MSc

The study entitled “Economic analysis of agricultural input subsidies for coconut cultivation in Kozhikode district” was carried out with the objectives of analyzing the growth of input subsidies for coconut cultivation, to analyse the impact of input subsidies on coconut production and also to identify the constraints faced by the farmers in availing the input subsidies. The relevant secondary data regarding the progress of Coconut Development Scheme and other areas of input subsidies such as fertilizer, credit and electricity in Kozhikode district were collected from the concerned institutions. Primary data were collected from Balussery and Kattipara panchayat of Kozhikode district for the agricultural year 2018-19. Random sampling technique was adopted and the total sample size was 80, out of which 40 were small farmers (≤ 2 ha of land) and 40 were large farmers (>2 ha of land).

The results of Compound Annual Growth Rate revealed that the total expenditure of Coconut Development Scheme (2009-14) was much lower (11.75 per cent per annum) when compared to that of Keragramam scheme (14.66 per cent per annum) by the Government of Kerala (2015-19). The total amount of electricity subsidy (2013-18) was recorded to have slow growth rate (0.48 per cent per annum) whereas credit subsidy (2008-18) was found to have faster rate (14.15 per cent per annum). The growth rate of total amount of fertilizer subsidy was found to be negative (-8.80 per cent).

Cost of cultivation was worked out using the ABC cost concept. The total cost of coconut cultivation (Cost C) incurred by the small farmers was ₹ 1.23 lakh ha-1 which was more than that of large farmers (₹ 1.07 lakh ha-1). It was found that profitability was more for large farmers with a B:C ratio of 1.36 while small farmers had a comparatively smaller B:C ratio of 1.17.

The results of Cobb-Douglas production function revealed that the R2 value for small farmers and large farmers was 0.71 and 0.59 respectively which indicated a good fit. The analysis of allocative efficiency for small farmers and large farmers revealed that only two components viz., quantity of manures and fertilizers and soil ameliorants were underutilized. While small farmers had underutilized quantity of

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hired labour, family labour and machine power, the large farmers had overutilized these resources.

Almost 54 per cent of respondents obtained the information about input subsidies from Krishi Bhavan. All the respondent small farmers were beneficiaries of Keragramam scheme implemented by the State Department of Agriculture, while large farmers were not eligible. A total of 29 farmers (27 per cent) and 22 farmers (36 per cent) were beneficiaries of electricity and credit subsidy respectively.

The total area covered by the sample farmers of Balussery and Kattipara panchayat was 99.47 acres and a total amount of ₹ 6.61 lakhs was availed under Keragramam scheme. The input subsidy under Keragramam scheme ensured cheap inputs for coconut farming as perceived by 67.5 per cent of the respondents. Nearly 55 per cent of beneficiaries perceived that input subsidies were sufficient under Keragramam scheme. The total amount of credit subsidies availed by the beneficiaries was ₹ 2.16 lakh, of which 59 per cent was availed by small farmers and 41 per cent by large farmers. The total amount of electricity subsidy availed by the beneficiaries was ₹ 36,330 of which 39 per cent was availed by small farmers and 61 per cent by large farmers.

The statistical analysis of the impact of agricultural input subsidies in coconut production revealed that the amount of subsidy for organic manure and electricity significantly increased the yield at 1 per cent and 5 per cent level of significance, respectively. The coefficient of multiple determination (R2) was 0.94, which indicated that 94 per cent of the variation in yield was explained by the independent variables such as amount of subsidies for organic manure, soil ameliorants, credit subsidy and electricity subsidy.

The timely availability and limited quantity of subsidized input were the major constraints faced by the beneficiaries under Keragramam scheme whereas complex administrative procedure was the major constraint faced by the beneficiaries of both electricity and credit subsidy.

Large farmers were not eligible to receive the subsidy under Keragramam scheme. As the study indicated better utilization of available resources by the large farmers, it is recommended to follow fair degree of equity in the distribution of

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subsidy to all farm- size categories. If more amount of subsidy were given to environmentally sustainable components such as organic manures and bio-fertilizer, it could enhance the use of these components by the farmers. This will considerably reduce the externalities due to chemical fertilizers. If more amount of subsidies were given to solar pumpset and micro-irrigation components, it will reduce the externalities from electric pumpset and enhance the conjunctive use of scarce resources such as water. Conjunctive use of water comprises of harmoniously combining the use of both surface and groundwater in order to minimize the undesirable physical, environmental and economic effects of each solution and to optimize the water demand/supply balance. Thus the study can be a guide for planners and policy makers.