Analysis of Profitability of BT Cotton Growers in District Multan-Pakistan

Abstract

The study estimates the cost of production, yield, farm inputs, net revenue, economic and business profit of BT cotton cultivators in district Multan of Punjab province (Pakistan). This study uses the comprehensive survey from Multan district to analyze the profitability level by collecting data on different variables.The study shows that farmers grow BT cotton because it provides resistance against cotton bollworms infestations and gives higher yields. The study estimates the impacts of BT cotton adoption on producer benefits, returns and also adoption status which is classified into small, medium and large farmers.Economic profit and gross margin depict the farmer’s economic conditions. In the study area large farmers of Multan district having more net revenue and gross margin as compared with Medium and small farmers of Multan district because of more inputs induction for the sake of more profitability. The analysis of Benefit Cost Ratio (BCR) depicts that BCR with imputed cost is less than one in all the cases i.e. small, medium and large while it is more than one without imputed cost. It means that farmers do not get profit if imputed cost is included in total cost. BCR is highest for small farmers followed by large farmers in case of without imputed cost estimation. It may be due to engagement of all family members in all the operations of crop cultivation. So they save labor expenses.

Keywords: Gross margin, Net Revenue, Economic Profit, Yield, Business Profit, BCR.