RICE PRODUCTION ECONOMICS OF SUB-TROPICAL AGROECOLOGY IN SOUTHERN BHUTAN

The objectives of this study were to assess the profitability of rice cultivation under the current cultivation practices through the determination of cost and return in Southern Bhutan. Using the multi-stage random sampling method, 300 farmers were included in the sample. The main tool used for data collection was a pre-tested semi-structured questionnaire. Budgeting techniques and descriptive statistics were used for analyzing the data. The study reveals that gross return was Nu. 52500 (≈USD 740) acre -1 of rice cultivation from the investment of Nu. 52434 (≈USD 738.5). Thus, the gross margin was Nu. 1066 (≈USD 15) which is equivalent to 2.1% of the total overall cost. The analysis shows that a benefit-cost ratio of 1.021 with break-even price and yield at Nu. 69 (≈USD 0.97) Kg -1 and 735 Kg milled rice respectively. Rice farming was found labour intensive and it accounts for 77% of the total cost whereas that of other costs constitutes only 13%. Sensitivity analysis on the benefit-cost ratio shows that rice production is more sensitive to change in productivity and labor requirements than subsidy. Despite low productivity, soil fertility and crop management were found poor in southern Bhutan. Thus, the study recommends technical intervention such as farm mechanization and exploration of labor-saving technologies, adoption of high-yielding improved varieties, soil, and crop management. On the flip side, pertinent policy interventions like subsidies, compensation, and incentives are also important to make rice farming profitable.