Crops Costs & Variations

This study based on Farm Management investigation Investigation conducted in India examines the extent and causes of inter-year as well as interregional variation in the cost of production of some major crops in India. It also highlights the changes in cost-structure and cost-price relationship with reference to technological change. The study also seeks to examine how far the regional cropping patterns are determined on the basis of the principle of comparative advantage. It workers the indices of cost of production of individual crops in different region and seeks to examine how far cost of production can serve as a basis of price-fixation. Enlarging flow of information has been carefully mustered, pooled and processed in the study leading to quite a few interesting observations. One would expect costs to vary over years and over regions since output caries over years and regions. The study suggests through analysis of variance, costs vary over regions but not over years if technology remains unchanged. Thus technological condition and resource base rather than seasonal factor influence costs prominently. The study observes also the instances where unit-cost of crop-output on irrigated land exceeds that on unirrigated land. This is an interesting and an exceptional observation. The study also notes a decline in the real costs caused by technological change brought about by Green Revolution. The study observes that market prices and production can only be one of the factors and there can be no mechanical formula approach to the fixation of support/procurement prices. The study strives also show that for a farmer in a given agro-climatic, technological and economic setup, what is relevant is the relative profitability of different crops of crop-combinations which can be grown in that region alongwith resource endowment and not the comparison of relative profitability of crops across the regions.