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Economics Analysis of Production, Resource Use Efficiency and Constraints Analysis of Sugarcane Cultivation in East Champaran District of North Bihar

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The present paper estimate the cost and returns of sugarcane cultivation, input use efficiency and production constraints have been computed using primary data collected from 68 sugarcane growers on various aspects of costs and returns spread over two blocks in East-Champaran district of Bihar. The paper has analysed that an average sugarcane cultivating farmers in the area spent 33.71 percent of the total cost on hired labour, 21.72 percent on seed, 17.69 percent on chemical fertilizers, 11.98 percent on machine power and 4.26 percent on plant protection chemicals, realized a net return of Rs. 114183 per hectare. This might be due to the fact that the value of BCR has reached its maximum (2.74) only at the farm size of above two hectare. The study was shown that planting materials (seeds), tractor cost and plant protection chemical uses have a positive and significant influence on sugarcane yield, indicating that these resources are being used at sub-optimal levels and there exists the possibility of enhancing the yield of sugarcane by increasing their use. Labour shortage during peak period (81.50) average score in garret’s ranking has been reported the major production constraints by the sugarcane growers. The general observation from the farmer’s perception in the area is that in spite of the fact that the central and state Government price incentives have provided them a relief to some extent the mechanism evolved for fixing minimum price does not cover the entire cost components and the risk factors involved in the sugarcane cultivation.
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Original Research Article https://doi.org/10.20546/ijcmas.2018.710.056
Economics Analysis of Production, Resource Use Efficiency and Constraints
Analysis of Sugarcane Cultivation in East Champaran
District of North Bihar
Shiva Pujan Singh1*, H.P. Singh2, Meera Kumari3, Md. Minnatullah4,
H. Chand1 and Balwant Kumar4
1Department of Agricultural Economics, Sugarcane Research Institute, Dr. Rajendra Prasad
Central Agricultural University, Pusa, India
2Department of Agricultural Economics, BHU, Varanasi, India
3Department of Agricultural Economics, BAU, Sabour, Bhagalpur, India
4Sugarcane Research Institute, RPCAU, Pusa, India
*Corresponding author
A B S T R A C T
Introduction
Sugarcane (Saccharium officinarum) is an
important commercial crop of the world and is
cultivated in more than 100 countries, the
leading countries being Brazil, India, China,
Thailand and Pakistan. India is the largest
consumer of sugar and second largest
producer of sugarcane after Brazil. Its share in
global sugarcane production was about 17 per
cent in 2016-17. It is the second important
commercial crop after cotton in India and
International Journal of Current Microbiology and Applied Sciences
ISSN: 2319-7706 Volume 7 Number 10 (2018)
Journal homepage: http://www.ijcmas.com
The present paper estimate the cost and returns of sugarcane cultivation, input use
efficiency and production constraints have been computed using primary data collected
from 68 sugarcane growers on various aspects of costs and returns spread over two blocks
in East-Champaran district of Bihar. The paper has analysed that an average sugarcane
cultivating farmers in the area spent 33.71 percent of the total cost on hired labour, 21.72
percent on seed, 17.69 percent on chemical fertilizers, 11.98 percent on machine power
and 4.26 percent on plant protection chemicals, realized a net return of Rs. 114183 per
hectare. This might be due to the fact that the value of BCR has reached its maximum
(2.74) only at the farm size of above two hectare. The study was shown that planting
materials (seeds), tractor cost and plant protection chemical uses have a positive and
significant influence on sugarcane yield, indicating that these resources are being used at
sub-optimal levels and there exists the possibility of enhancing the yield of sugarcane by
increasing their use. Labour shortage during peak period (81.50) average score in garret’s
ranking has been reported the major production constraints by the sugarcane growers. The
general observation from the farmer’s perception in the area is that in spite of the fact that
the central and state Government price incentives have provided them a relief to some
extent the mechanism evolved for fixing minimum price does not cover the entire cost
components and the risk factors involved in the sugarcane cultivation.
Ke ywords
Sugarcane, Cost &
revenue, Input use
efficiency and
constraints analysis
Accepted:
06 September 2018
Available Online:
10 October 2018
Article Info
Int.J.Curr.Microbiol.App.Sci (2018) 7(10): 512-519
513
grown in about 5.0 million hectares
production of about 31 million tone
contributing direct and indirect employment to
40 million farmers, 3.5 lakhs skilled and
unskilled workers in the manufacturing of
sugar.
Bihar is an important sugarcane growing state
in the country with its area of 0.30 m.ha.,
ranks fourth in sugarcane area with a share of
5.58 percent. The average production of Bihar
is 14.7mt (million tones) which is 4.68 percent
of the total production of the country with
yield level of 50tonesper hectare in 2016-17.
In Bihar the major sugarcane growing districts
are West-Champaran, East Champaran,
Gopalganj, Sitamrhi, Siwan and Samastipur
district respectively. Which do not only
account for nearly 70 percent cane area but 60
percent of annual cane production of the state.
Sugarcane is an important commercial crop in
the North Bihar. It has dominated the farming
system in this region for a long time.
Therefore, to explain the possibilities of
raising farm production and farm income in
this region. There are 28 sugar mills in Bihar,
out of which 16 are sick and closed 12 are
working in private sector.
The commercial farmer’s chiefly concern is to
secure a satisfactory margin between the cost
and selling price of his produce. Thus in order
to justify continuance a farm enterprise should
generate a net profit over the total cost. Hence,
this study becomes crucially important for the
farmers to know their production cost. The
cost of production and returns from sugarcane
varies from region to region and from one
category farmers to another.
The present study was carried out with the
following specific objectives:
To find out cost and revenue gain in sugarcane
cultivation.
To determine the resource use efficiency in
sugarcane production.
To explore the constraints faced by Farmers in
sugarcane cultivation and the suitable
suggestion to overcome, these constraints.
Materials and Methods
East-Champaran district in Bihar was
purposively selected for the study as this
district has the second highest area after West
Champaran district under sugarcane
cultivation the state. Sugarcane in grown up as
a major field crop by majority of the farmers
in the district and had a maximum area of
irrigated sugarcane cultivation.
The study is based on the primary data on
various aspects were collected from the 68
sample farmers spread over in four village of
two block from one leading district viz. East-
Champaran with respect to sugarcane area,
through pretested questionnaire by personal
survey method with the help of multi stage
random sampling technique. Post stratification
was made to classify the farmers into three
groups viz. marginal (<1.0 ha) small (1.0-2.0
hac), and medium large (>2.0 ha) categories
based on their land holding.
Analytical tools
A part from budgeting technique and cost
concepts, following analytical tools were
employed (i) benefit cost ratio (ii) production
function analysis and (iii) Garret’s ranking
technique for constraints analysis in sugarcane
cultivation.
Production function analysis was used for
determining the efficiency of various
resources used in the process of production.
The cobb-Douglas production function was
used due to higher value of coefficient of
multiple determinations obtained.
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514
Production function
Y = a +
b1 = Regression coefficient
ui = Error term (i = 1, 2…..n)
Where, y is the yield of sugarcane (tons), Xi is
the human labour (manday), X2, X3,X4……X6
denotes the cost of seed, manure and
fertilizers, irrigation cost, tractor cost and
plant protection chemicals respectively.
Resource use efficiency
The estimated coefficients of significant
independent variables were used to compute
the marginal value products (MVP).
MVPi = B Py
Here,
MVPi = Marginal value product of the ith input
= Geometric mean of the value of output (in
rupees)
= Geometric mean of the ith input (value in
rupees)
Bi = Estimated co-efficient (or) production
elasticity with respect to xi input.
Py = Price of out put
Garrett’s ranking technique
The opinions survey of farmers sample about
the various constraints in sugarcane
production was collected and analyzed using
Garrett’s ranking technique. The ranks given
by each respondent were converted into
percent position by using formula.
Percent position =
Where,
= Rank given to ith constraints by the jth
individual and
Nj = Number of constraints ranked by the jth
individual.
The estimated percent positions were
converted into scores using Garrett’s table.
The mean score values estimated for each
factor were arranged in the descending order.
The constraints with the highest mean value
was considered as the most important one and
the others followed in that order.
Results and Discussion
Cost and return structure in sugarcane
production
The cost of cultivation and cost of production
of any crop is the most important aspects of
the farm economy both at micro and macro
level. The productivity level depends on the
optimum allocation of resources which are
always being considered either of scarce or
costly and would have a definite impact on the
cost and revenue structure of crop farms. It
may be noticed that in agricultural production,
cost of production refers to the expenditure
incurred by the farmers on the various inputs
(fixed and variable) to obtain the final
produce. The fixed cost includes depreciation,
taxes, rent, interest, etc, which results from
past commitments of costs already sunk. It is
constant over time and does not change with
the changes in crop output. On the other hand,
there are variable cost viz. cost of human
labour (family and hired), machinery power,
seeds, manures, fertilizers, plant protection
chemicals, etc. which are directly linked up
with output. This would be an important cost
Int.J.Curr.Microbiol.App.Sci (2018) 7(10): 512-519
515
which determine how much and what is to be
produced. Therefore, it is the variable cost,
based on which the major cropping decisions
are taken at farm levels. The estimated cost
and revenue particulars of sugarcane
production pertaining to the different farm
level data collected from the sample farmers
of four villages of two blocks of East
Champaran district is furnished from Table 1.
A perusal of table 1 reveals that an average
sugarcane cultivation, farmers in the area
spent 33.71 percent of the total operating cost,
on hired human labour, 1.08 percent on
bullock power, 11.98 per cent on machinery
used for different operations. Out of total
operational cost, shared of material cost seed
(setts), fertilizer, plant protection chemicals
and irrigation charges was 21.79 percent,
17.69 percent, 4.26 percent and 6.47 percent
respectively. In other words of the cost
constituents, the share of hired labour was
recorded to be the maximum, indicating the
fact that sugarcane production in the area is
largely depend upon hired labour.
Human labour utilization was maximum in
planting; inter cultivation, followed by
harvesting and transportation cost of seed
occupied the second important position in the
cost of cultivation of sugarcane, as it is the
basic input on which the inters production
depend. Among the various categories of
farms through the average trends in the use of
factor inputs continue in all categories of
farms, there had been a significant difference
observed between farms, especially in the use
of machine power. From the point of view of
net return, this tended to increase with farm
size. This might be due to the fact that the
benefit of economics of scale has reached its
maximum only at the farm size of above 2.0
hectors). The crop productivity was 90 t/ha
under medium and large size farm and 53 t/ha
in marginal farm condition. So, there was 70
per cent higher yield.
Resource use efficiency
For sugarcane growers of East-Champaran:-
Y = 10.653
The Cobb-Douglas type of production
function was fitted for the estimation of
elasticities of important variables contributing
to the yield of sugarcane crop. It is very
important because resources of the farmers are
limited (Table 2). The value of co-efficient of
multiple determinations (R2) was found to be
more than 0.961 in farms indicating that the
explanatory variable included in the model can
explain more than96 per cent variation in yield
of sugarcane crop. The human labour utilized
in sugarcane cultivation was negative and non-
significant in some cases may be due to
timely, unavailability of human labour. The
utilization of seed, tractor cost and plant
protection chemical was significant with
positive sign for all the farm size. The
significant and positive co-efficient indicates
that there is scope for increasing, seed and
plant protection chemicals for enhancing
sugarcane productivity. The manure and
fertilizers utilize in sugarcane crop enhancing
efficiency, these inputs co-efficient were
negative and non-significant. It was reported
during field investigation that most of the
sample, farmers used excess quantity of
manures and fertilizer than the recommended
level. Return to seale (sum of the production
elasticity) was found (0.768) exhibit
increasing return to scale indicates that
simultaneous increase of one percent in factor
of production yield, increase more than are
percent in gross return.
Comparison of marginal value product
(MVP) with acquisition cost
The marginal value product of all the
resources were compared with their
Int.J.Curr.Microbiol.App.Sci (2018) 7(10): 512-519
516
corresponding acquisition cost i.e. the cost
price plus interest and the differences between
the two were tested statistically for their
significant with the help of t-test.
The perusal of the Table 3 indicates that the
marginal value product of seed, plant
protection chemicals and tractor cost is
significantly higher than its acquisition cost, it
indicates indicating that there is sub-optional
use of the seed, irrigation and tractor cost.
Therefore is need to increase the level of seed,
irrigation and tractor cost to achieve maximum
return. The marginal value productivity of
manure and fertilizers is significantly lower
than the requisition cost, indicating that there
is excess use of these resources than the
recommended level, there is need to decrease
use of manure and fertilizers application to
achieve maximum return. The interpretation of
marginal value product has been made with
respect to those resources only whose
regression coefficients were found to be
significant.
Table.1 Estimated cost and revenue particulars of sugarcane cultivation in
East Champaran district (Rs/ha)
Cost/revenue particulars
Farm size in ha.
<1.0
1.0-2.0
>2.0
All
Cost of Family labour
69.01
(11.52)
3204
(4.79)
2184
(2.50)
3165
(4.15)
Cost of hired labour
18291
24895
28153
25684
(30.54)
(37.20)
(32.30)
(33.71)
Cost of machine power
5514
6787
11774
9126
(9.20)
(10.14)
(13.51)
(11.98)
Cost of seed (setts) planting
14543
15215
18043
16548
(24.29)
(22.73)
(20.70)
(21.72)
Cost of chemical fertilizer
7830
9466
17875
13476
(13.07)
(14.04)
(20.50)
(17.69)
Cost of plant protection chemicals
2253
2707
3899
3246
(3.76)
(4.04)
(4.47)
(4.26)
Cost of irrigation charges
4546
4654
5244
4936
(7.59)
(6.95)
(6.01)
(6.47)
TVC
59878
66928
87172
76181
(100)
(100)
(100)
(100)
DIRTI-5
6469
7928
21818
14712
TC
66347
74856
108990
90893
TR
152468
177929
238522
205076
Net revenue (TR-TC)
86121
103073
129532
114183
Revenue over total variable cost (TR-TVC)
92.590
111001
151350
128895
B:C ratio (on variable cost)
2.55
2.66
2.74
2.69
B:C ratio (on total cost)
2.30
2.38
2.18
2.26
Yield (t/ha)
53
71
90
78
Cost of production (Rs./t)
1252
1054
1211
1165
Source: Survey data (figures in parentheses indicate percentage)
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517
Table.2 Cobb-Douglas production function estimates for sugarcane crop
Sl No.
Particulars
Regression
coefficient
Standard error
t-value
1
Intercept(A)
10.653
2.111
5.045
2
Human labour (Mandays) X1
-0.167
0.202
-0.828
3
Seed (Rs.) X2
0.210**
0.080
2.626
4
Manure and fertilizer (Rs.) X3
-2.674
0.782
-3.419
5
Irrigation cost (Rs.) X4
-0.026
0.125
-0.210
6
Tractor Cost (Rs.) X5
0.762***
0.382
1.995
7
Plant protection chemicals X6
2.663**
0.677
3.932
8
Sum of elasticities ( )
0.768
-
-
9
Co-efficient of multiple determination (R2)
09.61
-
-
Note: *** and ** indicate significant at 1% and5% probability level respectively
Table.3 Comparison of marginal value product (MVP) of the resources with their acquisition
cost in East Champaran district
Crop
Resources
Human
labour
(X1)
Seed
(X2)
Manure &
fertilizer
(X3)
Irrigation
cost (X4)
Tractor
cost (X5)
Plant
chemicals
(X6)
MVP at Geometric
mean
-1.16
3.26***
-23.45
-0.96
19.51**
17.52***
Acquisition cost
(per unit price)
1.12
1.12
1.12
1.12
1.12
1.12
Differences
-2.28
2.08
-24.57
-2.08
18.39
16.40
Standard error
0.202
0.080
0.782
0.125
0.382
0.677
Note: *** and ** indicate significant at 1 % and 5 % respectively
Table.4 Production constraints of sugarcane in East Champaran district (N =68)
Sl. No.
Particulars
Mean
scores
Garret ranking
1
Labour shortage during peak period
76.97
IV
2
Poor source of irrigation
81.50
I
3
Non-availability of fertilizer on time
77.03
III
4
Non-availability of improved variety of seed
76.78
V
5
High cost of plant protection chemicals
75.22
VI
6
Expensive improved technology
76.03
VII
7
Low selling price of the produce
71.11
IX
8
Lack of knowledge of scientific crop production
81.04
II
9
Pests and disease attack
72.93
VIII
10
Unavailability of loan on time
71.00
X
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Constraints faced by cultivators in
production of sugacane
The constraints being faced by the sample,
sugarcane growers were ranked using
Garrett’s ranking technique and the results are
given in Table 4.
The major constraints were labour shortage
during peak period as higher wages and most
of the laboures work under MNREGA
scheme. The second most significant
constraints was non availability of chemical
fertilizer on time with (81.04) average score
in Garrett’s ranking, identified. The other
constraints were non-availability of planting
material poor source of irrigation and high
cost of plant protection chemicals and
fertilizers.
Summary and policy implications
As a result, the estimates of the economics of
sugarcane production in East Champaran
district, the following observations can be
accounted for policy planning suitable to this
region.
It is worth pointing that the expenditure on
hired human labour was recorded to be the
highest among all operating costs for
sugarcane cultivation in the area.
Seed planting/seed cost, being a basic input
recorded to be an average of about 21.72 per
cent for sugarcane.
The net return per hectare and B-C ratio on
operating cost was found highest Rs. 129532
for larger farms respectively.
The study has shown that inputs such as
planting materials (seed sett), irrigation and
plant protection chemicals have positive and
significant influence on the yield of sugarcane
crop. The poor source of irrigation and labour
shortage in pick season and non-availability
of chemical fertilizer on time was found
significant constraints/problem in this region.
Hence, farmers need timely supply of quality
seed and other inputs (Irrigation, fertilizer,
pesticides etc.) and remunerative prices for
their produced.
The study recommends that can improve the
cropping system and stabilizes farm income
to the farmers with the increase in the extent
of irrigation facilities. For water scarcity use
of drip irrigation and precision farming may
be popularized.
The problem of non-availability of labour
may be addressed by using low cost
machineries and implements.
The paper has suggested that to enhance the
production and productivity farmers should be
motivated through visit to progressive farmers
field and organizations of field demonstration
and other communication means to use the
recommended level of inputs and improved
variety of seeds to enhanced the productivity
of sugarcane in the state.
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How to cite this article:
Shiva Pujan Singh, H.P. Singh, Meera Kumari, Md. Minnatullah, H. Chand and Balwant
Kumar. 2018. Economics Analysis of Production, Resource Use Efficiency and Constraints
Analysis of Sugarcane Cultivation in East Champaran District of North Bihar.
Int.J.Curr.Microbiol.App.Sci. 7(10): 512-519. doi: https://doi.org/10.20546/ijcmas.2018.710.056
... Jawanjal et al. (2014) observed that, in suru sugarcane coefficient of determination (R 2 ) was 0.9113 indicating 91 per cent of variation and in ratoon sugarcane co-efficient of determination (R 2 ) was 0.9344 indicating that, 93 per cent of the variation in the yield was explained by the identified input variables included in the function, e.g., expenditure on manures, plant protection, potassium and nitrogen in suru sugarcane cultivation, and plant protection and manures to be curtailed considering their excess utilization in ratoon sugarcane cultivation. Kumari, V. (2018) shows that planting materials (seeds), tractor cost and plant protection chemical uses have a positive and significant influence on sugarcane yield, indicating that these resources are being used at sub-optimal levels and there exists the possibility of enhancing the yield of sugarcane by increasing their use. ...
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Abstract Sugarcane is primarily grown in nine states of India namely; Uttar Pradesh, Maharashtra, Andhra Pradesh, Bihar, Gujarat, Haryana, Karnataka, Punjab, and Tamil Nadu. During early 19th century sugarcane cultivation started as cash crop and number of sugar factories open keeping in view a glimpses of sugarcane varietal screening and Improvement has been reviewed and found that Bihar was rich in term of sugar factories and its 20-40% share in national sugar production was already reported. It was the introduction of Co seedling that replace local varieties under cultivation those were Co 210, Co213, Co 214, Co 313, Co 331, Co 513,Co 356, Co 395,Co 453,Co508 and CoK 32, Co 383, Co 622,Co 419,Co 617,Co1148 and Co 1158 while in present varietal scenario cultivated varieties are Co 0238, Co 0118, Co 98014, CoP 9301, CoLk 94184, CoP 112, CoSe 01434, CoP 09437, BO 154 and CoP 16437. It was also found that POJ 2878, Co285, Co281, CP 28/11, Co213 & Co205 were mainly responsible for improvement in high yield and high sugar. The varietal development and evaluation of sugarcane varieties started in Bihar by after that Central Sugarcane Research Institute was established 1932 since then total 281 clones were developed at SRI, while several Sugarcane varieties of other place were also evaluated. AICRP on sugarcane under North Central Zone altogether 24 varieties were identified out of which 13 were notified for this zone while from SRI, total 10 varieties were identified among them two were notified. During last decade 44 clones were developed at SRI, Pusa and their evaluations were held time to time under water logging condition, red rot resistance and other biotic and abiotic stress as a result of hybridization followed by clonal selection in most of the genetic studied several clones are performing stable with high cane and sugar yield. This is a good sign for varietal improvement work in SRI, Pusa Bihar to release such technology for commercial cultivation which will overcome the past pride moment of sugarcane of Bihar again. Keywords: Varieties Co, BO, CoP, CoSe, CoLk, SRI, Pusa, AICRP on Sugarcane, Bihar
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