Productivity and the firm size
Relation between the size of a firm and its productivity is an old issue. Productivity typically refers to the output per unit of input. The interest on productivity has been in place since the early days of development economies. Since then, empirical research showed that there is a negative association between the firm size and productivity. Most of the research concluded that smaller farmers have higher production per unit of land used than the large farmers. Putting it in another way, smaller farmers on the same plot of land as large farmers are able to produce more than the large farmers.
The idea came forth later with significant ramifications especially in rural development and land reform context. Supporting the drastic land reform, it is now argued that the debate farm size having negative relationship with productivity is a genuine argument. This means that there will be an increase in equity and efficiency if the farm size could be equalized and impart dynamism in rural economy would be successful. In support of this argument, land reforms in Taiwan, Japan and South Korea are often used as examples. It is also said that land reforms in these countries led to creating consumer markets, political stability and agricultural surplus – all of which are the preconditions for sustainable development.
Bangladesh made its first attempt to research the relationship between productivity and the size of the farm. The small farmers in Bangladesh incur low opportunity costs which make it possible to use the land intensively, and as a result these farmers are able to yield more output than the bigger sized farms. The research also noted that since the labor supervising and monitoring costs were higher for the large farmers, they used labors less intensively.
It seems that the relationship is not always negative. It might be that the techno-ecological considerations that dominate specific crop production were not supported by the conventional notion. Small farmers were found to have marginal edge over the larger farmers in the case of TC aman in 1988. However, inverse relation was not found for the farms that were in-between large and small farms. These in-between farms had more yield than the small and large farmers. By 2008, the largest yield per unit was for the functionally landless farms followed by the other farm size groups. In this case the negative association was quite visible.
However, for the case of MV aman in 1988, researchers noted that there was a positive association between productivity and the size of the firm. However, in 2008, there was no consistent negative relationship for all paddy types. Small farmers in 2008 were found to have 4.18 ton per ha of land compared to 3.94 ton per ha of land for the large farms. This was a 6 percent higher yield. The difference was much higher when compared to other groups. The difference in the base year was very much discrete when the large farms yield 2.08 ton per ha and the smaller farms yield 2.68 ton per ha of land.
Small farms have the advantage of low opportunity costs as they often use family labor. His also allows them to use labor more intensively. On the other hand, larger firms are discouraged to use labor intensively due to the high monitoring and supervising cost incurred for the labor. The productivity of the small farms rises further as they are more vigilant over crop management in a bid to ensure food security.
Theodore Schultz, a famous Nobel-winning economist, observed that the Bangladeshi small farmers are efficient and rational which enables them to ensure that maximum production is attained from the piece of land they have. The economic boat might not be rocked for others due to the shortfall in production. However, this is not true for the small farmers where a small fall in crop production turns out to be a huge curse.
The farms tenure status is another debate surrounding the relationship between productivity and farm size. Along with Adam Smith and Alfred Marshall, many others have also argued that tenants yield lower output than the land owners. The main issue here is incentive. As the tenants have to give away one-half of what they produce, they tend to lose interest in producing additional amount of output. Furthermore, farmers are careful for their own land, but not as much careful for other's land.
Taking into consideration all types of paddy, per unit output for the share-croppers was the highest when compared to that of the lands operated by the owners. In 2008, share-croppers were found to top the list in case of MV aman and boro. Evidently, the current paper rejects the arguments put forward by Adam Smith and Marshall. This study observes that farmers do not have any productivity shortage even after paying half of their produced output to the land owners.
Cheung's hypothesis, which states that share cropping could be efficient if land owners shared some of the inputs with share-croppers probably worked in this case. Another reason, particularly for the case of MV paddy adoption, share-croppers and owner operators maintain the same pace. Finally, the high monitoring and supervising costs, coupled with the low labor opportunity cost might be the reasons for upsetting the conventional belief.
Non-paddy crops also followed the same result, particularly for wheat. It was found that there was a positive relationship between the size of the farm and wheat productivity, that is larger farms were able to produce more wheat per unit of land than their smaller counterparts. Again for pulses and potato, inverse relationship was observed where owner-farmers had lower productivity compared to the tenant farmers.
Simple attractive marketing tips
The cliché marketing plans have worked in the past. But in this competitive world, the best way to attract customers is to do something new, something creative. To grab the attention of the younger generation, you have to make a marketing plan which is new and fresh and goes with the current world.
The basic theory of attraction marketing is to remove the confusions a customer faces while they are making a decision. Your goal is not just to attract them but to gain their trust at the same time. Focus on the problems people face when they are buying something. Here are some few tips to attract new customers:
The first thing you should keep in mind is that learning is a continuous process. As you gain more experience in your business life you will learn more and more. Every mistake will lead you to a new lesson. Spread this knowledge you have to your customers. But make sure that this information is relevant and important for the customers to know. By helping out your customers when they are in a tight spot about their decision, they will automatically start trusting you.
Use the internet to your advantage. Set up a webpage for your company and offer your customers free services like manuals, training videos, updates, newsletters and other free stuff they can use. In return you can get their email address or any sort of contact information. This way, your customers get to know about your product and you get to know who is interested in your products.
Finally, put up a page on your website with your personal information. This way, people interested in your products will feel more connected to you. They will know who you are, your business goals and how you operate. This will make it easier for the customers to trust you.
These tips may seem very simple and obvious to you but once you actually use them practically, you will feel the magic very soon. This will boost up your clients and sales list and your customer list will keep growing every day.
Bangladesh to sign an ‘Open Skies’ deal with US soon
A primary agreement has been signed between governments of Bangladesh and the US on signing a full-fledged ‘open skies’ pact.
According to the statement of the U.S. State Department, the agreement makes opportunities for strengthening the economic partnership between the United States and Bangladesh through closer links in transport and trade.
The aviation officials of the two countries signed this agreement in Washington. It happened following a long negotiation. The U.S. government invited to sign this agreement last month while Dhaka asked the U.S. to allow it on resuming Dhaka-New York flights of Biman Bangladesh Airlines.
The United States has signed such kinds of agreements with more than 100 partners around the world. According to the agreement, airlines of the two countries will be allowed to operate between and beyond each others' territories. The pact is likely to strengthen two countries’ trade and tourism. According to the signed agreement, defense or military aircraft will not be allowed.
The ambassador of Bangladesh to the US said that the chairman of the Civil Aviation Authority of Bangladesh signed the agreement on behalf of the country.
Bangladesh Bank allows online purchases with credit cards
The Bangladesh Bank has finally approved a regulation that would allow international credit card holders to use it to make purchases online. This is a big step forward.
Under the existing regulations of the central bank, a traveler is allowed to spend upto $5,000 in non-Saarc countries and $2,000 in Saarc countries a year. With the new approval in place, a cardholder would be allowed to spend an additional $1,000 for online purchases along with the allowed travel allowance. However, for online purchases, a single deal cannot exceed $100.
Mr. Atiur Rahman, Governor of Bangladesh Bank, commented that the bank has taken this initiative for the ease of international credit card uses in the country, particularly keeping the young generation in mind. He also added that professional including online activists and journalists would also be benefited from this financial transaction digitalization. Initially, the bank plans to observe the users activities and reactions over the next three months, after which the bank will take steps accordingly.
Prominent bankers of the country appreciated this move by Bangladesh Bank. They have also said that this would grossly benefit the card users.
The recent approval would benefit international card uses to buy books, software, games and other products. It would also allow them to make hotel bookings.
At present there are about 700 thousand credit cards in Bangladesh. These cards are mostly from Standard Chartered Bank, Eastern Bank and BRAC Bank. Since November 2009, credit card holders were only allowed to make online payment domestically, such as paying utility bills and facilitating fund transfers. Now that international purchases are allowed, card holders would have greater ease and comfort in purchasing goods and services online.