N fertilizer in HYV Amanrice and reduce yield by 101.2 kg/ha which issubstantial. The corresponding effect on HYV Bororice is relatively lowerand negligible for HYV Aus rice. The result highlights the dilemma and the detrimental effect of urea price increase on the yield ofHYV Aman rice which is the main source of foodgrain supply for the nation. Therefore, price policy should be geared towards controlling relative price of urea which can be met by a combination of subsidizing urea price and/or improving rice price.