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I. BHAVANI DEVI, M. SRIKALA*, T. ANANDA AND V.SUBRAMANYAM
Research Scholar, Department of Agricultural Economics, S.V. Agricultural College, Tirupati – 517 502.
The total cost of cultivation of rice per ha in Kharif 2010-2011 worked out to 67,899 of which operational costs formed 70.20 per cent and the remaining fixed costs. Human labour was the major cost factor occupying 34.40 per cent of the total cost. Gross returns stood at 59,115, while the net returns were negative ( -8,784). Net returns over operational costs were 11,452. The total cost of cultivation in rabi was 66,905. Total operational costs were found be 50,282 slightly higher as compared to Kharif season. Among fixed costs rental value of owned land was less than that of Kharif season. Gross returns were 69,263, while net returns stood at 2,358. Net returns over operational costs were 18,981. The retailer’s margin ranged from 6.8 to 8.27 per cent of consumer’s rupee. The share of producer in the consumer’s rupee was 62.92 and 57.27 per unit respectively for old and new rice respectively.
Cost concepts, Cost of Cultivation, Net returns, Marketing Channels, Price spread
Rice is the most important and extensively grown food crop in the world. Rice is most important stable food of about 65 per cent of the population. It constitutes about 43 per cent of the total foodgrain production and 46 per cent of the total cereal production in the country. Green revolution has been most effective not only in expanding area under this crop but also in increasing its production and productivity. Contributing consistently to around 45 per cent of India’s cereal production, rice continues to hold the key factor to sustained food security as well as food sufficiency in the country. It continues to play vital role in the country’s export and contributes nearly 25 per cent of total agricultural export from the country (Singh et al., 2005). The present study aims at studying the economies of rice cultivation and price spread in coastal Andhra Pradesh. The present study aims at studying the economics of rice cultivation and price spread in coastal Andhra Pradesh.
The study was conducted in southern coastal districts of Andhra Pradesh viz., Krishna and Guntur districts. One mandal in each district with higher area under paddy was purposively selected. Following the same criterion two villages from each mandal were again purposivelyselected, 100 paddy farmers were randomly selected for the study. For studying the price spread 5 wholesalers/ processors and the same number of retailers were randomly selected.
In Krishna, Guntur and Prakasam, 60 farmers were randomly selected for the study. The data were collected for the year 2010-11 using a selected schedule.
The cost concepts include Cost A1, Cost A2, Cost B1, Cost B2, Cost C1, Cost C2 and Cost C3 have been worked out in the study.
Cost A1 = All actual expenses in cash and kind incurred in production
Cost A2 = Cost A1+ Rent paid for leased in land
Cost B1 = Cost A1+ Interest on value of owned capital assets
Cost B2 = Cost B1+ Rental value of owned land 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 per cent of Cost C2
Figures in parentheses indicate percentages to total costs
Producer’s share in consumer’s rupee (PS)
It is the price received by the producer expressed as a percentage of the retail price.
Ps= (PF/Pc) X 100
whereas,
PF = Price received by the producer Pc = price paid by the consumer
To study the marketing aspects, 20 traders were randomly selected.
The profitability of any enterprise depends upon costs and returns. Generally, in any economic study total costs are discussed under two heads viz., variable costs and fixed costs. In general, variable costs alone are reckoned to be the cost of cultivation by the farming community ignoring the fixed costs. The profit and loss too are worked out accordingly.
But in economic analysis of any business enterprise, the fixed costs are also taken into account to arrive at total costs and thereby to compute the profits. Variable
costs include expenses on labour employed to perform different cultural practices and also expenses incurred on material inputs like seeds, FYM, fertilizers, plant protection chemicals etc. The fixed costs are depreciation on working assets, interest on fixed capital, rent on land and land revenue. The particulars of cost of cultivation of rice are presented in Table 1.
The cost of cultivation represents the average costs of rice farmers of Guntur and Krishna districts which is presented in Table-1.
Kharif: The total cost of cultivation of rice per ha in Kharif 2010-2011 was 67,899 of which operational costs formed 70.20 per cent and the remaining fixed costs. Human labour was the major cost factor occupying 34.40 per cent of the total cost.
Rabi: The total cost of cultivation in rabi was 66,905. Total operational costs were found be 50,282 slightly higher as compared to Kharif season. Among fixed costs rental value of owned land was less than that of Kharif season.
The cost of cultivation of sugarcane also dealt by adopting the cost concepts used in farm management studies viz., Cost A1, Cost A2, Cost B and Cost C. The
concept of Cost C is the most comprehensive one. It includes all costs, both fixed and variable and hence provides a basis for comparison between different types of operational holdings. The cost of cultivation of kharif and rabi rice according to cost concepts was worked out and presented in Table 2.
It is noticed that the commercial cost (Cost C3) was higher at 66,905 on rabi season compared to kharif season ( 67,899). Gross returns stood at 59,115, while the net returns were negative (- 8,784). Net returns over operational costs were 11,452. Gross returns were 69,263, while net returns stood at 2,358. Net returns over operational costs were 18,981.
The price spread is the difference between the price paid by the consumer and price received by producer. The price spread analysis is carried out for old rice and newly harvested rice (Table-3). The channel that was selected
was Producer Processor Retailer Consumer.
The processing costs for both old and new rice were 30 each per quintal of rice processed. The processor’s margin was identical for both types of rice and between the processor and retailer, it was processer who netted a margin of 465/Q and his share in consumer’s rupee stood at 22.08 and 25.12 for the said types. The retailer’s margin ranged from 6.8 to 8.27 per cent of consumer’s rupee for
the said types. When the share of producer in the consumer’s rupee was estimated, it was 62.92 can 57.27 per unit for old and new rice respectively. Similar findings were reported by Kumar et al. (2015).
The total cost of cultivation of rice per ha in Kharif
2010-2011 worked out 67,899 of which operational costs formed 70.20 per cent and the remaining fixed costs. Human labour was the major cost factor occupying 34.40 per cent of the total cost. Net income was found to be higher in rabi season. The total cost of cultivation in rabi was 66,905. Total operational costs were found be 50,282 slightly higher as compared to Kharif season. Among fixed costs rental value of owned land was less than that of Kharif season. When the share of producer in the consumer’s rupee was estimated, it was 62.92 can 57.27 per unit for old and new rice respectively.
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