ECONOMIC VIABILITY OF ORGANIC PADDY PRODUCTION IN CENTRAL INDIA

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1 Agric. Sci. Digest., 33 (4) : , 2013 DOI /j AGRICULTURAL RESEARCH COMMUNICATION CENTRE / indianjournals.com ECONOMIC VIABILITY OF ORGANIC PADDY PRODUCTION IN CENTRAL INDIA Govind Prasad Namdev*, Ashutosh Shrivastav and P. K. Awasthi Department of Agricultural Economics and Farm Management, Jawaharlal Nehru Krishi Vishwa Vidyalaya, Jabalpur , India Received: Accepted: ABSTRACT An attempt has been made in this study to examine the cost and return analysis of organic and inorganic farming practices for paddy cultivation in Jabalpur district of M.P. The finding of the study revealed that on an average the total cost of cultivation (Cost C 3 ) of paddy under organic and inorganic were observed to be Rs. 821 and Rs respectively. The average yield per hectare of paddy crop was found maximum in inorganic farms (21.92q/ha) against q/ha in organic farms. Medium farmers harvested maximum yields of paddy under both the situations and lower yields were in large farms. The price of organic paddy was found relatively higher than inorganic paddy in the study area. Net and output-input ratio was higher in organic farm. Thus, incremental net was only Rs per ha is realizing that organic farming was economically viable and profitable over inorganic paddy farming in the study area. Net on different farm size in organic situation ranged from Rs to Rs and Rs to Rs per ha in case of inorganic paddy. It is suggested that sincere efforts be made by the extension personnel to motivate the framers to adopt improved production technology to minimize the yield gap. Key words: Central India, Cost of cultivation, Economic viability,, Organic paddy. INTRODUCTION India has tremendous potential to become a major exporter of organic rice in the international market. During , around 630 MT of organic basmati rice was exported from India through APEDA. (Surekha, et al. 2012) The state of Madhya Pradesh happens to be the second largest of the Indian Union with variety of soil, crop complexes and its richness in biodiversity. The recent emphasis on high yielding varieties of crops, increasing irrigation facilities and special crop development programs has necessitated the use of higher quantity of fertilizer for increasing the yield per unit of cropped area. Since chemical fertilizers are costly inputs, the use of organic fertilizer cannot be overlooked. is one of the widely used methods, which is thought of as the best alternative to avoid the ill effects of chemical farming. It is a system that is designed and maintained to produce agricultural products by the use of methods and substances that maintain the integrity of organic agricultural products until they reach the consumer.( Narayanan, 200). Organic farming systems rely on ecologically based practices such as cultural and biological pest management and virtually excludes the use of synthetic chemicals in crop production and prohibits the use of antibiotics and hormones in livestock production. The present study was undertaken to workout the cost and returns and comparative profitability for organic and inorganic farming in Panagar block of Jabalpur district, Madhya Pradesh. MATERIALS AND METHODS The study was confined to Panagar block of Jabalpur district, Madhya Pradesh. Five organic villages namely, Umaria Choubey, Kasahi, Kundra Kheda, Liti and Urdwakhurd were selected randomly from the selected block. From the selected villages, the list of organic farmers grown paddy was prepared with the help of RAEO. The list of farmers was further categorized into three size groups according to their size of land holding viz., small (up to 2 ha), medium (2.01 to ha) and large (above ha). Fifty farmers were selected from each category of organic and inorganic groups. Thus, the study covered total 100 * Corresponding author s gnamdev8gmail.com

2 242 AGRICULTURAL SCIENCE DIGEST farmers comprised of organic and inorganic paddy in the selected area. The data required were collected through survey method in the agricultural year The farm business analysis viz., costs and returns, cost concepts, profitability concept (gross, net, output-input ratio) techniques were used to analyzed the collected data. RESULTS AND DISCUSSION Cost and returns received from cultivation of organic paddy were assessed at various cost and profitability concepts. The cost of production of organic paddy was also taken into consideration for assessing the relevance of minimum support price. Breakup of cost cultivation: For different scale of production, the cost of cultivation of organic and inorganic paddy was estimated and same have been presented in Table 1. Organic paddy: The cost of cultivation of organic paddy on different scale of production was estimated and it was observed that on an average the cost of cultivation was Rs. 822/ha and ranged from Rs. 7486/ha to Rs. 9364/ha on different categories of farms. In the total cost per cent and per cent was estimated as operational cost and fixed cost, respectively. The maximum operational cost was found at the medium farm (71.3%), followed by large (69.4%) and small farm (69.18%) of the total cost in the study area. Medium farmers (31.19%) used more hired human labaour as compared to small (27.8%) and large (23.46%) farmers in cultivation of organic paddy the large farmers used more family members. Maximum machine labours were used by large farmers (1.48%) as compared to medium (1%) and small (14.0%) farmers. The maximum bullock labour was used by small (1.97%) farmers and minimum in large farmers (1.0%). An average farmer used 1.70 per cent of total cost on bullock labour. The more costs on plant protection was incurred by medium (2.12%) farmers, followed by small (2.0%) and large (2.00%) farmers with an average expenditure of Rs per hectare was estimated. The average fixed cost on sample farm was Rs. 247 per hectare which varied between Rs to Rs. 282 per hectare. In relative term fixed cost accounted to be to per cent of total cost on different size of farm which should be reduced by enhancing total production of paddy on sample farms. Cost of cultivation of paddy crop: The total cost of cultivation of organic paddy was farmers classified according to various cost viz., A 1, A 2, B 1, B 2, C 1, C 2 and C 3, for paddy crop. The terms, which are included in these costs, have been explained in the research methodology chapter. The details of these costs of organic and inorganic paddy for sample farms have been shown in Table 2. Organic paddy: It was observed from the table(2) the cost of C 3 was highest on small size (Rs.10300), followed by medium (Rs.987) and large size (Rs.823/ha). Thus, decreasing trend was observed between total crop incurred and farm size. Similar trend was also observed in cost C 1 and C 2 with farm size found maximum in small size group. Cost A 2 represent paid out cost in term of cash and kind involved in crop production. Cost A 1 and cost A 2 of sample respondents were the same due to absence of the practice of leasing and therefore, cost A 1 was not mentioned in the table. Cost A 2 increased as the size of land holding increased. It was Rs. 6736, 6079 and 40 per hectare for small, medium and large size of land holding, respectively. The same trend was observed in case of cost B 1, and B 2 as that of cost A 2. It was observed that the percentage of cost A 1, to cost C 2 of the concerning category decreased as the size of land holding increased. Thus, it could be concluded that small size groups needed more investment for cultivation of organic paddy crop as compared to medium and large size groups. Inorganic paddy: It was observed from the table (2) that the cost for C 3 was highest on small farmers (Rs. 129) followed by medium 9Rs ) and large (1411) size of land holdings. Thus, decreasing trend was observed between total cost incurred and farm size. Similar trend was also observed with farm size. Cost A 2 represents paid out cost in terms of cash and kind involved in crop production. Cost A 1 and cost A 2 of sample respondents were the same due to absence of the practice of leasing and

3 Vol. 33, No. 4, Cost of item TABLE 1: Break-up of cost of cultivation of paddy at different farms (Unit value Rs./ha) Size of respondents Operational cost Hired human labour Large Medium Small Ave. Large Medium Small Ave (23.46) (31.19) (27.8) 2361 (27.70) 3093 (22.84) 314 (2.19) 3799 (24.46) 3469 (24.21) Family labour (11.3) (.69) (4.98) 603 (7.07) 293 (19.1) 1149 (8.24) 1066 (6.86) 1603 (11.19) Bullock labour (1.0) (1.9) (1.97) 14 (1.70) 47 (3.1) 18 (1.13) 132 (0.8) 2 (1.78) Mechanic labour 102 (1.48) (1.00) 140 (14.0) 1271 (14.91) 1721 (12.71) 2461 (17.6) 3130 (20.16) 2437 (17.01) TOTAL Material cost Value of seed Value of manure Bio-fertilizer/ Fertilizer etc, Plant Protection materials Irrigation charges Interest working capital Total operational cost (A+ B) on 18 (2.00) 18 (2.12) 196 (2.0) 180 (2.06) 734 (.42) 1067 (7.6) 1071 (6.89) 97 (6.68) Nil (69.18) 6234 (71.3) 612 (69.4) 97 (70.11) (82.64) (82.00) (81.39) 117 (82.06) Fixed cost L:and revenue Rental value of owned land Interest on fixed capital Depreciation (implements & farm building) Total fixed cost (30.80) (28.48) (30.4) (29.90) (17.3) (18.00) (18.60) (18.00) Total cost therefore, cost A 1 was not mentioned in the table. Cost A 2 decreased as the size of land holding increased. It was Rs , Rs and Rs. 881 per hectare for small, medium and large size of land holding, respectively. The same trend was observed in case of cost B 1 and B 2, as that of cost A 2. It was observed that the percentage of cost A 2 to cost C 2 of the concerning category decreased as the size of land holding increased. Thus, it could be concluded that small

4 244 AGRICULTURAL SCIENCE DIGEST TABLE2: Cost of cultivation of paddy crop of sample respondents under organic and inorganic farms Size of respondents Particular s Large Medium Small Average Large Medium Small Average Cost A 1 (A 2 ) 40 (4.7) 6079 (63.4) 6736 (6.4) 773 (61.6) 881 (9.2) (69.) (71.9) 109 (67.1) Cost B Cost B Cost C Cost C Cost C size groups needed more investment for cultivation of inorganic paddy crop as compared to medium and small size groups. Gross from paddy crop under organic and inorganic farming: The analysis of farm per hectare both for organic and inorganic paddy required on output and prices data. The output of main and by-product and the estimated gross have been provided in Table 3. Organic paddy: The data revealed that on an average organic paddy growers received Rs per hectare as the gross from the cultivation of organic paddy. The medium size of farmers was found maximum gross (Rs /ha), followed by small (Rs /ha) and large size of farmers (Rs /ha) in the study are. The maximum price of output received from organic paddy was found to be Rs per quintal in medium size of farm as compared to small 9Rs. 110/qt) and large size of farmers (Rs. 112/qt). The medium farmers received per cent and 6.34 per cent from main product and by-product, respectively. The small and large size of farmers was received and per cent from main product. The small and large size of farmers was received 6.9 and 7.60 per cent from by-product, respectively. The yield of organic paddy main product and was recorded to be 14.88/qt which varied between 13.0 to 1.7 q/ha. The by-product obtained from organic paddy was around bullock cart across farm size in the study area. In monetary terms, the value of by-product was Rs.800 per hectare obtained in different size of farm, respectively. The analysis of farm per hectare both for organic and inorganic paddy required on output and prices data the output of main and by-product and the estimated gross have been provided in Table Inorganic paddy:the data revealed that on an average inorganic paddy growers received Rs per hectare as the gross from the cultivation of inorganic paddy. The medium size of farmers was found maximum gross (Rs /ha) followed by small (Rs /ha) and large size of farmers (Rs /ha) in the study area. The maximum price of output received from inorganic paddy was found to be Rs. 990 per quintal in small size of farm, as compared to medium (Rs. 970/qt) and large size of farmers 9Rs. 960/qt). The medium farmers received per cent and.29 per cent from main product and by-product, respectively. The small and large size of farmers was received and per cent farm main product. The small and large size of farmers was received.39 and.98 per cent from by-product, respectively. The yield of inorganic paddy main product and was recorded to be which varied between 20.8 to 23.0 qt/ha. The by-product obtained from inorganic paddy was around bullock cart across farm size in the study area. In monetary terms the value of byproduct was Rs.800 per hectare obtained in different size of farm, respectively. Profits from cultivation of paddy crop: In the previous section, investment and gross analysis have been carried out for organic and inorganic paddy for the different size group. In this part, farm business analysis is peep out. Profit is expressed in three forms, i.e.net farm, family labaour and farm business. Details have been explained in methodology chapter. Organic paddy: As shown in Table 4 the net farm was found to be maximum in medium farm (Rs /ha), followed by small farm (Rs /

5 Vol. 33, No. 4, Parti cul ar s M ain product q/ha) Value of m ain product (Rs/ha) Byproduct (Bullock cart/ha) Value of byproduct (Rs/ha) Gross (Rs/ha) Particula rs Gross Net Family labour Farm business Cost benefit ratio TABLE3: Gross for paddy crop of sample respondents under organic and inorganic farms Si ze of respondents Large Medium Small Average L arge Medium Small Average 130 (112) 1188 (92.39) (20) 120 (7.60) (1172) 1849 (93.66) (20) 120 (6.34) (110) (93.4) (20) 120 (6.9) (1149) (93.2) (20) 120 (6.80) (960) 1977 (94.0) (20) 120 (.9) (970) 2239 (94.7) (20) 120 (.29) (990) (94.6) (20) 120 (.39) (973.33) (94.8) (20) 120 (.3) Size of respondents Large Medium Small Average Large Medium Small Average (49.90) (1.3) (4.68) (48.70) (29.09) (34.94) (26.21) (30.14) (9.63) (8.29) (3.07) (6.60) (47.88) 4.72) (37.2) (43.60) (72.60) TABLE4: Profits from cultivation of paddy under organic and inorganic farms (69.16) (64.47) 1296 (68.20) (8.04) (4.80) 1080 (46.87) (3.09) 1 : : : : : : : : 1.43 ha) and large farm (Rs.16438/ha). It was 4.68, 1.3, and per cent for small, medium and large and overall farm, respectively. The family labour was also found maximum in medium farm (Rs /ha) and lower in large and small size groups (Rs /ha). The percentage of family labour to gross revealed increase relation with farm size increased on overall farm family labour was Rs per hectare and in terms of percentage to gross it was 6.60 per cent. The behavior of farm business was same as that of family labaour. It was 72.60, 69.16, and per cent for large, medium and small and overall size groups, respectively. The input output ratio was found 1: 2.06 at medium size of farm, 1: 2.0 at large size of farm and 1: 1.84 at small size of farm shows that large farmers used their resources more economically than medium and small size of farmers. Inorganic paddy: As shown in Table 4 the net farm was found to be maximum in medium farm

6 246 AGRICULTURAL SCIENCE DIGEST (Rs. 8249/ha), followed by large farm 9Rs. 6112/ ha) and small farm (Rs. 6067/ha). It was 26.21, 34.94, and per cent for small, medium and large and overall farm, respectively. The family labour was also found maximum in large farm (47.88%) and lower in small (37.2%) and medium size groups (4.72%). The percentage of family labour to gross revealed increase relation with farm size increased on overall farm family labour was Rs per hectare and in term of percentage to gross it was per cent. The behavior of farm business was same as that of family labour. It was 8.04, 4.80, and 3.09 per cent for large, medium, small and overall size groups, respectively. The input output ratio was found 1:1.36 at small size of farm, 1:1.4 at medium size and 1:1.41 at large size of farm shows that medium. Suggestions: On the basis of the finding of study, following suggestions to farmers used their resources more economically than small and large size of farmers popularize are made for the study area. The wide gap between productivity level of organic farming and attainable yield was observed in the study area decrease by augmenting the productivity level of organic farming. Sincere efforts are made by the extension personnel to motivate the farmers to adopt improved production technology to minimize the yield gap. Krishi Vigyan Kendra should identify the problems of the farmers and feed back and solution of constraints be provided in time to the farmers. Manure and bio-fertilizer and other inputs must be made available through societies and other distribution centres at village level and it should ensure for supply of quality inputs to the farmers to enhance productivity level. Government officers and other network should be established in each village to produce organic products from farmers. Government should also announce separate support price to the organic product. REFFERENCE Narayana, S. (200) in India.: Relevance, Problems and Constraints, Occasional paper- 38; Dept. of Economic Analysis and Research, NABARD, Mumbai. Surekha, K., Jhansilakshmi, V., Somasekhar, N., Latha, P.C., Kumar, R.M., Shobha Rani, N., Rao, K.V. and Viraktamath, B.C. (2012): Status of and research experiences in rice: Journal of Rice Research.3: No.1