Abstract
Wheat research and extension activities in Bangladesh have contributed significantly to the welfare of society by facilitating increases in the production of human food with the use of scarce resources during the past 30 years. Being an economic activity, it can be subjected to economic analysis. Although studies in other countries reveal that agricultural research is highly profitable, few efforts have been made to study the productivity of agricultural research, particularly wheat research and extension in Bangladesh. Therefore, the present study was an attempt to estimate the benefits from wheat research and evaluate the level and distribution of benefits, and the social rates of return to investment in wheat research and extension activities in Bangladesh. Economic surplus approach as well as the production function approach were employed. The first model used in this study was the one that developed by Akino and Hayami (1975) based on the economic surplus approach. The second model was based on the production function approach in which multifactor productivity index was a function of rainfall, temperature, research, extension and adoption rate of modern variety. Two forms of research and extension variables were used in the production function approach. The first was a stock variable and the second was a 10-year second degree polynomial distributed lag variable. The focus of this study was on wheat research activities conducted over the period 1973-74 to 2001-02. Two scenarios were examined. The first included all research and extension activities devoted to the development of wheat production. The second included all research and extension except conventional extension activities to the production of wheat. The results revealed that the society benefited substantially from the investment in wheat research and extension activities in Bangladesh. The average internal rate of return to investment in all wheat research and extension activities was 33.14 percent. This rate of return was moderately sensitive to the assumption of aggregate production function shifter, but rather insensitive to the assumptions about the supply and demand elasticities. In both the cases, the marginal internal rates of return were substantially higher than the average rates of return. These were 39.06 and 66.80 percent obtained from stock variable model and distributed lag model respectively. Analyses of the distribution of social benefits from the wheat research and extension activities revealed the producers' and consumers' share in the social benefits. Consumers received 86.97 percent of the social benefits, while producers received the remaining 13.07 percent in the base situation assumptions. The distribution of social benefit was sensitive to change in the aggregate production function shifter and assumptions about the supply and demand elasticities.