Chapter VI ANALYSIS OF THE COST AND RETURN ON PADDY...

Chapter VI

ANALYSIS OF THE COST AND RETURN ON PADDY CULTIVATION

Various operations and practices involved in paddy cultivation

along with the problems faced by the farmers in the process of cultivation

have all been discussed in the previous chapter. It is appropriate to study

the cost of cultivation and the return on paddy so as to know the income

earning capacity of the paddy farmers.

The cost of cultivation varies according to the type of the farmers

and even between the first and second crop. There may be variations in

the cost of cultivation even between two different sample areas. This will

have an impact on returns also. Hence an attempt is made to study the

variation in the cost and to identify the causes for such variation.

Cost of cultivation of any crop covers crop cost, labour cost, land

cost, machinery cost and livestock cost. Crop cost refers to those costs

incurred in the purchase of seeds and plants, manures and fertilizers,

pesticides and insecticides and irrigation charges.

Machinery cost includes the hire charges of machinery, fuel for

machinery, electricity, minor repairs and interest charges on machineries.

170 Labour cost covers the actual wages paid and the imputed value of family

labour.

Land cost includes rent paid to the land lord in the case of lease and

national rent for owned lands. The livestock cost includes the cost of

maintaining the livestock such as feed cost, fodder cost, cost of veterinary

medicine and the interest on the value of livestock and depreciation.

All these cost concepts discussed above cover both fixed as well as

variable costs. Fixed costs are of non-recurring nature, while variable

costs are of recurring types and have to be incurred in every production

period variable costs are also known as operational cost or working cost.

Fixed costs are those costs which are not a function output, hence

they do not vary with the level of production land revenue, interest on

capital for the use of fixed resources, contractual payments, such as rent

and the value of services form fixed resources, contractual payments.

Variable costs constitute the outlay of funds that are a function of

output in a given production period i.e. they vary with level of output.

Fixed costs are those costs which are independent of output, that is

they do not change with changes in output. Fixed costs are also known as

overhead cost and include charges such as contractual rent, insurance,

property tax, interest on capital, etc. Thus fixed costs are those which are

incurred in hiring the fixed factors of production and cannot be altered in

the short run.

171 Variable costs are those costs which are incurred on the

employment of variable factors of production and can be altered in the

short run. Thus the total variable costs change with changes in the output

in the short run i.e. they increase or decrease when the output rises of falls.

Thus, there are two views about the fixed cost.

1. Fixed costs are non-recurring in nature.

2. Fixed costs are those which do not change with the level of output.

In the cultivation of short duration crops all costs are recurring in

nature. Hence the first view is not usable for proper classification of fixed

cost and variable cost. Therefore the second view is taken for classifying

the cost into variable cost and fixed cost.

Cultivation expenses for each activity have been collected from the

farmers and they are classified as variable expenses and fixed expenses

based on their impact on output.

The average cost of cultivation is ascertained by dividing the total

cost by the total area of land for each analysis.

6.1. COST OF CULTIVATION OF PADDY

Cost of cultivation is an important factor and it is the basis on

which marketing decisions are made. A farmer whether big or small,

prefers to sell his product in the market only when the market price covers

the cost of production so as to leave a profit. So, the computation of cost

of cultivation is paramount before analyzing the marketing behaviour of

172 the farmers. Cost of cultivation of paddy in the study is analysed on the

guide lines of Government of India,

Estimation of cost has been done in the following manner

1. Human labour, bullock labour and machine labour (hired) value at the

actual rates paid by the farmer.

2. Family labour-valued at the rate of wages paid for hired labour for

similar work.

3. Bullock labour and machine labour (owned) – valued at rates paid to

hire the same.

4. Seeds (purchased), insecticides and pesticides, manure (purchased),

fertilizers, irrigation charges – valued at rates actually paid by the

farmers.

5. Seeds (farm produced), manure (owned) – valued at the prevailing

market prices.

6. Depreciation on implements – values at 20 per cent and apportioned

in proportion to the value of output of paddy to the total value of

output of all the crops of the year.

7. Land revenue – actually paid by the farmer.

8. Interest on working capital – valued at 12 per cent of half of the crop

growth period.

9. Imputed interest on owned fixed capital – valued at a rate of 10 per

cent of the value of assets (excluding land) and apportioned in

proportion to the value of output of paddy to the total value of out put

of all the crops of the year.

The components of cost given under ‘comprehensive scheme for

studying the cost of cultivation of principal crops’ have been re-arranged

so as to throw light on the variable cost and fixed cost. The classification

173 of cost according to their behaviour into fixed and variable elements is

very essential for profit planning, effective cost control and taking vital

decisions as to the time and rate at which paddy is to be sold.

6.1.1. Storage pattern

Having seen that paddy is stored for better prices now, it is our turn

to see the details regarding storage of paddy in the study area. Type of

store houses, storage cost, etc. deserve attending to learn the economics of

storage.

6.1.2. Storage Facilities

Adequate storage facilities help the farmers spread their sale over a

period of time after harvesting. Farmers may generally store paddy either

in their houses or houses of relatives or godowns run by the primary co-

operative society or rural godowns run by market committees. But a

surprising phenomenon observed is that all farmers stored their paddy

only in their houses. Not a single farmer was found to make use of their

relative’s houses, godowns of co-operative societies and market

committees.

6.1.3. Payments in kind and other retentions

The payments in kind and other retentions at the farm level affect

the level of marketable surplus. The payments and retentions are wages in

kind to permanent labourers employed on the farm, kind wages paid to the

casual labourers in harvesting paddy, customary payments to waterman,

craftsman, Economically and socially backward people in the village,

temples, etc. rent paid for leased – in land in which paddy is cultivated,

interest payment for loan, irrigation charges for paddy land which depends

174 on purchased water supply, paddy payments for relatives like old parents

who reside separately, sisters, brothers and other close relatives who have

no land / paddy land, seed for forthcoming sowing, wastages at the time of

storing and transporting and deductions during the time of marketing.

They make payments and retentions by varieties and seasons in each

village. This is necessary to estimate the correct level of marketable

surplus of paddy in different situations. Before presenting the level of

such deductions at farm level, let us look at the nature and dimension of

such payments in the study villages.

6.1.4. Wage for permanent labourers

Generally wage paid to permanent labourers is paddy and

remaining in kind, particularly in paddy. These labourers hail from local

and nearby villages and work from morning to evening in the farm.

Owing to the workload and nature of work, they are paid paddy for

consumption purpose. Usually, some of the marginal and small farmers in

the delta villages have part-time permanent labourers only for irrigation of

the paddy fields. They are doing watching and channelising water from

canals to paddy fields. They are paid by fixed quantity of paddy for this

service per season, generally, 5 bags per year.

These labourers also do (simultaneously) the same work in other

farmer’s field. In this area, a few farmers belonging to medium and large

groups have regular permanent labourers in their farms. In this area

labourers are paid generally in cash. One or two farmers pay the part of

wages in kind, either as coarse cereals or as paddy. Only a small quantity

of paddy, ranging from 3 to 4 bags, is involved in these transactions.

175 6.1.5. Wage for casual labourers

Wages for casual labourers in agriculture are generally paid in the

form of cash for all agricultural activities. Only in the harvesting of paddy

(complete kind) and groundnut (either cash or kind), wages are paid in

kind. In a few areas, wage for harvesting of coarse cereals are paid in

kind. Wage rate for paddy harvesting varies according to farm, season

and village. The wage per person is fixed and it is four marakkals (one

marakkal is equal to 4 kg). So bargaining is made only on the number of

labourers for harvesting one acre or piece of land. Depending upon the

demand for labourers and other factors, the number of labourers may vary

between 30 and 35 persons per acre. Actually, the number of persons

working and the number of persons agreed in the contract may differ. But

wage paid for the number of persons working in the field may exceed or

be lower than in the agreement. For analytical convenience, this type of

wage rate is transformed into wage rate as in the other villages.

The following are the major determinants of wage rate for

harvesting paddy.

i) distance between paddy field and kalam (threshing place).

ii) demand for labourers at the time of harvest.

iii) climatic conditions prevailing at the time of harvest.

iv) expected yield from the piece of paddy land; and

v) the size of landholding of the farmer.

Greater the distance between paddy field and threshing place,

higher is the wage rate, since the work requires more time and labour.

Generally, paddy, sowing and harvesting in many areas take place within

a limited time span. So, the demand for labourers is very high at certain

176 periods and less in some other period, thus contributing to variation in

wage rate. The climatic conditions prevailing at the time of harvest also

influence the wage rate. If there is heavy rain, the farmers are forced to

accept higher wage rate demanded by labourers so as to avoid crop

spoilage. The expected yield of paddy also determines the wage rate. If

the expected productivity is high in a piece of land, labourers accept to

reduce the wage rate expressed as a share of output and vice versa.

Finally, the large farmers have a group of casual labourers. Traditionally,

this group works on such farms. Because of the regularity of

employment, such casual labourers accept a somewhat lower level of

wage rate than the rate prevailing in the area.

6.1.6. Customer payments

Customer payments are made to watchman, crafts man, dhobi,

barber, economically and socially backward people in the village and to

temples etc.,

6.1.7. Loan repayment

Farmers require loan for both agricultural and non-agricultural

purpose. The loans obtained are generally repaid in cash. Sometimes, a

few farmers belonging to marginal and small groups repay their loans in

terms of paddy. There is a growing literature on interlinking in the case of

food crops, because farmers need relatively small amount of loan and it is

available from the business community of the same village who also have

no agricultural land. They need paddy for consumption requirements and

demand paddy as the mode of repayment of loan from the farmers.

177 6.1.8. Interest payment

As in the case of repayment of loan, we also see the payment of

interest in the form of paddy.

6.1.9. Irrigation charges

Irrigation charges for water purchased for paddy cultivation from

other farmers are also paid in the form of paddy. The irrigation charges

very from farm to farm and taluk-to-taluk. It ranges from 5 to 6 bags per

acre per season. But irrigation charges for crops other than paddy are paid

in cash.

6.1.10. Consumption of paddy

Quantity taken for consumption from production is a major

determinant of marketable surplus. Generally, paddy producing farmers

meet their consumption requirements of rice from their own production of

paddy. Some of the marginal and small farmers meet their consumption

need mostly by allotting from production and the remaining by purchasing

from open market and or government fair price shops. This is also

practised among a few medium group farmers of non-delta region. But

for a large proportion of medium farmers in the region, all the medium

farmers in the delta region and all large farmers in the both regions meet

their grain consumption needs entirely from own production. One or two

farmers in the lower groups sold all their inferior variety of paddy and

bought back superior variety of rice or such variety in paddy from other

farmers or traders.

178 6.1.11. Paddy for relatives

Traditionally, farmers give rice with a certain amount of money to

aged parents as Jeevanasam (like pension). A number of farmers give

considerable quantity of paddy / rice to their close relatives like married

sisters, brothers, etc. who have no paddy land / agricultural land and are

engaged in non-agricultural occupations in near by places.

6.1.12. Wastage and deductions

Wastage and weight loss of paddy occur at the time of storage.

Wastages happen by rats, pests, etc. The weightage loss occurs by the

loss of moisture content of paddy while storing it. Apart from this,

wastage occurs during the time of the transport of paddy from one place to

another place. The weightage loss and other wastages are directly

associated with quantum and period of storage. Another component

determining the level of marketable surplus is deduction made by

marketing authorities by means of taking samples (higher than the

required quantity) and reduction for moisture content. This is illegal,

because already the marketing authority offers a price for paddy according

to moisture content in it. However, according to some of the farmers, if

they protest, the weighman will over-report the moisture content and

farmers will receive an even lower price.

6.1.13. Receipts of paddy

Like the payments and retentions, farmers receive paddy from

different sources. The sources are wages received, land, collection of

loan, collection of interest, irrigation charges, relatives and other sources.

179 6.1.14. Wages

A few family members of marginal and small groups may be

working as agricultural labourers, either permanent or casual. They may

receive paddy as wage. In this village, agricultural labourers belonging to

marginal and small farm households earn paddy in this way.

6.1.15. Loan and interest collection

No one receives paddy as collection of loan or interest in both the

seasons. This is because the farmers generally do not get loan for

agricultural operations from private sources in cash. They are borrowing

mostly from the co-operative society or commercial banks or acquire

agricultural inputs on credits.

6.1.16. Irrigation charges

Farmers receive paddy as irrigation charges by selling water to near

by field, which has no own well or canal water facilities.

6.1.17. Marketable surplus of paddy

The marketable surplus of paddy is defined as the surplus quantity

available for sale from production after deducting all payments and

retentions such as consumption, wage for permanent labourers, wage for

harvesting, customary payments, rent for leased – in land, load repayment,

interest payment, irrigation charges, paddy given to relatives, seed

deductions and wastage.

The primary data collected were analysed through well known

statistical tools. The tools were selected for analysis on the basis of merit

and weightage of each and every individual problem of the study

180 concerned. The various tools which were used to analyse the data were,

mean, medium, standard, deviation, Anova table, Duncan table and

regression. The analysis of each table is given in terms of percentage.

The descriptive findings and reasons are the same.

6.1.18. Variety of paddy

Varieties have been classified under two categories called common

and fine. In Kuruvai and Thaladi season only these varieties are

cultivated. Common varieties are IR-20, ADT-36, TKM-9, CO-43, CR-

1009 and fine varieties are white Ponni and Katta Ponni.

181

TABLE 6.1 Variety of paddy cultivators – farm size

Farm size

ADT-36 IT-20

TKM-9

CO-43

CR-1003

White & Katta Ponni

Maginal 27 67 --- --- --- ---

Small 35 48 --- --- --- ---

Medium 24 29 --- --- --- 06

Large 20 13 07 07 14 03

Total 20 (35.3)

13 (52.3)

07 (2.3)

07 (2.3)

14 (4.7)

09 (3.0)

Source: Primary data. Note: Figures in parentheses refer to percentage.

From the above table we can understand the majority of the farmers

in the study area. Cultivators of IR-20 numbered 157 out of the 300

farmers followed by 106 farmers cultivating ADT-36. The lowest

cultivating crop variety is TKM-9 and CO-43. This clearly slows that the

IR-20 will give more profit than the other varieties, so the farmers give

more importance to cultivating IR-20 and ADT-36 than other varieties.

182 TABLE 6.2 Variety of paddy cultivation in the study area

(no. of farmers)

Study area ADT-36 IT-20TKM-

9 CO-43

CR-1003

White and Katta Ponni

Kumbakonam 33 66 --- --- --- 01

Orathanadu 46 52 --- --- --- 02

Papanasam 27 39 07 07 14 06

Total 106 (35.3)

157 (52.3)

7 (2.3)

7 (2.3)

14 (4.7)

09 (3.0)

Source: Primary data. Note: Figures in parentheses refer to percentage.

From the above table, one may find that Kumbakonam taluk,

stands first having 66 farmers cultivating to IR-20 followed by 52 and 36

farmers producing IR-20 variety. Further even in the ADT variety of

paddy Orathanadu stands first having 46 farmers producing ADT-36

followed by Kumbakonam and Orathanadu taluks with 33 and 27 farmers

respectively.

183 TABLE 6.3 Kuruvai production per acre – area wise

(no. of farmers)

Per acre Production Kumbakonam Orathanadu Papanasam Total

20.00 --- --- 6 (100.00 ) 6

(100.00 )

21.00 6 (100.00 ) --- --- 6

(100.00 )

22.00 --- --- 6 (100.00 ) 6

(100.00 )

23.00 --- --- 7 (100.00 ) 7

(100.00 )

24.00 18 (34.6 ) 27

(51.9 ) 7

(13.5 ) 52

(100.00 )

25.00 38 (36.5 ) 34

(32.7 ) 32

(30.8 ) 104

(100.00 )

26.00 32 (37.2 ) 26

(30.2 ) 28

(32.6 ) 86

(100.00 )

27.00 6 (18.2 ) 13

(39.4 ) 14

(42.4 ) 33

(100.00 )

Total 100 (33.33) 100

(33.33) 100

(33.33) 300

(100.00) Source: Primary data. Note: Figures in parentheses indicate percentage. It is perceived from the presented data that the highest is

production at 59.7 per cent in Papanasam taluk with 32 bags of paddy and

the lowest in Orathanadu at 18.9 per cent. This may be due to the high

yielding cultivated land in Papanasam followed by Kumbakonam, further

46.2 per cent and 53.8 per cent having the highest production of 37 bags

per acre while Papanasam accounted for 100 per cent having production

of 38 bags per acre and no other area exceeded production in Papanasam.

184 TABLE 6.4 Thaladi production per acre – area wise

(no. of farmers)

Per acre Production Kumbakonam Orathanadu Papanasam Total

32.00 18 (23.4) 13

(16.9) 46

(59.7) 77

(100.00)

33.00 7 (100.00) --- --- 7

(100.00)

34.00 19 (50.00) 19

(50.00) --- 38

(100.00)

35.00 31 (36.50) 27

(31.80) 27

(31.80) 85

(100.00)

36.00 19 (26.00) 34

(46.60) 29

(24.40) 73

(100.00)

37.00 6 (46.20) 7

(53.8) --- 13

(100.00)

38.00 --- --- 7 (100.00) 7

(100.00)

Total 100 (33.33) 100

(33.33) 100

(33.33) 300

(100.00) Source: Primary data. Note: Figures in parentheses indicate percentage.

185

The Thaladi production shows the high production level found in

almost all production areas from 20 bags to 27 bags in Papanasam and

low productivity level in Kumbakonam taluk. Orathanadue stands second

next to Papanasam in terms of productivity with 26 and 27 bags category,

both Papanasam and Kumbakonam stand equal.

Both the Kuruvai and Thaladi production were compared in the

study areas. Kuruvai production is much higher than the Thaladi

production. This is an example of marginal diminishing utility. When

land is being used repeatedly, the production capacity of the land goes on

decreasing.

186 TABLE 6.5 Descriptive, Anova and Duncan Tables for average land

holdings in the study area

One ANOVA test is prepared to test whether the average land

holding differs significantly among the three areas of study mainly

Kumbakonam, Orathanadu and Papanasam taluks.

Descriptive table 6.5(a)

Study area N Mean Standard deviation Standard

error

95% confidence interval for mean

Lower bound

Upper bound

Kumbakonam 100 5.0300 2.9023 0.2902 4.4541 5.6059

Orathanadu 100 6.6150 5.1394 0.5739 5.5952 7.6348

Papanasam 100 5.0550 2.9905 0.2991 4.4616 5.6484

Total 300 5.5667 3.379 0.2290 5.1259 6.0074

Source: Calculated on the basis of the data collected during the field work.

The above table gives the mean, standard deviation; standard error

and 95 per cent confidence interval for mean are given for the three areas.

187

ANOVA table 6.5(b)

Land Sum of

squares df

Mean

square F Significant

Between groups 184.662 2 62.441 5.649 0.004

Within groups 4334.265 297 14.594

Total 4499.167 299

In the above ANOVA table as the significance value is 0.004

which is less than 0.05, the average land holding differs significantly in

the three sampled areas.

Duncan table 6.5(c)

Study area N Subset for alpha = 0.5

1 2

Kumbakonam 100 5.0300

Orathanadu 100 6.6150

Papansam 100 5.0550

Sig. .963 1.000

From the Duncan table, we learn that Kumbakonam and

Papanasam respondents on the average have 5 acres of land which

indicates wet land and garden land while the Orathanadu respondents have

188 on an average 6.6 acres which is significantly higher than the other two

areas.

TABLE 6.6 Descriptive, Anova and Duncan Tables for the average cost

of Kuruvai season – area wise



error


Lower bound

Upper bound

Kumbakonam 100 4075.2954 1955.6289 195.5629 3687.2561 4463.334

Orathanadu 100 3298.6286 380.0055 38.0005 3223.2273 33.74030

Papanasam 100 3704.6020 1129.8976 112.9896 3480.4058 3928.798

Total 300 3692.8420 1355.6416 78.2680 3538.8961 3846.867


ANOVA table 6.6(b)

Land Sum of

squares df

Mean


Between groups 3.0E + 07 2 1.5E+07 6.631 .000

Within groups 5.2E + 08 297 1748519

Total 5.6E + 08 299

189

Duncan table 6.6(c)


1 2 3



Papansam 100 4075.2954

Sig. 1.000 1.000 1.000

From the above table, we find that the average Kuruvai cost per

acre in the study area in Papanasam taluk shows that the major mean cost

is Rs.4075.29. This analysis has revealed the lower quality of land and

the higher cost of manure. Kumbakonam taluk is the lowest among three

study area with high quality of land and higher utilization of new

technologies and manure. The cost wise analysis of Kuruvai is satisfactory

in Kumbakonam when compared to the other two areas.

190 TABLE 6.7 Descriptive, Anova and Duncan Tables for the average cost

of Thaladi season – area wise



error


Lower bound

Upper bound

Kumbakonam 100 4279.0601 2053.4109 205.3410 3871.6190 4686.501

Orathanadu 100 3463.5801 0399.0057 039.9006 3384.3987 3542.731

Papanasam 100 4193.0931 1280.9053 128.0905 3938.9337 4447.252

Total 300 3978.5711 1458.2029 084.1894 3812.8923 4144.248


ANOVA table 6.7(b)

Land Sum of

squares df

Mean


Between groups 4.0E + 07 2 2.02 + 07 10.11 .000

Within groups 6.0E + 08 297 2005473

Total 6.4E + 08 299

191

Duncan table 6.7(c)


1 2



Papansam 100 4279.0601

Sig. 1.000 0.668

From the above table, it can be noted that the expenses per acre

show the differences in expenses incurred in different areas. The

difference between the average expense in Papanasam and Orathanadu is

almost equal but in Kumbakonam the cost per acre is the lowest.

From the above analysis it is noteworthy to note that Thaladi leads

with the lowest in terms of expenditure in cost per acre in Kuruvai

compared to other areas.

192 TABLE 6.8 Descriptive, Anova and Duncan tables for the average

Kuruvai cost – farm wise


Farm size N Mean

Standard deviation

Standard error


Lower bound

Upper bound

Marginal farmers 103 2939.7403 263.6452 25.9777 2888.2136 2991.2670

Small farmers 94 3573.7066 516.1078 53.2325 3467.9975 3679.4145

Medium farmers 66 4026.0168 605.4701 74.5282 3877.1736 4174.8599

Large farmers 37 5497.6710 2916.4213 479.4667 4625.2878 6470.0543

Total 300 3692.8420 1355.6416 78.2680 3538.8161 3846.867


ANOVA table 6.8(b)

Land Sum of

squares df

Mean


Between groups 1.9E + 08 3 6.3E + 07 51.149 .000

Within groups 3.6E + 08 296 1222598

Total 5.5E + 08 299

193

Duncan table 6.8(c)

Farm size N Subset for alpha = 0.5

1 2 3 4

Marginal farmers 108 2989.7406

Small farmers 94 8573.7086

Medium farmers 66 4026.0168

Large farmers 37 5497.6710

Sig. 1.000 1.000 1.000 1.000

The above table shows that most of the farmers in the study area

are marginal farmers and their average expenditure is Rs.2989.74 per acre.

And out of 300 farmers, in the study group, only 37 large farmers have got

the mean of Rs.5498.67 per acre.

194 TABLE 6.9 Descriptive, Anova and Duncan tables for average Thaladi

cost – farm wise


Farm size N Mean

Standard deviation

Standard error


Lower bound

Upper bound


Small farmers 94 3752.3919 541.9132 55.8941 3641.3973 3863.3864

Medium farmers 66 4227.3178 889.7436 78.2546 4071.0323 4383.6029

Large farmers 37 5772.5546 3062.2424 503.4295 4751.5521 6793.5570

Total 300 3978.5711 1458.2029 84.1894 3812.8923 4144.2499


ANOVA table 6.9(b)

Land Sum of

squares df

Mean



Within groups 4.7E + 08 296 1591374

Total 6.4E + 08 299

195

Duncan table 6.9(c)


1 2 3





Sig. 0.096 1.000 1.000

From the above table, it has been observed that out of 300 farmers

in the study area, 103 farmers form part of the marginal group having the

average cost per acre with Rs.3381.15 and 37 large farmers have

Rs.5572.55 as the average cost per acre.

From the combined analysis of both the Kuruvai and Thaladi it can

be understood that cost per acre for Thaladi is higher than Kuruvai cost

due to increase in the variable cost per acre.

196 TABLE 6.10 Descriptive, Anova and Duncan tables for Kuruvai cost per

bag – farm wise



error


Lower bound

Upper bound

Kumbakonam 100 118.6359 56.2865 5.6266 107.4714 129.800

Orathanadu 100 123.0692 60.8859 6.0886 110.9889 135.159

Papanasam 100 109.3651 33.9912 3.3991 102.6205 116.109

Total 300 117.0234 51.8746 2.9950 111.1295 122.917


ANOVA table 6.10(b)

Land Sum of

squares df

Mean


Between groups 9780.120 2 4390.080 1.827 0.163

Within groups 794812.2 297 2876.135

Total 804592.3 299

197

Duncan table 6.10(c)


1 2 3 4





Sig. 1.000 1.000 1.000 1.000

From the analysis of cost per bag of paddy production, it can be

inferred that Papanasam stands the lowest among the other taluks with an

average cost Rs.109 per bag followed by Kumbakonam with Rs.118 per

bag, the highest being Orathanadu where the cost per bag comes to

Rs.123/=. Further while analyzing the cost factor Papanasam is placed

better than the other two study areas in terms of cost. The reason is due to

qualitative cultivable land available in Papanasam compared to

Orathanadu where only meagre area of quality land is available.

198 TABLE 6.11 Descriptive, Anova and Duncan tables for Thaladi cost per

bag – area wise


Study area N Mean Standard deviationStandard

error


Lower bound

Upper bound

Kumbakonam 100 172.2550 87.0685 8.7068 154.9787 189.532

Orathanadu 100 177.9221 87.1093 8.7109 160.6372 196.206

Papanasam 100 171.5709 60.0993 6.0099 159.8459 183.496

Total 300 173.9160 78.9085 4.5558 164.9505 182.883


ANOVA table 6.11(b)

Land Sum of squares df Mean square F Significant

Between groups 2430.755 2 1215.378 .194 .824

Within groups 1859307 297 6260.291

Total 1881737 299

199



1



Papansam 100 177.9221

Sig. .597

The descriptive table shows that the Thaladi cost per bag is the lowest in

Kumbakonam followed by Orathanadu and Papanasam and the cost being

Rs.171, Rs.172 and Rs.177/= respectively in the three study areas.

Further the comparative study of the cost analysis reveals that out of both

Kuruvai and Thaladi seasons, the cost of cultivation is much lower for Kuruvai

when compared to Thaladi crop cultivation. This is again due to diminishing

marginal utility, where the repeated use of land increases the variable cost by

putting more manures etc. However the fixed cost will remain the same.

200 TABLE 6.12 Multiple linear regression for marginal farmers in Kuruvai

season production per acre

Taking Kuruvai profit per acre as the dependent variable and

cultivation as variable cost, cultivation fixed cost, total no. of members in

the family and Kuruvai production per acre as independent variables a

multiple linear regression analysis is carried out. The results are given

below

Model summary table 6.12(a)

Model R R square Adjusted R

square Standard error of the

estimate

1 .9958 .990 .990 54.8173

From the table R square equation is 0.990 which means that 99 per

cent of the variability is explained in the dependent variable by the above

said independent variable.

Co-efficient table 6.12(b)

Model

Unstandardized co-efficients Standardized

co-efficients beta t Sig.

Std. error

Constant 14466.783 111.615 102.932 .000

CUL-VCOS -4.78E-02 .22 -0.23 -2.172 .032

CUL-FCOS .143 .049 .033 2.949 .004

TNF -7.292 4.558 -0.019 -1.600 .133

KUGR-PRO .436 .005 1.792 90.840 .000

201 From the co-efficient table all the variables except TNF (Total

number of family members) are having significant effect on the

regression. Thus, the regression equation is obtained as

Y = 11466.783 – 478E.02x1 + 0.143x2 + 0.436x3

where, x1 is variable cost, x2 is cultivation fixed cost, and x3 Kuruvai

cropped production.

CUL-VCOS - Kuruvai cultivation variable cost.

CUL-FCOS - Kuruvai cultivation fixed cost.

KUGR-PRO - Kuruvai crop production per acre.

TNF - Total number of members in the family.

202 TABLE 6.13 Multiple linear regression for small farmers in Kuruvai

production per acre




estimate

1 .9958 .993 .992 62.7092

The table indicates R square is 0.992 which means that 99 per cent

of the variability is explained in the dependent variable by the above said

independent variable.


Model

Unstandardized co-efficients Standardized co-efficients

beta t Sig.

Std. error

Constant 11027.860 176.984 62.682 .000

CUL-VCOS -4.14E-02 .57 -0.012 -0.732 .486

CUL-FCOS 2.603E-02 .012 .035 2.213 .029

TNF 4.375 7.363 .006 0.594 0.554

KUGR-PRO 0.214 0.002 2.863 88.549 0.000

In the co-efficient table, it can be noted that all the variables except

TNF (Total number of members in the family) have significant effect on

regression. Thus the regression equation is obtained as

Y = 11027.860 – 4.14E-02x1 + 2.603E-02x2 + 0.214x3

where, x1 is variable cost of cultivation, x2 is fixed cost of cultivation and

x3 is production of an acre of Kuruvai crop.

203 TABLE 6.14 Multiple linear regression for medium farmers in Kuruvai





estimate

1 .9958 .991 .990 61.0557

From the table it can be observed that R square equation is 0.990

which means that 99 per cent of the variability is explained in the

dependent variable by the above said independent variable.


Model


beta t Sig.

Std. error

Constant 9077.875 425.744 21.322 .000

CUL-VCOS .440 .142 .046 3.092 .003

CUL-FCOS -5.43E-02 .012 .069 -4.631 .000

TNF -10.109 10.813 -0.013 0.935 0.054

KUGR-PRO 0.149 0.008 3.108 49.457 0.000 It is perceived from the co-efficient table that all the variables

except TNF (Total number of members in the family) are having

significant effect on the regression.

Thus the regression equation is obtained as

Y = 9077.875 + 0.440x1 – 5.43E.02x2 + 0.149x3

where x1 shares the variable cost of cultivation,

x2 shares the fixed cost of cultivation.

x3 shares the Kuruvai crop production per acre.

204 TABLE 6.15 Multiple linear regression for large farmers in Kuruvai





estimate

1 .992R .984 .992 42.7490

It can be seen from the above table that R square equation is 0.992

which means that 99 per cent of the variability is explained in the

dependent variable by the above said independent variable.


Model


beta t Sig.

Std. error

Constant -10348.1 1513.870 -6.836 .000

CUL-VCOS 8.272 .536 1.881 15.432 .000

CUL-FCOS 1.793 .095 1.400 18.933 .000

TNF -981.748 39.265 -2.904 -25.003 .000

KUGR-PRO -6.69E-02 .003 -3.136 -19.412 .000

205 TABLE 6.16 Multiple linear regression for marginal farmers in Thaladi





estimate

1 .6958 .483 .456 325.1857


Model


beta t Sig.

Std. error

Constant 8592.361 630.603 13.626 .000

TNF 112.932 26.206 .385 4.691 .000

KUGR-PRO -4.25E-02 .019 -0.213 -2.251 .027

THA-VCOS .199 .120 .123 1.553 .124

THA-FCOS -2.488 .292 -0.706 -8.532 .000

It can be seen from the table presented that R square equation is

0.456 which means that 99 per cent of the variability is explained in the

dependent variable by the model summary of the independent variables.

And co-efficient table of all the variables except TNF (Total number of

members in the family) are having significant effect on the regression.

Thus, the regression equation is obtained as

Y = 8592.361 + 0.199x1 – 2.488x2 – 4.25E.02x3

where x1 is cultivation variable cost, x2 cultivation fixed cost and x3

Thaladi crop production per acre.

206 TABLE 6.17 Multiple linear regression for small farmers in Thaladi





estimate

1 .5238 .273 .232 267.8606


Model


beta t Sig.

Std. error

Constant 5910.034 751.496 7.731 .000

TNF -66.361 31.499 -0.200 -2.110 .038

KUGR-PRO 1.223E-03 .10 .038 .119 .906

THA-VCOS .666 .230 .476 2.894 .005

THA-FCOS -0.219 .050 -0.698 -4.364 .000

From the table, it is important to note that R square equation is

0.232 which means that 99 per cent of the variability is explained in the

dependent variable by the above said independent variable. And from co-

efficient table we note all the variables except TNF (Total number of

members in the family) are having significant effect on regression which

is obtained as

Y = 5910.034 + 0.666x1 – 0.219x2 + 1.223E-03x3

207 TABLE 6.18 Multiple linear regression for medium farmers in Thaladi





estimate

1 .9188 .643 .830 235.9172


Model


beta t Sig.

Std. error

Constant 23489.937 1645.062 14.279 .000

TNF -95.066 41.780 -0.131 -2.275 .026

KUGR-PRO .152 .012 3.407 13.026 .000

THA-VCOS -4.837 .524 -0.545 -8.858 .000

THA-FCOS .163 .045 .223 3.589 .001

From the above table, it may be observed that R square equation is

0.830 which means that 99 per cent of the variability is explained. And

from the co-efficient table, it can be noted that all the variables except

TNF (Total number of members in the family) are having significant

effect on equation which is obtained as

Y = 23489.937 - 4.837x1 + 0.163x2 + 0.152x3

208 TABLE 6.19 Multiple linear regression for large farmers in Thaladi





estimate

1 .9748 .948 .942 115.5334


Model


beta t Sig.

Std. error

Constant -63421.5 3458.384 -18.349 .000

TNF -1147.498 73.323 -2.272 -15.650 .000

THA-VCOS 22.867 1.141 3.622 19.870 .000

THA-FCOS 3.297 .201 1.723 16.363 .000

It can be deducted from the table presented that R square equation

is 0.942 which means that 99 per cent of the variability is explained. And

from the co-efficient table, if any may be noted that are the variables

except TNF are having significant effect on equation which obtained as

Y = 63421.5 = 22.867x1 + 3.297x2 + 110.583x3

209 TABLE 6.20 Descriptive, Anova and Duncan Tables for marketable

surplus in Kuruvai season – area wise


Study area N Mean Standard deviationStandard

error


Lower bound

Upper bound

Kumbakonam 100 29.0572 6.2590 .6258 27.8154 30.293

Orathanadu 100 29.0703 7.9448 .7945 27.4939 30.649

Papanasam 100 28.7816 5.2759 .5276 27.7347 29.829

Total 300 -

28.9697 5.6652 .9790 28.2236 29.771


ANOVA table 6.20(b)

Land Sum of squares df Mean square F Significant

Between groups 5.317 2 2.858 .061 .941

Within groups 12882.078 297 43.374

Total 12887.394 299

Source: Computed from primary data

210



1



Papansam 100 29.0703

Sig. .773

Source: Computed from primary data.

It can be seen from the table that the marketable surplus can be

defined as the excess of the samples over total retention. The descriptive

analysis of the table shows that all the three study areas show almost equal

amount of samples with little difference between Kumbakonam and other

study area. An average of 29 bags per acre is marketable surplus in all the

three areas.

211 TABLE 6.21 Descriptive, Anova tables for Thaladi season profit per

acre– farm wise


Farm size N Mean

Standard deviation

Standard error


Lower bound

Upper bound

Marginal

farmers 103 7225.1845 440.9600 43.4491 7139.0034 7311.3655

Small

farmers 94 7206.2128 305.6528 31.5257 7143.6090 7266.6155

Medium

farmers 66 6609.0909 571.5922 70.3581 8468.5760 8749.8058

Large

farmers 37 6858.1351 479.3889 78.8110 6698.2989 7-17.9713

Total 300 7038.4800 509.5706 29.4201 6980.5384 7096.3266

Source: Calculated from primary data.

ANOVA table 6.21(b)

Land Sum of

squares df

Mean


Between groups 2.0E + 07 3 6535734 33.337 .000

Within groups 5.6E + 07 296 196053.4

Total 7.8E + 07 299

212



1 2 3





Sig. 1.000 1.000 .809

Source: Computed from primary data.

From the table on profitability it may be observed that out of the

300 farmers in the study area, the average profit of marginal farmer is

only Rs.7225.18 per acre and whose number is 103 compared to the

average profit of Rs.7038.48 per acre for the 300 farmers. However from

the combined analysis of 60th Kuruvai and Thaladi one may find that the

average profit is much higher in Kuruvai cultivation than in Thaladi. This

is due to the low yielding quality of the land. Further the marginal

farmers are earning less amount of profit both in Kuruvai and Thaladi

cultivation.

213 TABLE 6.22 Descriptive, Anova and Duncan tables for average net profit

per acre – farm wise (per year)


Farm size N Mean

Standard deviation

Standard error


Lower bound

Upper bound


Small farmers 94 18361.30 726.2723 74.9093 18212.54 18510.05

Medium farmers 66 17350.84 1012.8582 124.8740 17101.85 17509.63

Large farmers 37 18241.92 522.2607 85.8591 18067.79 18416.05

Total 300 18177.29 918.0916 52.7174 18079.54 1828.08


ANOVA table 6.22(b)

Land Sum of

squares df

Mean



Within groups 1.9E + 08 296 638659.6

Total 2.5E + 08 299

214



1 2





Sig. 1.000 .066


The table indicates that the combined analysis of net profit per year

both in Kuruvai and Thaladi is about Rs.18,177/= per acre among 300

farmers in the sample study area, the highest being Rs.18,515/= and the

lowest being of Rs.17,350/= per acre for the medium level farmers. The

higher profit for marginal farmers is due to lesser amount of the labour

cost.

215 TABLE 6.23 Descriptive, Anova and Duncan tables for average net profit

per acre – area wise (per year)


Area code N Mean Standard deviation Standard

error


Lower bound

Upper bound

Kumbakonam 100 18243.36 969.0725 98.9072 18051.09 18435.87

Orathanadu 100 18327.09 579.7715 51.9772 1822.96 18430.22

Papanasam 100 17961.39 1111.1372 111.1137 17740.92 18181.86

Total 300 18177.29 918.0916 52.7174 18073.54 18281.03


ANOVA table 6.23(b)

Land Sum of

squares df

Mean


Between groups 7342074 2 3871037 4.506 .012

Within groups 2.4E + 08 297 614629.9

Total 2.5E + 08 299


216



1 2



Papanasam 100 18327.09

Sig. 1.000 .512


From analysis of net profit per acre, table it can be understood that

Kumbakonam stands the lowest among the other taluks with net profit

Rs.17,961/= per year followed by Orathanadu Rs.19,240/= the highest

being Papanasam where the net profit comes to Rs.18,327/=. Further

while analyzing the net profit Papanasam is placed better than the other

two study area.

Chapter VI ANALYSIS OF THE COST AND RETURN ON PADDY...

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