Mustard

Economics

Break-up of cost of cultivation per hectare

Crop : Rapeseed & Mustard Crop

Items	Cost (Rs.)
Operational Cost	4906.94
Human Labour
Casual	788.40
Attached	58.63
Family	1184.10
Total	2031.13
Bullock Labour
Hired	25.80
Owned	444.93
Total	470.73
Machine Labour
Hired	660.02
Owned	67.32
Total	727.34
Seed	98.48
Fertilizer & Manure
Fertilizer	984.91
Manure	110.67
Total	1095.58
Insecticides	0.67
Irrigation Charges	457.37
Int. On working capital	115.54
Fixed Cost	4407.61
Rental Value of Owned Land	3418.09
Rent paid for Leased in Land	2.57
Land revenue, ceases & taxes	22.31
Dep on Implements & F.BLDC.	157.56
Int. On fixed capital	807.08
Total Cost (C2)	9404.55
C2*	9714.20
C3	10685.62
C3 (Rs./Quintal)	980.47

Cost Items

• . The items of cost of cultivation cover both paid out cost (out of pocket expenses) and the imputed costs. The items covered under these costs are;

Paid-out costs:

(i)Hired labour (human, animal and machinery)
(ii) Maintenance expenses on owned animals and machinery
(iii) Expenses on material inputs such as seed (home grown and purchased), fertilizer, Manure (owned & purchased), Pesticides and irrigation.
(iv) Depreciation on implements and farm buildings (such as cattle sheds, machine sheds, storage sheds).
(v) Land revenue
(vi) Rent paid for leased-in land.

Inputed Costs:

• Value of family labour / managerial input of the farmer, rent of owned land and interest on owned fixed capital for which the farmer does not incur any cash expenses.

Cost Concepts

• Costs are generated following certain cost concepts. These cost concepts and the items of costs included under each concept are given below.

Cost A1

• Value of hired human labour
• Value of hired bullock labour.
• Value of owned bullock labour.
• Value of owned machinery labour.
• Hired machinery charges.
• Value of seed (both farm produced and purchased).
• Value of insecticides and pesticides.
• Value of manure (owned and purchased).
• Value of fertilizer.
• Depreciation on implements and farm buildings.
• Irrigation charges.
• Land revenue, cesses and other taxes.
• Interest on working capital.
• Miscellaneous expenses (artisans, etc.)

• Cost A2 Cost A1 + rent paid for leased-in land.
• Cost B1 Cost A1 + interest on value of owned fixed capital assets (excluding land).
• Cost B2 Cost B1 + rental value of owned land (net of land revenue) and rent paid for leased-in land
• Cost C1 Cost B1 + imputed value of family labour.
• Cost C2 Cost B2 + imputed value of family labour.
• Cost C2 Cost C2 + Additional value of human labour based on use of higher rate, i.e., Statutory Wage rate or the actual market rate. This is an intermediate concept.
• Cost C3 Cost C2* + 10 percent of Cost C2 to account for managerial input of the farmer.

Imputation Procedures:

• Some of the inputs used in production process come from family sources. The procedure adopted for deriving imputed values of these inputs is as under.

Items Procedure

• Family labours On the basis of statutory wage rate or the actual market rate whichever is higher.
• Owned animal labour On the basis of cost of maintenance, which includes the following.
  1. Cost of green and dry fodder.
  2. Cost of concentrates.
  3. Depreciation on animals & cattle sheds.
  4. Upkeep labour charges.
  5. Other expenses, if any.


• Owned machinery charges On the basis of cost of maintenance of farm machinery, which includes diesel, electricity, lubricants, depreciation, repairs and other expenses, if any.
• Implements Depreciation & charges on account of minor repairs.
• Farm produced manure Evaluated at rates prevailing in the village.
• Rent of owned land Estimated on the basis of prevailing rents in the village for identical type of land or as land or as reported by the sample farmers, subject to the ceiling of fair rents given in the land legislation of the concerned State.
• Interest on owned fixed capital Interest on present value of fixed assets charged at the rate of 10% per annum.
• Interest on working capital Interest is charged at the rate of 12.5% per annum on the working capital for half the period of crop.
• Kind payments The kind payments are evaluate at pricos prevalent in the village at the time such payments are made.
• Main product and by-product Imputed on the basis of post harvest prices prevailing in the selected village.

Evaluation of Farm Assets

Item Procedure

• Owned and self-cultivated land Evaluated at rates prevalent in the village taking into account the differences in type of soil, distance from village, source of irrigation etc.
• buildings (cattle sheds, Evaluated at rates prevailing in the village. Storage sheds, etc.)
• Implements and other farm Machinery Evaluated at market prices.
• Livestock Evaluated at market prices.

Top