Profitability Assessment with the application of BRASS model of Small-scale Rubber Plantation at Chittagong Hill Tract, Bangladesh

Abstract

This study concentrated on the profitability assessment of the small-scale rubber production by applying the Bioeconomic Rubber Agroforestry Support System (BRASS) model of Small-scale Rubber Production at Chittagong Hill Tract, Bangladesh. Considering the present market conditions of the cost of materials, land costs, labor costs, rubber prices and discount rate, the results of the Discounted Cash-flow (DCF) analysis indicate that the investment on small-scale rubber plantations in the Chittagong Hill Tracts is not profitable in the short run but in the long run, it is profitable. Rubber production is highly profitable if the government provides an interest-free loan to the poor farmers, and the farmers can reduce their investment costs. The farmers can control the investment costs by co-management. Rubber cultivation can be made more profitable if the farmers cultivate intercropping in their garden for the first few years. Considering the present market situation, the DCF analysis for the study shows that 28 years is the optimum rotation in small-scale rubber plantations with intercropping. With this optimum rotation, the CHT area can be financially most profitable for small-scale farmers. Investment in rubber plantations gives decent economic returns to the small-scale farmers. With the high discount rate, the investment in small-scale rubber plantations is no more profitable. Therefore, the government should allow interest-free credit or very low-interest rate credit support to small-scale rubber cultivators to make the maximum investment profit. With no intercropping, small-scale rubber cultivation is no more profitable. So, in line with the government policy of restricting shifting cultivations, the government should allow small-scale farmers to cultivate intercrops along with rubber cultivations.