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Economics and constraint analysis of non traditional maize farmers in

Mahbubnagar district under Tank of Andhra Pradesh

Article · March 2016

DOI: 10.15740/HAS/IRJAES/7.1/232-241

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International R esearch J ournal of A gricultural E conomics and S tatistics

Volume 7 | Issue 1 | March, 2016 | 232-241  e ISSN-2231-6434

Research Paper Economics and constraint analysis of non

traditional maize farmers in Mahbubnagar district
under Tank of Andhra Pradesh

I. SHAKUNTALA DEVI AND K. SUHASINI

See end of the paper for ABSTRACT : This paper has been drawn from part of work done by the authors to assist Varsha NGO,
authors’ affiliations
Hyderabad in project on the value chain analysis of maize with an objective to study the economics of
Correspondence to :
maize farmers cultivating under tank irrigation and constraints faced by them in Mahbubnagar district.
I. SHAKUNTALA DEVI
Department of
The study showed that out of total cost of cultivation of Rs. 32041.23 per hectare, the operational
Agricultural Economics, costs contributed 84.41 per cent and the remaining 15.59 per cent by fixed costs. Farmers secured a net
College of Agriculture, benefit cost ratio of Rs.0.56, i.e., receiving Rs. 0.56 for every rupee invested in maize cultivation. Small
Rajendranagar, farm holdings and limited resource availability and vagaries of monsoon like drought associated with
HYDERABAD
(TELANGANA) INDIA highest cost on labour increased pressure of diseases/pests are the major constraints faced by the
farmers in the study area.
KEY WORDS : Constraints, Economics, Maize, Profitability, Tank irrigation
Paper History :
Received : 30.01.2015; HOW TO CITE THIS PAPER : Devi, I. Shakuntala and Suhasini , K. (2016). Economics and constraint analysis of
Revised : 01.06.2015; non traditional maize farmers in Mahbubnagar district under Tank of Andhra Pradesh. Internat. Res. J. Agric. Eco.
Accepted : 02.07.2015 & Stat., 7 (1) : 232-241.

INTRODUCTION : production in the country. Maize production is dominated

by Andhra Pradesh and Karnataka, producing 38 per cent
Maize (Zea mays L.) is one of the most versatile of India’s maize in 2010-11. Nine states viz., Karnataka,
emerging crops having wider adaptability. Maize is a Andhra Pradesh, Tamil Nadu, Rajasthan, Maharashtra,
cereal crop which is cultivated widely throughout the Bihar, Uttar Pradesh, Madhya Pradesh and Gujarat
world and has the highest production among all the account for 85 per cent of India’s maize production and
cereals. It is an important food staple in many countries 80 per cent of area under cultivation.
and is also used in animal feed and many industrial Area under hybrid seeds in 2010-11 is estimated to
applications. The crop has tremendous genetic variability, be 60 per cent of the total area under maize cultivation.
which enables it to thrive in tropical, subtropical, and In addition to staple food for human being and quality
temperate climates. Maize is grown throughout the year feed for animals, maize serves as a basic raw material
in India. It is predominantly a Kharif crop with 85 per as an ingredient to thousands of industrial products that
cent of the area under cultivation in the season. Maize is includes starch, oil, protein, alcoholic beverages and food
the third most important cereal crop in India after rice sweeteners etc. moreover the rich nutri-maize can be
and wheat. It accounts for 9 per cent of total food grain exploited commercially by the consumers in the form of

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 I. SHAKUNTALA DEVI AND K. SUHASINI

fortified supplements (Raghupathi et al., 2012; Nair and MATERIALS AND METHODS :
Eapen, 2012 and Kumar et al., 2013).
Maize in India is at present is used as poultry feed. Mahbubnagar district is purposively selected for the
Poultry industry is heavily dependent on maize, as it forms study considering the area expansion under maize and
50-60 per cent of the input required for broiler feed and the crop being used by poultry feed manufacturers in
25-35 per cent of the input required for layer feed. Maize and around Hyderabad. Maddigatla village of Bhoothpur
is the preferred source of energy in feed when compared mandal is selected for the present study as suggested by
with other substitutes due to availability, higher energy officials of Community Based Tank Management Project
and price economics. Poultry feed’s share has remained where the farmers grow maize under Gunta cheruvu tank
around 45-50 per cent of the total demand for maize in which has an ayacut area of 121.7 acres. In this study
the country over the past 4-5 years. Maize has emerged area sample farmers from the identified list of maize
as important crop in the non-traditional regions of i.e. growers are selected by following simple random
peninsular India as the state like Andhra Pradesh which technique. The required primary data is obtained from
ranks 5th in area (0.79 m ha) has recorded the highest 60 sample farmers from the village by interview method.
production (4.14 m t) and productivity (5.26 t ha-1) in the The information regarding capital investment, costs,
country although the productivity in some of the districts returns and constraints were obtained. The cost concepts
of Andhra Pradesh seemed on par with USA. viz., cost A1, cost B and cost C were used in the present
In Andhra Pradesh, maize is sown normally from study and these are derived as follows:
June 15th to July 15th in Kharif in all the maize growing Cost A1: This cost includes value of hired human
districts and October to November in Rabi in labour, owned and hired bullock labour, owned and hired
Rayalaseema and Telangana regions and October to machinery services, seeds, FYM, fertilizers, plant
January in coastal region. Kharif harvest is from protection chemicals, depreciation, land revenue and
September to November and in Rabi from February to interest on working capital.
May. Peak arrivals hit from October to December and Cost A2: Cost A1+ rent paid for leased in land. In
March to April, medium in January to February and the the recent study all the farmers are owner cultivators.
arrivals are lean during June to August. Maize price Hence cost A1 and cost A2 are one and the same.
mainly depends upon demand for poultry feed, rainfall Cost B: Cost A1/A2 + rental value of owned land
factors, production and export demand. The study focused + interest on fixed capital
on the economics of maize production and constraint Cost C: Cost B + imputed value of family labour.
analysis in Mahbubnagar district It gives the total cost of cultivation

Table A : Area, production and yield of maize (2001-02 to 2011- Farm income measures :
2012)
Year Area (Million Production Yield
These are the returns over different cost concepts.
Hectare) (Million Tonne) (Kg./Hectare) Different income measures are derived using the cost
2001-02 6.58 13.16 2000 concepts. These measures include farm business income,
2002-03 6.64 11.15 1681 family labour income, net income, farm investment income,
2003-04 7.34 14.98 2041 etc. the following formulae are used.
2004-05 7.43 14.17 1907
2005-06 7.59 14.71 1938 Gross income :
2006-07 7.89 15.09 1912 The income obtained from the sale of the product.
2007-08 8.12 18.96 2335 The actual amounts received from product marketed at
2008-09 8.17 19.73 2414 the prevailing price were considered for arriving at gross
2009-10 8.26 16.72 2024 income.
2010-11* 8.49 21.28 2507 Farm business income = gross income- cost A1 /
2011-12** 7.27 15.86 2181 A2
Note : * : Fourth Advance Estimates as released on 19.07.2011.
** : First Advance Estimates as released on 14.09.2011 Family labour income = gross income – cost B
: The Yield rates given above have been worked out on the basis of Net income = gross income –cost C
Production and area figures taken in ' 000 units.
Source : Ministry of Agriculture, Govt. of India
Farm investment income = farm business income-
Internat. Res. J. Agric. Eco.& Stat., 7 (1) Mar., 2016 :
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 ECONOMICS & CONSTRAINT ANALYSIS OF NON TRADITIONAL MAIZE FARMERS

imputed family labour and Tulasi seeds.

Benefit-cost ratio : Net income/ Cost C
Cost of cultivation of maize :
Garrett’s ranking technique : The total cost of cultivation is Rs. 32041.23 per
In the Garrett’s scoring technique, the respondents hectare. The increase has occurred in all major cost items
were asked to rank the factors or problems and these like Human labour, Bullock labour, Machine labour, Seed,
ranks were converted into per cent position by using the Farm yard manure, Fertilizers and pesticides. Among
formula operation cost items, human labour recorded the
100 x (R ij - 0.5) maximum share in the increase in cost of cultivation over
Per cent position 
Nj time. Out of total increase of Rs. 32041.23 in the cost of
where, cultivation per hectare, the operational cost items
Rij = Ranking given to the ith attribute by the jth contributed 84.41 per cent and the remaining 15.59 per
individual cent by fixed cost items.
N j = Number of attributes ranked by the j th As the increase in cost of production is mainly due
individual. to increase in prices of labour and inputs used, there is a
By referring to the Garrett’s table, the per cent need to encourage the use of improved machinery in
positions estimated were converted into scores. Thus, place of labour so as to reduce the cost, from the
for each factor the scores of the various respondents government. There is also a need to focus on price
were added and the mean values were estimated. The stabilisation to make maize cultivation a profitable
attributes with the highest mean value was considered enterprise for the farmers. As the upper reaches of tank
as the most important one and the others followed in that suffer from water stress whereas lower reaches from
order. water logging conditions, which necessitates suitable crop
planning suggesting alternates which fit into poultry-feed
industry as the adoption of maize is mainly due to
RESULTS AND DATA ANALYSIS : availability of readymade market and hybrid seed. Maize
Farmers in the study area grow maize hybrids in in the study area is always prone to yield risk as it is
the study area. The farmers go for change in the seed grown in non-traditional belt and marginal lands.
hybrid depending on the neighbours suggestions they As discussed the operational costs include the costs
always go on group decisions i.e., if the majority are going of human labour, bullock labour, tractor power, seed
for a specific hybrid the rest of the farmers follow the material, farm yard manure, fertilizers, pesticides and
lead. This shows they do not have individual decision interest on working capital. The fixed costs include the
making capacity. Farmers obtain seed from private seed rental value of owned land, depreciation charges and
dealers mostly. It is observed from the Table 1 the hybrids Table 2: Cost of cultivation of maize (Rs./ha)
that are used in Mahbubnagar district are Kaveri, Pioneer, Particulars Costs Percentage
Siri, Tulasi and AP seeds. Among which Kaveri and Operational costs 27046.23 84.41
Pioneer are preferred by majority of the sample farmers. Human labour 8250 25.75
Bullock labour 1775 5.54
Table 1 : Comparison of cost of seed for maize hybrids Machine labour 4500 14.04
Hybrid Cost (Rs. per kg) Seed rate (kg per ha) Seed 1150 3.59
Kaveri 80 17.5 Farm yard manure 1755 5.48
Pioneer 140 18.75 Fertilizers 7262.5 22.67
Siri 100 20 Pesticides 1571.55 4.90
Tulasi 76 17.5 Interest on working capital 782.175 2.44
Fixed costs 4995 15.59
Seed is generally available in 5 kg packs. Farmers Rental value of owned land 3750 11.70
go for a seed rate of 17.5 kg to 20 kg per hectare. Majority Depreciation 875 2.73
of the farmers go for Kaveri due to its cost friendliness Interest on fixed capital 370 1.15
and colorful seed type. A very few farmers go for Siri Total cost (Rs.) 32041.23 100

104 Internat. Res. J. Agric. Eco.& Stat., 7 (1) Mar., 2016 :

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 I. SHAKUNTALA DEVI AND K. SUHASINI

interest on fixed capital. The particulars of cost of indicates the success or failure of the farm business. An
cultivation are presented in Table 2. important element in the farm business organization
relates the manner in which the resources are allocated.
Cost concepts and income measures : A measuring stick is necessary to provide guides and
The cultivation expenditure of maize is dealt by standards for appraising the use of various resources.
analyzing the cost concepts used in farm management Accordingly various income measures viz., gross income,
studies. i.e. Cost A1, Cost A2, Cost B and Cost C were net income, farm business income, family labour income
worked out. Cost A1 includes value of hired human labour, and farm investment income were worked out and
owned and hired bullock labour, owned and hired presented in Table 4.
machinery services, seeds, FYM, fertilizers, plant Gross income is the total revenue earned by the
protection chemicals, depreciation, land revenue and farmer producer from the sale of the produce. The
interest on working capital. Cost A2 includes the sum of estimated average gross income from one hectare maize
cost A1 and rent paid for leased in land. was Rs. 50000. Although gross income is a good measure
Under Cost B it is addition of costs like cost A1/A2 to gauge the productivity and efficiency of the farm, but
, interest on fixed capital excluding land and rental value it alone does not reveal the success of a farm business.
of owned land which is accounted to be Cost C (Rs. Hence, net income of the farmer was analyzed. Higher
32041.23 per hectare) is computed by adding the imputed the net income, more success is the farm business. The
value of family labour to Cost B. The cost concepts were net income was Rs. 17958.77 per hectare.
worked out for maize and are presented in table. The farm business income realization per hectare
It is evident from the details of Table 3 that there was Rs. 23578.77. The family labour income earnings
was no leasing activity among the sample farmers and per hectare was Rs. 19458.77. The farm investment
hence Cost A1 and Cost A2 remained the same. The
Table 4 : Farm income measures of maize producers on per hectare
total per hectare cost of cultivation of castor (Cost C) basis (Rs./ha)
was worked out to Rs. 32041.23. Cost B was estimated Particulars Costs
to be Rs. 30541.23. The variation from Cost B to Cost C Gross income 50000
has reflected the family labour contribution in maize Farm business income 23578.77
cultivation. Family labour income 19458.77
Net income 17958.77
Table 3 : Cost concepts of castor producer farmers on per hectare Farm investment income 22078.77
basis (Rs./h)
Benefit cost ratio 0.56
Particulars Costs (Rs./h)
Cost A1 / A2 26421.23
Table 5 : Marketable and relative marketed surplus in maize
Cost B 30541.23
Sr. No. Particulars Quantity
Cost C 32041.23
1. Main product(q) 50
2. By product(q) /Wages/gifts(q) /Family 0
Measures of farm income of maize producers: consumption
Costs and returns are the two important elements 3. Marketable surplus(q) 50
of any business enterprise. Cost represents the value of 4. Marketed surplus(q) 50
the inputs used in the production process whereas returns 5. Price received per quintal of main product (Rs. 1000
present the value of the output achieved. The relative per q)
magnitude of the costs and returns from the enterprise 6. Total gross income from main product (Rs. /q) 50000

Table 6 : Constraints for low productivity include

Sr. No. Particulars Mean garette gcore Rank
1. Climatic conditions resulting in drought/excess water associated with increased pressure of diseases/pests 64.56 II
2. Cultivation in Kharif is mainly under rain-fed conditions on marginal lands with inadequacy in irrigation 57.12 III
3. Limited adoption of improved production-protection technology 48.83 IV
4. Deficiencies in the production and distribution system of quality seed 47.32 V
5. Small farm holdings and limited resource availability with farmers 78.59 I

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 ECONOMICS & CONSTRAINT ANALYSIS OF NON TRADITIONAL MAIZE FARMERS

income of maize per hectare was Rs. 22078.77. Farmers obtained are not stable, as it is grown in non suitable
were able to secure a net benefit cost ratio of Rs.0.56, marginal lands. Kharif maize is particularly dependent
i.e., receiving Rs.0.56 for every rupee invested in maize on the monsoon so drought tolerant/resistant hybrids can
cultivation. give desired yields in un-favourable conditions. The
extension mechanism should create the awareness among
Marketable surplus and economics of maize the farmers how to reduce the risk and suggest alternative
production : substitutes which can fit into the poultry feed value chain.
It is evident from the Table 5 that the gross income Rehabilitation and maintenance of tanks is another
from maize is Rs. 35796.84 per hectare. Almost all the important initiative to be taken up in the study area. Steps
produce is sold to the traders/commission agents so can be initiated for consolidation of small holdings.
marketable equals to marketed surplus. Price received
per quintal of maize produced is Rs. 1000 maize is not
given as wages or gifts or used for family consumption. Authors’ affiliations:
K. SUHASINI, Department of Agricultural Economics, College of
The by product or plant remains are crushed under the Agriculture, Rajendranagar, HYDERABAD (TELANGANA) INDIA
ground when they go for next crop. Total gross income
from the main product is Rs. 50000.
LITERATURE CITED :
Constraints for low productivity in the study area: Hasan, F.M. (2008). Economic efficiency and constraints of
The problems faced by the maize farmers in the maize production in the Northern region of Bangladesh.
study area when ranked using the garette score technique J. Innov. Dev. Strategy, 1(1): 18-32.
the problems like small farm holdings and limited resource
Kumar, R., Srinivas, K. and Sivaramane, N. (2013). Assessment
availability (Hasan, 2008) unsuitable climatic conditions of the maize situation, outlook and investment
with increased pressure of diseases/pests, Cultivation in opportunities in India. Country Report – Regional
Kharif is mainly under rain-fed conditions on marginal Assessment Asia (MAIZE-CRP), National Academy of
lands with inadequacy in irrigation ranked the first, second Agricultural Research Management, Hyderabad, India.
and third major problems and the other problems faced Nair, S.R. and Eapen, L.M. (2012). Food price in nation in India
by them are limited adoption of improved production- (2008 to 2010): A commoditywise analysis of the causal
protection technology and lack of efficient production and factors. Economic & Political Weekly, May 19.
distribution system of quality seed (Table 6).
Raghupathi, D., Umashanker, C., Venkatesh, M. and Setty,
T.A.S. (2012). Value chain of maize for commercialization-
Conclusion : An innovative model. Indian Res. J. Extn. Edu., (Special
The main conclusion of the study is that the yields Issue), Vol.2.

106 Internat. Res. J. Agric. Eco.& Stat., 7 (1) Mar., 2016 :

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