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  Economics


Ikisan - Economics Of Cotton cultivation
Cost of cultivation


Labour Requirement

Labour utilisation per hectare of cotton according to farm size and operation

Operations Small
farms
Medium
farms
Large farms Pooled farms
  CPD MD CPD MD CPD MD CPD MD
Prepara
tory cultivation
9.86 (45.
47)
9.86
(12.
07)
9.66
(49.
03)
9.66
(11
.71)
6.98 (48.27) 6.98 (9.09) 7.9 (48.12) 7.96 (10.49)
Sowing   9.47
(11.
59)
  9.36
(11
.34)
  8.36 (10.89)   8.70 (11.46)
Manure's and
fertilizer application
2.23 (10.
28)
4.87
(5.
96)
2.23
(11
.31)
5.83
(7.
07)
1.37 (9.4) 5.42 (7.06) 1.68 (10.57) 5.36 (7.06)
Intercult
ivation
8.93 (41.
19)
13.39 (16.
40)
7.81
(39
.64)
12.23 (14.
94)
6.11 (42.25) 16.94 (14.25) 6.90 (41.7) 11.60 (15.28)
Plant protection   34.35 (42.
06)
  35.66 (43.
23)
  35.58 (46.35)   34.6 (45.6)
Picking   9.71
(11.
89)
  9.64
(11.
68)
  9.48 (12.53)   7.65 (10.08)
Total 21.68 (100
.00)
81.65 (100.
00)
19.7 (100
.00)
82.18 (100
.00)
14.46 (100.00) 76.76 (100.00) 16.54 (100.00) 75.87 (100.00)

Note: Figures in parenthesis indicate per cent to total

  • CPD = Cattle pair days
  • MD = Man days.
Small Farms
  • A farm having < 2.5 acres of wet land (or) > 5 acres of dry land
Medium farms
  • A farm having < 5 acre of wet land (or) < 10 acres of dry land
Large farms
  • A farm having > 5 acres of wet land (or) > 10 acres of dry land
Pooled farms
  • Average of the small farms & medium farms.

Cost of cultivation according to cost items: Cost of cultivation of cotton per hectare according to farm size and cost items (Rs/hectare)

Parti
culars
Small Farms % to total Medium Farms % to total Large Farms % to
total
Pooled
Farms
% to
Total
Variable Costs 34   26   26   80  
Human labour                
Hired 530
.23
2.99 772.69 4.28 950
.37
5.12 714
.06
3.95
Family 848
.69
4.78 696.37 3.86 185
.42
1.00 633
.37
3.51
Total 1378
.92
7.77 14698
.06
8.14 1135
.79
6.12 1347
.43
7.46
Cattle Labour                
Hired 339.36 1.91 200.78 1.11 171
.912
0.93 252
.46
1.40
Family 138.14 0.78 199.39 1.10 167
.23
0.90 165
.32
0.91
Total 477.50 2.69 400.17 2.21 339
.14
1.83 417
.78
2.31
Machine Labour                
Hired 538.10 3.03 607.96 3.37 967.
25
5.20 668
.09
3.70
Family - - - - - - - -
Total 538.10 3.03 607.96 3.37 967
25
5.20 668
.09
3.70
Seed 478.73 2.70 617.09 3.42 791
.74
4.26 601
.95
3.33
Manure's
and Fertilizers
3387
.43
19.08 3288
.26
18
21
3308
.04
17.81 3335
.35
18.47
Plant protection chemicals 7637
.46
43.03 7705
.41
42
.68
7965
.42
427
.88
7741
.53
42.88
Interest
on
working capital
425.97 2.40 439.08 2.43 463
.59
2.50 439
.64
2.43
Total variable costs 14324
.10
80.70 14527
.03
80
.46
14970
.97
80.60 14551
.77
80.60
Fixed
Costs
               
Rental
value of
own land
3080
.60
17.36 3152
.62
17
.46
3200
.20
17.23 3133
.91
17.36
Land revenue - - - - - - - -
Depreci
ation
278.39 1.57 291
.43
1.
61
305
.94
1.64 289
.51
1.60
Interest
on
fixed
capital
65.78 0.37 83.85 0.
47
97
.74
0.53 79
.64
0.44
Total
fixed
costs
3424
.77
19.30 3527
.90
19
.54
3603.
38
19.40 350
3.06
19.40
Total
culti
vation
costs
17748
.87
100.00 18054
.93
100
.00
18574
.85
100
.00
1805
4.83
100.00

  • The costs incurred towards pesticides was the major cost which consisted of about 43 per cent of total cost in all the size group of farms.
  • Next in the order of importance was manure's and fertilisers which consisted of about 17 per cent to 19 per cent of the total cost among the size group of farms.
  • The actual order of importance followed by manures and fertilizers was human labor, machine labor, seed, cattle labor and lastly interest on working capital in the descending order.
Cost of cultivation according to cost concepts

Parti
culars
TVC TFC COST A COST B COST C Prime cost % to total cost
Small 14324.1 3424.77 13753.8 16900.18 17748.87 14602.49 82.27
Medium 14527.03 3527.9 14122.09 17358.56 18054.93 14818.46 82.07
Large 14970.97 3603.88 15091.49 18389.43 18574.85 15276.91 82.24
Pooled 14551.77 3503.06 14207.92 17421.47 18054.83 14841.29 82.20

Cost Concepts

Cost A1

  • Value of hired human labor
  • Value of hired & owned animal labor
  • Value of hired & owned machinery labor
  • Value of seeds (if non seeds) Pesticides.
  • Fertilzers, manners (if un manure's also)
  • Depreciation of machinery & form building
  • Irrigation changes
  • Land revenue & taxes
  • Intrest on working capital.
  • Miscellaneous Charges.
Cost A2
  • Cost A1 + rent paid for leased land
  • Cost A = (A1 + A2)
Cost B1
  • Cost A1 + intrest on owned fixed capital (Excluding land)
Cost B2
  • Cost B1 + rental value of own land + rent paid for leased land
  • Cost B = Cost (B1 + B2)
Cost C1
  • Cost B1 + imputed value of family labor
Cost C2
  • Cost B2 + imputed value of family labor
Cost C3
  • Cost C2 + 10% of the cost C2 to account for the value of management
  • input Cost C = Cost (C1 + C2 + C3)
Cost of production per quintal of cotton

  • It would be better to take unit into consideration rather than going by the average costs alone. The unit costs will be useful for decision making at micro level and to sort out the policy implications at macro level.
  • Hence, the costs per quintal were also worked out for cotton and presented.
  • From the analytical figures it is clear that the total cost of production of cotton per quintal ranged from Rs. 2246.69 on small farms to Rs. 2068.87 on large farms. On small farms, it was Rs. 2028.64 and for pooled farms it was Rs. 2124.10 per hectare.
  • This did not indicate any perceptible relationship with the farm size.
Cost of production of cotton per quintal according to cost concepts and farm size (in rupees)

Particulars TVC TFC COST A COST B COST C Prime Cost
Small 1813.17 433.5 1740.98 2139.26 2246.69 1848.41
Medium 1632.25 396.39 1586.75 1950.4 2028.64 1664.99
Large 1663.44 400.43 1676.83 2043.27 2063.87 1697.43
Pooled 1711.97 412.12 1671.52 2049.56 2124.10 1746.03


 
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