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 BRRI from 15 regions covering an 11 year period (2001–2011). Results revealed that the level of N fertilizer used in experiments to increase HYV rice yield was far lower than the economic optimum level in Aman and Boro seasons but 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 Aman rice and reduce yield by 101.2 kg/ha which is substantial. The corresponding effect on HYV Boro rice is relatively lower and negligible for HYV Aus rice. The result highlights the dilemma and the detrimental effect of urea price increase on the yield of HYV Aman rice which is the main source of food grain 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.