Economic analysis of rice production in Kuttanad and kole areas of kerala

Abstract

The present investigation on economic analysis of rice production in Kuttanad and kole areas of Kerala was undertaken during the agricultural year 1992-93. The study aimed at comparing costs and returns, measure productivity of farm resources, examine the possibility of increasing incomes by reallocating the existing resources and examining the marketed surplus and factors contributing to it and to identify the constraints in rice production. Data for the study was generated through a sample survey of farmers. Two stage random sampling was adopted for the study. The largest single item of cost of operation was fertilizer and its application cost for both Kuttanad and kole. The largest single item of input was labour in both the areas. Cost A1, cost A2, cost B1, cost B2, cost C1 and cost C2 per hectare were Rs.9953.03, Rs.9953.02, Rs.9953.02, Rs.13090.68, Rs.10099.82 and Rs.13237.48 respectively for Kuttanad and Rs.9566.17, Rs.9566.17, Rs.9566.17, Rs.12256.35, Rs.9706.17 and Rs.12396.35 respectively for kole area. The income measures in relation to different cost concepts, in rice cultivation such as gross income, farm business income , family labour income, net income and benefit cost ratio were Rs.15688.30, Rs.5735.28, Rs.2597.62, Rs.2450.82 and 1.19 respectively for Kuttanad and Rs.13450.91, Rs.3884.74, Rs.1194.56, Rs.1054.56 and 1.09 respectively for kole area. The average per hectare yield in quintals of rice in Kuttanad was 37.72 excluding harvest charges paid in kind and 47.15 including kind portion. Corresponding values for kole area were 32.53 and 40.66 quintals respectively. Benefit cost ratio calculated both by excluding and including the kind portion of the produce were 1.19 and 1.14 respectively for Kuttanad. The corresponding benefit-cost ratios for kole area were 1.09 and 1.07 respectively. Bulk line cost on C2 basis was Rs.4000 per tones for Kuttanad and Rs.4600 per tonne for kole area. Production function analysis done separately for the two areas revealed that contribution of independent variables namely machine labour, human labour and fertilizer towards gross income was found to be significant and positive for both the areas. The estimated percentage increase in gross income with one per cent increase in these three inputs came to 0.12 per cent, 0.46 per cent and 0.39 per cent respectively for Kuttanad area. For kole area, the corresponding values are 0.09 per cent, 0.51 per cent and 0.28 per cent respectively. The sum of the elasticities of production function for Kuttanad and kole were 0.9748 and 0.8936 respectively, and indicated diminishing returns to scale. Marginal value productivity to factor-cost ratios showed that a rupee invested in the three inputs, viz., machine labour, human labour and fertilizer will add Rs.5.25, Rs.1.47 and Rs.2.33 respectively in Kuttanad and Rs.2.78, Rs.1.42 and Rs.1.42 respectively for kole area, if the farmer has unlimited amount of money. Under limited resource conditions, optimum levels of inputs such as machine labour, human labour and fertilizer were worked out for both the areas. For Kuttanad to achieve maximum production, the expenditure on machine labour, and fertilizer should be enhanced from the existing level whereas the expenditure on human labour should be reduced. In the case of kole area, the expenditure on machine labour should be enhanced while the same on human labour should be reduced. The analysis also showed that by re-allocating the existing resources farmers could increase their income by 16.61 pr cent at the aggregate level in Kuttanad. Marketing analysis revealed that the marketed surplus amounted for 69.17 per cent of the total produce in Kuttanad and 67.89 per cent of the total produce in kole area. For the sample as a whole marketed surplus accounted for 68.92 per cent of the total produce. The quantity given as wages came to 18.06 per cent and 14.89 per cent of the total produce in Kuttanad and kole areas respectively. Around 10.28 and 14.93 per cent of the total produce was used for farm household consumption in Kuttanad and kole areas. The quantity used for seed purpose was 2.49 and 2.29 per cent of the total produce in Kuttanad and kole areas respectively. Multiple regression analysis to estimate the factors determining the marketed surplus for the sample as a whole revealed that productivity is the only significant variable. Non-availability of labour and their increased costs, weed infestation and incidence of pests and diseases were perceived by the farmers as the important constraints to rice production in both the areas. Salinity and acidity followed by the problem of submergence formed the fifth and sixth major constraints in Kuttanad. In kole submergence formed the fifth constraint followed by the problem of acidity and salinity.