Indian Journal of Economics and Development
Year : 2017, Volume : 13, Issue : 2
First page : ( 305) Last page : ( 314)
Print ISSN : 2277-5412. Online ISSN : 2322-0430.
Article DOI : 10.5958/2322-0430.2017.00180.9

Farm Size Profitability Relations in Wheat Cultivation in Punjab

Bhoi Priya Brata*, Singh Jasdev, Kumar Sanjay

Department of Economics and Sociology, Punjab Agricultural University, Ludhiana-141 004, Punjab

*Corresponding author's email: priyaecon-cobsaes@pau.edu

JELCodes: Q12, Q15, Q16

Online published on 20 June, 2017.

Abstract

The present study examines the trends in input cost structure and profitability of wheat cultivation across different farm size categories underlining the importance of different inputs over time in relation to farm size. For this, the farm level input-output data on wheat cultivation in Punjab at two points of time (2001–02 and 2011–12) was taken from the ‘Cost of cultivation scheme ’. The analysis revealed that over time the fixed costs increased at a much sharper rate as compared to the operational costs on all the categories of farms and contributed the major part of the increase in the total cost of cultivation. During both of the study years, the cost of wheat cultivation and its profitability portrayed an inverse and direct relationship respectively with the farm size. The scale economies on larger farms which led to relative lower per unit cost resulted in higher profitability in comparison to their smaller counterparts. The study suggested that the farm policies should be aimed to bring down the production costs on the smaller size farms. Further, there is a need to tailor the farm policies like liberalised land lease market to encourage more concentration of operational holdings in relatively profitable higher size groups.

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Keywords

Cost structure, farm-size, profitability.

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