CHAPTER - VII COST AND RETURNS ESTIMATES 208
COST AND RETURNS ESTIMATES Introduction: Estimate of farm (Agriculture) based on the cost of production of different crops are basic to formulate measures for the provision of incentives to s, fixation of minimum support price (MSP), control and stabilization of prices. Agricultural of late has become a un remunerative activity due to escalation of cost and low monetary returns. For this state of affairs, there are number of macro and micro level causes. At the macro level the causes are the price policy of the government with regards to output, various inputs and trade restrictions, that have an impact on the cost of cultivation and the value of output which have baring on s. At the micro level the causes are the supply of inputs and their supply price, soil conditions etc. The estimation of cost of cultivation for any crop has certain limitation. For eg. there are certain common items of cost of cultivation such as those relating to farm fixed assets and farm management etc., pose problem in estimating the cost. The problem is really with apportionment of cost on items like own land, own capital equipment and assets. This difficulty sometimes result in the extreme view that the individual farm product has know final cost that can be determinable independently of the cost of other products. However, actually a major part of the cost of cultivation consisting expenditure on human labour, machinery, seed, fertilizers, manure, pesticides and irrigation charges are determinable. Keeping these aspects the analysis of cost of cultivation is attempted. This chapter presents discussion on estimation of and cost of sugarcane cultivation in the study area. The focus is on economics of sugarcane cultivation. Generally the cost and returns are expected to vary with the size of the farm. Therefore, the analysis focused on economics of sugarcane cultivation relating to different farm size groups. The cost of cultivation is analyzed from two 209
angles 1) Economic cost analysis 2) Cost concepts used in Farm management studies. As sugarcane in Andhra Pradesh is grown in two types namely 1) Plant crop 2) Ratoon crop. The analysis is also made separately for these two types of crops for both gur and sugar. Further, to capture the difference in the cost of cultivation on own land and leased land (land hired on rent basis) cultivation. Economics of sugarcane cultivation is separately estimated for own land as well as on leased in land. The problems in sugarcane cultivation as stated by the cultivators is also given. 7.1. Economic Analysis of Cost of Production: (a). Sugarcane Gur Plant Crop: For estimation of costs, data is elicited from the sample sugarcane s on different inputs that go into the production. The market prices are considered for converting the physical units into monetary cost. As pointed out earlier the data relates to the agricultural year 2010-11. In the economic analysis, the Total Cost of production (TC) comprises of Total Fixed Cost (TFC) and Total Variable Cost (TVC). For Gur s, the TC of production per hectare is estimated Rs.1.33 lakhs of which TVC accounts for Rs.1.03 lakhs (78% of TC) and TFC accounts for about Rs.0.30 lakhs (22% of TC) (table 7.1). 210
Table: 7.1 Gur Plant Cultivation Item Marginal % Small % Medium % Total % s Hired human labour 31075 24.52 35099 27.10 38255 27.36 33661 25.31 Own human labour 15185 11.98 12876 9.94 14500 10.37 14004 10.53 Seed 13545 10.69 13602 10.50 11987 8.57 13436 10.10 Bullock labour 633 0.50 353 0.27 413 0.30 478 0.36 Machinery (tractor) 4481 3.54 5807 4.48 6572 4.70 5172 3.89 Machinery (crusher) 11848 9.35 12118 9.36 12627 9.03 11521 8.66 Irrigation 2295 1.81 1613 1.25 3062 2.19 2332 1.75 Transport 1801 1.42 1904 1.47 2188 1.57 1885 1.42 Manure 2149 1.70 2712 2.09 3246 2.32 2702 2.03 Fertilizer & pesticides 3444 2.72 3325 2.57 3838 2.75 4308 3.24 Land revenue/ rent 8764 6.92 7361 5.68 8470 6.06 8198 6.16 Interest on working capital 5447 4.30 6025 4.65 5838 4.18 5770 4.34 TVC 100667 79.43 102795 79.37 110996 79.40 103467 77.79 Interest on fixed capital 1936 1.53 1620 1.25 4200 3.00 4928 3.71 Rental value of own land 24132 19.04 25091 19.37 24600 17.60 24608 18.50 TFC 26068 20.57 26711 20.63 28800 20.60 29536 22.21 TC 126735 100 129506 100 139796 100 133003 100 Note: Percentage to Total Cost (TC) 211
Among different components of TVC, labour charges account for nearly 36% followed by machinery and cost of the seed. These four items put together accounts for nearly 60% of the total cost. Rental value of own land is the single cost component accounting for 19.04% of the total cost. But this cost is not actually incurred by the it is an imputed cost. Among the three size group the cost of production is comparatively more for medium size group. In fact the estimated cost of production of this size group is more than what is observed for the total sample. 212
Item Marginal Table: 7.2 TVC/ TFC for Gur Plant Cultivation % Small % Medium % Total s Hired human labour 31075 30.87 35099 34.14 38255 34.47 33661 32.53 Own human labour 15185 15.08 12876 12.53 14500 13.06 14004 13.53 Seed 13545 13.46 13602 13.23 11987 10.80 13436 12.99 Bullock labour 633 0.63 353 0.34 413 0.37 478 0.46 Machinery (tractor) 4481 4.45 5807 5.65 6572 5.92 5172 5.00 Machinery (crusher) 11848 11.77 12118 11.79 12627 11.38 11521 11.13 Irrigation 2295 2.28 1613 1.57 3062 2.76 2332 2.25 Transport 1801 1.79 1904 1.85 2188 1.97 1885 1.82 Manure 2149 2.13 2712 2.64 3246 2.92 2702 2.61 Fertilizer & pesticides 3444 3.42 3325 3.23 3838 3.46 4308 4.16 Land revenue/ rent 8764 8.71 7361 7.16 8470 7.63 8198 7.92 Interest on working capital 5447 5.41 6025 5.86 5838 5.26 5770 5.58 TVC 100667 100 102795 100 110996 100 103467 100 Interest on fixed capital 1936 7.43 1620 6.06 4200 14.58 4928 16.68 Rental value of own land 24132 92.57 25091 93.94 24600 85.42 24608 83.32 TFC 26068 100 26711 100 28800 100 29536 100 TC 126735 129506 139796 133003 Note: Percentage to TVC and TFC % 213
Table 7.2 presents data relating cost of production wherein the cost of each item of cost expressed as percentage to TVC and TFC separately. Labour cost, seed, hiring of machinery constitutes about 60% of TVC. This is noticed for the total sample and also for different size groups. The TC, TVC, and TFC are observed to be highest for medium s and lowest for marginal s. As far as composition of the cost of cultivation and item wise distribution of the cost do not show striking differences among the three categories of s. One important point that can be noticed from the details presented in table 7.1 and 7.2 is that the TC of production has positive relationship with the size of the farm. This is noticed for both TVC and TFC also. 214
Table: 7.3 Gur Ratoon Cultivation Item Marginal % Small % Medium % Total % s Hired human labour 31375 31.31 33882 32.22 40345 35.10 34814 31.26 Own human labour 9326 9.31 9949 9.46 7255 6.31 8625 7.74 Seed - - - - - - - - Bullock labour 215 0.21 280 0.27 - - 231 0.21 Machinery (tractor) - - - - - - - - Machinery (crusher) 10192 10.17 10999 10.46 12057 10.49 16052 14.41 Irrigation 2295 2.29 1613 1.53 3062 2.66 2332 2.09 Transport 1447 1.44 1593 1.51 1544 1.34 1517 1.36 Manure 2149 2.14 2712 2.58 3246 2.82 2702 2.43 Fertilizer & pesticides 3444 3.44 3325 3.16 3838 3.34 4202 3.77 Land revenue/ rent 8764 8.75 7361 7.00 8470 7.37 8198 7.36 Interest on working capital 5247 5.24 6520 6.20 6680 5.81 5938 5.33 TVC 74454 74.30 78234 74.39 86497 75.26 84611 75.97 Interest on fixed capital 1623 1.62 1840 1.75 3840 3.34 2157 1.94 Rental value of own land 24132 24.08 25091 23.86 24600 21.40 24608 22.09 TFC 25755 25.70 26931 25.61 28440 24.74 26765 24.03 TC 100209 100 105165 100 114937 100 111376 100 Note: Percentage to Total Cost (TC) 215
Table: 7.4 TVC/ TFC for Gur Ratoon Item Marginal % Small % Medium % Total % s Hired human labour 31375 42.14 33882 43.31 40345 46.64 34814 41.15 Own human labour 9326 12.53 9949 12.72 7255 8.39 8625 10.19 Seed - - - - - - - - Bullock labour 215 0.29 280 0.36 - - 231 0.27 Machinery (tractor) - - - - - - - - Machinery (crusher) 10192 13.69 10999 14.06 12057 13.94 16052 18.97 Irrigation 2295 3.08 1613 2.06 3062 3.54 2332 2.76 Transport 1447 1.94 1593 2.04 1544 1.79 1517 1.79 Manure 2149 2.89 2712 3.47 3246 3.75 2702 3.19 Fertilizer & pesticides 3444 4.63 3325 4.25 3838 4.44 4202 4.97 Land revenue/ rent 8764 11.77 7361 9.41 8470 9.79 8198 9.69 Interest on working capital 5247 7.05 6520 8.33 6680 7.72 5938 7.02 TVC 74454 100.00 78234 100.00 86497 100.00 84611 100.00 Interest on fixed capital 1623 6.30 1840 6.83 3840 13.50 2157 8.06 Rental value of own land 24132 93.70 25091 93.17 24600 86.50 24608 91.94 TFC 25755 100 26931 100 28440 100 26765 100 TC 100209 105165 114937 111376 Source: Primary survey Note: Percentage on TVC and TFC 216
Table 7.3 and 7.4 present details of cost of cultivation of sugarcane Gur ratoon crop. The TC of production per hectare is estimated Rs.1.11 lakhs of which TVC accounts for 0.84 lakhs (about 75% in TC) and TFC accounts for about Rs.0.27 lakhs (24% of TC). Among different categories of s the TC is highest for medium s and lowest for marginal s. There is no difference in the distribution of TC between TVC and TFC for the three categories of s. Among different components of TVC, labour charges is the single item accounts for about 40% of TVC followed by machinery (crushing) and fertilizers and pesticides. These four items put together accounts for 60% of the total cost. The interest paid on working capital is also another cost item that is accounts for considerable amount. In case of TFC, Rental value of own land is the single cost component accounting for 24.08% of the total cost. But this cost is not actually incurred by the it is an imputed cost. It is the highest for small s and lowest for marginal s. TC, TVC and TFC and the size of the farm have a positive relationship. From the above discussion the conclusions are 1) cost on hired human labour in TVC and 2) cost relating to rent on own land in TFC are predominant 3) TC, TVC, TFC are comparatively more for medium s than the other two categories of s. 217
(c). Comparison of Cost between Plant and Ratoon Crop (GUR): Table: 7.5 Total Cost Differences Gur Cultivation (Value in Rupees per Hectare) Farm size Plant Ratoon Difference Marginal 126735 100209 26526 Small 129506 105165 24341 Medium 139796 114937 24859 Total sample 133003 111376 21627 Table: 7.6 TVC Cost Differences Gur Cultivation (Value in Rupees per Hectare) Farm size Plant Ratoon Difference Marginal 100667 74454 26213 Small 102795 78234 24561 Medium 110996 86497 24499 Total sample 103467 84611 18856 Table: 7.7 TFC Cost Differences Gur Cultivation (Value in Rupees per Hectare) Farm size Plant Ratoon Difference Marginal 26068 25755 313 Small 26711 26931-220 Medium 28800 28440 360 Total sample 29536 26765 2771 Comparison of cost of production between plant crop and ratoon crop of gur is shown in table 7.5 to 7.7. The cost of production is comparatively low for ratoon crop. The cost differences between two crops are noticed in TVC only. The 218
cost differences is observed in case of cost of seed, labour charges for (a) land preparation, (b) seed planting and weeding (c) tractor charges for ploughing. The cost difference between plant and ratoon is comparatively more for medium s than the other two categories. 219
Table: 7.8 Sugar Plant Cultivation Item Marginal % Small % Medium % Total % s Hired human labour 20021 20.37 21266 20.38 22752 19.50 20450 19.59 Own human labour 4431 4.51 4485 4.30 6512 5.58 4570 4.38 Seed 12535 12.75 12959 12.42 12578 10.78 12627 12.10 Bullock labour 1026 1.04 413 0.40 595 0.51 870 0.83 Machinery (tractor) 3201 3.26 4921 4.72 4886 4.19 3665 3.51 Irrigation 2438 2.48 1618 1.55 3172 2.72 2438 2.34 Transport 8769 8.92 8904 8.53 10670 9.15 8857 8.48 Manure 2149 2.19 2717 2.60 3246 2.78 2702 2.59 Fertilizer & pesticides 3444 3.50 3330 3.19 3838 3.29 4202 4.03 Land revenue/ rent 8764 8.92 7366 7.06 8470 7.26 8198 7.85 Interest on working capital 5447 5.54 6035 5.78 5838 5.00 5770 5.53 TVC 72225 73.48 74014 70.95 82557 70.76 74349 71.23 Interest on fixed capital 1936 1.97 2620 2.51 5307 4.55 4057 3.89 Rental value of own land 24132 24.55 27691 26.54 28800 24.69 25979 24.89 TFC 26068 26.52 30311 29.05 34107 29.24 30036 28.77 TC 98293 100 104325 100 116664 100 104385 100 Note: Percentage to Total Cost (TC) 220
Table: 7.9 TVC/ TFC for Sugar Plant Cultivation Item Marginal % Small % Medium % Total % s Hired human labour 20021 27.72 21266 28.73 22752 27.56 20450 27.51 Own human labour 4431 6.13 4485 6.06 6512 7.89 4570 6.15 Seed 12535 17.36 12959 17.51 12578 15.24 12627 16.98 Bullock labour 1026 1.42 413 0.56 595 0.72 870 1.17 Machinery (tractor) 3201 4.43 4921 6.65 4886 5.92 3665 4.93 Irrigation 2438 3.38 1618 2.19 3172 3.84 2438 3.28 Transport 8769 12.14 8904 12.03 10670 12.92 8857 11.91 Manure 2149 2.98 2717 3.67 3246 3.93 2702 3.63 Fertilizer & pesticides 3444 4.77 3330 4.50 3838 4.65 4202 5.65 Land revenue/ rent 8764 12.13 7366 9.95 8470 10.26 8198 11.03 Interest on working capital 5447 7.54 6035 8.15 5838 7.07 5770 7.76 TVC 72225 100.00 74014 100.00 82557 100.00 74349 100.00 Interest on fixed capital 1936 7.43 2620 8.64 5307 15.56 4057 13.51 Rental value of own land 24132 92.57 27691 91.36 28800 84.44 25979 86.49 TFC 26068 100 30311 100 34107 100 30036 100.00 TC 98293 104325 116664 104385 Note: Percentage to TVC and TFC. 221
The TC of production of sugarcane s who sells produce to sugar mills is separately analyzed for both plant and ratoon types. Table 7.8 and 7.9 present these details. The TC of production per hectare is estimated Rs.1.04 lakhs of which TVC accounts for Rs.0.74 lakhs (72% of TC) and TFC accounts for about Rs.0.30 lakhs (28% of TC). Among different categories of s the TC is highest for medium size s and lowest for marginal s. However, there is no difference in the distribution of TC between TVC and TFC for the three categories of s. Among different components of TVC, cost incurred on human labour accounts for nearly 25% of TVC followed by machinery (tractor) charges, and cost of the seed. These four items put together accounts for 40% of the total cost. The interest paid on working capital is another important item cost i.e. accounts for 5.54% considerable amount. In TFC, Rental value of own land is the single cost component accounting for 24.55% in the total cost. It is highest for medium s and lowest for marginal s. There is positive relationship between the size of the farm and the cost of production. 222
Item Marginal Table: 7.10 Sugar Ratoon Cultivation % Small % Medium % Total s Hired human labour 18438 23.97 20141 24.21 20708 22.35 18970 22.65 Own human labour 3076 4.00 2796 3.36 4600 4.96 3066 3.66 Seed - - - - - - - - Bullock labour - - - - - - - - Machinery (tractor) - - - - - - - - Irrigation 2295 2.98 1613 1.94 3062 3.30 2332 2.78 Transport 7086 9.21 8899 10.70 10670 11.52 8857 10.58 Manure 2149 2.79 2712 3.26 3246 3.50 2702 3.23 Fertilizer & pesticides 3444 4.48 3325 4.00 3838 4.14 4202 5.02 Land revenue/ rent 8907 11.58 7421 8.92 8580 9.26 8304 9.92 Interest on working capital 5447 7.08 6025 7.24 5838 6.30 5770 6.89 TVC 50842 66.11 52932 63.62 60542 65.35 54203 64.73 Interest on fixed capital 1936 2.52 2620 3.15 4307 4.65 3057 3.65 Rental value of own land 24132 31.38 27651 33.23 27800 30.01 26479 31.62 TFC 26068 33.89 30271 36.38 32107 34.65 29536 35.27 TC 76910 100 83203 100 92649 100 83739 100 Note: Percentage to Total Cost (TC) % 223
Table: 7.11 TVC/ TFC for Sugar Ratoon Cultivation Item Marginal % Small % Medium % Total % s Hired human labour 18438 36.27 20141 38.05 20708 34.20 18970 35.00 Own human labour 3076 6.05 2796 5.28 4600 7.60 3066 5.66 Seed - - - - - - - - Bullock labour - - - - - - - - Machinery (tractor) - - - - - - - - Irrigation 2295 4.51 1613 3.05 3062 5.06 2332 4.30 Transport 7086 13.94 8899 16.81 10670 17.62 8857 16.34 Manure 2149 4.23 2712 5.12 3246 5.36 2702 4.98 Fertilizer & pesticides 3444 6.77 3325 6.28 3838 6.34 4202 7.75 Land revenue/ rent 8907 17.52 7421 14.02 8580 14.17 8304 15.32 Interest on working capital 5447 10.71 6025 11.38 5838 9.64 5770 10.65 TVC 50842 100.00 52932 100.00 60542 100.00 54203 100.00 Interest on fixed capital 1936 7.43 2620 8.66 4307 13.41 3057 10.35 Rental value of own land 24132 92.57 27651 91.34 27800 86.59 26479 89.65 TFC 26068 100 30271 100 32107 100 29536 100 TC 76910 83243 92649 83739 Note: Percentage to TVC and TFC. 224
The TC of production of ratoon crop per hectare is estimated Rs.0.83 lakhs of which TVC accounts for Rs.0.54 lakhs (65% of TC) and TFC accounts for about Rs.0.29 lakhs (35% of TC). Among different categories of s the TC is highest for medium s and lowest for marginal s. Among different components of TVC, labour charges account for nearly 28% of TVC followed by transport charges and fertilizers and pesticides. These four items put together accounts for 43% of the total cost. The value of interest paid on working capital is another important item cost that is accounted for 7.08% of TC. In TFC, Rental value of own land is the single cost component accounting for 31.38% of the total cost. TFC has positive relationship with the farm size. But this cost is not actually incurred by the it is an imputed cost. The cost of production and size of farm has positive relationship as is evident from table 7.10 and 7.11. From the above discussion the conclusions are 1) cost of human labour in TVC and 2) cost relating to rent on own land in TFC are predominant. 3) TC, TVC, TFC are comparatively more for medium s than the other two categories of s. (f). Comparison of Cost between Plant and Ratoon Crops: Table: 7.12 Total Cost Differences for Sugar Cultivation (Value in Rupees per Hectare) Farm size Plant Ratoon Difference Marginal 98293 76910 21383 Small 104325 83203 21122 Medium 116664 92649 24015 Total sample 104385 83739 20646 225
TABLE: 7.13 TVC Differences for Sugar Cultivation (Value in Rupees per Hectare) Farm size Plant Ratoon Difference Marginal 72225 50842 21383 Small 74014 52932 21082 Medium 82557 60542 22015 Total sample 74349 54203 20146 Table: 7.14 TFC Differences for Sugar Cultivation (Value in Rupees per Hectare) Farm size Plant Ratoon Difference Marginal 26068 26068 - Small 30311 30271 40 Medium 34107 32107 2000 Total sample 30036 29536 500 Comparison of cost of production between plant and ratoon crop is shows in tables 12 to 14. The cost of production is comparatively low for ratoon crop. Lower cost of production for ratoon crop is due to difference in cost relating to certain items of TVC. These are cost of seed, labour charges on land preparation, seed planting and weeding tractor charges for ploughing. The cost difference between two types is more comparatively for medium s. In order to know whether the variation (difference) in a total cost of production of sample s is significant or not value of coefficient of variation (CV) is estimated. This is attempted for all categories of s and for the total sample for two types of cultivation (plant and ratoon). These values are given in table. C.V. = X 100 226
Category Table: 7.15 Values of CV of Total Cost (TC) Marginal Small Medium Total s Gur plant 23.52 19.84 13.25 19.00 Gur ratoon 25.97 18.50 17.96 21.68 Sugar plant 22.51 20.75 19.67 20.35 Sugar ratoon 21.46 17.94 22.00 19.86 The evidence provided in table 7.15 suggests that there is no much variation in the total cost of cultivation for each category of sample s and for the total sample. However, from the values of CV there is conclusive evidence showing that whatever the variation exists it is comparatively high for marginal s in Gur (plant and ratoon) cultivation. In sugar cultivation it is high for marginal in the plant crop and high for medium in the ratoon crop. 227
7.1.1. Comparison between Gur Farmers and Sugar Farmers: Table: 7.16 Cost Differences between Owner and Tenant Cultivators of all Sugar Farmers (Value in Rupees per Hectare) Category Owner Cultivator Tenant Cultivator Gur Plant Marginal Small Medium Total Marginal Small Medium Total Cost A 1 76718 82558 88026 81265 Cost A 2 85482 89919 96496 89463 Cost C 117971 122205 131326 124805 Cost C 126735 129506 139796 133003 Difference 41253 39647 43300 43540 Difference 41253 39587 43300 43540 Gur Ratoon Cost A 1 56364 60924 70772 67788 Cost A 2 65128 68285 79242 75986 Cost C 91445 97804 106467 103178 Cost C 100209 105165 114937 111376 Difference 35081 36880 35695 35390 Difference 35081 36880 35695 35390 Sugar Plant Cost A 1 59030 62163 67575 61581 Cost A 2 38859 42715 47362 42833 Cost C 89529 96959 108194 96187 Cost C 68003 75782 84069 75345 Difference 30499 34796 40619 34606 Difference 29144 33067 36707 32512 Sugar Ratoon Cost A 1 67794 69529 76045 69779 Cost A 2 47766 50136 55942 51137 Cost C 98293 104325 116664 104385 Cost C 76910 83203 92649 83739 Difference 30499 34796 40619 34606 Difference 29144 33067 36707 32602 228
7.2. Cost of Cultivation analysis based on Farm Management Survey Costs: Costs involved in cultivation fall into two categories, paid out or actual costs and unpaid or imputed costs. Expenses on hired labour, seed, manure, fertilizer, machinery etc., are example of items in category while, rent on own land, interest on own capital, managerial allowance and family labour are items in the later category. The cost of cultivation of sugarcane farming is analyzed from angle of cost concepts used in Farm Management Studies (FMS). In farm management studies there are four important concepts of cost. And two important concepts of are used. These are, Cost A 1 = this cost approximated actual expenditure incurred in cash and kind and included the following cost items: (a) Hired human labour (b) Owned and hired bullock labour (c) Seed (d) Manures and fertilizers (e) Implements charges (f) Land revenue and other taxes (g) Irrigation charges and transport (h) Interest paid on working capital. Cost A 2 = Cost A plus Actual rent paid (tenant s) Cost B = Cost A 1 plus (a) rent paid or (b) evaluated on owned land and (c) interest on fixed capital (excluding land only) Cost C = Cost B plus the value of family labour used (both paid out cost + imputed cost). The Farm Business Income (FBI): The surplus obtained by deducting Cost-A 2 from value of total output is known as Farm Business Income (FBI). This is the real measure of earnings of the and his family for management of risk, labour, use of land and capital. Farm Income: Farm Income is the surplus earned over cost C is another measure of earning of the. 229
The analysis of the cost of production of agricultural crops based on farm management cost approach provides insights regarding the cost incurred actually and imputed. The worked out on this basis will provide an understanding about the economics of cost cultivation. The farm management cost concepts mentioned above have two broad classifications. (1) Actual paid out cost which is cost A 1 (owner ). This cost is in fact the actual expenditure incurred by the towards cultivation on their own land. For tenant s the paid out cost also include rent actually paid on leased in land (Cost A 2 ). Before presenting explanation of cost of cultivation analysis based on FMS it is necessary to discuss some issues relating to (1) hiring of capital equipment and (2) hiring in of human labour by marginal and small s. Does hiring of labour on smaller holdings necessarily imply full utilization of family labour possessed by them? The argument is, in dual labour system (family and hired), it has been pointed out that the marginal and small s not only hire out labour but also hire causal labour to carry out farm operations. The hired human labour mostly used for crop harvesting in sugarcane cultivation. In this context it is necessary to understand the factors lying behind such hiring of labour. In harvesting period in order to ensure that the yield is not adversely affected, operations may have to be conducted within a very short period. This urgency to complete a certain volume of work may necessitate the hiring of labour even on small farms particularly in case of crops like sugarcane. Further even on small farms there is deficiency of family labour to carry out farm operation in a specified time period in such a case hiring of labour is often resorted to supplement family labour. In case capital equipment, due to cost of purchase and indivisibility of machinery, quite a number of sample s reported that they relay completely on hiring these. These include tractor for ploughing and sugarcane crushers. The Gur manufacturing s generally own crushers to extract sugarcane juice to prepare Gur. Many s of this category reported hiring of crushers. Keeping these aspects, the analysis and discussion is attempted. 230
Table: 7.17 Cost of Cultivation: Gur Plant crop (Value in Rupees per Hectare) S.N Item Marginal s Small s Medium s Total s o Amount To % Cost C Amount To % Cost C Amoun t To % Cost C Amount To % Cost C 1) Hired human labour 31075 26.34 35099 28.72 38255 29.13 33661 26.97 2) Bullock charges 633 0.54 353 0.29 413 0.31 478 0.38 3) Machine 16329 13.84 17925 14.67 19199 14.62 16693 13.38 4) Seed 13545 11.48 13602 11.13 11987 9.13 13436 10.77 5) Manure 2149 1.82 2712 2.22 3246 2.47 2702 2.16 6) Irrigation 2295 1.95 1613 1.32 3062 2.33 2332 1.87 7) Fertilizer & pesticides 3444 2.92 3325 2.72 3838 2.92 4308 3.45 8) Transport 1801 1.53 1904 1.56 2188 1.67 1885 1.51 9) Interest on working capital 5447 4.62 6025 4.93 5838 4.45 5770 4.62 Total cost A 1 76718 65.03 82558 67.56 88026 67.03 81265 65.11 10) Land rent paid 8764 7.43 7361 6.02 8470 6.45 8198 6.57 Cost A 2 (tenant) 85482 72.46 89919 73.58 96496 73.48 89463 71.68 11) Money value of family labour 15185 12.87 12876 10.54 14500 11.04 14004 11.22 Cost A 2 (A 1 + item 11) 91903 77.90 95434 78.09 102636 78.15 95269 76.33 (A 2 + item 11) (tenant) 100667 85.33 102795 84.12 110996 84.52 103467 82.90 12) Interest on own capital 1936 1.64 1620 1.33 4200 3.20 4928 3.95 13) Rent on own land 24132 20.46 25091 20.53 24600 18.73 24608 19.72 Cost B (Cost A 1 + 12 and 13 items) 102786 87.12 109329 89.46 116826 88.95 110801 88.78 (Cost A 2 + 12 and 13 items) (tenant) 111550 94.55 116630 95.44 125296 95.41 118999 95.35 Cost C (Cost B + item 11) 117971 100 122205 100 131326 100 124805 100 Cost C (tenant) 126735 107.43 129506 105.97 139796 106.45 133003 106.57 231
Table 7.17 present details of cost of production. For the total s the paid out cost per hectare (Cost A 1 ) is estimated at Rs.81265 for owner and Cost A 2 is estimated at Rs.89463 for tenant. Among different components of Cost A 1 it is expenditure towards human labour is the predominant item of expenditure. The other important item on which considerable amount is spent are charges paid for machinery, includes tractor for ploughing, cost of seed and charges paid for crusher to crush the sugarcane and to extract juice and the cost of seed. There are three important items of expenditure, the cost of which is estimated by imputing prevailing market price. These costs items include a) money value of family labour b) interest on own capital and c) rent on own land. If these costs are added to Cost A 1, Cost C is arrived. Per hectare Cost C is estimated at Rs.1, 24,805 for owner cultivator and Rs.1,33,003 for tenant cultivator for the total sample. Among different categories of s both Cost A 1 and Cost C are comparatively more for medium than the other two categories of s. When individual items of expenditure are considered, labour cost, charges on machinery and seed cost is predominant. Among imputed costs, it is imputed rent on own land is predominant. For medium s imputed value on own family labour is comparatively low as these s have less family labour working on farms. 232
Table: 7.18 Cost of Cultivation: Gur Ratoon crop (Value in Rupees per Hectare) S.No Item Marginal s Small s Medium s Total s Amount To % Cost C Amount To % Cost C Amount To % Cost C Amount To % Cost C 1) Hired human labour 31375 34.31 33882 34.64 40345 37.89 34814 33.74 2) Bullock charges 215 0.24 280 0.29 - - 231 0.22 3) Machine 10192 11.15 10999 11.25 12057 11.32 16052 15.56 4) Seed - - - - - - - - 5) Manure 2149 2.35 2712 2.77 3246 3.05 2702 2.62 6) Irrigation 2295 2.51 1613 1.65 3062 2.88 2332 2.26 7) Fertilizer & pesticides 3444 3.77 3325 3.40 3838 3.60 4202 4.07 8) Transport 1447 1.58 1593 1.63 1544 1.45 1517 1.47 9) Interest on working capital 5247 5.74 6520 6.67 6680 6.27 5938 5.76 Total cost A 1 56364 61.64 60924 62.29 70772 66.47 67788 65.70 10) Land rent paid 8764 9.58 7361 7.53 8470 7.96 8198 7.95 Cost A 2 (tenant) 65128 71.22 68285 69.82 79242 74.43 75986 73.65 11) Money value of family labour 9326 10.20 9949 10.17 7255 6.81 8625 8.36 Cost A 2 (A 1 + item 11) 65690 71.84 70873 72.46 78027 73.29 76413 74.05 (A 2 + item 11) (tenant) 74454 81.42 78234 79.99 86497 81.24 84611 82.00 12) Interest on own capital 1623 1.77 1840 1.88 3840 3.61 2157 2.09 13) Rent on own land 24132 26.39 25091 25.65 24600 23.11 24608 23.85 Cost B (Cost A 1 + 12 and 13 items) 82119 89.80 87855 89.83 99212 93.19 94553 91.64 (Cost A 2 + 12 and 13 items) (tenant) 90883 99.39 95216 97.35 107682 101.14 102751 99.58 Cost C (Cost B + item 11) 91445 100.00 97804 100.00 106467 100.00 103178 100.00 Cost C (tenant) 100209 109.58 105165 107.53 114937 107.96 111376 107.95 233
Table 7.18 present details of cost of cultivation of sugarcane gur ratoon crop the paid out cost (Cost A 1 ) is estimated at Rs.67,788 for owner, Cost A 2 is estimated at Rs.75,986 for tenant. Among different components of Cost A 1 it is expenditure towards human labour is the principle item of payments. The other item is charges paid for crusher to crush the sugarcane, charges paid for manures and fertilizers. In fact, as pointed out previously this is the actual money paid by the from his pocket. Cost C is estimated at Rs.1,03,178 for owner cultivator and Rs.1,11,376 for tenant cultivator. Among different categories of s both Cost A 1 and Cost C are comparatively more for medium than the other two categories of s. When individual items of expenditure are considered, labour cost charges, on machinery are predominant. Among imputed costs, it is imputed rent on own land is prime. 234
Table: 7.19 Cost of cultivation: Sugar Plant crop (Value in Rupees per Hectare) S.No Item Marginal s Small s Medium s Total s Amount To % Cost C Amount To % Cost C Amount To % Cost C Amount To % Cost C 1) Hired human labour 20021 22.36 21266 21.93 22752 21.03 20450 21.26 2) Bullock charges 1026 1.15 413 0.43 595 0.55 870 0.90 3) Machine 3201 3.58 4921 5.08 4886 4.52 3665 3.81 4) Seed 12535 14.00 12959 13.37 12578 11.63 12627 13.13 5) Manure 2149 2.40 2717 2.80 3246 3.00 2702 2.81 6) Irrigation 2438 2.72 1618 1.67 3172 2.93 2438 2.53 7) Fertilizer & pesticides 3444 3.85 3330 3.43 3838 3.55 4202 4.37 8) Transport 8769 9.79 8904 9.18 10670 9.86 8857 9.21 9) Interest on working capital 5447 6.08 6035 6.22 5838 5.40 5770 6.00 Total cost A 1 59030 65.93 62163 64.11 67575 62.46 61581 64.02 10) Land rent paid 8764 9.79 7366 7.60 8470 7.83 8198 8.52 Cost A 2 (tenant) 67794 75.72 69529 71.71 76045 70.29 69779 72.54 11) Money value of family labour 4431 4.95 4485 4.63 6512 6.02 4570 4.75 Cost A 2 (A 1 + item 11) 63461 70.88 66648 68.74 74087 68.48 66151 68.77 (A 2 + item 11) (tenant) 72225 80.67 74014 76.34 82557 76.30 74349 77.29 12) Interest on own capital 1936 2.16 2620 2.70 5307 4.91 4057 4.22 13) Rent on own land 24132 26.95 27691 28.56 28800 26.62 25979 27.01 Cost B (Cost A 1 + 12 and 13 items) 85098 95.05 92474 95.37 101682 93.98 91617 95.24 (Cost A 2 + 12 and 13 items) (tenant) 93862 104.84 99840 102.97 110152 101.81 99815 103.77 Cost C (Cost B + item 11) 89529 100.00 96959 100.00 108194 100.00 96187 100.00 Cost C (tenant) 98293 109.79 104325 107.60 116664 107.83 104385 108.52 235
Table 7.19 present details of cost of cultivation of sugar plant crop. Cost A 1 is estimated at Rs.61, 581 for owner cultivator, Cost A 2 is estimated at Rs.69, 799 for tenant cultivator. Among different components of Cost A 1 it is expenditure towards human labour is the major item of expenditure. The other items are charges paid for machinery, charges paid for seed, charges paid for transport on which considerable amount is spent. In fact, as pointed out earlier this is the actual money paid by the from his pocket. Cost C is estimated at Rs.96,187 per hectare for owner cultivator and Rs.1, 04,385 for tenant cultivator. Both Cost A 1 and Cost C are comparatively more for medium than the other two categories of s. When individual items of expenditure are considered, labour cost charges on machinery and seed cost are predominant. Among imputed costs, it is imputed rent on own land is predominant. For medium s imputed value on own family labour is comparatively low. 236
Table: 7.20 Cost of Cultivation: Sugar Ratoon crop (Value in Rupees per Hectare) Marginal s Small s Medium s Total s S.No Item To % To % To % To % Amount Amount Amount Amount Cost C Cost C Cost C Cost C 1 Hired human labour 18438 27.11 20141 26.58 20708 24.63 18970 25.15 2 Bullock charges - - - - - - - - 3 Machine - - - - - - - - 4 Seed - - - - - - - - 5 Manure 2149 3.16 2712 3.58 3246 3.86 2702 3.58 6 Irrigation 2295 3.37 1613 2.13 3062 3.64 2332 3.09 7 Fertilizer & pesticides 3444 5.06 3325 4.39 3838 4.57 4202 5.57 8 Transport 7086 10.42 8899 11.74 10670 12.69 8857 11.74 9 Interest on working capital 5447 8.01 6025 7.95 5838 6.94 5770 7.65 Total cost A 1 38859 57.14 42715 56.37 47362 56.34 42833 56.78 10 Land rent paid 8907 13.10 7421 9.79 8580 10.21 8304 11.01 Cost A 2 (tenant) 47766 70.24 50136 66.16 55942 66.54 51137 67.79 11 Money value of family labour 3076 4.52 2796 3.69 4600 5.47 3066 4.06 Cost A 2 (A 1 + item 11) 41935 61.67 45511 60.06 51962 61.81 45899 60.85 (A 2 + item 11) (tenant) 50842 74.76 52932 69.85 60542 72.01 54203 71.85 12 Interest on own capital 1936 2.85 2620 3.46 4307 5.12 3057 4.05 13 Rent on own land 24132 35.49 27651 36.49 27800 33.07 26479 35.10 Cost B (Cost A 1 + 12 and 13 items) 64927 95.48 72986 96.31 79469 94.53 72369 95.94 (Cost A 2 + 12 and 13 items) (tenant) 73834 108.57 80407 106.10 88049 104.73 80673 106.94 Cost C (Cost B + item 11) 68003 100.00 75782 100.00 84069 100.00 75435 100.00 Cost C (tenant) 76910 113.10 83203 109.79 92649 110.21 83739 111.01 237
Table 7.20 present details of cost of cultivation of sugar ratoon crop. The paid out cost (Cost A 1 ) is estimated at Rs.42,833 per hectare for owner cultivator and Cost A 2 is estimated at Rs.51,137 for tenant among with different components of cost A 1 it is expenditure towards human labour is the most important item of costs. The other item is charges paid for transport, charges paid on manures and fertilizers. In fact, as discussed earlier this is the actual money paid by the from his concise. Cost C is estimated at Rs.75,345 for owner cultivator and Rs. 83739 for tenant cultivator. Both Cost A 1 and Cost C are comparatively more for medium than the other two categories of s. When individual items of expenditure are considered, labour cost charges on machinery and seed cost are predominant. Among imputed costs, it is imputed rent on own land is predominant. It is observed that there are variations in the cost of production among s belonging to different size groups. In view of this, it is pertinent to know whether the observed differences in the cost of cultivation are statistically significant or not coefficient of variation is estimated. For this analysis Cost A 1, Cost A 2 and Cost C are considered. Tables 7.21 to 7.23 give these details. The estimated values of CV do not reveal marked variation among different categories of s. In fact the variation is comparatively less for Cost-C than other two costs. Table: 7.21 Values of CV of Cost A Category Marginal Small Medium Total s Gur plant 24.84 22.09 34.74 26.40 Gur ratoon 29.75 27.52 21.67 25.62 Sugar plant 23.41 25.94 28.22 25.14 Sugar ratoon 23.28 20.48 27.61 25.61 238
Category Marginal Table: 7.22 Values of CV of Cost A 1 Small Medium Total s Gur plant 16.96 19.20 23.22 20.41 Gur ratoon 19.79 20.48 25.28 22.44 Sugar plant 24.29 20.19 23.22 22.29 Sugar ratoon 23.28 20.48 24.29 22.19 Category Marginal Table: 7.23 Values of CV of Cost C Small Medium Total s Gur plant 23.41 19.69 13.09 18.96 Gur ratoon 25.94 18.12 17.85 21.21 Sugar plant 22.38 20.48 19.20 20.18 Sugar ratoon 21.36 17.85 21.97 19.58 7.3. Returns of Sugarcane Cultivation: To judge the profitability of sugarcane cultivation, it is necessary to estimate the returns against the cost of cultivation. This analysis is attempted from different angles. 1) Estimation of Gross Value of Output or Gross Income 2) Estimation of Farm Business Income (FBI) 3) Estimation of Farm Income (FI) 1) Estimation of Gross Income: The Gross Value of Output or Gross Income estimated for sugarcane Gur s and Sugarcane Sugar s. The gross value of output of gur s is estimated by taking into consideration the weight of the manufactured gur and prevailing price of gur in the local wholesale market. In the study area the gur prices are fixed by auction in the local Anakapalli gur market. 239
The s who sell their sugarcane to local sugar factories receive price from these factories. [in fact, the Commission of Agriculture Cost and Prices (CACP), Government of India (GOI) fixes the Statutory Minimum Price (SMP). All the sugar factories in the country expected to purchase sugarcane from the s by paying this SMP]. Data on the prices received by the sample s are used for Gross Income calculation. 2) Estimation of Farm Business : Farm Business Income = Gross Income Cost A 1 Cost A 2 is separately estimated for owners and tenants. For owner = Cost A 1 + money value of family labour. For tenant s = Cost A 2 + money value of family labour. 3) Estimation of Farm Income: Farm Income = Gross Income Cost-C (both actual and imputed cost) (a). Sugarcane Gur Farmers: Table: 7.24 GI/FI/FBI of Gur on own land (Value in Rupees) Farm size Sugarcane Gur own cultivator s Plant crop Ratoon crop Gross Cost-C Farm Gross Cost-C Farm Marginal s 136473 117971 18502 115990 91445 24545 Small s 147115 122205 24910 131083 97804 33279 Medium s 139566 131326 8240 129068 106467 22601 Total s 141693 124805 16888 122931 103178 19753 Farm size Gross FBI of Sugarcane Gur own cultivator s Plant crop Ratoon crop Cost-A Farm Gross Cost-A Business Farm Business Marginal s 136473 76718 59755 115990 56364 59626 Small s 147115 82558 64557 131083 60924 70159 Medium s 139566 88026 51540 129068 70772 58296 Total s 141693 81265 60428 122931 67788 55143 240
With the help of this data the gross is estimated. Table - 7.24 presents information relating to the gur s. The gross per hectare for plant crop amounted to Rs. 1.42 lakhs as against Rs. 1.23 lakhs for ratoon crop. Further, among different size groups of s the small s gross value of output is highest for medium size s and for marginal s it is lowest. Though the gross for plant crop is more. Farm is more for ratoon crop. This is noticed for the three size groups of s examined. This is mostly due to the differences in cost of production. The total cost of production for ratoon crop is relatively less than their counter parts in plant cultivation. As pointed out earlier for ratoon crop the cost relating to seed plantation, ploughing and land preparation are not incurred. Thus, whatever the advantage the plant crop has in gross value of output is nullified by its high cost of production. In case of plant crop surprisingly the F.I of medium is comparatively low than the other two. This may be attributable to 1) lower yield and 2) high cost. The profitability of sugarcane cultivation analyzing from the angle of imputed cost may not give the true picture. Normally A does not feel that he is cultivating under a loss as long as his output covers all inputs for which he pays from his pocket. That is paid out cost (Cost A 1 ). The FBI obtained after deducting Cost A from G.I, is the real measure of earnings of the and his family. The methodology of estimation is already stated. A perusal of table-24 reveals that the FBI is estimated at Rs. 60428 for plant crop and Rs. 55,143 for ratoon crop for total sample. FBI is comparatively more for small s than marginal and medium s. This is noticed for both plant and ratoon cultivation. This analysis of estimation both FI and FBI does not show any conclusive evidence, regarding the pattern of relationship between the size of the farm FI and FBI. It can be noticed from the table that the small size s have comparatively high than the other two categories in both plant and ratoon cultivation. 241
Table: 7.25 GI/FI/FBI of Gur Tenant cultivation (Value in Rupees) Gur tenant cultivator s (in Rupees) Farm size Plant crop Ratoon crop Gross Cost-C Farm Gross Cost-C Farm Marginal s 136473 126735 9738 115990 100209 15781 Small s 147115 129506 17609 131083 105165 25918 Medium s 139566 139796-230 129068 114937 14131 Total s 141693 133003 8690 122931 111376 11555 Farm size Gross FBI of Gur tenant cultivator s Plant crop Ratoon crop Cost-A Farm Gross Cost-A Business Farm Business Marginal s 136473 85482 50991 115990 65128 50862 Small s 147115 89919 57196 131083 68285 62798 Medium s 139566 96496 43070 129068 79242 49826 Total s 141693 89463 52230 122931 75986 46945 Table 7.25 presents the details of of tenant s relating sugarcane gur cultivation. In case of plant crop the F.I after adjusting to Cost C is estimated at around Rs 8690. Among three categories small s have comparatively higher F.I. this is mostly due to higher value of gross output. In case of ratoon crop the average F.I of the sample is estimated that Rs. 11555 per hectare. In case of ratoon crop also the small s have comparatively higher F.I. For another important observation is F.I is higher for ratoon crop. Which is as pointed out earlier is due to low cost of production. FBI is estimated at Rs.52, 230 for plant crop and Rs.46945 for ratoon crop for total s. In case of both types of cultivation, the small s have comparatively high FBI. 242
(b). Sugarcane Sugar Farmers: Farm size Table: 7.26 GI/FI/FBI of Sugar on Own Farm Gross Plant crop Cost-C rupees) owner cultivator s Farm Gross Ratoon crop Cost-C (in farm Marginal s 76040 89529-13489 61992 68003-6011 Small s 77479 96959-19480 65046 75782-10736 Medium s 87532 108194-20662 66696 84069-17373 Total s 77477 96187-18710 63323 75435-12022 Farm size Gross FBI of owner cultivator s (in rupees) Plant crop Cost-A Farm Business Gross Ratoon crop Cost-A Farm Business Marginal s 76040 59030 17010 61992 38859 23133 Small s 77479 62163 15316 65046 42715 22331 Medium s 87532 67575 19957 66696 47362 19334 Total s 77477 61581 15896 63323 42833 20490 Table 7.26 presents information relating to the of sugar s. The gross Income per hectare amounted to Rs.77477 in the case of sugar plant crop as against Rs.63323 for ratoon crop. Further, among different size groups the G.I is high for medium s and for marginal s it is lowest in both types of cultivation. Estimates of FI shows distressing picture in both types of cultivation. FI is shows losses to s as GI is less than the Cost C. This is observed for all size groups for both plant and ratoon cultivation. However it has been argued that it is FBI than FI is the real measure of the earnings of the cultivator 243
as FBI estimation takes into consideration the actual expenditure incurred by the cultivator. The estimated FBI the three categories of s do not reveal an encouraging scenario. The sugarcane s who are selling cane to sugar factories are able to earn an amount of about Rs.15, 000 to Rs.17, 000 per hectare is really distressing. The estimated FBI is highest for small s an lowest for medium s. Further, relatively for ratoon crop the FBI is more than plant crop for all the three categories. Farm size Table: 7.27 GI/FI/FBI of Sugar tenant cultivation Gross (in rupees) Sugar tenant cultivator s Plant crop Ratoon crop Cost-C Farm Gross Cost-C Farm Marginal s 76040 98293-22253 61992 76910-14918 Small s 77479 104325-26846 65046 83203-18157 Medium s 87532 116664-29132 66696 92649-25953 Total s 77477 104385-26908 63323 83739-20416 Farm size Gross FBI of Sugar tenant cultivator s (in rupees) Plant crop Cost-A Farm Business Gross Ratoon crop Cost-A Farm Business Marginal s 76040 67794 8246 61992 47766 14226 Small s 77479 69529 7950 65046 50136 14910 Medium s 87532 76045 11487 66696 55942 10754 Total s 77477 69779 7698 63323 51137 12186 Table 7.27 presents the details of of tenant s relating to sugarcane sugar cultivation. In case of plant crop the F.I for the total sample is estimated at around Rs.-26908. All s are getting losses. However small 244
s the loss is comparatively high. This is mostly due to higher value of gross output. In case of ratoon crop the average F.I of the sample total s is estimated that Rs.-20416 per hectare. In case of ratoon crop also the small s the loss is comparatively high. Another important observation is, comparatively the loss is less for ratoon crop than plant crop. Which as pointed out earlier is due to low cost of production in case of ratoon crop. The FBI of both types of cultivation is given in table-7.27. It is evident from the table that, for the total sample the FBI is Rs.7698 and Rs. 12186 for plant and ratoon crop respectively. The estimated FBI though positive as against FI, yet it is very less indicating that sugarcane s are not able earn enough even for all the toil of their family. There is no marked difference in the FBI among different size group. The only silver living is that for ratoon crop FBI is relatively more than plant crop. This is noticed for the total sample and also for individual s also. Among gur and sugar cultivators it is Gur cultivation the s are comparatively high. This is attributable to lowest cost of production and high Gur prices. 245
7.4. Cost Returns Ratio Table: 7.28 Cost Returns Ratio of Gur and Sugar s for TC (Value in Rupees) Cost Returns Ratio for Gur own cultivators S.No Farm size Plant crop Ratoon crop 1 0-2.50 1.15 1.26 2 2.51-5.00 1.20 1.34 3 5 and above 1.06 1.21 Total 1.13 1.19 Cost Returns Ratio for Gur tenant cultivators 1 0-2.50 1.07 1.15 2 2.51-5.00 1.13 1.24 3 5 and above 0.99 1.12 Total 1.06 1.10 Cost Returns Ratio for Sugar own cultivators 1 0-2.50 0.84 0.91 2 2.51-5.00 0.79 0.85 3 5 and above 0.80 0.79 Total 0.81 0.83 Cost Returns Ratio for Sugar tenant cultivators 1 0-2.50 0.77 0.80 2 2.51-5.00 0.74 0.78 3 5 and above 0.75 0.71 Total 0.74 0.75 The Cost Returns Ratio (CRR) is estimated. Considering the Gross Income (G.I) and Total Cost (T.C). Table 7.28 gives these details. For Gur s, the ratio is comparatively high for ratoon crop. It is estimated at 1.19 for owner and 1.10 for tenant. There is much difference in the CRR among the three categories of s. In sugar s, the CRR values show very distressing and discouraging picture. The situation is much worse for tenant s. The estimated CRR for tenant s, for total sample is 0.74 and 0.75 for plant 246
and ratoon crop respectively. The estimated CRR for sugar owner cultivator is marginally better than tenant cultivator. This situation is a result of steep hike in the prices of various inputs that goes into production and MSP of sugarcane crop is not adjusted proportionately to changes in cost. This low CRR in sugarcane cultivation is to be viewed seriously by policy makers to avoid, further distress among sugarcane growers. If this problem is not addressed with appropriate policy measures, may lead to crop holiday or shifting to other crops. 7.5. Problems of sugarcane in the study area The technical analysis on the input output relationship, input use efficiency and cost and returns throws light on the technical aspect of the sugarcane cultivation. The researcher during his course of visit to different sample villages for collecting data has noted down the problems being faced by the sugarcane s as expressed by them. Some of these the important of these problems are given below which help to suggest appropriate policy measures. These problems are: Increase in the cost of production due to increase input cost, especially the cost of labour. There is scarcity of labour as stated by is largely due to implementation of Mahatma Gandhi national Rural Employment Guarantee Act during the season of agriculture operation. This scarcity of labour has increased the wages. In fact this scheme is to be implemented during non agriculture but the local implementing authority is not adhering to this norm. These s are not aware of recent techniques of production and farm management which help to increase output and reduce cost. As bore wells are important source of irrigation for sugarcane cultivation in the study area, electricity power failures, lack of adequate power supply are affecting the irrigation which in turn affect the output, and weight of crop. 247
The MSP fixed by the government is not remunerative to the s in view of steep rise in cost of production, transportation and incidental costs. Unless these problems faced by sugarcane s is solved by appropriate policy measures, sugarcane s may declare crop holiday (as happened recently for Paddy crop in Andhra Pradesh) which affect the sugar mills and eventually on the supply of sugar and gur. 7.6. Conclusion: The TC of production per hectare for Gur s is estimated Rs.1.33 lakhs. Among the three size group the cost of production is comparatively more for medium size group. As far as composition of the cost of cultivation and item wise distribution of the cost do not show striking differences among the three categories of s. The TC of production has positive relationship with the size of the farm. This is noticed for both TVC and TFC also. The TC of production of gur ratoon crop per hectare is estimated Rs.1.11 lakhs. Among different categories of s the TC is highest for medium s and lowest for marginal s. However, (1) Cost on hired human labour in TVC and (2) cost relating to rent on own land in TFC are predominant (3) TC, TVC, TFC are comparatively more for medium s than the other two categories of s. The cost of production is comparatively low for ratoon crop. The cost difference between plant and ratoon is comparatively more for marginal s than the other two categories. The TC of production of sugarcane s per hectare is estimated Rs.1.04 lakhs. There is positive relationship between the size of the farm and the cost of production. Among different categories of s the TC is highest for medium s and lowest for marginal s. In case of sugar s 1) cost of human labour in TVC and 2) cost relating to rent on own land in TFC are predominant. TC, TVC, TFC are comparatively more for medium s than the other two categories of s. There is no much variation in the total cost of cultivation for each category of sample s and for the total sample. However, from the values of CV there is conclusive evidence showing that whatever the variation exists it is comparatively high for marginal s in Gur (plant and 248