A Socio-economic Analysis of Private Plant Nursery Business in Bangladesh

The Agriculturists 16(2):102-114(2018) ISSN 2304-7321 (Online), ISSN 1729-5211 (Print) A Scientific Journal of Krishi Foundation Indexed Journal DOI: http://dx.doi.org/ 10.3329/agric.v16i02.40348 Impact Factor: 0.568 (GIF, 2015) A Socio-economic Analysis of Private Plant Nursery Business in Bangladesh Al Mamun*, Arifur Rahman and Nabihatul Afrooz Research Department, Emerging Credit Rating Ltd., Dhaka, Bangladesh *Corresponding author and Email: Received: 25 September 2018 Accepted: 25 December 2018 Abstract This study was conducted to examine the socio-economic condition, profitability, and marketing channel of small-scale private plant nurseries in Bangladesh. The study is based on survey data collected from 105 respondents from the Dhaka metropolitan area, Savar Upazila and two Upazilas of Gazipur District during January-March 2018 using a structured questionnaire. The study reveals that about 74 percent of private plant nursery established on government land in Dhaka metropolitan area, whereas in Gazipur and Savar areas the nurseries are mostly on the rented property which is 68 percent and 56 percent respectively. The average land size of the nursery is 9.06 decimal in Dhaka metropolitan area, 182.06 decimal in Gazipur and 121.18 decimal in Savar area. The average length of the business is 12 years where more than 80 percent of the firms are run by sole ownership. The average annual income using per decimal land from the plant nursery business is Tk.76,411 in Dhaka, Tk.7,066 in Gazipur and Tk.10,085 in Savar. The benefit-cost ratio is 1.53, 1.51 and 1.52 per decimal for Dhaka, Gazipur and Savar areas, respectively. Usually, two intermediaries such as wholesalers and retailers are involved in the plant nursery business. Although plant nursery business is a profitable enterprise, however, the owners are facing numerous problems which need to be improved in order to the smooth expansion of the nursery business in Bangladesh. Keywords: Bangladesh, private plant nursery, the benefit-cost ratio (BCR), profitability, marketing channel. 1. Introduction Bangladesh economy has been growing at a steady pace in the last decade (WB, 2018). Despite the robust economic growth, one-third of the annual employment growth rate declined (from 3.1 percent to 1.8 percent) between 200310 and 2010-16 periods (Farole and Cho, 2017). During this period (2003-16), Bangladesh economy has generated more than 1.15 million net jobs per year on average (Farole and Cho, 2017). Within employed peoples, about 40 percent of them are underemployed, and many persons have counted as employed those are worked only a few hours a week and at low wages rate (CIA, 2018). However, people are more interested in looking for a job instead of being an investor or entrepreneur in Bangladesh. The reasons may be the lack of investment capital and investment-friendly environment (WB, 2018). Plant nursery business can be a good solution for them, because of lower investment cost, higher return and lower risk for doing the business (Haque et al., 2007). In recent years, plant nursery business entered into a new dimension especially in Dhaka metropolitan area, where the plant nursery 103 owners are selling plants as well as providing different types of services such as rooftop gardening, landscaping and so on. It is because of the significant growth of per capita income, rapid growth of urbanization, environmental degradation, and the nutritional values (BBS, 2018; Statista, 2018; ECDS, 2017). Considering the environmental issues, more and more people in metropolitan areas are spending time in the plantation on rooftops, balconies and even indoors to beautify their little corners and in some cases to meet up some nutritional demand of fresh and organic fruits and vegetables (Islam, 2002). The country requires significant numbers of plant nurseries to fulfill the enormous demand of plants both in urban and rural areas, which creates an opportunity for youth unemployed people to become an entrepreneur. Few economic studies have been conducted on nursery business in Bangladesh (Islam et al., 1998; Haque et al., 2007), especially in urban areas (Ahmed et al., 2008). A large number of plant nurseries exist in Savar and Dhaka metropolitan area, but no economic study has been found based on these areas. Haque et al. (2007) have conducted a study in Jessore and Gazipur districts, but data had been collected 15 years ago and hence does not show the present status of nursery business. Moreover, no study has been found which emphasizes different segment such as the marketing channel of the plant nursery business. Therefore, considering these facts, this study had been conducted in Gazipuar, Savar and Dhaka metropolitan areas with objectives: i) to identify the socio-economic status of the nursery owners, ii) to estimate the profitability of nursery business, and iii) to explore the marketing channel and problems associated with the business. The findings of this study will help the researcher to do further research on this industry, and the policymakers will get a proper idea about this industry, and enable them to take appropriate policy for further improvement of the plant nursery business. Similarly, the findings of this study will help the entrepreneurs to understand the current situation of this business. Private plant nursery business in Bangladesh 2. Materials and Methods This study has collected primary data by using a Multistage Sampling method. In the first stage, using the Cluster Sampling method, Uttara, Mirpur, Dhanmondi, Sher-E-Bangla Nagar, Badda, Gulshan, Progoti Sarani-Debogram Road, and Ramna area has been selected from the Dhaka Metropolitan area. Similarly, Saver Union and Ashulia Thana have been chosen from Savar Upazila, and Rajendrapur from Kapasia and Mouchak from Kaliakair has been chosen from Gazipur District. The areas have been selected by the availability of the plant nurseries in the locality.1 In the second stage, the data has been collected using the lottery method of Simple Random Sampling. Fifty-five plant nurseries have been randomly selected from Dhaka Metropolitan area; twenty-five has been selected from Kapasia and Kaliakair Upazila in Gazipur District and twenty-five nurseries from Savar Union and Ashulia Thana in Savar Upazila.2 However, the 1 First, Dhaka Division has been selected from the existing eight Divisions by using Cluster Sampling method. After that Dhaka and Gazipur District has been chosen from the thirteen districts of Dhaka Division. Farther, using the same method, Dhaka Metropolitan Area and Savar Upazila has been chosen from Dhaka District and Kaliakair and Kapasia Upazila has been chosen from Gazipur District. 2 In Dhaka Metropolitan area, ten out of eightyseven plant nurseries have been selected from Uttara, ten out of fifty-eight from Mirpur, five out of thirty-two from Dhanmondi, five out of twenty-eight from Sher-E-Bangla Nagar, five out of thirty-three fr (...truncated)