dynamics of cost and return of principal crops in …...certificate – ii this is to certify that...

Dynamics of Cost and Return of PrincipalCrops in Madhya Pradesh

THESIS

Submitted to the

Jawaharlal Nehru Krishi Vishwa Vidyalaya, Jabalpur

In partial fulfillment of the requirements forthe Degree of

MASTER OF SCIENCE

In

AGRICULTURE(AGRICULTURAL ECONOMICS & FARM MANAGEMENT)

By

ARUNA PARAJULI

Department of Agricultural Economics & Farm ManagementJawaharlal Nehru Krishi Vishwa Vidyalaya, Jabalpur

College of AgricultureJabalpur (MP)

2013

CERTIFICATE – I

This is to certify that the thesis entitled “Dynamics of Cost andReturn of Principal Crops in Madhya Pradesh” submitted in partial

fulfillment of the requirement for the degree of “Master of Science inAgriculture,” of Jawaharlal Nehru Krishi Vishwa Vidyalaya, Jabalpur is

a record of the bonafide research work carried out by Ms. ArunaParajuli under my guidance and supervision. The subject of the thesis

has been approved by the Student’s Advisory Committee and the

Director of Instruction.

No part of the thesis has been submitted for any other degree or

diploma (Certificate awarded etc.) or has been published / published part has

been fully acknowledged. All the assistance and help received during the

course of the investigation have been fully acknowledged by her.

Dr. N. K. Raghuwanshi

Chairman of the Advisory Committee

THESIS APPROVED BY THE STUDENT’S ADVISORY COMMITTEE

Chairman (Dr. N. K. Raghuwanshi) …………………………………..

Member (Dr. K.G. Choubey) …………………………………..

Member (Dr. P.K. Awasthi) …………………………………..

Member (Dr. A.K. Pandey) …………………………………..

CERTIFICATE – II

This is to certify that the thesis entitled “Dynamics of Cost andReturn of Principal Crops in Madhya Pradesh” submitted by Ms.Aruna Parajuli to the Jawaharlal Nehru Krishi Vishwa Vidyalaya, Jabalpur in

partial fulfillment of the requirement for the degree of “Master of Science inAgriculture” in the Department of Agricultural Economics and Farm

Management has been, after evaluation, approved by the External Examiner

and by the Student’s Advisory Committee after an oral examination on the

same.

Place: Jabalpur SignatureDate:

Dr. N.K. Raghuwanshi(Chairman of the Advisory Committee)

THESIS APPROVED BY THE STUDENT’S ADVISORY COMMITTEE

Chairman (Dr. N. K. Raghuwanshi) …...……………………..

Member (Dr. K.G. Choubey) …...……………………..

Member (Dr. P.K. Awasthi) …...……………………..

Member (Dr. A.K. Pandey) …...……………………..

Head of the Department (Dr. N. K. Raghuwanshi) …...……………………..

Director of Instruction (Dr. P. K. Mishra) ……….…………………

Acknowledgement

I would like to place on record my deep sense of reverence and gratitude

to my respected guide and Chairman of my Advisory Committee Dr. N.K.

Raghuwanshi, Professor & Head, Department of Agricultural Economics and

Farm Management for his guidance, valuable suggestions and constant

encouragement for the entire period, which resulted in the completion and

presentation of this thesis.

No words can fully express my sincere thanks and gratitude to the

members of my advisory committee Dr. K.G. Choubey, Professor, Department of

Agril. Economics and FM, Dr. P.K. Awasthi, Professor, Department of Agril.

Economics and FM and Dr. A.K. Pandey Professor, Department of Extension

Education for their time, guidance, generous advices without which this study

would never have been completed.

I am deeply indebted to Dr. H.O. Sharma, Director, Agro-Economic

Research Centre, JNKVV, Jabalpur for his consistent and invaluable inspirations,

guidance, suggestions and deliberative discussions throughout the course of my

study.

I sincerely express my thanks to Dr. V.S. Tomar, Hon’ble Vice-Chancellor,

JNKVV, Jabalpur, Dr. S.K. Rao, Dean Faculty of Agriculture, Dr. P. K. Mishra,

Director of Instruction, Dr. R. S. Khampariya, Dean College of Agriculture, Dr. P.K.

Bisen, Dean Student Welfare, JNKVV, Jabalpur for providing me all necessary

facilities during research work. With great pleasure I express my sincere thanks to

Dr. A.M. Mishra, Dr. A K. Sarawgi, Dr. R. M. Sahu, Dr. A. Shrivastava, Dr.

D.N.Tiwari and Dr. N. P. Sharma for their kind advice and able guidance.

I gratefully acknowledge the help provided by Ravi Singh Chouhan,

Dushyant Kumar, Arvind Dangi and all the members of AERC, JNKVV during the

course of my analysis work.

I express my sincere thanks to JNKVV central library and all the staff

members, and Departmental liabrary incharge D. P. Pathak for their help and

cooperation received during the course of present investigation.

It is like a drop in the ocean of words which can never reach its mark to

acknowledge infinite love, blessings, sacrifices and constant encouragement of

my loving parents Shri Khagendra Raj Parajuli and Smt. Shanta Parajuli, my dear

sisters Shreejana and Karuna, brother Kishor, my ever caring brother in-law

Swostik Ghimire and a sweet little baby Saatvik Ghimire who have been the sole

source of inspiration for me to proceed ahead in my life. Lastly I would like to

convey my cordial thanks to all those unmentioned who directly or indirectly

helped me to fulfill my dream.

Place: Jabalpur

Date: Aruna Parajuli

LIST OF CONTENTS

Chapter Title Page. No.

1. INTRODUCTION 1-4

2. REVIEW OF LITERATURE 5-19

3. PROFILE OF THE STUDY AREA 20-30

4. MATERIALS AND METHODS 31-36

5. RESULTS AND DISCUSSION 37-64

6. SUMMARY, CONCLUSIONS AND SUGGESTIONS 65-72

REFERENCES 73-78

APPENDICES I - VIII

VITA

LIST OF TABLES

Table No. Title Page No.

3.1 General profile of Madhya Pradesh state 22

3.2 Different agro-climatic zones of Madhya Pradesh 23

3.3 Land use pattern of Madhya Pradesh 24

3.4 Cropping pattern of Madhya Pradesh 25

3.5 Land holding of Madhya Pradesh 26

3.6 Source wise irrigated area in Madhya Pradesh 27

3.7 Crop wise irrigated area in Madhya Pradesh 27

3.8 Amount of fertilizer used in Madhya Pradesh 28

3.9 Seed distribution in different season in MadhyaPradesh

29

3.10 Minimum support price of principal crops in MadhyaPradesh

30

5.1 Trend, growth and variability in area, production andyield of paddy in Madhya Pradesh

37

5.2 Trend, growth and variability in area, production andyield of wheat in Madhya Pradesh

40

5.3 Trend, growth and variability in area, production andyield of gram in Madhya Pradesh

42

5.4 Trend, growth and variability in area, production andyield of soybean in Madhya Pradesh

45

5.5 Trend, growth and variability in area, production andyield of cotton in Madhya Pradesh

47

5.6 Pattern of input use, cost and income of paddy inMadhya Pradesh

50

5.7 Pattern of input use, cost and income of wheat inMadhya Pradesh

52

Table No. Title Page No.

5.8 Pattern of input use, cost and income of gram inMadhya Pradesh

54

5.9 Pattern of input use, cost and income of soybean inMadhya Pradesh

56

5.10 Pattern of input use, cost and income of cotton inMadhya Pradesh

58

5.11 Relation between yield, cost of production, netincome and support price of paddy in MadhyaPradesh

60

5.12 Relation between yield, cost of production, netincome and support price of wheat in MadhyaPradesh

61

5.13 Relation between yield, cost of production, netincome and support price of gram in Madhya Pradesh

62

5.14 Relation between yield, cost of production, netincome and support price of soybean in MadhyaPradesh

62

5.15 Relation between yield, cost of production, netincome and support price of cotton in MadhyaPradesh

63

5.16 SGR and CGR of support price of principal crops inMadhya Pradesh

64

LIST OF FIGURES

Figure No. Title Page No.

3.1 Map of Madhya Pradesh 21

4.1 Map showing districts of Madhya Pradesh 31

5.1 Trend of area, production and yield of paddy 38

5.2 Trend of area, production and yield of wheat 41

5.3 Trend of area, production and yield of gram 43

5.4 Trend of area, production and yield of soybean 46

5.5 Trend of area, production and yield of cotton 48

LIST OF ABBREVIATIONS

BCR Benefit-Cost Ratio

Bt Bacillus thuringiensis

CACP Commission for Agricultural Costs and Prices

CGR Compound Growth Rate

CV Coefficient of Variation

DES Directorate of Economics and Statistics

et al. Et alli (and other)

Fig Figure

GoI Government of India

Govt. Government

ha hectare

i.e. that is

KCC Kisan Credit Card

kg kilogram

MGNREGA Mahatma Gandhi National Rural Employment Guarantee Act

MOA Ministry of Agriculture

MSP Minimum Support Price

pc percent

qtl. quintal

regre. coeff. regression coefficient

Rs Rupees

SGR Simple Growth Rate

SRI System of Rice Intensification

Sq. km Square kilometer

tn. tonnes

yr year

1

INTRODUCTION

1.1. The problem and its practical utility

Cost studies are the backbone in the field of research in agricultural

economics which is quite evident of the fact that all systematic research in our

discipline started with cost studies not only in India but at abroad also. These

studies went through various stages and were refined every time with the

experience, looking to the nature and limitations of agricultural business.

Very systematic studies in India started in the year 1954 when the

Directorate of Economics and Statistics, Ministry of Agriculture (GOI) conducted

farm management studies in the selected states of India. They were further

repeated also and wide experience was obtained through those studies. Again

an important milestone in the cost studies was the initiation of comprehensive

scheme on Cost of Cultivation of principal crops in 1971 practically in all states to

feed data to Agricultural Price Commission (now Commission for Agricultural

Costs and Prices) followed by problem oriented farm management studies in

certain command area of the country. Cost of Production form an important basis

of price fixation of agricultural commodities.

Agriculture is a critical sector of the Indian economy. Though its

contribution to the overall Gross Domestic Product (GDP) of the country has

fallen from about 19 percent in 2004-05 to 14 percent in 2011-12 (“Agriculture

share in GDP”, 2012) a trend that is expected in the development process of any

economy, agriculture yet forms the backbone of development. An average Indian

still spends almost half of their total expenditure on food, while roughly half of

India’s work force is still engaged in agriculture for its livelihood.

Madhya Pradesh is an agrarian state with about 74 percent population of

the state depending directly or indirectly on agriculture (Agriculture of Madhya

Pradesh, 2013). Agriculture and its allied services contribute 44 percent share in

the state’s economy (Agriculture of Madhya Pradesh, 2013). The state has

greater dependence on agriculture, both from an economic as well as

2

employment perspective. Between 2006-07 and 2010-11, the sector’s

contribution to GDP at current prices grew at 13.5 percent (Government of India,

2011). While the absolute growth of the sector at current prices shows an

increasing trend, the rate of growth across different years has been highly

fluctuating. Further, between 2006-07 and 2010-11, secondary and tertiary

sectors grew at a higher pace than agriculture - consequently, the relative

contribution of agriculture sector to the state economy, reduced from 23.85

percent to 20.93 percent (Government of India, 2011).

Since independence, Madhya Pradesh is constantly improving its

agricultural produce by implementing various plans and projects. The introduction

of high yielding varieties of crops and utilization of various chemical fertilizers has

brought a revolution in the crop production. The food grains production increased

from 14.1 million tonnes in 2004-05 to 16 million tonnes in 2010-11. It has now

increased by 19 percent and reached 19.46 million tonnes which shows how the

state is becoming self sufficient in providing food grains to the people (“Madhya

Pradesh India’s new grain bowl”, 2012).

Cost of Cultivation Scheme

The Central Sector Scheme for Studying the Cost of Cultivation of

Principal Crops in India started in the year 1970-71. At present 19 States (Andhra

Pradesh, Assam, Bihar, Chhatisgarh, Gujarat, Haryana, Himachal Pradesh,

Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Orissa, Punjab,

Rajasthan, Tamil Nadu, Uttar Pradesh, Uttarakhand and West Bengal) are

covered under the scheme. The scheme envisages collection of representative

data on inputs and outputs in physical and monetary terms, compilation and

supplying the estimates of cost of cultivation per hectare and cost of production

per quintal of the selected crops to CACP every year on a continuing basis. The

data collected from this survey are used for the successful implementation of

various schemes in the Agricultural sector, required to draw up realistic plans for

the development of various crops, diversification of cropping patterns and

maximization of net returns from them. Moreover, these data are used by the

3

States and Central Governments to fix floor support prices for agricultural

commodities.

To collect, validate and compile data pertaining to the Cost of Cultivation and

production of principal crops in Madhya Pradesh using cost accounting

method.

To train the field assistants in data collection periodically.

To provide the compiled data on cost of cultivation of mandate crops to DES

for averaging the data for the Madhya Pradesh state crop.

1.2. Importance of cost and prices in Indian agriculture

Cost helps in selection of most profitable enterprise and fixation of Support

price of principal crops which Govt. of India announces for both Kharif and Rabi

crops well advance of their sowing. The analysis of cost is important in the study

of managerial economics because it provides a basis for two important decisions

made by managers: (a) whether to produce or not and (b) how much to produce

when a decision is taken to produce.

Agricultural price policy plays an important role in achieving growth and

equity in Indian economy in general and agriculture sector in particular. The

major underlying objective of the Indian government’s price policy is to protect

both producers and consumers. Achieving food security at both national level

and household level is one of challenges in India today. Currently, food security

system and price policy basically consists of three instruments: procurement

prices/minimum support prices, buffer stocks and public distribution system

(PDS). Agricultural price policy is one of the important instruments in achieving

food security by improving production, employment and incomes of the farmers.

There is a need to provide remunerative prices for farmers in order to maintain

food security and increase incomes of farmers. There has been a debate on

price vs. non-price factors in the literature. However, a review of literature shows

that they are complements rather than substitutes (Dev and Ranade 1998; Rao

2004&2006; Schiff and Montenegro 1997).

4

1.3. OBJECTIVES

The general objective of the study is to examine the cost and return of

principal crops and probe into extent of the production variability. The present

study is undertaken with the following specific objectives:

1. To estimate the trend and growth rate of area, production and productivity of

principal crops in Madhya Pradesh.

2. To study the behaviour of input use, cost and return of the principal crops.

3. To examine the relation between production growth rate, cost of production,

net income and support price of principal crops.

4. To suggest appropriate policy measures for enhancing crop production in

the study area.

1.4. Hypothesis

The hypothesis made in this present study is given below:

1. There is no change in the economic structure and behavior of crops over

time.

2. There is no relation between cost of production, net income and support

price.

1.5. Limitations

This study doesn’t claim to be free from limitations. Some of the limitations

are present in this study also. The present study is based on the time-series data

of principal crops of Madhya Pradesh covering the period of 10 years (2000-01 to

2009-10). The empirical estimations are based on data collected from different

published reports and sources, therefore validity of data cannot be questioned.

Hence, the conclusions drawn from this study will be valid under the given

specific conditions and may not be generalized for wider applications.

5

REVIEW OF LITERATURE

Review of literature is very essential for any research. This chapter

reviews the research work done in the fields related to the objectives of study.

The main objective of review of literature is to determine what works (both

theoretical and practical) have been done in the past, which could assist in

delineation of problematic area, provide a basis for conceptual framework,

method and procedures and suggest operational definitions of major concept to

help in interpretation of findings. Hence it can be concluded that the review of

literature provide guidelines to an investigator making his work more precise

through the use of review of literature. Some of the review of literature related to

the present study is reviewed in the following:

A brief resume of work done in Madhya Pradesh and India

Mishra et al. (2000) conducted a study on production and marketing of

banana in Gorakhpur district of Uttar Pradesh. The researcher worked out the

total per hectare cost of production of banana on small, medium and large farms

at Rs 36,281.50 Rs 37,820.50 and Rs 38,447.50 respectively with average cost

of Rs 37,516.50 per hectare. Per hectare average gross returns were Rs

71,133.33 which was higher on large farms (Rs 73,400) followed by medium

farms (Rs 72,250) and small farms (Rs 67,750). The average input output ratio

was 1:1.89.

Angles (2001) assessed the growth performance of turmeric in important

south Indian states over the period from 1979-80 to 1998-99, by using the

exponential growth function of the form Yt = abt. They reported that the growth

rates in area, production and productivity of turmeric in Andhra Pradesh, Tamil

Nadu, and Karnataka registered positive and a significant growth. While growth

rate of area was negative (-0.02%) in Kerala but production and productivity of

turmeric were recorded positive and a significant growth. The growth rates in

area (2.07%), production (6.57%) and productivity (3.78%) of turmeric in India

registered positive and a significant growth. A negative growth rate of area was

found (-0.02%) in Kerala as the production of turmeric is undertaken in small

6

patches, where the plantations crops such as rubber, coconut etc. dominated

and they were more profitable than turmeric. The other main problem was the

labour requirement, wherein around 50 per cent of the cost of cultivation was

spent on labour in turmeric production. But the labour availability was scarce and

labour wage was very high. Hence, the farmers opted for plantation crops where

there was no need of more labour throughout the year. As a consequence, the

area under turmeric was reducing year after year.

Mamatha et al. (2002) the growth rate of area in Kerala was declined (-

4.32% per annum) due to felling of cashew trees, conversion of cashew area into

rubber plantations due to its rise in prices. The cashew production growth rates

were positive and significant for Andhra Pradesh (10.16%), West Bengal

(12.56%), Karnataka (7.72%), Tamil Nadu (12.84%) and Maharashtra (24.95%).

The growth rate of production in Orissa was negative (-5.25%) and non-

significant due to decline in the productivity. The productivity growth rate in Goa

(-7.78%), Kerala (-0.96%), Orissa (-7.49%) and Tamil Nadu (-0.14%) were

indicated negative and decreasing trend. The growth rate of area (5.20%),

production (2.26%) and productivity (2.87%) at all India level were experienced

positive, significant and shown increasing trend.

Neelappa Shetty (2002) studied the technical and allocative efficiency of

paddy production in TBP area. The per hectare cost of cultivation of paddy was

Rs 26,192 and Rs 25,938 in Bellary and Raichur districts. The variable costs

(85%) constituted the major portion of the total cost of cultivation. The

expenditure on human labour was found to be the major item of variable cost.

The fixed cost per hectare was estimated to be Rs 33,896 Rs 33,746 respectively

for Bellary and Raichur districts farmers Rental value of land formed the major

item of fixed cost. The gross return per hectare of paddy cultivation was Rs

42,842 and Rs 40,735 for farmers in Bellary and Raichur districts.

Verma (2002) studied the economics of onion and found that cost of

cultivation over cost A1, cost B1, cost B2, cost C1, cost C2 and cost C3 were

worked out to Rs 21,790.24, Rs 22,309.05, Rs 24,499.05, Rs 24,949.28, Rs

7

27,139.28 and Rs 29853.20, respectively. The per ha yield on an average was

263.75 qtl/ha. The average gross return was Rs 72, 531.25 per ha. It was highest

(Rs 74,580) on large farms and lowest (Rs 70,218.50) on small farms. The

average yield and gross return increases with the increase in farm size, because

large sized farmers had incurred higher investment per hectare on modern

inputs. The average net returns over cost A1, cost B1, cost B2, cost C1, cost C2

and cost C3 were found to be Rs 50,741.01, Rs 50,222.20, Rs 48,032.20, Rs

47,581.97, Rs 45,391.97 and Rs 42,678.05 per hectare of onion respectively.

The average cost of production per quintal of onion was worked out to be Rs

102.89 on cost C2 and Rs113.18 on cost C3. The average family labour income

and farm business income were calculated Rs 45,318.28 and Rs 46,459.66 per

hectare respectively. The average input-output ratio at cost A1, cost B1, cost B2,

cost C1, cost C2 and cost C3 were worked out to be 1:3.32, 1:3.25, 1:2.96, 1:2.90,

1:2.97 and 1:2.42 respectively.

Narasimham et al. (2003) studied cost and returns of paddy in Yanam

region of Union Territory and Pondicherry. The study highlighted that the cost of

production of paddy per hectare was found highest among all the size groups.

The total costs were high on large farms in both crop I (kharif) and crop II (rabi)

with Rs 18,094.26 and Rs 19,071.29, respectively. Rental value on own land in

the cost of production of crop II was more than crop I in all size groups. Gross

return per hectare was the highest on large farms followed by medium and small

farms in both crop I and crop II. Net returns also showed direct relation with the

farm size.

Yadukumar et al. (2003) projected the economics of cashew plantations and

the per hectare total cost of production was worked out to be Rs 90,227, Rs

85,195, Rs 99,946, Rs 1,85,925 and Rs 1,51,512 under different planting

densities of 7.5 m × 7.5 m (175 plants), 8 m × 8 m (156 plants), 10 m × 10 m

(200 plants), 4 m × 4 m (625 plants) and 5 m × 5 m (400 plants), respectively.

The yields of raw nuts per tree were 28 kg (4900 kg/ha), 28 kg (4368 kg/ha), 28

kg (5600 kg/ha), 17.5 kg (10939 kg/ha) and 21.5 kg (9000 kg/ha) for the

respective plant densities. The gross income per hectare of above said different

8

planting densities worked out to Rs 1,97,750, Rs 1,79,400, Rs 2,30,000, Rs

4,28,185 and Rs 3,60,000. The net incomes per hectare were obtained for above

mentioned respective planting densities were Rs 1,07,523, Rs 94,205, Rs

1,30,054, Rs 2,42,260 and Rs 2,08,488.

Nagpure et al. (2004) in their study on economics of sugarcane

production in Vidarbha region of Maharashtra state estimated that per hectare

cost of cultivation in Suru crop at cost A, B and C was estimated Rs 35,178.86,

Rs 53,207.91 and Rs 54,011.11 respectively. In case of ratoon it was estimated

to Rs 25,612.88, Rs 42,326.52 and Rs 43,162.62 respectively. The net income

per hectare of Rs 15,766 was worked out higher in case of ratoon crop as

against Rs 11,334 from Suru crop. The efficiency of per rupee investment in the

cultivation of ratoon vis-à-vis of suru crop at cost C was estimated to 1.36 and

1.21 respectively.

Shibu et al. (2004) observed that the annual compound growth rate of

area was highest (5.97%) in period-I compared to whole period (2.22%) with

declining trend in period-II (-1.82%). A positive significant growth rate of

production was noticed (3.76%) in period-I with stagnation in production growth

rate (0.02%) in whole period and showing a declining trend (-1.18%) in period-II.

The increase in area during first period has contributed to the increase in

production by 3.76 per cent per annum. The negative productivity growth rate

was registered in the whole period (-2.11%) as well as in period-I (-2.08%) with a

low and positive growth rate was recorded in period-II (0.87%). The production

growth rate was recorded a positive (2.62%) in period-I with a negative growth

rate (-2.37%) in period-II. The productivity showed a decline in period-I (-3.54%)

and period-II (-0.76%).

Varghese (2004) worked out the trend in area, production and productivity

of cardamom in Kerala. The area under cardamom registered a negative

percentage annual trend growth rate of -1.216. The output grows at an average

annual trend growth rate of 4.14 percent and yield registered an average annual

growth rate of 5.15 percent.

9

Bhullar (2005) studied the trends in production of dry chilies in India and

found that Andhra Pradesh, Karnataka, Maharashtra and Orissa put together

account for 75 per cent of the total Indian production. Punjab state occupied 3.10

per cent of area and was ranked 8th during 1974-77, which decreased

substantially to only 0.46 percent in 1998-2001. Production-wise, Punjab

accounted for 4.61 per cent of production during 1974-77, which fell to 0.74 per

cent during 1998-2001. There had been significant improvement in the

productivity of chillies at 1945 kg per ha, followed by Punjab at 1688 kg per ha,

Rajasthan at 1064 kg per ha and Arunachal Pradesh at 1272.7 kg per ha and

Gujarat 786 kg per ha.

Saraswat and Rane (2006) conducted a study on production and

marketing of peach fruit in Rajgarh area of Sirimour district in Himachal Pradesh.

The compound growth rate with respect to area and production showed that the

area under peach increased at the rate of 4.31 per cent per annum. The highest

area under peach was recorded in Sirmour district, whereas district Mandi

registered the highest rate of production growth in the state i.e., 9.32 per cent per

annum. The district wise production scenario indicated that there are variations

out of 12 districts only 4 districts had registered a positive growth in production

i.e., Solan (22.55%) followed by Una Bilarpur and Mandi.

Rane and Bagade (2006) studied economics of production and marketing

of banana in Sindhudurg district of Maharashtra. The study revealed that the per

hectare cost at cost C in Dodamarg and Sawantadi tahsil were Rs 1.52 lakhs and

Rs 1.53 lakh respectively. In Dodamarg tahsil banana was grown as a sole crop

where per hectare cost of cultivation was Rs 1.28 lakh and in Sawantadi tahsil

the per hectare cost was Rs 1.15 lakh. Benefit cost ratio in Dodamarg tahsil and

Sawantadi tahsil were 2.20 and 2.33 respectively. The average benefit cost ratio

of banana cultivation was 2.27.

Jadhav et al. (2007) studied the economic performance of agro-based

industry of mushroom production in Maharashtra. The per kg total cost of

mushroom cultivation has been found as Rs 24.47, constituting 54.5 percent as

10

variable cost and 45.5 percent as fixed cost. The cost of production of mushroom

has been worked out as Rs 28.11/kg. The gross returns have been found as Rs

61.67/kg and net returns as Rs 35.11/kg, with benefit cost ratio of 2.19.

Deshpande et al. (2008) estimated economics of selected medicinal and

aromatic crops in Karnataka, Madhya Pradesh, West Bengal, Uttarnchal and

Kerala. Total cost of cultivation and gross returns of sweet flag per acre were Rs

44,876.58 and Rs 77,184 respectively and net returns over variable and total

cost per acre were Rs 37,026.2 and Rs 32,308.4 respectively. Patchouli cost of

cultivation and gross returns per acre were Rs 48,417.88 and Rs 48,680

respectively and net returns over variable and total cost per acre was Rs 3,180.7

and Rs 262.12 respectively. Isabgol cost of cultivation and gross returns per acre

were Rs 5,975.8 and Rs 10,688.26 respectively and net returns over variable and

total cost per acre was Rs 6,510.64 and Rs 4,712.46 respectively. Total cost of

cultivation and gross returns for ashwagandha per acre were Rs 26,396.75 and

Rs 84,000 respectively and net returns over variable and total cost per acre were

Rs 60,495 and Rs 57,603.3 respectively. Total cost of cultivation and gross

returns for chandramuli per acre were Rs 26,217 and Rs 70,500 respectively and

net returns over variable and total cost per acre were Rs 47,343 and Rs 45,093

respectively. Average total cost of cultivation and gross returns for jumbo faran

per acre per year were Rs 13,605 and Rs 44,344 respectively and net returns

over variable and total cost per acre per year were Rs 30,738.4 and Rs 30,738.4

respectively. Total cost of cultivation and gross returns for leadwort per acre were

Rs 1,55,350.13 and Rs 4,61,700 respectively and net returns over variable and

total cost per acre were Rs 3,15,864.88 and Rs 3,06,349.9 respectively. Total

cost of cultivation and gross returns from lemon grass per acre were Rs 14,412

and Rs 11,149.8 respectively and net returns over variable and total cost per

acre were Rs -832.57 and Rs -3262.93. This showed lemon grass cultivation in

study area was not profitable.

Ali and Kappor (2008) analysed farmer’s perception on risks in fruits and

vegetables production and estimated annual growth rates during past two

decades for area, production and yield of the selected crops in Uttar Pradesh.

11

Data revealed that there was a sharp decline in growth of area under maize

(-1.75%) and oilseeds (-3.69%) production during 1991-92 to 2005-06. The area

under rice and wheat production has also experienced a negative growth during

2001-02 to 2005-06. However, during this duration, pulses were grown on more

area, as is evident by a moderate growth of 1.17 percent in their area. The

notable growth in area was recorded under vegetables production, which was

2.12 percent during 1991-92 to 2001-02 and 2.67 percent during 2001-02 to

2005-06; the highest 3.08 percent being during 1991-92 to 2005-06. It is clear

that shift in most of the crops areas that occurred during 1991-92 to 2005-06

appeared to be diverted towards the production of high-value crops like fruits and

vegetables. It is also evident that a strong decline in production was experienced

by foodgrains (-2.04%) during 2001-02 to 2005-06 and oilseeds (-2.12%) during

1991-92 to 2005-06, as the farmers have been induced to diversify their cropping

system towards high-value commercial crops.

Rahman and Imam (2008) carried out a study to find out the appropriate

models using latest model selection criteria that could describe the

best growth pattern of pigeon pea, chickpea and field pea pulse production in

Bangladesh. The study also tried to measure the instability, growth rates

of pigeon pea, chickpea and field pea pulse production and to determine the

efficient time series models to forecast the future pigeon pea, chickpea and

field pea pulse production in Bangladesh. The study revealed that

the pigeon pea pulse production was relatively stable (CV being 26.70%)

compared to the chickpea (CV being 49.43%) and field pea (CV being 27.78%).

Among the deterministic type models for pigeon pea, chickpea and

field pea pulse production the cubic model was found to be the most appropriate

one. The variation of the growth rates in pigeon pea pulse production was - 28.71

percent to 2.52 percent, in chickpea pulse production was -79.49 to 2.56 percent

and in field pea pulse production was -19.12 to 5.83 percent during the study

period. For forecasting purpose, we forecasted the pigeon pea, chickpea and

field pea pulse production in Bangladesh in the year of 2008-09 to 2012-2013.

12

Sinha et al. (2008) studied the comparative economics of rice cultivation

by different methods. It has been found that each of three direct seeding rice

technologies have lower cost of cultivation as compared to transplanted rice. The

total cost of cultivation per hectare has been found highest in transplanted rice

(TP) (Rs 22,267), followed by wet seeding (WS) by rice seed drum (Rs 18,133),

drill seedling (DS) by zero till drill machine (Rs 17,087) and zero till (ZT) drilling

by zero till drill machine (Rs16,518). The reduction in cost has been due to

saving in transplanting, uprooting and less irrigation requirements in direct

seeding methods. The per hectare net return has been estimated maximum in

DS (Rs 20,745), followed by ZT (Rs 18,237), WS (Rs 17,737) and TP (Rs

14,613). Increase in net profit in direct seeded rice over transplanted rice has

been observed to be highest in DS (42%), followed ZT (25%) and WS 21%).

Sita Devi and Ponnarasi (2009) conducted an economic analysis of

modern rice production technology. The cost of cultivation was computed for the

paddy crop separately for the two categories, viz. SRI and conventional methods.

The total cost of cultivation per hectare was lower by about 10 percent in SRI

method (Rs 21,655) than conventional method (Rs 25,914). Among the

components of the total cost, human labour occupied the highest share in both,

viz. 43.61 percent in SRI method and 41.87 percent in conventional method.

Also, the cost of production per tonne of paddy were lower in SRI (Rs 3,937) than

conventional method (Rs 7,430) of rice cultivation. The net returns were higher in

SRI (Rs 27,009) than conventional (Rs 14,499) method. It was mainly due to

higher productivity of paddy in the SRI method.

Radha et al. (2009) carried out a study on the economic analysis of water-

saving rice production technologies viz. System of rice intensification (SRI), semi-

dry and rotational irrigation vis-a-vis farmer’s practice. Among the three water-

saving rice production technologies analyzed, the total cost of cultivation has

been recorded highest in SRI (Rs 58,645/ha), followed by rotational (Rs

47,140/ha) and semi-dry (Rs 39,321/ha). But, the per hectare yield is maximum

in SRI (6.85 tn), followed by semi-dry (6.66 tn) and rotational (6.2 tn), inferring

that all the three technologies have recorded higher yields over the farmer’s

13

practice with 5.5 tn/ha. However, the net returns are high in semi-dry (Rs

43,484/ha), followed by rotational (Rs 30,085/ha) and SRI (Rs 26,466/ha)

methods.

Khan et al. (2009) conducted a comparative economic analysis of drip,

drip with subsidy and furrow systems of irrigation in quality mulberry leaf

production. The study has revealed that per hectare total cost on furrow and drip

irrigation system was Rs 93,339 and Rs 77,852 respectively, but the peasants

who availed subsidy (50%) of drip irrigation system incurred Rs 71,552 only,

thereby saving an amount of Rs 24,787. Further, the net return per hectare on

furrow, drip and drip system with subsidy has been found at Rs 23,661, Rs

42,148 and Rs 48,448 respectively. An additional net return per hectare of Rs

18,487 and Rs 6,300 was obtained for without and with subsidy in drip irrigation

system, which is of Rs 24,787.

Amale et al. (2009) studied the economic impact of ridges and furrow

method of soil water technique on rabi sorghum cultivation. The rabi sorghum

shared more area on conventional (55%) than ridges and furrow (42%) method.

The per hectare cost of cultivation of rabi sorghum has been observed to be

about 40 percent higher on ridges and furrow method (Rs 9,610) than

conventional method (Rs 6,851). But, yield has been recorded substantially

higher on the sample farms following the dryland technology of soil-water

conservation (8.86 qtl/ha) than those using conventional method (4.90 qtl/ha).

Therefore, the net profit received by the sorghum growers adopting ridges and

furrow method has been found nearly about four-times more than those using the

conventional method.

Mittal (2009) studied the economic feasibility of diversifying towards

horticultural crops and calculated the growth rate in area and production of fruits

and vegetables over the period 1990-2004 and different sub periods. For fruit,

the area growth was 3.28 percent in 1990-95, which increased to 6.67 percent

during the period 2000-04. The production of fruits grew at the rate of 9.43

percent in the initial period, but later the growth started declining. The area under

14

vegetables increased at the rate of 3.15 percent during 1995-2000, which later

declined. During the same period, high production growth was also observed.

The overall growth was 3.38 percent for fruits and 2.10 percent for vegetables

during the period 1990-2004. The production growth was 3.06 percent and 3.95

percent for fruits and vegetables, respectively. The BCR of cereals production

was less than one and in many cases it was even less than 0.50. On the other

hand, for fruits and vegetables, the BCR was above 1 in all the cases and even

higher. It is indicative of the economic benefit of crop diversification towards fruits

and vegetables.

Singh et al. (2009) studied the economics of farming system in Uttar

Pradesh and found in all farming systems the average cost of production to be

Rs 20,122/ha. It was highest (Rs 21,259/ha) on sugarcane-based farming

system, followed by vegetable- based farming system (Rs 17,320/ha). The labour

cost was found highest in vegetable-based farming system (Rs 4,228/ha),

followed by sugarcane-based farming system (Rs 4,085/ha). Expenditure on

seed was highest on the sugarcane-based farming system (Rs 4,286/ha),

followed by vegetable-based farming system (Rs 4,251/ha). Expenditure on

machinery was also found the highest on the sugarcane-based farming system

(Rs 4,117/ha), followed by livestock based farming system (Rs 3,903/ha). The

analysis indicates that labour-use, machinery, seed, fertilizer and marketing cost

were the major components of crop production and constituted about 92 percent

of total cost.

Sindhu et al. (2010) in supply chain analysis of onion and cauliflower in

Punjab, has estimated the costs and returns from their cultivation and found the

cost of cultivation for onion and cauliflower at Rs 49,563/ha and Rs 34,840/ha

respectively. Within the variable costs of cultivation, the share of human labour

exceeded 356 percent in both the crops, indicating the labour- intensive

character of the vegetable crops. The seed and nursery-raising were other

important cost components accounting for 25 percent and 16 percent of the

variable costs of onion and cauliflower crops respectively. Expenditure on

fertilizers in onion and cauliflower ranged between 25 percent and 29 percent,

15

the rental value of land was the major constituent accounting for almost three-

fourths of the total fixed cost. The gross returns from onion were Rs 1.24 lakh/ha,

while gross returns from cauliflower were Rs 72,912/ha. Both yield and price

differentials accounted for large differences in the gross returns from these two

crops. While the returns over variable costs were Rs 87,656/ha for onion and Rs

48,395/ha for cauliflower, the respective net returns amounted to be Rs

74,597/ha for onion and Rs 38,072/ha for cauliflower cultivation.

Goudra et al. (2011) studied the compound growth rate of area,

production and productivity of chilli for all the districts of North Karnataka. Area-

wise, Belgaum (4.85), Gulbarga (0.81), Raichur (0.40) districts were significant at

10 percent of level of significance. Production-wise, Belgaum (5.49), Bijapur

(1.11), Haveri (0.79) districts were significant at 10 percent level of significance.

Productivity wise, Bidar (1.74) and Raichur (0.21) districts were significant at 10

percent level of significance. Northern Karnataka as a whole registered positive

compound growth rate for area (13.76), production (13.88), productivity (12.20).

The area, production and productivity under chilli decreased in North Karnataka

with highest instability across all the districts.

Sonnad et al. (2011) formulated the research project to address the

impact of World Trade Organisation (WTO) on domestic oilseeds production. The

results of the study have shown that area under rapeseed and mustard, soybean,

sunflower and castor increased with an overall annual compound growth rate of

2.13, 17.61, 9.15 and 1.85 per cent respectively. The increase in productivity of

all nine selected oilseed crops put together from pre-WTO period to post-WTO

period, was 140 kg per ha. The overall growth of productivity was positive in all

the oilseed crops except sunflower. The mean production of the nine oilseeds put

together had increased from 9.99 million tonnes during Pre-Technology Mission

on Oilseeds (TMO) period to 17.68 million tonnes in pre-WTO period and to

22.33 million tonnes in post-WTO period.

Channaveer et al. (2011) tried to assess the impact of MGNREGA on the

changes in input-use pattern, labour-use pattern, labour productivity, cost of

16

cultivation and returns from selected crops in Gulbarga district, Karnataka. In the

cost of cultivation and returns from redgram and rabi jowar, the cost of cultivation

of redgram was found significantly higher (22.91%) in fully-implemented (Rs

7,391/acre) than in partially-implemented (Rs 5,698/acre) MGNREGA villages. It

was due to significantly higher cost on labour (27.20%) and machinery (42.10%)

in the fully implemented MGNREGA villages. The prevailing labour wage rates

were higher in the fully-implemented than partially-implemented MGNREGA

villages. The material input cost was also higher (12.82%) in the fully-

implemented than partially-implemented MGNREGA villages. In the rabi jowar,

the cost of cultivation in fully-implemented MGNREGA villages (Rs 4,521/acre)

was significantly higher (16.37%) compared to partially-implemented (Rs

3,781/acre) MGNREGA villages due to the higher cost on labour wage rates. The

cost on material input was higher by 16.45 percent in fully-implemented

compared to partially-implemented MGNREGA villages. The redgram yield was

significantly higher (18.95%) in fully-implemented than partially-implemented

MGNREGA villages, due to higher input-use, better irrigation facilities and slightly

better soil fertility status. Hence, gross return received by farmers was higher by

17.82 percent in the fully-implemented MGNREGA villages. However, net returns

obtained Rs 99/acre was lower by more than 300 percent compared to those of

partially-implemented MGNREGA village farmers Rs 457/acre. The higher cost of

cultivation (22.91%) due to higher cost on labour and machinery resulted in lower

net returns in the fully-implemented MGNREGA villages. In the rabi jowar, both

the main yield (2.54qtl/acre) and by-product yield (2.09 bullock cart/acre)

obtained in fully-implemented MGNREGA villages were higher by 11.81 percent

and 6.22 percent respectively compared to partially-implemented MGNREGA

villages.

Rajarathinam and Parmar (2011) studied area, production and

productivity trend and growth rates of castor crop grown in Anand district of

middle Gujarat. The study found that the percent growth rate in case of

production to be 5.79 percent per annum which was due to the combined effect

17

of increase in area and productivity at a rate of 2.86 and 3.41 percent per annum

respectively.

Birthal et al. (2012) studied the potential economic benefits from adoption

of improved drought-tolerant groundnut in India. Groundnut production in the

Anantapur district increased at an annual rate of 6.5 percent during 1965-66 to

1985-86, which decelerated to less than 1 per cent during 1987-88 to 2007-08.

During both the periods, the growth occurred mainly due to area expansion. The

yield growth rather turned out to be negative in the latter period. The deceleration

in the growth was accompanied by increased variability. The coefficient of

variation (CV) in production increased from 35.1 per cent during 1965-66 to

1985-86 to 49.9 per cent during 1986-87 to 2007-08. The CV in yield increased

from 26.7 per cent during 1965-66 to 1985-86 to 42.9 per cent during 1986-87 to

2007-08. The CV in planted area, on the other hand, declined from 11.4 per cent

to 8.5 percent during 1986-87 to 2007-08. A comparison was made on the yield

of different groundnut varieties, the variety ICGV9114 had a yield advantage of

23.6 per cent over TMV 2 and 8.9 percent over JL24. Its cost of cultivation,

however, was 17 per cent more than that for TMV 2, but 6 percent less compared

to that for JL 24. The gross and net revenues (pods and haulms) were higher

from ICGV91114 than those from other varieties. The net revenue was higher by

36 percent over TMV 2 and 24 percent over JL 24.

Sharma and Gummagolmath (2012) found fluctuations in the area and

production of guar in Rajasthan as well as in India are interrelated as a larger

area gives higher production if the inputs remain constant. But, variation in yield

may be due to weather conditions, technological changes, agronomic practices

followed etc. The study on growth and instability in area, production and yield of

guar in Rajasthan and India shows that the value of CV for production of guar

was 60 per cent for Rajasthan and 44 percent at all-India level, indicating high

instability. The magnitude of CV for yield of guar was higher in Rajasthan (51%)

than at all-India level (33%). However, lower CV for area under guar cultivation

shows stability in the acreage allocation for this crop. It was mainly due to the

fact that under rainfed conditions, farmers have limited alternatives in terms of

18

crop selection, implying thereby that production of guar can be stabilized with the

stable yield of the crop over the years The compound growth rates in area and

production of guar revealed a marginal growth, while in yield a negative growth

was found during the period 1970-71 to 2007-08. Thus, the increase in

production of guar can be achieved by improving the level and stable growth in

the yields.

Bista et al. (2012) made an attempt to study the progress and

performance of Kisan Credit Card scheme with a case study of Bihar. The cost

and return analysis of Kisan Credit Card beneficiary and non-beneficiary farmers

has revealed that the cost of cultivation per hectare for all four major crops

(paddy, maize, wheat and potato) was higher for beneficiary than non-beneficiary

farmers It was due to application of higher amount of purchased inputs facilitated

by the borrowed money. The gross return per hectare for all crops was also

higher for beneficiary than non-beneficiary farmers The net return per ha was

higher for all the crops and it was the highest in potato. The KCC beneficiary

farmers realized higher returns due to higher use of inputs (Singh and Sekhon,

2005).

Sharma et al. (2012) has worked out the economics of production of three

medicinal and aromatic plants, viz. menthol mint, tulsi and vetiver. The cultivation

of these plant species has been found to be highly profitable. In their study in

cost structure of aromatic crops, the per hectare cost and return from cultivation

of these three crops were calculated at current prices. The total variable cost was

found to be highest for vetiver (Rs 75,517/ha), followed by menthol mint (Rs

23,489/ha) and tulsi (Rs 18,106/ha). The share of variable cost ranged between

74 and 79 percent of the gross cultivation cost of these aromatic crops. The

input-utilization pattern in the cultivation of these crops showed that for vetiver

the major cost was on machine (16.82%), slips (15.15%), human labour

(13.95%) and irrigation (8.75%). In both tulsi and menthol mint, the major costs

were on human labour, interculture, distillation and irrigation. The net return over

cost was also highest for vetiver (Rs 1,53,933/ha), followed by menthol mint (Rs

53,250/ha) and tulsi (Rs 40,094/ha).

19

Rao (2012) worked out costs and returns in cultivation of sugarcane under

irrigated and rainfed conditions. The total cost of cultivation of sugarcane was

highest in plant irrigated conditions (Rs 1,47,454/ha), followed by rainfed (Rs

90,939/ha) and was least in ratoon irrigated crop (Rs 81,106/ha). Out of the total

operational cost, under plant irrigated conditions, 76 percent (Rs 72,569) was

incurred on labour charges and 24 percent (Rs 22,917) was on materials,

whereas under rainfed condition 65 percent (Rs 11,733) was incurred on labour

charges and 35 percent (Rs 6,318) on materials. This shows the labour-intensive

nature of sugarcane under irrigated as well as rainfed conditions. The operational

cost on the cultivation of sugarcane in the North Costal Zone had increased from

Rs 39,398 in 2001-02 (Alibaba, 2005) to Rs 90,939/ha in 2008-09 ( present

study), i.e. by about 230 percent in a period of 7 years. The major contributor to

this increase was labour wages, which had increased 3-times (from Rs 40/day to

Rs 120/day).

Ramanan (2012) studied the cost of production and capital productivity of

grape cultivation and worked out the establishment cost of a grape garden to Rs

2,41,986 and the annual operational and maintenance cost of bearing grape was

worked out to Rs 48,284.05 per hectare. The cost of production was estimated to

be Rs 7.59/kg. The Capital Productivity analysis showed favourable figures for

Net Present Value (Rs15,5864.50) and Benefit-Cost Ratio (1.33). Internal Rate of

Return was worked to be 24.76 percent as against an opportunity cost of 7 per

cent. The payback period was worked out and it was found 2.25 years. It

indicates that the investment made in a vineyard will be obtained within 2.25

years.

20

PROFILE OF THE STUDY AREA

This chapter deals with the description and profile of the study area which

is presented under the following major headings:

3.1. General Profile of the study area

3.2. Climate and Temperature

3.3. Agro-climatic zones of Madhya Pradesh

3.4. Soil

3.5. Land use pattern

3.6. Cropping pattern

3.7. Operational land holding

3.8. Source wise irrigated area

3.9. Crop wise irrigated area

3.10. Fertilizer use

3.11. Seed distribution

3.12. Minimum support price of selected principal crops

3.1. General Profile:

Madhya Pradesh is situated at the heart of India and lies between latitude

21o6'and 26o54'N and longitude 74o and 82o47'E. It covers a geographical area of

308, 245 sq.km which is about 9.38% of the total area of India. The State is land

- locked and at no point is the sea less than 300 km away. Uttar Pradesh,

Chhattisgarh, Andhra Pradesh, Maharashtra, Gujarat and Rajasthan are

surrounding states. There are many important rivers which cross through

Madhya Pradesh. Narmada River is the most important of all and is known as the

lifeline of Madhya Pradesh. The hills give rise to the main river systems - the

Narmada and the Tapti, running from east to west, and the Chambal, Sone,

Betwa, Mahanadi, and the Indravati west to east.

21

Fig 3.1 Map of Madhya Pradesh

22

Table 3.1: General profile of Madhya Pradesh state

Population size 7,25,97,565

Population density (Persons per sq km) 236

Sex ratio (Females per 1000 males) 930

Area 308,245 sq. km

Divisions 10

Districts 50

Tahsils 342

Development blocks 313

Gram Panchayats 22,000

No. of Villages 54,903

No. of towns 476

Rural population 52,537,899

Urban population 20,059,666

Literacy % 70.6

Literate Persons 4,38,27,193

Illiterate Persons 1,82,22,077Source: Census of India, 2011

3.2. Climate and Temperature

Madhya Pradesh has a subtropical climate. Like most of north India, it has

a hot dry summer (April–June), followed by monsoon rains (July–September) and

a cool and relatively dry winter. The average rainfall is about 1,370 mm (53.9 in).

The annual rainfall received in the state varies from 700mm to 1,600 mm. In the

eastern districts, it ranges between 1,500 to 1,600 mm, in the northern districts it

varies from 700 to 900mm and in the western and central districts between 1,000

to 1,200 mm with an average rainfall of the state about 1,370 mm.

Mostly, the rains are received during monsoon months 25 to 55 rainy

days. Very little rains are received in winter (October to March) ranging from 60

to 80 mm. The maximum temperature during extreme summer reaches as high

as 45oc and minimum temperature during winter to 5oc. The maximum normal

23

temperature during the year varies between 25 to 35oc and the minimum

between 10 to 20oc. the average relative humidity ranges from 40 to 70% during

the year.

3.3. Agro-climatic zones of Madhya Pradesh

Based on the climatic conditions and physical features, the topography of

Madhya Pradesh includes the following agro-climatic zones:

Table 3.2: Different agro-climatic zones of Madhya Pradesh

S.No. Agro-climatic zones Districts Covered

1. Chhattisgarh Plains Balaghat

2.Northern Hill Region

of Chhattisgarh

Shahdol, Mandla, Dhindori, Anuppur, Sidhi (Partly),

Umaria

3.Kymore Plateau and

Satpura Hills

Rewa, Satna, Panna, Jabalpur, Seoni, Katni, Sidhi

(except Singroli Tahsil)

4.Central Narmada

Valley

Narsinghpur, Hoshangabad, Sehore (Partly), Raisen

(Partly)

5. Vindhya PlateauBhopal, Sagar, Damoh, Vidisha, Raisen (except Bareli

Tahsil), Sehore (except Bundhi Tahsil), Guna (Partly)

6. Gird Region

Gwalior, Bhind, Morena, , Sheopur-Kala, Shivpuri

(except Pichore, Karera, Narwar, Khania-dana Tahsil),

Guna (except Aron, Raghogarh, Chachoda Tahsil)

Ashoknagar

7. Bundelkhand Chhatarpur, Datia, Tikamgarh,& Shivpuri (Partly)

8. Satpura Plateau Betul & Chhindwara

9. Malwa PlateauMandsaur, Neemuch, Ratlam, Ujjain, Dewas, Indore,

Shajapur, Rajgarh & Dhar (Partly) Jhabua (Partly)

10. Nimar Plains Khandwa, Burhanpur, Khargone, Barwani, Harda,

Dhar (Partly) District.

11. Jhabua Hills Jhabua Diistrict (except Petlawad Tahsil) & Dhar

(Partly)

24

3.4. Soil

Soils of Madhya Pradesh vary as per the structure, colour and texture and

composition in the different regions. Madhya Pradesh comprises of a variety of

soils ranging from rich clayey to gravely. According to the survey done in the

state, the major groups of soils found in the state can be divided into five major

categories namely Alluvial Soil, Black Soil or Regur Soil, Clayey soil, Mixed Soil

and Red and Yellow.

3.5. Land Use Pattern

The pattern of land use of any place or country at any particular time is

determined by the physical, economic and institutional framework taken together.

In other words, the existing land-use pattern in different regions in India has been

evolved as a result of the action and interaction of various factors, such as the

physical characteristics of land, the institutional framework, the structure of other

resources (capital, labour etc.) available, and the location of the region. The land

utilization pattern of Madhya Pradesh state is given in detail in the below table.

Table 3.3: Land use pattern of Madhya Pradesh (2010-11)

Classification MillionHectare

(%) Percentto Total area

Total geographical area 30.75Forest area 8.613 28Land not available for cultivation 3.38 11Other non agril. Land excluding fallow land 1.358 4.4Cultivable waste lands 1.170 3.8Fallow land 1.185 3.8Cropped Areaa) Net area sown 15.07 49b) Area sown more than once 5.71 18.6Gross cropped area 20.78 67.6Net irrigated area 6.42 42.6Gross irrigated area 6.57 31.6Irrigation Intensity % 102Cropping intensity in % 138%Rainfed area 70

Source: GoI, Ministry of Agriculture, Agricultural Statistics at a glance 2011

25

3.6. Cropping Pattern

Of the total cropped area under crop cultivation in the state, 53.6 per cent

is sown during the Kharif season while the other 46.4 per cent is sown during the

Rabi season. (MoA, 2011) Near about 41 percent of the cropped area is

generally occupied by cereal crops, while pulses occupy nearly 21 percent area

and oilseed occupies about 27 percent of the total sown area. Vegetables, fruits,

fodder and other horticultural crops occupy rest of around 11 percent cropped

area.

The major crops grown in Madhya Pradesh includes paddy, wheat, maize

and jowar among cereals and gram, tur, urad, and lentil among pulses while

soybean, groundnut and mustard among oilseed crops.

Table 3.4: Cropping pattern of Madhya Pradesh

S.No. Crops Area (million Ha) % to total Cropped area1. Paddy 1.66 7.92. Wheat 4.9 23.63. Jowar 0.39 1.94. Maize 0.86 4.15. Other Cereals 0.51 2.5

Total Cereals 8.33 406. Gram 3.04 14.67. Tur 0.35 1.68. Urad 0.47 2.39. Lentil 0.62 2.910. Other Pulses 0.7 3.4

Total Pulses 5.19 24.911. Soybean 5.67 27.312. Mustard 0.78 3.813. Groundnut 0.25 1.314. Other Oilseeds 0.49 2.4

Total Oilseed 7.2 34.8Gross Cropped Area 20.78 100

Source: Directorate of Economics & Statistics, 2011

26

Among the major crops grown in this state of Central India also includes

commercial crops like cotton and Sugarcane. These two significant cash crops

are grown in a considerable area in few districts of Madhya Pradesh. Horticulture

crops like Potato, Onion, Garlic, along with fruits like Papaya, Banana, Oranges,

Mango and Grapes are also grown in the state of Madhya Pradesh. In some

parts of the state medicinal crops and narcotic crops are also cultivated.

3.7. Operational Land Holding of Madhya PradeshThe operational land holding status of the farmers in Madhya Pradesh is

shown in the table 3.5. Total number of farmers are 79.08 lakhs with 159.94

lakhs area land holding. It is seen that there is uneven land distribution in

Madhya Pradesh among the farmers as about 68 percent of small and marginal

farmers possess only about 30 percent of land holding and remaining 70 percent

is in the hands of other farmers. On an average the average land holding of

farmers in Madhya Pradesh is 2.02 ha.

Table 3.5: Land holding of Madhya Pradesh

Category Farmers(Lakh No.)

(%) Area(Lakh ha)

(%) Averageholding

Marginal 31.99 40.45 15.87 9.92 0.49

Small 21.48 27.16 30.76 19.23 1.43

Others 25.61 32.38 113.31 70.85 4.42

Total 79.08 100 159.94 100 2.02

Source: National Conference on Agriculture, 2011

3.8. Source Wise Irrigated Area

The table 3.6 shows the net and gross irrigated area in Madhya Pradesh

using various source of irrigation which is 7139 and 7421 thousand hectares

respectively. It is found that well is the major source of irrigation (about 38%)

followed by tube well (about 30%). Minimum area has been irrigated by tank.

27

Table 3.6: Source wise irrigated area in Madhya Pradesh(Thousand Ha)

S.No. Source Net IrrigatedArea

% toTotal

Gross IrrigatedArea

% toTotal

1. Canal 1136 15.9 1221 16.5

2. Tank 182 2.5 189 2.6

3. Tubewell 2140 29.9 2208 29.7

4. Well 2666 37.4 2758 37.1

5. Others 1015 14.2 1045 14

6. Total 7139 100 7421 100Source: Directorate of Economics & Statistics, 2011

3.9. Crop Wise Irrigated Area

Table 3.7 shows the detail of the area of selected principal crops provided

with irrigation facilities. It has been observed that maximum area under wheat is

provided with irrigation facilities (87.1%) followed by cotton (49.4) and gram

(48.5). The crop receiving the least irrigation facilities is soybean which is only

0.24 percent of the total cultivated area.

Table 3.7: Crops wise irrigated area of Madhya Pradesh

(Hectare)

Crop Irrigated area(ha)

Total area cultivated(ha)

% of irrigatedareaPaddy 321744 1573535 20.44

Wheat 4037496 4633125 87.1

Gram 1399695 2882264 48.5

Soybean 13832 5538358 0.24

Cotton 290084 586270 49.4

Source: Directorate of Economics & Statistics, 2011

28

3.10. Fertilizer use

Total use of NPK fertilizer in Madhya Pradesh in the year 2011-12 is given

in the table 3.8. The total amount of fertilizer used is 18.92 lakh metric ton where

nitrogen is used in highest amount i.e. 10.62 lakh metric tonnes. The

recommended dose of nitrogen and phosphorus fertilizer is in the ratio of 2:1 but

the ratio of N and P is less which indicates the improper and imbalance use of

fertilizer. So the farmers are not being able to get optimum production or output.

Table 3.8: Amount of fertilizer used in Madhya Pradesh

Fertilizer Amount used (Lakh Mt)

Nitrogen 10.62

Phosphorus 7.50

Potassium 0.80

Total 18.92

Source: National Conference on Agriculture, 2012

3.11. Seed distribution

Seed is a fertilized matured ovule together covered with seed coat. Seed

is the most vital and crucial input for crop production, one of the ways to increase

the productivity without adding appreciably to the extent of land now under

cultivation by planting quality seed. Seed distributed in Madhya Pradesh in both

kharif and rabi season is given below in table 3.9. A total of 31.18 lakh quintal

seed is distributed in the year 2011-12 for different crops. Soybean is the major

crop grown so the seed distribution is maximum for it which is about 14 lakhs

quintal followed by wheat about 11 lakhs quintal. Distribution of seeds of these

crops account about 3/4th of the total seed distributed.

29

Table 3.9: Seed distribution in different season in Madhya Pradesh

Kharif Crops Distribution(Lakhs Qtl)

Rabi Crops Distribution(Lakhs Qtl)

Paddy 1.36 Wheat 10.52

Maize 0.62 Gram 3.92

Jowar 0.12 Pea 0.17

Urd 0.10 Lentil 0.14

Moong 0.04 Mustard 0.14

Arhar 0.12 Total Rabi 14.92

Groundnut 0.03

Soybean 13.71

Cotton 0.08

Total Kharif 16.26Source: National Conference on agriculture, 2012

3.12. Minimum support price of principal crops

MSP is price fixed by Government of India to protect the producer -

farmers - against excessive fall in price during bumper production years. The

minimum support prices are a guarantee price for their produce from the

Government. The major objectives are to support the farmers from distress sales

and to procure food grains for public distribution. The minimum support prices

are announced by the Government of India at the beginning of the sowing

season for certain crops on the basis of the recommendations of the Commission

for Agricultural Costs and Prices (CACP). The table 3.10 shows the MSP of

selected principal crops of Madhya Pradesh. From that table it can be seen that

the maximum MSP is fixed for long staple cotton which is Rs 3300 per quintal

and minimum is for common paddy Rs 1080 per quintal.

30

Table 3.10: Minimum support price of principal crops in Madhya Pradesh

S.No.

Crops Type MSP (Rs/Quintal)

1. Paddy Common 1080

2. Wheat 1285

3. Gram 2800

4. Soybean Yellow 1690

5. Cotton Long staple 3300

Source: Ministry of Agriculture and Cooperation, GoI, 2012

31

MATERIALS AND METHODS

This chapter deals with the description of the study area, the nature and

sources of data and analytical tools and techniques employed. Materials and

methods are presented under the following major headings:

4.1.Study area

4.2.Data needed

4.3.Crops selected

4.4.Period of Study

4.5.Analytical tools and techniques

4.6.Concepts and terminologies

4.7.Limitations

4.1. Study area

The study is confined to whole of Madhya Pradesh state which comprises

50 districts and divided into 11 agro-climatic regions.

Fig 4.1: Map showing districts of Madhya Pradesh

32

4.2. Data needed

The study has been carried out using the time series secondary data

which were collected from Directorate of Economics and Statistics, Agriculture

Price and Cost Scheme JNKVV, Jabalpur and various published sources.

Secondary data covers the data of state level area, production, productivity, cost

of cultivation, cost of production and minimum support price of goods which

pertain to the one decade period i.e. 2000-01 to 2009-10.

4.3. Crops selected

Principal crops were selected namely paddy, wheat, gram, soybean and

cotton. These crops together occupy about 77 percent area (76.8 %) of the

cultivated area of Madhya Pradesh so they are considered as principal crops.

4.4. Period of the study

The study has been carried out on the time series secondary data of a

decade period from 2000-01 to 2009-10.

4.5. Analytical techniques

This section discusses the various statistical tools used during the

analysis of the study.

Dynamics of Cost of CultivationAbsolute change

Absolute change = Current Year- Base Year

Relative change

Relative Change = Current Year- Base Year × 100Base Year

Where,Base Year = Triennial average of area, production, productivity, cost and

profitability of crops considered from year 2000-01 to 2002-03

33

Current Year = Triennial average of area, production, productivity, cost and

profitability of crops considered from year 2007-08 to 2009-10

To avoid the influence of extreme values the base period was fixed as thefirst triennial of the time series.

Measurement of trendThe linear rate of growth was estimated by fitting a linear trend form of equation.

Y = a + bx

Where, Y = Time series data of Area, Production, Yield, Cost andProfitability of crops considered.

X = Period (year 2000-01 to 2009-10)

a = intercept

b = regression coefficient (slope)

The simple growth rate has been calculated by using the formula.

Simple growth rate (%) = b × 100Y

Where, Y = ∑Y/N

The compound growth rate (CGR) is calculated by using exponential form of

equation

CGR (%) = (Antilog of b-1) ×100

The growth rates were tested from the significance of ‘t’ test.

t cal = b

S.E. of b

Where,

b = regression coefficient

S.E. of b= Standard error of regression coefficient

Measurement of Variability

C.V. =Standard Deviation (σ) × 100Mean (X)

Where, C.V. = Coefficient of VariationX = Arithmetic Mean

34

Correlation Coefficient

N∑ XY- ∑ X. ∑Yr =

N ∑Y2 - ∑Y 2 N ∑X2- ∑X 2

4.6. Concepts and terminologies

Minimum Support Price: Minimum Support Price is the price at which

government purchase crops produce from the farmers, whatever may be

the price for the crops.

Cost of Cultivation: Cost of Cultivation is the total cost incurred in

cultivating per unit area of land and expressed in Rs/ha.

Cost of Production: Cost of Production is the total cost incurred in

production of per unit of crops output and expressed in Rs/qtl.

Correlation Coefficient: The correlation coefficient is used to indicate the

relationship of two random variables. It provides a measure of the strength

and direction of the correlation varying from -1 to +1.

Cost: Cost refers to the total amount of fund that is used for the purpose

of production or productive purpose.

Gross income: Gross income can be defined as the total of earned

income plus unearned income. Earned income includes salaries, wages,

tips, and professional fees. Unearned income includes taxable interest,

ordinary dividends, capital gain distributions, unemployment

compensation, taxable social security benefits, etc.

Net income : Net income in business is defined as what remains after

subtracting all the costs (namely, business, depreciation, interest,

and taxes) from a company's revenues.

Cost Concepts: Costs are generated by following certain cost concepts.

The following farm management cost concepts (Raju and Rao, 1990)

included under each concepts are given below:

35

Cost A1:

I. Value of hired human labour.

II. Value of hired bullock labour.

III. Value of owned bullock labour.

IV. Value of owned machinery labour.

V. Hired machinery charges.

VI. Value of seed (both farm produced and purchased).

VII. Value of insecticides and pesticides.

VIII. Value of manure (owned and purchased).

IX. Value of fertilizer.

X. Depreciation on implements and farm buildings.

XI. Irrigation charges.

XII. Land revenue and other taxes.

XIII. Interest on working capital.

XIV. Miscellaneous expenses (value of other items which are used up in

current production).

Cost A2 : Cost A1 + rent paid for leased-in land.

Cost B1 : Cost A2 + interest paid on Value of owned fixed capital assets

(excluding land).

Cost B2 : Cost B1 + rental Value of owned land (net of land revenue) and rent

paid for leased- in land.

Cost C1 : Cost B1 + imputed Value of family labour.

Cost C2 : Cost B2 + imputed Value of family labour.

Cost C3 : Cost C2 + 10% of Cost C2 as risk/managerial cost

36

Income measures

Gross income = Value of output (Main product and by- product) at farm harvest

price.

Net income = Gross income – Cost C3

4.7. Limitations of the study

The present study is fully based on the time series secondary data of

Madhya Pradesh covering the period of 10 years (2000-01 to 2009-10) of

principal crops. Due to time and financial resource constraints different analytical

methods could not be employed. Gross income from main product and by-

product has been considered for analysis. The correlation has been calculated

using only cost of production C3.

37

RESULTS AND DISCUSSION

In this chapter, an attempt has been made to analyze the collected data in

the light of stated objectives in an established sequence.

The necessary data were collected from various issues of Madhya

Pradesh agricultural statistics published by Government of Madhya Pradesh.

Data were subjected to various statistical tools and techniques to draw

meaningful conclusions. The results are presented under following different sub-

headings and they are:

5.1. Dynamics of production performance

In this section effort has been made to study the production performance

of principal crops in Madhya Pradesh by estimating absolute and relative change,

variability, trend, simple growth and compound growth rate.

Table 5.1: Trend, growth and variability in area, production and yield ofpaddy in Madhya Pradesh (2000-01 to 2009-10)

Figures in parenthesis indicates standard error of regre. coeff.*** significant at 1%

Parameters Area (‘000ha) Production (‘000 ton) Yield (kg/ha)

Base Year 1716.66 1223.33 723.00

Current Year 1523.33 1426.67 912.30

Absolute Change -193.33 203.33 189.30

Relative Change (%) -11.26 16.62 26.18

a 1796.60 1310.60 751.20

b -26.66***(5.92)

19.33(30.22)

21.89(16.81)

SGR (%) -1.616 1.36 2.51

CGR (%) -1.643 1.88 3.12

CV (%) 5.78 18.72 18.18

38

Fig 5.1: Trend of area, production and yield of paddy

y = -26.66x + 1796.R² = 0.717

0

500

1000

1500

2000

'000

ha

Year

Area

y = 19.33x + 1310.R² = 0.048

0

500

1000

1500

2000

'000

ton

Year

Production

y = 21.89x + 751.2R² = 0.175

0200400600800

10001200

kg/h

a

Year

Yield

39

5.1.1. Paddy:

The trend, growth rate and variations in area, production and yield of

paddy in Madhya Pradesh during the period 2000-01 to 2009-10 has been

presented in the table 5.1 and figure 5.1. Table 5.1 inferred that absolute and

relative change in area of paddy in Madhya Pradesh over the study period was

negative -193.33 thousand hectare and -11.26 percent respectively. But the

absolute and relative change of its production was increased by 203.33 thousand

tonnes and 16.62 percent respectively and that for yield was 189.3 kg/ha and

26.18 percent respectively. The result indicates that there was decrease in the

area under paddy cultivation in successive years but production has increased

due to increase in yield of paddy in Madhya Pradesh which may be the result of

use of quality inputs(e.g. hybrid seed, fertilizer, etc.) and adoption of improved

technology.

The value of regression coefficient (b) shows the direction of the change in

variables. The value of b of area, production and yield during the period of

reference was found to be -26.66 thousand hectare, 19.33 thousand tonnes and

21.89 kg/ha per year respectively. The negative value of ‘b’ of area also supports

the fact that the area under paddy has decreased annually in Madhya Pradesh

which is also shown in the figure 5.1. Regression coefficient value of yield was

more than that of production which offset or compensates negative effect of area.

Simple growth rate for area, production and yield of paddy was obtained -

1.62, 1.36 and 2.51 percent per year and the compound growth rate was -1.64,

1.88 and 3.12 percent per year followed by the coefficient of variation 5.78, 18.72

and 18.18 percent respectively indicating stagnation or decline in area allocation

under crop although production and yield varied at par of 18 to 19 percent. The

per annum growth rate of yield of paddy was relatively higher than its production

which is due to negative area rate of change.

40

Table 5.2: Trend, growth and variability in area, production and yield ofwheat in Madhya Pradesh (2000-01 to 2009-10)


Base Year 3463.33 5263.33 1582.00

Current Year 4130.00 7473.33 1834.67

Absolute Change 666.67 2210.00 252.67

Relative Change (%) 19.25 41.99 15.97

a 3424.3 5020 1569.60

b 88.60***(27.05)

304.10***(87.00)

34.16**(12.30)

SGR (%) 2.26 4.54 1.94

CGR (%) 2.37 4.87 2.01

CV (%) 9.06 17.70 8.40Figures in parenthesis indicates standard error of regre. coeff.*** significant at 1%** significant at 5%

5.1.2. Wheat:

The trend, growth and variability of area, production and yield of wheat in

Madhya Pradesh during the period 2000-01 to 2009-10 has been shown in the

table 5.2 and figure 5.2. It is observed from the figure that the area under wheat

showed a positive and increasing trend with a magnitude of 88.60 thousand

hectare. The area under wheat has increased from 3463.33 thousand ha (base

year) to 4130 thousand ha (current year) showing a relative change of 19.25

percent with the variability of 9.06 percent (CV) and a simple growth of 2.26

percent over the period and compound growth of 2.37 percent per year.

41

Fig 5.2: Trend of area, production and yield of wheat

y = 88.60x + 3424.R² = 0.572

010002000300040005000

'000

ha

Year

Area

y = 304.1x + 5020R² = 0.604

02000400060008000

10000

'000

ton

Year

Production

y = 34.17x + 1569.R² = 0.490

0

500

1000

1500

2000

2500

kg/h

a

Year

Yield

42

The production of wheat showed a positive and increasing trend with the

magnitude of 304.1 thousand ton per year. The production of wheat has

increased from 5263.33 thousand ton (base year) to 7473.33 thousand ton

(current year) showing a relative change of 41.9 percent with the variability of

17.7 percent (CV) and a simple growth of 4.54 percent per year and compound

growth of 4.87 percent per year.

The yield of wheat also showed a positive and increasing trend with the

magnitude of 34.16 kg/ha per year. The yield of wheat has increased from 1582

kg/ha (base year) to 1834.67 kg/ha (current year) showing relative change of

15.97 percent with the variability of 8.40 percent and simple growth of 1.94 per

year and compound growth of 2.01 percent per year.

Table 5.3: Trend, growth and variability in area, production and yield ofgram in Madhya Pradesh (2000-01 to 2009-10)


Base Year 2330.00 1910.00 819.33

Current Year 2790.00 2610.00 921.00

Absolute Change 460.00 700.00 101.67

Relative Change (%) 19.74 36.65 12.41

a 2232.60 1770.00 806.90

b 67.69**(25.27)

107.40*(49.10)

16.93(12.86)

SGR (%) 2.59 4.55 1.88

CGR (%) 2.73 4.60 1.83

CV (%) 11.44 22.52 13.50Figures in parenthesis indicates standard error of regre. coeff.** significant at 5%* significant at 10%

43

Fig 5.3: Trend of area, production and yield of gram

y = 67.69x + 2232.R² = 0.472

0500

100015002000250030003500

'000

ha

Year

Area

y = 107.4x + 1770R² = 0.374

0500

100015002000250030003500

'000

ton

Year

Production

y = 16.93x + 806.9R² = 0.178

0200400600800

10001200

kg/h

a

Year

Yield

44

5.1.3. Gram:

The trend, growth rate and variations in area, production and yield of gram

in Madhya Pradesh during the period 2000-01 to 2009-10 has been presented in

the table 5.3 and figure 5.3. Table 5.3 inferred that absolute and relative change

in area, production and yield all were positive in Madhya Pradesh over the study

period. The absolute and relative change in area of gram cultivated was found to

be 460 thousand ha and 19.74 percent. The absolute and relative change of its

production was 700 thousand tonnes and 36.65 percent and that for yield was

101.67 kg/ha and 12.41 percent respectively. The result indicated that the

increase in production was due to increase in both area and yield but the

increase in area was more than the yield of gram.

The value of regression coefficient (b) shows the direction of the change in

variables. The value of b of area, production and yield during the period of

reference was found to be 67.69 thousand hectare, 107.4 thousand tonnes and

16.93 kg/ha per year respectively. Regression coefficient value and per annum

growth rate of area was more than that of yield which revealed that there was

more contribution of increased area in increase in production of gram than that of

yield.

Simple growth rate for area, production and yield of gram obtained was

2.59, 4.55 and 1.88 percent and the compound growth rate was 2.73, 4.60 and

1.83 percent followed by the coefficient of variation 11.44, 22.52 and 13.50

percent respectively indicating high variation in production of crop. The per

annum growth rate of yield of gram was less but its production growth rate per

annum was found to be higher.

45

Table 5.4: Trend, growth and variability in area, production and yield ofsoybean in Madhya Pradesh (2000-01 to 2009-10)


Base Year 4370.00 3276.66 748.33

Current Year 5163.33 5913.33 1143.66

Absolute Change 793.33 2636.67 395.33

Relative Change (%) 18.15 80.47 52.83

a 4061.30 2651.30 695.50

b 111.57***(21.72)

346.30***(59.42)

49.57***(12.74)

SGR (%) 2.38 7.60 5.12

CGR (%) 2.37 8.00 5.47

CV (%) 8.25 25.58 19.16Figures in parenthesis indicates standard error of regre. coeff.*** significant at 1%

5.1.4. Soybean:


soybean in Madhya Pradesh during the period 2000-01 to 2009-10 has been


relative change in area, production and yield all were positive in Madhya Pradesh

over the study period. The absolute and relative change for area of soybean

cultivated was found to be 793.33 thousand ha and 18.15 percent. The absolute

and relative change of its production was 2636.67 thousand tonnes and 80.47

percent and that for yield was 395.33 kg/ha and 52.83 percent respectively. The

result indicated that the increase in production of soybean was due to increase in

both area and yield of the crop.

The value of regression coefficient (b) of area, production and yield during

the period of reference has been found 111.57 thousand hectare, 346.3

thousand tonnes and 49.57 kg/ha per year respectively and all of them were

found to be significant at 1 percent.

46

Fig 5.4 Trend of area, production and yield of soybean

y = 111.5x + 4061.R² = 0.767

0100020003000400050006000

'000

ha

Year

Area

y = 346.3x + 2651.R² = 0.809

01000200030004000500060007000

'000

ton

Year

Production

y = 48.08x + 728.3R² = 0.637

0200400600800

100012001400

kg/h

a

Year

Yield

47

Simple growth rate for area, production and yield of soybean obtained was

2.38 thousand hectare, 7.60 thousand tone and 5.12 kg/ha per year and the

compound growth rate was 2.37, 8.0 and 5.47 percent followed by the coefficient

of variation 8.25, 25.58 and 19.16 percent respectively indicating high variation in

production of crop followed by the yield. Though the value of ‘b’ was higher for

area of soybean, the per annum growth rate of yield of soybean was higher than

that of area which revealed that there was more contribution of increased yield in

increase in production of soybean than that of area.

Table 5.5 Trend, growth and variability in area, production and yield ofcotton in Madhya Pradesh (2000-01 to 2009-10)

Parameters Area (‘000ha) Production (‘000 bales) Yield (kg/ha)

Base Year 530.00 344.67 321.33

Current Year 720.00 860.00 695.67

Absolute Change 190.00 515.33 374.33

Relative Change(%) 35.85 149.52 116.49

a 449.30 250.80 264.70

b 29.9***(7.98)

71.67***(8.23)

50.60***(7.27)

SGR (%) 4.87 11.11 9.32

CGR (%) 4.66 13.94 11.36

CV (%) 18.49 35.37 30.47Figures in parenthesis indicates standard error of regre. coeff.*** significant at 1%

48

Fig 5.5 Trend of area, production and yield of cotton

y = 29.93x + 449.3R² = 0.637

0200400600800

1000

'000

ha

Year

Area

y = 71.67x + 250.8R² = 0.904

0200400600800

10001200

'000

bal

es

Year

Production

y = 50.68x + 264.7R² = 0.858

0100200300400500600700800900

kg/h

a

Year

Yield

49

5.1.5. Cotton:


cotton in Madhya Pradesh during the period 2000-01 to 2009-10 has been


relative change in area, production and yield all were positive in Madhya Pradesh

over the study period. The absolute and relative change for area of cotton

cultivated was found to be 190 thousand ha and 35.85 percent. The absolute and

relative change of its production was 515.33 thousand bales and 149.52 percent

and that for yield was 374.33kg/ha and 116.49 percent respectively. The result

indicated that the increase in production was due to increase in both area and

yield of cotton.

The value of regression coefficient (b) of area, production and yield of

cotton during the period of reference has been found 29.9 thousand hectare,

71.67 thousand bales and 50.6 kg/ha per year respectively. Value of regression

coefficient ‘b’ for yield was more than that of area.

Simple growth rate for area, production and yield of cotton obtained was

4.87, 11.11 and 9.32 percent per year and the compound growth rate was 4.66,

13.94 and 11.36 percent followed by the coefficient of variation 18.49, 35.37 and

30.47 percent respectively indicating high variation in the yield of cotton than the

area, resulting more fluctuation in production. It was observed that though at

present there is rapid increase in production of cotton, still there is large scope

for increasing the production of cotton in Madhya Pradesh by increasing both the

yield and area cultivated under cotton.

5.2. Behaviour of input use, cost and return of principal crops

Crop production process involves use of various inputs including land

preparation, inputs like seed, irrigation water, fertilizer, pesticide and labour, etc.

Overtime, the prices of these inputs have increased resulting in higher cost of

production. In this section effort has been made to study the pattern of inputs

being used, their cost and return from the cultivation of principal crops in Madhya

Pradesh.

50

Table 5.6 Pattern of input use, cost and income of paddy in Madhya Pradesh(2000-01 to 2009-10)

(Rs/ha)

Inputs, Costand Income

Parameters

a bAC

(RC %)SGR(%)

CGR(%)

CV(%)

Seed 458.6767.80***(13.85)

470.5(70.81)

8.15 7.79 28.5

Fertilizer 430.549.37**(16.74)

345.98(57.79)

7.03 6.37 29.5

Manures 628.63.29

(16.04)53.74(9.31)

0.50 0.56 21.29

Human Labour 2695.03278.25***(82.72)

1894.81(52.01)

6.58 6.08 26.04

Bullock Labour 1654.59-2.90

(25.60)-17.08(-0.97)

-0.17 -0.13 13.39

Cost ofCultivation

A24852.8

408.8**( 134.1)

2814.97(44.62)

5.75 5.28 23.77

C39627.2

1146.6**(380.7)

7952.53(58.55)

7.19 6.47 29.89

Cost ofProduction

(Rs/qtl.)

A2333.6

6.68(6.59)

39.05(10.92)

1.80 1.86 16.18

C3682.5

23.03*(12.11)

146.53(18.98)

2.84 2.77 15.44

Yield (qtl./ha) 12.960.78*(0.41)

5.88(38.5)

4.55 4.29 24.73

Gross Income(Rs/ha) 2948.65

2093.65**(661.46)

14908.31(162.52)

14.47 13.31 58.77

Figures in parenthesis indicates standard error of regre. coeff.*** significant at 1%** significant at 5%* significant at 10%

51

5.2.1. Paddy:

Table 5.6 presents the pattern of input use, cost and income in paddy

cultivation in Madhya Pradesh over the study period. All factors were found to be

positive except animal labour use. The value of regression coefficient (b) shows

the direction of the change in variables. The value of ‘b’ is highest for human

labour which is Rs 278.25 per hectare per year followed by seed rate Rs 67.8 per

hectare and the lowest is that of manures (Rs 3.29 per hectare) and negative (Rs

-2.90) for bullock labour. The negative value of bullock labour indicates excessive

use on one hand and the other that in successive years the use of bullock labour

in paddy cultivation is being replaced by machine. The per annum growth rate of

seed is highest among all the inputs used which is 8.15 and 7.79 percent simple

growth and compound growth rate followed by coefficient of variation 28.5

percent.

The absolute and relative change in cost of cultivation at C3 of paddy was

found to be Rs 7,952.53 and 58.55 percent with the regression coefficient (b)

value of Rs 1146.6 per ha/year. The simple growth and compound growth rate of

cost C3 per hectare was found to be 7.19 and 6.47 percent respectively followed

by the coefficient of variation 29.89 percent. The cost of production C3 for paddy

showed the linear growth rate of 2.84 percent and compound growth of 2.77

percent per annum with the variation of 15.44 percent. The value of regression

coefficient (b) was found to be Rs 23.03 per quintal/year and the absolute and

relative change was Rs 146.53 per qtl. and 18.98 percent respectively.

The yield obtained by using the above inputs showed the simple growth

rate of 4.55 percent and per annum compound growth of 4.29 percent with the

coefficient of variations 24.73 percent. The value of regression coefficient (b) and

absolute change of gross income obtained in the form of main and by product

were Rs 2093.65 and Rs 14908.31 per ha/year respectively. The relative change

was 162.5 percent and coefficient of variation was 58.77 percent with simple

growth of 1.94 per year and compound growth of 2.01 percent per year.

52

Table 5.7 Pattern of input use, cost and income of wheat in Madhya Pradesh(2000-01 to 2009-10)

(Rs/ha)

Inputs, Costand Income

Parameters

A b AC(RC %)

SGR(%)

CGR(%)

CV (%)

Seed590.18 120.94***

(14.11)820.63(91.33)

9.63 9.96 30.71

Fertilizer1016.18 37.81***

(9.72)267.76(24.26)

3.08 3.25 11.56

Manures25.98 -1.80

(1.82)-13.29

(-93.97)-11.27 -68.98 103.18

Human Labour1804.64 181.59***

(29.08)1236.58(52.69)

6.47 6.38 21.53

Bullock Labour832.66 -17.35

(15.34 )-152.09(-18.54)

-2.35 -1.96 19.28

Cost ofCultivation

A2 5522.5 539.5***(28.58)

3766.54(56.21)

6.35 6.67 19.45

C3 10681.5 1531.85***(113.7)

10711.06(74.61)

8.01 8.34 24.8

Cost ofProduction

(Rs/qtl.)

A2 289.9 8.82***(2.09)

53.62(16.93)

2.60 2.66 9.50

C3 582.1 31.3***(5.90)

204.93(30.26)

4.15 4.20 14.26

Yield (qtl./ha) 16.91 0.83***(0.13)

6.32(35.15)

3.86 4.03 12.91

Gross Income(Rs/ha)

7725.53 2607.88***(230.01)

18564.82(135.34)

11.81 12.84 36.87

Figures in parenthesis indicates standard error of regre. coeff.*** significant at 1%

53

5.2.2. Wheat:

Table 5.7 presents the pattern of input use, cost and income obtained by

cultivation of wheat in Madhya Pradesh over the study period. Values of seed,

fertilizer and human labour were found positive but that of manures and bullock

labour was found negative. The value of regression coefficient ‘b’ was found

highest for human labour which is Rs 181.59 per ha/year followed by seed rate

Rs 120.94 per ha/year and lowest and negative is that of animal labour (Rs -

17.35 per ha/year). The positive and high value of ‘b’ for human labour indicates

that whatever technologies may be developed for agriculture, human labour is

the must and requisite for operating them and performing different activities. The

per annum growth rate of seed is highest among all the inputs used which is 9.63

and 9.96 percent simple growth and compound growth rate followed by

coefficient of variation 30.71 percent. The highest fluctuation was found in

manures (103.18%) and least for fertilizers.

The cost of cultivation (C3) which is the total cost, showed the value of

regression coefficient (b) Rs 1531.85 per ha/year with the relative change of

74.61 percent and coefficient of variation 24.8 percent. The annual compound

growth rate was found to be 8.34 percent and the linear growth to be 8.01

percent. The cost of production (C3) showed the value of ‘b’ Rs 31.3 per qtl/year

being significant at 1 percent level of probability. The relative change was found

to be 30.26 percent followed by the variation of 14.26 percent with the annual

compound growth rate of 4.20 percent.

The value of regression coefficient (b) for yield and gross income was

found to be 0.83 kg/ha per year and Rs 2607.88 per ha/year and their relative

changes were 35.15, 135.34 percent with variability of 12.91 and 36.87 percent

respectively. The simple growth and compound growth rate of yield was found to

be 3.86 and 4.03 percent per year and that of gross income was 11.81 and 12.84

percent respectively.

54

Table 5.8 Pattern of input use, cost and income of gram in Madhya Pradesh(2000-01 to 2009-10)

(Rs/ha)

Inputs, Cost andIncome

Parameters

a b AC(RC %)

SGR(%)

CGR(%)

CV(%)

Seed1055.51 157.22**

(52.42)1123.2(76.25)

8.18 8.37 34.07

Fertilizer460.55 8.39*

(3.84)68.36

(14.21)1.65 1.62 8.20

Manures13.96 -0.19

(1.84)-2.36

(-54.15)-1.54 -38.1 123.0

3

Human Labour1342.86 135.7***

(35.88)929.05(52.24)

6.49 6.05 24.55

Bullock Labour698.96 -18.28

(10.91)-151.27(-21.91)

-3.05 -2.87 18.15

Cost ofCultivation

A2 447.2 403.2***(61)

2632.94(47.10)

6.05 6.05 19.92

C3 9977.3 924.8***(134.8)

6172.84(49.36)

6.13 6.16 20.10

Cost ofProduction

(Rs/qtl.)

A2 464.6 31.7***(9.36)

190.37(33.51)

4.9 5.18 19.58

C3 1040.4 73.29***(20.17)

456.33(35.98)

5.07 5.25 19.48

Yield (qtl./ha) 9.54 0.07(0.12)

0.74(7.84)

0.75 0.79 10.59

Gross Income(Rs/ha)

11292.97 1233.5***(216.46)

8647.36(61.51)

6.82 7.07 23.06

Figures in parenthesis indicates standard error of regre. coeff.*** significant at 1%** significant at 5%* significant at 10%

55

5.2.3. Gram:

The pattern of input use, cost and income from gram cultivation in Madhya

Pradesh over the study period has been presented in table 5.8. It was seen from

the table that among five inputs considered, value of regression coefficient (b) of

three inputs seed, fertilizer and human labour were found positive and of other

two i.e. manures and bullock labour was negative. The negative value of b Rs -

18.28 and Rs -0.19 per ha/year of bullock labour and manures respectively

indicated that in successive years the use of animal labour in gram cultivation is

being replaced by machine and manures are replaced by chemical and bio-

fertilizers for increasing crop production. The use of manures was seen highly

fluctuating over the period with CV 123.03 percent. The value of ‘b’ for seed,

human labour and fertilizer were found to be Rs 157.22, Rs 135.7 and Rs 8.39

per ha/year respectively.

The value of regression coefficient (b) for the cost of cultivation at A2 and

C3 both were positive and increasing with figure Rs 403.2 and Rs 924.8 per

ha/year. The cost A2 showed the annual compound growth rate of 6.05 percent

with the variability of 19.92 percent and annual compound growth rate for cost of

cultivation C3 was 6.16 percent with the variation of 20.10 percent. In case of

cost of production, value of b was found to be Rs 31.7 and Rs 73.29 per qtl/year

for cost A2 and cost C3 simultaneously. Relative change of A2 was 33.51 percent

and of C3 was 35.98 percent followed by the coefficient of variation 19.58 and

19.48 percent respectively.

The value of regression coefficient (b) of yield and gross income was 0.07

kg/ha and Rs 1233.5 per ha/year respectively. The linear growth rate of yield of

gram and gross income was calculated at 0.75 and 6.82 percent with the

variation of 10.59 and 23.06 respectively. Value of ‘b’ of yield was seen to be low

as compared to the value of ‘b’ of cost of cultivation and cost of production

indicating that though cost has increased rapidly in inputs but the yield has not

increased so far. It can be inferred that income from gram can be increased more

by increasing the yield of the crop.

56

Table 5.9 Pattern of input use, cost and income of soybean in MadhyaPradesh (2000-01 to 2009-10)

(Rs/ha)


Parameters

a b AC(RC %)

SGR(%)

CGR(%)

CV(%)

Seed924.29 113.93***

(29.05)819.95(68.22)

7.34 7.20 27.42

Fertilizer588.28 7.84

(9.00)43.80(7.56)

1.24 1.31 12.78

Manures117.89 40.76***

(7.15)299.88

(141.05)11.91 12.79 40.28

Human Labour1673.99 238.41***

(45.19)1643.38(72.86)

7.98 7.93 27.43

Bullock Labour969.93 27.02

(32.22)97.10(9.40)

2.41 3.01 25.72

Cost ofCultivation

A2 4017 547.5***(76.9)

3834.7(70.21)

7.7 7.8 25.38

C3 7923 1222***(206.2)

8758.72(79.36)

8.3 8.28 27.99

Cost ofProduction

(Rs/qtl.)

A2 516.8 15.8(14.3)

67.37(10.96)

2.62 3.04 21.88

C3 1006.2 42.8(26.3)

232.99(19.17)

3.44 3.69 20.97

Yield (qtl./ha) 9.004 0.41**(0.13)

3.36(35.38)

3.69 3.88 15.34

Gross Income(Rs/ha)

5892.16 1752.8***(360.82)

13254.86(137.49)

11.28 11.64 39.53

Figures in parenthesis indicates standard error of regre. coeff.*** significant at 1%** significant at 5%

57

5.2.4. Soybean:

Table 5.9 presents the input use, cost and income pattern from soybean in

Madhya Pradesh over the study period. The value of regression coefficient (b) for

all variables was positive and increasing. The value of ‘b’ was found maximum

for human labour (Rs 238.41/ha/year) followed by seed (Rs 113.93/ha/yr) and

the lowest value was of fertilizer (Rs 7.84/ha/yr). The positive value of ‘b’ of all

variables inferred that more and more of these variables are being used for

soybean cultivation. The value of ‘b’ of manures and bullock labour in previous

crops were found negative but here their positive value indicated that there is

increasing trend in the use of these variables in the recent year for this crop.

Cost of cultivation at A2 and C3 both showed a positive and increasing

trend with a magnitude of Rs 547.5 and Rs 1222 per ha/year over the study

period. The cost A2 and C3 showed the relative change of 70.21, 79.36 percent

and linear growth of 7.7 and 8.3 percent followed by the variation of 25.38 and

27.99 percent. Cost of production at A2 and C3 also showed a positive and

increasing trend with a magnitude of Rs 15.8 and Rs 42.8 per qtl/year over the

study period. The cost A2 and C3 showed the annual compound growth of 3.04

and 3.69 percent and followed by the variation of 21.88 and 20.97 percent

respectively. The relative change of cost A2 and C3 was 10.96 and 19.17 percent

and linear growth was found to be 2.62 and 3.44 percent respectively.

The yield obtained by using the above inputs showed the linear growth

rate of 3.69 and compound growth of 3.88 percent with the coefficient of

variations of 15.34 percent. The relative change of yield was found to be 35.38

percent and value of regression coefficient was 0.41kg/ha/year. The value of

regression coefficient (b) and absolute change of gross income obtained in the

form of main and by product were Rs 1,752.8 per ha/year and Rs 1,3254.86 per

ha/year respectively. The relative change was 137.49 percent and coefficient of

variation 39.53 percent with simple growth of 11.28 per year and compound

growth of 11.64 percent per year.

58

Table 5.10 Pattern of input use, cost and income of cotton in MadhyaPradesh (2000-01 to 2009-10)

(Rs/ha)


Parameters

a b AC(RC %)

SGR(%)

CGR(%)

CV(%)

Seed1100.27 162.28

(108.33)867.27(73.97)

8.14 14.71 52.67

Fertilizer939.69 85.33

(59.17)486.21(47.57)

6.05 8.84 40.36

Manures54.53 75.05**

(29.08)519.84

(473.38)16.06 28.34 73.12

Human Labour2555.68 557.54***

(102.44)3795.74(117.06)

9.91 13.90 33.83

Bullock Labour1450.99 130.52**

(56.67)845.94(47.66)

6.01 7.26 28.85

Cost ofCultivation

A2 52.93 1079.6***(328)

6884.6(108.03)

9.61 14.63 38.38

C3 10420.8 2643.2***(620.4)

17187.82(122.10)

1059 14.44 38.48

Cost ofProduction

(Rs/qtl.)

A2 1675.1 -81.3***(16.62)

-597.37(-39.71)

-6.63 -6.72 23.18

C3 3348.7 -132.9***(24.3)

-994.88(-31.84)

-5.07 -5.02 17.32

Yield (qtl./ha) 1.83 1.44***(0.27)

9.93(234.56)

14.77 20.59 50.82

Gross Income(Rs/ha)

3200.92 3883.11***(774.12)

26447.77(250.40)

15.81 20.09 54.95

Figures in parenthesis indicates standard error of regre. coeff.*** significant at 1%** significant at 5%

59

5.2.5. Cotton:

The pattern of input use, cost and income from cotton cultivation in

Madhya Pradesh over the study period has been presented in table 5.10. The

value of regression coefficient (b) was found to be positive and increasing for all

five variables. The trend value (b) of human labour was found maximum which

was Rs 557.54 per ha/year followed by seed (Rs 162.28), bullock labour (Rs

130.52), fertilizer (Rs 85.33) and minimum was of manure (Rs 75.05 per

ha/year). The positive value of ‘b’ of manure and bullock labour indicated that still

manures and bullock labour are being used for cotton cultivation in Madhya

Pradesh unlike in other crops which showed negative and decreasing pattern.

High coefficient of variation was seen for manures followed by seed with value

73.12 and 52.67 percent accordingly.

In cost of cultivation, cost A2 and C3 showed the value of regression

coefficient (b) Rs 1079.6 and Rs 2643.2 per ha/year with the relative change of

108.03, 122.10 percent and coefficient of variation 38.38 and 38.48 percent

accordingly. The annual compound growth rate was found to be 14.63, 14.44

percent and that simple growth rate was 9.61 and 10.59 percent per year. The

cost of production at A2 and C3 showed the negative value of ‘b’ Rs -81.3 and Rs

-132.9 per qtl/year which indicated that the cost of production for cotton in

Madhya Pradesh in successive years was decreasing. The relative change was

found to be -39.71 and -31.84 percent and annual compound growth rate was

-6.72 and -5.02 percent per year respectively.

The value of regression coefficient (b) for yield and gross income was

found to be 1.44 kg/ha/year and Rs 3883.11 per ha/year and their relative

change 234.56 and 250.4 percent with variability of 50.82 and 54.95 percent

respectively. The value of ‘b’ of yield of cotton was found more than those of

remaining four crops considered indicating that there is further scope for the

production of cotton in Madhya Pradesh. The simple growth and compound

growth rate of yield of cotton was found to be 14.77 and 20.59 percent and that

of gross income was 15.81 and 20.09 percent respectively.

60

5.3. Relation between production growth rate, cost of production, netincome and support price

The magnitude and association of crop production with cost of production,

net return and minimum support price of selected crops at the state level have

been estimated to explain their relationship. On the basis of aprorai knowledge

the following factors contemplated are:

Y= Production (qtl/ha)

X1= Cost of production

X2= Net income

X3= Minimum support price

These factors served as the determinants of crop production in terms of

their correlation coefficients.

Table 5.11 Relation between yield, cost of production, net income and MSPof paddy in Madhya Pradesh (2000-01 to 2009-10)

Cost of Production(C3)

Net Income(Rs/ha)

MSP(Rs/ha)

Yield (qtl./ha) 0.07*** 0.92 0.61***


0.24 0.67

Net Income(Rs/ha) 0.70

*** Significant at 1%

5.3.1. Paddy:

The above table 5.11 shows the correlation between yield, cost of

production, net income and MSP of paddy in Madhya Pradesh over the study

period. Value of correlation coefficient ‘r’ between yield and cost of production

was found to be positive and significant with value 0.07 which indicates weak

correlation between two. The positive value of ‘r’ indicates that there is ample

space to increase in the level of yield of paddy in Madhya Pradesh. The value of

‘r’ between yield and net income was calculated to be 0.92 which indicates a

strong correlation between two of them. The correlation between cost of

61

production and net income was found to be 0.24 which shows less relation. The

correlation of yield, cost of production and net income with minimum support

price was found to be 0.61, 0.67 and 0.70 respectively.

Table 5.12 Relation between yield, cost of production, net income and MSPof wheat in Madhya Pradesh (2000-01 to 2009-10)


Net Income(Rs/ha)

MSP(Rs/ha)

Yield (qtl./ha) 0.64*** 0.83 0.78


0.92*** 0.88

Net Income(Rs/ha) 0.90***


5.3.2. Wheat:

Table 5.12 shows the correlation between yield, cost of production, net

income and MSP of wheat in Madhya Pradesh. Value of correlation coefficient ‘r’

between yield and cost of production was found 0.64 which indicates average

correlation between them and was significant at 1 percent level of significance.

The positive value of ‘r’ indicates that though wheat is one of the major crops of

Madhya Pradesh, still farmers are not able to obtain the optimum level of yield

from wheat which they should have obtained. The value of ‘r’ between yield and

net income was found to be 0.83 which indicates a high correlation between two

of them. The correlation between cost of production and net income was found to

be 0.92 and significant which shows strong correlation. The correlation of yield,

cost of production and net income with minimum support price was found to be

0.78, 0.88 and 0.90 respectively.

62

Table 5.13 Relation between yield, cost of production, net income and MSPof gram in Madhya Pradesh (2000-01 to 2009-10)


Net Income(Rs/ha)

MSP(Rs/ha)

Yield (qtl./ha) -0.304*** 0.01 0.35***


0.62*** 0.66



5.3.3. Gram:

The correlation between yield, cost of production, net income and MSP of

gram in Madhya Pradesh has been shown in the above table 5.13. Value of

correlation coefficient ‘r’ between yield and cost of production was found to be

negative i.e. -0.30 and significant which indicates inverse relation between them.

The negative value of ‘r’ indicates that farmers are getting optimum level of yield

from cultivation of gram and hence cost of production is also less. The value of ‘r’

between yield and net income was found to be 0.01 which indicates very low

correlation between two of them. The correlation between cost of production and

net income was found to be 0.62 and significant which shows average

correlation. The correlation of yield, cost of production and net income with

minimum support price was found to be 0.35, 0.66 and 0.53 respectively.

Table 5.14 Relation between yield, cost of production, net income and MSPof soybean in Madhya Pradesh (2000-01 to 2009-10)


Net Income(Rs/ha)

MSP(Rs/ha)

Yield (qtl./ha) -0.14 0.97 0.615Cost of Production

(C3)-0.084 0.572


63

5.3.4. Soybean:

Table 5.14 shows the correlation between yield, cost of production, net

income and MSP of soybean in Madhya Pradesh over the study period. Value of

correlation coefficient ‘r’ between yield and cost of production was found -0.14

which indicates low negative correlation between them. The negative value of ‘r’

here also indicates that the productivity of soybean in Madhya Pradesh is

satisfactory, optimum level of yield has been obtained. The value of ‘r’ between

yield and net income was found to be 0.97 which indicates a high correlation

between two of them. The correlation between cost of production and net income

was found to be -0.08 and significant at 1 percent level of significance. The



Table 5.15 Relation between yield, cost of production, net income and MSPof cotton in Madhya Pradesh (2000-01 to 2009-10)


Net Income(Rs/ha)

MSP(Rs/ha)

Yield (qtl./ha) -0.91* 0.46 0.59


-0.65*** -0.71


*** Significant at 1% * Significant at 10%

5.3.5. Cotton:

The correlation between yield, cost of production, net income and MSP of

cotton in Madhya Pradesh has been shown in the above table 5.15. Value of

correlation coefficient ‘r’ between yield and cost of production of cotton was found

to be -0.91 and significant which indicates high negative correlation between

them. The negative value of ‘r’ indicates that farmers are getting optimum level of

yield from cultivation of cotton which is due to the use of Bt cotton and hence

cost of production is also less. The value of ‘r’ between yield and net income was

found to be 0.46 which indicates very average correlation between two of them.

64

The correlation between cost of production and net income was found to be -0.65

and significant which shows average negative correlation. The correlation of

yield, cost of production and net income with minimum support price was found

to be 0.59, -0.71 and 0.53 respectively.

5.4. Growth of MSP

The minimum support prices are perceived by the farmers as a guarantee

price for their produce from the Government. These prices are announced by the

Government at the commencement of the season to enable them to pursue their

efforts with the assurance that the prices would not be allowed to fall below the

level fixed by the Govt. Such minimum support prices are fixed at incentive level,

so as to induce the farmers to make capital investment for the improvement of

their farm and to motivate them to adopt improved crop production technologies

to step up their production and thereby their net income.

Table 5.16 SGR and CGR of Minimum support price of principal crops inMadhya Pradesh (2000-01 to 2009-10)

(Rs/qtl)

Particulars Crop

Paddy Wheat Gram Soybean Cotton

a 390 442.6 1037.66 733 150.33

b 47.2***(9.45)

59.69***(11.20)

71.33***(5.72)

56.45***(10.49)

117.21***(32.8)

SGR 7.54 7.74 4.98 5.41 5.45

CGR 7.06 7.56 5.16 5.29 5.10


Table 5.16 shows the SGR and CGR of minimum support price ofprincipal crops in Madhya Pradesh over the study period. It is seen from the tablethat the value of regression coefficient ‘b’ for all the crops considered was foundto be positive and significant at 1 percent level of significance. The value of ‘b’was found to be highest for cotton with value 117.21 rupees per quintal per yearand lowest for paddy which is 47.2 rupees per quintal per year.

65

SUMMARY, CONCLUSION AND SUGGESTIONS6.1. Summary

Cost Studies are backbone in the field of research in the discipline of Agril.

Economics. Cost helps in selection of most profitable enterprise and fixation of

support price of principal crops which Govt. of India announces for both Kharif

and Rabi crops well advance of their sowing. Ministry of Agriculture and

Cooperation, GOI also implemented cost of cultivation of principal crops scheme

in 19 states of the country since 1970. Cost and Price of Farm inputs and output

provided fluctuates overtime. Farmers agitate both at road to parliament that crop

production is not a profitable avocation. Profitability from farm business depends

on: - i) Cost of farm inputs ii) Price of output produced iii) Stability of cost and

price and related factors. Looking to the importance of cost and revenue, the

present study seeks to answer the following questions:- i) Magnitude of Cost of

Cultivation & Profitability level of selected crops overtime ii) Extent of variation in

Cost of Cultivation, Cost of Production and Net Profit iii) Relation between Cost

of Production, Net profit and Support Price.

Though paddy and wheat are major cereal crops of India, government is

saying that till date farmers are not being able to get the optimum level of yield

from these crops. So in general, this study was conducted to see the status of

principal crops production and productivity and return from them in Madhya

Pradesh. Moreover, the study on the “Dynamics of cost and return of principal

crops in Madhya Pradesh” was taken up with the following specific objectives:

1. To estimate the trend and growth rate of area, production and productivity of

principal crops in Madhya Pradesh.

2. To study the behaviour of input use, cost and return of the principal crops.

3. To examine the relation between production growth rate, cost of production,

net income and support price of principal crops.

4. To suggest appropriate policy measures for enhancing crop production in

the study area.

The study is confined to Madhya Pradesh state using the time series

secondary data which were collected from Directorate of Economics and

66

Statistics, Agro economic research centre, JNKVV, Jabalpur and various

published sources. Secondary data covers area, production, productivity, cost of

cultivation, cost of production and minimum support price of selected crops which

pertain to the one decade period (2000-01 to 2009-10).

The absolute and relative change, trend, simple and compound growth

rate, coefficient of variation and correlation coefficient techniques were used to

analyse the collected secondary data.

Major FindingsIn order to achieve the stated objectives, paddy, wheat, gram, soybean

and cotton were selected as principal crops because these crops together

occupy about 77 percent area (76.8%) of the gross cultivated area of Madhya

Pradesh. The major findings of this study are as follows:

1. In Madhya Pradesh, area under paddy showed negative and decreasing

trend -26.66 thousand hectare per year with a compound growth rate of -

1.64 percent per year and 5.78 percent fluctuation during the period. But the

production and yield showed positive and increasing trend with the

magnitude of 19.33 thousand ton per year and 21.89 kg/ha /year

respectively. The annual growth rate of production was 1.88 percent with

variability of 18.72 percent (CV) and annual growth of yield was 3.12

percent and coefficient of variation 18.18 percent.

Among the five inputs considered, value of regression coefficient ‘b’ was

found positive for all inputs except bullock labour (Rs -2.9 per ha/year) and

highest was found for human labour (Rs 278.25 per ha/year). In order to

achieve the optimum yield of paddy (21.89 kg/ha/yr), there was increase in

the cost of cultivation A2 and C3 of the crop by the magnitude of Rs 408.8

and Rs 1,146.6 per ha/year respectively. The increase in cost of production

A2 and C3 found to be Rs 6.68 and Rs 23.03 per qtl/year. The return

obtained from the crop production in the form of gross income was found to

be increased with the magnitude of Rs 2,093.65 per ha/year.

67

The value of correlation coefficient ‘r’ between yield and cost of production

for paddy was found to be positive and significant with value 0.07 and that

between yield and net income was calculated to be 0.92. The correlation

between cost of production and net income of paddy was 0.24. The



2. Area, production and yield of wheat in Madhya Pradesh all showed positive

and increasing trend with the magnitude of 88.60 thousand hectare, 304.10

thousand ton and 34.16 kg/ha per year respectively. The area under wheat

has increased from 3463.33 thousand hectare (base year) to 4130 thousand

hectare (current year) showing relative change of 19.25 percent with

variability of 9.06 percent (CV) and annual growth of 2.37 percent per year.

The production of wheat has increased from 5263.33 thousand ton (base

year) to 7473.33 thousand ton (current year) showing relative change of

41.9 percent with variability of 17.7 percent (CV) and annual growth of 4.87

percent per year. The yield of wheat has increased from 1582 kg/ha (base

year) to 1834.7 kg/ha (current year) showing relative change of 15.97

percent with variability of 8.40 percent (CV) and annual growth of 2.01

percent per year.


found positive and highest for human labour (Rs 181.59 per ha/year) but it

was found negative for manures (Rs -1.80 per ha/year) and bullock labour

(Rs -17.35 per ha/year). The coefficient of variation (CV) of manures in

wheat crop was found highest (103.18%) and least value of CV of fertilizer.

Annual increase in yield of wheat (34.16 kg/ha) was obtained by the

increase in the use of input which accounted for the increase in both the

cost of cultivation and cost of production of the crop. Cost of cultivation at

cost C3 increased Rs 1,531.85 per ha/year and cost of production at cost C3

with Rs 31.3 per qtl./year respectively. The gross income from wheat

cultivation in Madhya Pradesh increased with the magnitude of Rs 2,607.88

per ha/year.

68


for wheat also was found to be positive and significant (0.64) and between

yield and net income was 0.83. The correlation between cost of production

and net income of wheat was 0.92 indicating strong relation. The correlation

of yield, cost of production and net income with minimum support price of

wheat was found to be 0.78, 0.88 and 0.90 respectively.

3. Area, production and yield of gram in Madhya Pradesh all showed positive

and increasing trend with the magnitude of 67.69 thousand hectare, 107.40

thousand ton and 16.93 kg/ha per year respectively. Value of ‘b’ was found

significant for area and production but was non-significant incase of yield.

The simple growth rate for area, production and yield was 2.59, 4.55 and

1.88 percent per year respectively. High fluctuation (22.52%) was seen

incase of production of gram.


found positive and highest for seed (Rs 157.22 per ha/year) but it was found

negative for manures (Rs -0.19 per ha/year) and bullock labour (Rs -18.28

per ha/year). Manures used in gram also showed highest value of

coefficient of variation (123.03%) and least was recorded for fertilizer

(8.2%). Cost of cultivation C3 for gram increased with the magnitude of Rs

924.8 per ha/year and cost of production C3 with Rs 73.29 per qtl/year. The

gross income from gram cultivation in Madhya Pradesh increased with the

magnitude of Rs 1,233.5 per ha/year which is least among the crops

considered.


for gram was negative and significant (-0.30) and between yield and net

income it was positive but less 0.01. The correlation between cost of

production and net income of gram was 0.62 indicating average relation.

The correlation of yield, cost of production and net income with minimum

support price of gram was 0.35, 0.66 and 0.53 respectively.

69

4. Area, production and yield of soybean in Madhya Pradesh all showed

positive, significant and increasing trend with the magnitude of 111.57

thousand hectare, 346.30 thousand ton and 49.57 kg/ha per year

respectively. The compound growth rate for area, production and yield was

2.37, 8.0 and 5.47 percnt per year respectively. The high fluctuation was

seen in production with value of CV 25.58 percent.

All of the considered inputs showed positive and increasing trend in

soybean. Highest value of ‘b’ was of human labour (Rs 2,38.41 per ha/year)

and lowest was of fertilizer (Rs 7.84 per ha/year) for soybean.


for soybean was also negative (-0.14) and between yield and net income it

was positive (0.97) which shows high correlation. The correlation between

cost of production and net income of soybean was negative (-0.08). The


price of soybean was 0.61, 0.57 and 0.61 respectively.

5. Area, production and yield of cotton in Madhya Pradesh all also showed

positive, significant and increasing trend with the magnitude of 29.9

thousand hectare, 71.67 thousand bales and 50.6 kg/ha per year

respectively. The compound growth rate for area, production and yield of

cotton was 4.66, 13.94 and 11.36 percent per year respectively. The high

fluctuation was seen in production of cotton with value of CV 35.37 percent

followed by yield (30.47%).

All of the considered inputs showed positive and increasing trend in cotton

also. Highest value of ‘b’ was of human labour (Rs 557.54 per ha/year) and

lowest was of manures (Rs 75.05 per ha/year) for cotton with the highest

fluctuation of 73.12 percent per year. The cost of production of cotton

showed negative and decreasing trend with the magnitude of Rs -81.3 per

qtl/year for A2 and Rs -132.9 per qtl/year for C3. The gross income from

cotton cultivation was found to be the highest (Rs 3,883.11 per ha/year)

among the considered five principal crops.

70


for cotton was also negative and significant (-0.91) showing hight correlation

between them and between yield and net income it was positive (0.46)

which shows average correlation. The correlation between cost of

production and net income of cotton was negative (-0.65). The correlation of

yield, cost of production and net income with minimum support price of

cotton was 0.59, -0.71 and 0.53 respectively.

6.2.Conclusion1. There was decrease in the area under paddy in successive years in

Madhya Pradesh but production has increased due to the increased in

yield of paddy which may be the result of use of quality inputs (e.g. hybrid

seed, fertilizer, etc.) and improved technology by the cultivators.

The positive value of correlation coefficient ‘r’ between yield and cost of

production in paddy indicates that there is ample space to increase in the

level of yield of paddy in Madhya Pradesh.

2. The increase in production of wheat in Madhya Pradesh is due to the

combined effect of both the area under wheat and the yield of the crop.

The increase in area seems to be more than increase in yield. The high

value of coefficient of variation (CV) of manures in wheat indicated that

there was more fluctuation in the use of manures in wheat cultivation

during the period considered.

The positive and significant value of correlation coefficient ‘r’ between

yield and cost of production of wheat indicates that still farmers are not

able to obtain the optimum level of yield from wheat which they should

have obtained.

3. The increase in production of gram in Madhya Pradesh is due to the

combined effect of both the area under gram and the yield of the crop.

Non-significant value of yield of gram indicated that increase in area is

more responsible for increase in production of gram than increase in yield.

The high value of coefficient of variation (CV) of manures in gram

71

indicated that there was more fluctuation in use of manures in gram by the

cultivators. It may be because in some years farmers use manures while

in some other years they don’t use.

The negative and significant value of ‘r’ between yield and cost of

production of gram indicated that farmers are getting optimum level of

yield from cultivation of gram and hence cost of production is also less for

gram.

4. Madhya Pradesh being the major producer of soybean in India, at

successive years is giving importance to increase both the quality and

quantity of soybean produced which can be inferred by seeing the table

5.9 named pattern of input use and income of soybean in Madhya

Pradesh. Organic production of soybean is being increased by use of

more and more of manures and slowly decreasing the amount of fertilizers

used. Unlike in previous three crops, still there is use of bullock labours for

soybean cultivation because cultivators assume that bullock labours are

more reasonable than machines.

5. The increase in production of cotton in Madhya Pradesh is due to the

combined effect of both the area under cotton and the yield of the crop.

Increase in the level of yield of cotton was more responsible for the

increased production of cotton which may be the use of Bt cotton in

successive years in Madhya Pradesh.

Manures are being increasingly used in cotton cultivation and production

as the quality, importance and value of organic cotton has been realized

by both the government and cultivators Increased in the yield of cotton

due to the use of Bt cotton has decreased the cost of production of this

crop and has resulted in the increase of the gross income from cotton in

Madhya Pradesh. The negative value of ‘r’ between yield and cost of

production of cotton indicated that farmers are getting optimum level of

yield from cultivation of cotton which is due to the use of Bt cotton and

hence the cost of production is decreasing.

72

6.3. Suggestions

Based on the above conclusions drawn from the study, following suggestions

can be given:

It is useful to conduct a study inorder to find out the causes which are

hindering for achieving the optimum level of two major crops (paddy and

wheat) and find out the adoption pattern of recommended technologies

adopted by the farmers in different agro-climatic regions of Madhya

Pradesh.

Government should ensure proper and adequate supply of crucial inputs

especially manures to the farmers so that they can trap export potential of

that particular product.

Efforts should also be made for skill oriented training related to the crop

production e.g. farm management techniques.

Government should establish market intelligence cell in each Agricultural

universities which conduct studies related to market research and cost-

price relationship of agricultural commodities.

Apart from price incentives, government should also focus on the non-

price incentives to increase the productivity of crops and also to reduce

the cost of cultivation.

73

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I

Area, production, yield, MSP, cost of cultivation, cost of production, yield and gross income of paddy in Madhya Pradesh

Year Area(‘000 ha)

Production(‘000 tn)

Yield(kg/ha)

MSP(Rs/qtl.)

Cost of Cultivation(Rs/ha)

Cost of Production(Rs/qtl.) Yield

(Qt/ha)Gross Income

Rs/haCost A2 Cost C3 Cost A2 Cost C3

2000-2001 1710 980 575 510 6058.26 13477.29 377.42 834.65 13.96 8409.59

2001-2002 1760 1660 948 530 6987.46 15054.05 314.63 676.42 18.92 11480.24

2002-2003 1680 1030 646 550 5880.29 12216 380.11 804.54 12.93 7628.44

2003-2004 1710 1750 1074 550 5772.74 12845.31 263.76 605.71 18.51 10771.81

2004-2005 1680 1390 818 560 6534.38 13174.12 466.23 882.28 12.91 10398.93

2005-2006 1710 1690 1045 570 5989.64 14159.76 342.64 769.8 16.03 11736.34

2006-2007 1680 1390 874 580 6422.39 13805.92 370.1 764.23 16.21 11968.94

2007-2008 1560 1460 938 850 7054.3 15015.51 404.45 861.64 15.36 12144.4

2008-2009 1560 1560 927 850 9612.03 24149.95 339.27 821.43 26.64 33448.5

2009-2010 1450 1260 872 950 10704.61 25439.49 445.6 1072.15 21.45 26650.3Source: Directorate of Economics and Statistics, Ministry of Agriculture, Govt. of India

II

Area, production, yield, MSP, cost of cultivation, cost of production, yield and gross income of wheat in Madhya Pradesh

Source: Directorate of Economics and Statistics, Ministry of Agriculture, Govt. of India



Yield(kg/ha)

MSP(Rs/qtl.)



(Qt/ha)Gross Income


2000-2001 3310 4870 1535 610 6008.63 13322 297 659.05 17.2 12617.25

2001-2002 3700 6000 1691 620 6661.05 14034.49 310.24 651.05 18.44 13758.62

2002-2003 3380 4920 1520 630 7431.82 15708.26 342.64 721 18.35 14773.07

2003-2004 4090 7360 1879 630 7723.2 16491.6 293.27 624.92 22.88 17624.6

2004-2005 4200 7320 1821 640 7822.51 16165.66 310.86 642.19 21.79 16979.23

2005-2006 3780 6200 1710 650 8424.29 18837.07 362.13 799.83 20.3 21271.34

2006-2007 4270 7840 1916 750 9428.42 21310.01 357.86 803.89 22.91 26821.68

2007-2008 4100 6730 1714 1000 10223.18 23677.55 370.4 860.19 23.86 31472.06

2008-2009 4010 7280 1895 1080 10272.8 24880.87 372.8 896.39 23.59 31776.64

2009-2010 4280 8410 1895 1100 10905.16 26639.52 367.56 889.33 25.52 33594.71

III

Area, production, yield, MSP, cost of cultivation, cost of production, yield and gross income of gram in Madhya Pradesh




Yield(kg/ha)

MSP(Rs/qtl.)



(Qt/ha)Gross Income


2000-2001 1970 1620 1620 1100 5399.34 12291.66 550.65 1251.27 9.36 14154.23

2001-2002 2550 2400 2400 1200 5744.98 12921.52 482.21 1105.08 11.16 15750.81

2002-2003 2470 1710 1710 1205 5623.06 12299.19 671.25 1447.97 8.03 12265.67

2003-2004 2790 2580 2580 1400 5483.88 12497.11 479.67 1090.49 10.87 15401.31

2004-2005 2750 2550 2550 1425 5434.12 12229.11 489.04 1106.64 10.42 14453.19

2005-2006 2560 2370 2370 1435 6815.02 15516.24 685.84 1555.03 9.52 18573.17

2006-2007 2590 2550 2550 1445 7484.82 16855.25 760.11 1706.1 9.42 22062.56

2007-2008 2440 1740 1740 1600 7392.83 17058.29 770.52 1774.84 9.09 22689.97

2008-2009 2840 2790 2790 1730 8174.19 18616.9 751.34 1712.49 10.29 21927.55

2009-2010 3090 3300 3300 1760 9099.19 20355.7 753.38 1685.98 11.41 23495.28

IV

Area, production, yield, MSP, cost of cultivation, cost of production, yield and gross income of soybean in Madhya Pradesh



Yield(kg/ha)

MSP(Rs/qtl.)



(Qt/ha)Gross Income


2000-2001 4470 3430 767 865 4786.06 9981.88 490.86 1004.64 9.22 8988.01

2001-2002 4450 3730 840 885 5634.43 11503.36 469.93 947.97 11.27 11240.18

2002-2003 4190 2670 638 895 5964.13 11624.34 883.03 1693.14 6.5 8693.33

2003-2004 4210 4650 1106 930 6241.5 13693.38 475.99 1028.92 12.61 16689.42

2004-2005 4590 3760 1082 1000 6409.45 13226.64 577.54 1187.59 10.58 13566.7

2005-2006 4590 4800 1058 1010 6490.22 13192.66 542.79 1095.04 11.28 13187.99

2006-2007 4760 4780 1006 1020 6869.84 13842.15 555.7 1116.68 11.49 14234.74

2007-2008 5020 5480 1091 1050 7983.68 16656.1 612.49 1275.71 12.36 19459.77

2008-2009 5120 5850 1142 1390 9176.6 19072.53 713.09 1479.2 12.12 20229.4

2009-2010 5350 6410 1198 1390 10728.46 23657.13 720.37 1589.83 14.09 28996.94Source: Directorate of Economics and Statistics, Ministry of Agriculture, Govt. of India

V

Area, production, yield, MSP, cost of cultivation, cost of production, yield and gross income of cotton in Madhya Pradesh


Production(‘000 bales)

Yield(kg/ha)

MSP(Rs/qtl.)



(Qt/ha)Gross Income


2000-2001 500 250 244 1825 2787.54 8156.21 1480.96 3098.3 2.53 9605.56

2001-2002 540 394 369 1875 5426.51 12109.6 1415.04 2957.11 3.81 9166.16

2002-2003 550 390 351 1895 10904.38 21964.27 1615.95 3316.52 6.36 12914.84

2003-2004 560 630 566 1925 10030.08 20530.26 1423.93 2839.01 6.98 17075.62

2004-2005 570 626 555 1960 11461.77 22786.14 1402.36 2800.13 7.56 13455.57

2005-2006 620 750 594 1980 16000.27 38352.68 943.64 2223.83 16.32 43090.55

2006-2007 640 830 669 1990 15925.97 31893.53 1273.12 2553.42 11.9 29242.6

2007-2008 630 860 699 2030 14178.74 31153.71 1009.05 2238.7 13.44 32346.56

2008-2009 620 860 719 3000 13864.9 32527.53 823 1933.39 16.06 40058.32

2009-2010 910 860 669 3000 11728.59 30112.31 887.78 2215.18 12.99 38625


VI

Value of inputs used in paddy cultivation in Madhya Pradesh(Rs/ha)

Value of inputs used in wheat cultivation in Madhya Pradesh(Rs/ha)

YearSeed

Charges

Fertilizer

ChargesManure

Human

Labour

Bullock

Labour

2000-2001 655.344 609.0271 537.9712 3541.8175 1519.02

2001-2002 640.1 682.7841 676.2184 4071.3528 2057.4605

2002-2003 697.9116 504.1795 515.9416 3316.2402 1707.0076

2003-2004 681.1945 541.8282 692.4005 3498.5505 1629.0963

2004-2005 727.538 617.6187 948.6116 3407.5893 1425.4389

2005-2006 690.5445 644.2149 716.7024 3923.6 1531.668

2006-2007 818.3904 587.2236 488.796 3881.3777 1284.4953

2007-2008 910.4673 685.1105 585.848 4298.0436 1635.032

2008-2009 1160.3592 1000.0228 568.7232 5563.9011 1746.2808

2009-2010 1334.032 1148.8084 736.804 6751.9119 1850.9078Source: Directorate of Economics and Statistics, Ministry of Agriculture, Govt. of India

YearSeed

Charges

Fertilizer

ChargesManure

Human

Labour

Bullock

Labour

2000-2001 867.352 995.712 11.09 2310.175 545.5716

2001-2002 909.3425 1012.78 5.0107 2280.25 921.2658

2002-2003 918.849 1302.3792 26.3516 2450.136 994.0852

2003-2004 963.028 1141.4095 49.5352 2337.86 837.32

2004-2005 997.7517 1241.74 16.548 2259.6244 671.3065

2005-2006 1167.5867 1225.2275 13.5608 2711.8548 651.7647

2006-2007 1572.6273 1208.2026 35.712 2933.8452 746.3533

2007-2008 1576.5821 1428.5499 2.5572 3233.5332 737.9631

2008-2009 1693.5912 1347.4846 0.0001 3545.9992 665.4781

2009-2010 1887.2896 1338.1284 0.0001 3970.785 601.1866


VII

Value of inputs used in gram cultivation in Madhya Pradesh(Rs/ha)

Value of inputs used in soybean cultivation in Madhya Pradesh(Rs/ha)

YearSeed

Charges

Fertilizer

ChargesManure

Human

Labour

Bullock

Labour

2000-2001 1491.1238 479.1472 7.524 1878.825 540.8112

2001-2002 1608.2703 518.04 5.5627 1764.4022 830.8538

2002-2003 1319.2032 445.2 0.0001 1691.3955 699.6556

2003-2004 1293.8326 520.6813 30.209 1722.6374 582.6912

2004-2005 1280.5 497.556 29.1183 1749.669 540.0993

2005-2006 1783.4432 456.7725 5.6 1976.5377 665.3773

2006-2007 2638.1544 502.3211 44.6904 1987.3 506.751

2007-2008 3172.824 534.3784 0.0001 2202.9792 596.322

2008-2009 2360.9261 522.1982 0.0001 2597.9584 452.863

2009-2010 2254.4626 590.9165 6 3320.844 568.2988


YearSeed

Charges

Fertilizer

ChargesManure

Human

Labour

Bullock

Labour

2000-2001 1103.6145 525.525 176.472 2192.2196 681.3063

2001-2002 1145.2896 564.6364 213.484 2409.8196 1136.6293

2002-2003 1356.486 648.0365 247.8744 2163.9072 1279.1672

2003-2004 1476.2331 601.8012 290.7228 2545.4125 957.3036

2004-2005 1714.888 687.7812 264.5783 2604.2965 876.764

2005-2006 1241.3356 812.0296 406.5099 3422.0512 1781.5473

2006-2007 1406.2574 604.8875 283.787 2819.0158 1084.8516

2007-2008 1517.6937 653.422 427.895 3153.2432 1163.9628

2008-2009 2150.904 564.7726 599.613 3766.8868 1091.74

2009-2010 2396.6712 651.4176 509.9904 4775.9706 1132.704


VIII

Value of inputs used in cotton cultivation in Madhya Pradesh(Rs/ha)

YearSeed

Charges

Fertilizer

ChargesManure

Human

Labour

Animal

Labour

2000-2001 495.012 379.7526 169.376 1658.2968 1083.0952

2001-2002 671.2173 1306.0386 40.0644 3018.6927 1698.1877

2002-2003 2351.1618 1380.1644 120 5050.0668 2543.3638

2003-2004 926.0052 1302.1641 365.7555 5401.6514 2735.551

2004-2005 3059.7402 995.562 234.726 6166.2384 1286.2325

2005-2006 3771.9015 1870.4477 915.146 7058.907 1953.98

2006-2007 2534.1012 2331.3876 939.1326 6753.4704 2525.8296

2007-2008 2203.5564 2085.0352 808.6794 6855.6096 2469.0033

2008-2009 2054.5312 1401.6957 689.0544 7127.01 2518.2486

2009-2010 1861.1307 1037.876 391.2288 7131.6672 2875.2282Source: Directorate of Economics and Statistics, Ministry of Agriculture, Govt. of India

ABSTRACT

Title of the thesis : “Dynamics of cost and return of principal crops inMadhya Pradesh.”

Student’s Name : Miss Aruna Parajuli

Father’s Name : D/o Mr. Khagendra Raj Parajuli

Permanent Address : House no. 24, Bindhyabasini Marg, Miruwa-2, Pokhara,

Kaski, Nepal

Name of advisor : Dr. N.K. Raghuwanshi

Address (Office) : Head of Department, Deptt. of Agril. Economics & Farm

Management, College of Agriculture, JNKVV, Jabalpur

(M.P.) 482004

Degree awarded : Master of Science in Agriculture

Year of award of : 2013

degree

Major subject : Agricultural Economics & Farm Management

Total no. of pages in : 78

the thesis

No. of words in the : 377abstract

Signature of Advisor Signature of Signature of StudentHead of Department

(Dr. N.K. Raghuwanshi) (Dr. N.K. Raghuwanshi) (ARUNA PARAJULI)

ABSTRACT

The present study entitled “Dynamics of cost and return of principal crops inMadhya Pradesh” was undertaken with a view to examine the behavior of inputuse, costs and returns overtime and relation between level of production, cost ofproduction, net income and support price along with status of production ofprincipal crops in Madhya Pradesh. The study is confined to Madhya Pradesh asa whole based on secondary data viz. area, production, yield, cost incurred onmajor inputs, cost of cultivation and cost of production at cost A2 and C3, yieldand gross income from principal crops namely paddy, wheat, gram, soybean andcotton covering a period of one decade ending 2009-10. Absolute and relativechange, trend and growth rates, coefficient of variation and multiple correlationetc. techniques were used to analyse the collected data.

The highlight of the study revealed that among the selected crops only acreageof paddy exhibit declining trend but its production increased due to augment inyield level. Maximum production increase in relative terms was observed incotton (15%) followed by soybean (80.47%), wheat (42%), gram (37%) and leastin paddy (17%). Production growth rate per annum ranged between 1.88% inpaddy to 13.94% in cotton during the period under reference. Positive trend wasnoticed for all major inputs barring bullock labour in paddy, wheat, gram andmanures in gram and wheat crops. Highest per annum growth rate during thereference period was found in cotton (28.34%) against lowest of 0.56% formanures in paddy production. Behaviour of cost of cultivation and cost ofproduction both at cost A2 and C3 of selected crops were accelerated except costof production of cotton which decline remarkably due to many folds increase inyield. Similar trend and growth rate behavior were found in yield and grossincome. Cost of production of gram and wheat decline due to increase in theyield level revealed by inverse and significant relation between these variables.As expectation yield and net income obtained from selected crops revealedpositive association similar results were also found between yield and minimumsupport price although non-significant among crops. Thus, government shouldestablish market intelligence cell in each Agricultural universities which conductstudies related to market research and cost-price relationship of agriculturalcommodities.

VITA

The author of this thesis Ms. ARUNA PARAJULI D/O ShriKHAGENDRA RAJ PARAJULI was born on 30 t h July in Kaski

Distr ict, Gandaki Zone of Nepal. She completed her higher

secondary school in the year 2005.

After this she joined Himalayan College of Agricultural Sciences and

Technology (HICAST), Bhaktapur, Nepal and successful ly completed

B.Sc. (Ag.) in 2010.

Thereafter, she took admission in M.Sc. (Ag.) for special izat ion in

Agri l. Economics and Farm Management at College of Agriculture,

JNKVV, Jabalpur through Indian Embassy under Nepal-AID-FUND

scholarship and this thesis has been submitted for the partial

fulf i l lment of the Master’s degree programme.

dynamics of cost and return of principal crops in …...certificate – ii this is to certify that...

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