CROP WISE INPUT SUBSIDY - Shodhgangashodhganga.inflibnet.ac.in/bitstream/10603/18141/12... · CROP WISE INPUT SUBSIDY The objective of this chapter is to estimate crop-wise subsidy

CHAPTER 4

CROP WISE INPUT SUBSIDY

CHAPTER 4

CROP WISE INPUT SUBSIDY

The objective of this chapter is to estimate crop-wise subsidy and evaluate the impact of

withdrawal of input subsidy on the profitability of different crops and overall agriculture

sector across the different farm size. This chapter has been divided into six broad sections

namely methodology, utilisation of subsidy and profitability of different crops,

comparison of crop wise input subsidy and profitability, profitability of agriculture sector

(without subsidy), problems in accessing input subsidy and summary.

4.1 METHODOLOGY

The methodology to estimate fertiliser, canal and electricity subsidy is given in chapter 3.

To estimate the profitability of different crops, data on gross return and cost of cultivation

was collected through field survey. Directorate of Economics & Statistics, Ministry of

Agriculture uses the following concepts relating to the cost of cultivation:

Cost AI = All expenses in cash and kind incurred in production by owner

Cost A2 = Cost AI + rent paid for lease-in land

Cost A2 + FL = Cost A2 + imputed value offamily labour

Cost 81 =

Cost 82 =

Cost CI =

Cost C2 = Cost C2* =

Cost C3 =

Cost AI + interest on value of own capital asset (excluding land)

Cost BI + rental value of owned land (net ofland revenue)

Cost B I + imputed value of family labour

Cost 82 + imputed value of family labour

Cost C2 estimated by taking into account statutory minimum or

actual wage which ever is higher

Cost C2* + 10 percent on account of managerial functions

performed by farmer

In this study the concept of C2 relating to cost of cultivation is used to estimate the

profitability of different crops after the withdrawal of input subsidy.

100

4.2 UTILISATION OF SUBSIDY AND PROFITABILITY OF DIFFERENT

CROPS

4.2.1 Wheat

Table 4.1 presents the profitability of wheat crop before and after the withdrawal of input

subsidy across different farm size groups in selected districts of Haryana. Out of 324

sample households, 312 households had sown wheat during the reference year 2005-06.

Farmers from different farm size groups had recorded profit (with input subsidy) in all

three districts. Per acre profitability was highest for large farm size group followed by

medium and small farm size groups. It was due to higher yield per acre and lower cost of

cultivation of wheat for the large farm size group in comparision to other farm size

groups. Per acre profit (with input subsidy) recorded by all sample households in,

Bhiwani, Panipat and Yamunanagar districts was Rs. 2240, Rs. 2488 and Rs.2082

respectively. For the entire sample households, per acre gross return, cost (C2) and

profitability was Rs. 17982, Rs. 15447 and Rs. 2270 respectively.

Per acre fertiliser and electricity subsidy was highest for large farm size group followed

by medium and small farm size group in all the three districts. The highest subsidy to the

cultivators of wheat was in the form of fertiliser followed by electricity and canal

irrigation. At the aggregate level, average per acre total input subsidy for the small,

medium and large farm size group was Rs. 1452, Rs.l590 and Rs.1668 respectively. For

the entire sample households, the highest per acre total input subsidy was for

Yamunanagar (Rs. 1600) district followed by Panipat (Rs. 1578) and Bhiwani (Rs.1532)

districts.

Average per acre profit (without subsidy) for the small, medium and large farm size

group was Rs. (-) 87, Rs. 556 and Rs.1630 respectively. After the withdrawal of input

subsidy, small farm size group has shown losses in Panipat (Rs.-121) and Yamunanagar

(Rs.-170) district. Without input subsidy, the profitability of wheat crop had declined

significantly across the different farm size groups. Though, medium and large farm size

groups had recorded profit, but the margin of profit was low. As a percentage of cost

(C2), total input subsidy for small, medium and large farm size groups was 9.34, 10.09

101

Farm No. Of Size Farmer

Small 34 Medium 35

Large 36 Total 105

Small 36 Medium 35

Large 36 Total 107

Small 30 Medium 34 Large 36 Total 100


Source: Primary Survey

Table 4.1 COMPARISION OF PROFITABILITY WITH AND WITHOUT INPUT SUBISY

WHEAT

Profit Total Cost After Total Value C2 Selling cost Fertiliser Electricily_ Irrigation Subsidy_

BHIWANI 15314 13409 1475 1167 14 263 1444 16935 14538 2107 1224 74 231 1528 16927 13671 3137 1250 170 203 1624 16392 13873 2240 1214 86 233 1532

PANIPAT 19124 17349 1354 1266 29 179 1475 19988 17146 2511 1312 104 185 1601 20119 16420 3600 1324 141 193 1658 19744 16972 2488 1301 91 186 1578

Y AMUNANANAGR 17536 15911 1268 1186 166 86 1438 17615 15558 1819 1254 279 106 1640 18279 15020 3158 1289 338 96 1723 17810 15497 2082 1243 261 96 1600

ALL DISTRICT 17325 15557 1366 1207 70 176 1452 18179 15748 2146 1263 152 174 1590 18442 15037 3298 1288 216 164 1668 17982 15447 2270 1252 146 171 1570

102

RS.IAcre Profit Subsidy After Asa

Subsidv %ofc2

31 10.77 579 10.51 1513 11.88 708 11.04

-121 8.50 910 9.34 1942 10.10

\ 910 9.30

-170 9.04 179 10.54 1436 11.47 481 10.33

-87 9.34 556 10.09 1630 11.09 700 10.16

and 11.09 percent respectively. For the entire sample households, the input subsidy

accounted for 10.16 percent of the cost of cultivation (C2). Thus, withdrawal of input

subsidy would significantly affect the profitability of wheat crop across different farm

size groups.

4.2.2 Sugarcane

Out of 324 sample households, only 91 farming households had sown sugarcane during

the reference year (table 4.2). In Bhiwani district, small farm size group had not sown

sugarcane crop. In all the three districts, farmers with different farm size had registered

profit. At the aggregate level, the average per acre profitability (with input subsidy) was

highest for large farm size group (Rs.14024) followed by small (Rs. 13762) and medium

(Rs. 12718) farm size groups. Per acre profit for all the sample households in Bhiwani,

Panipat and Yamunanagar districts was Rs. 6235, Rs. 14255 and Rs.17505 respectively.

As in the case of wheat crop, per acre fertiliser and electricity subsidy was highest for

large farm size group followed by medium and small farm size groups. Fertiliser subsidy

accounted for the major share of total input subsidy followed by electricity and canal

irrigation. Average per acre total input subsidy for the small, medium and large farmers

was Rs. 1691, Rs. 2271 and Rs. 2471 respectively. Per acre total input subsidy was

highest for Yamunanagar (Rs. 2290) district followed by Bhiwani (Rs. 2252) and Panipat

(Rs.2078) district. Due to high water intensity, per acre electricity subsidy to sugarcane

(Rs. 642) was much higher than that of wheat (Rs. 146) crop. This led to huge difference.

in per acre input subsidy to sugarcane (Rs. 2144) and wheat (Rs. 1544) crop.

For the small, medium and large farm size groups, the average per acre profit (without

subsidy) was Rs. 12072, Rs. 10448 and Rs.11553 respectively. Farmers with different

farm sizes had registered profit in all the three districts. Average per acre profit (without

subsidy) was highest in Yamunanagar district followed by Panipat and Bhiwani district.

It was due to the higher yield per acre in Yamunanagar district when compared to other

districts. As a percentage of cost, total input subsidy for small, medium and large farm

103

size group was 6.00, 8.42 and 8.29 percent respectively. For the entire sample

households, the input subsidy was 7.57 percent of the cost of cultivation (C2).

4.2.3 Paddy

Table 4.3 presents the comparison of profitability of paddy crop before and after the

withdrawal of input subsidy. Out of total sample households, 191 households had' sown

paddy during the reference year. The highest number of household which had sown

paddy during the reference period was in Panipat (81) district followed by Yamunanagar

(78) and Bhiwani (32) districts. For the total sample households in all the three districts,

per acre profitability (with input subsidy) was highest for large (Rs. 2991) farm size

group followed by medium (Rs.1963) and small (Rs.1413) farm size groups. This

indicates that farmers from different farm size groups had earned marginal profit from

paddy crop during the reference year.

Average per acre total input subsidy for the small, medium and large farm size group in

three districts was Rs. 2167, Rs. 2533 and Rs. 2667 respectively. Fertiliser subsidy

accounted for the major share of total input subsidy followed by electricity and canal

irrigation. For the entire sample households, per acre total input subsidy was highest for

Bhiwani (Rs. 2577) district followed by Yamunanagar (Rs. 2511) and Panipat (R~.2280)

districts. Due to high water intensity of paddy crop, per acre subsidy for paddy (Rs.2456)

was higher than other crops such as wheat (Rs.1570) and sugarcane (Rs.2144).


groups in three districts was Rs. -754, Rs. -571 and Rs.323 respectively. Without any

input subsidy, small and medium fann size groups had recorded losses, where as large

farm size group earned marginal profit. For the total sample households, per acre profit in

Bhiwani, Panipat and Yamunanagar district was Rs. -62, Rs.-553 and Rs.-387

respectively. Small and medium fanners suffered losses in all the three districts. As a

percentage of cost (C2), total input subsidy for small, medium and large farm size group

was 13.41, 15.95 and 17.14 percent respectively. Thus, withdrawal of input subsidy

would severely affect the profitability of paddy crop across the different farm size groups

105


Small 7 Medium 8

Large 17 Total 32

Small 23 Medium 25

Large 33 Total 81


Small 51 Medium 60

Large 80 Total 191

Source: PrImary Survey


PADDY

Profit Total Cost After Total Value C2 Selling cost Fertiliser Electricity Irrigation Subsidy

BHIWANI 15610 13723 1437 1204 801 466 2472 17661 14773 2612 1250 991 425 2666 17604 13981 3497 1177 972 444 2593 16958 14159 2515 1210 922 445 2577

PANIPAT 19462 18130 913 1278 222 453 1953 19112 16945 1828 1345 556 439 2340 19540 16998 2442 1389 715 443 2548 19371 17358 1728 1338 498 445 2280

Y AMUNANANAGR 18899 16637 1890 1250 646 180 2077 17656 15942 1447 1338 1038 219 2595 18845 15692 3032 1398 1285 176 2860 18466 16090 2123 1329 990 192 2511

ALL DISTRICT 17990 16163 1413 1244 557 367 2167 18143 15887 1963 1311 861 361 2533 18663 15557 2991 1321 991 355 2667 18265 15869 2122 1292 803 361 2456

106


Subsidy %ofc2

-\035 18.01 -53 18.04 904 18.55 -62 18.20

-1040 10.77 -512 13.81 -106 14.99 -553 13.14

-186 12.48 -1147 16.28

172 18.23 -387 15.60

-754 13.41 -571 15.95 323 17.14 -334 15.48

4.2.4 Basmati

Out of total sample households, only 80 households had sown basmati during the

reference year (table 4.4). The number of farmers who had sown basmati was highest in

Panipat district followed by Yamunanagar and Bhiwani district. In all the three districts,

farmers with different farm sizes had registered profit (with input subsidy). Average per

acre profitability was highest for large farm size group (Rs.5685) followed by small (Rs.

4722) and medium (Rs. 4620) farm size groups. For all the sample households, per acre

profit in Bhiwani, Panipat and Yamunanagar districts was Rs. 3842, Rs. 6233 and

Rs.4952 respectively. For the entire sample households, profitability of basmati (Rs.

5009) was more than common paddy (Rs. 2122) during the reference year.

Fertiliser subsidy accounted for the major share of total input subsidy followed by canal

irrigation and electricity. Average per acre total input subsidy for the small, medium and

large farm size groups was Rs. 1831, Rs. 2141 and Rs. 2271 respectively. Therefore, the.

highest per acre subsidy was utilised by the farm size group followed by the medium and

the farm size groups. Per acre total input subsidy was highest in Bhiwani (Rs. 2208)

district followed by Yamunanagar (Rs. 2102) and Panipat (Rs.1933) district.

Average per acre profit (without subsidy) recorded by the small, medium and large farm

size groups was Rs. 2891, Rs. 2480 and Rs.3414 respectively. It was highest in the

Panipat district followed by Yamunanagar and Bhiwani district. As a percentage of cost,

total input subsidy for small, medium and large farm size group was 12.37, 13.54 and

14.93 percent respectively. Thus, withdrawal of input subsidy would significantly

increase the cost of cultivation crop and so negatively affect the profitability of bas mati.

4.2.5 Cotton

Table 4.5 show that, 61 households had sown cotton during the reference year and all

these sample households were from Bhiwani district. For the total sample households, per

acre cost of cultivation and return was Rs. 14869 and Rs. 16618 respectively. Profitability

was highest for large (Rs. 2133) farm size group followed by medium (Rs.1414) and

107



Small 10 Medium 14

Large 17 Total 41

Small 5 Medium 9 Large II Total 25




BAS MATI

Profit Total Cost After Total Value C2 Se lling cost Fertiliser Electricity Irrigation Subsidy

BHIWANI 16900 13281 3169 1250 267 842 2359 19490 15771 3549 1250 390 421 2061 19057 14149 4809 1250 491 463 2204 18482 14400 3842 1250 383 575 2208

PANIPAT 22670 16077 6178 1282 -53 435 1664 22607 16888 5394 1329 150 429 1908 23744 16517 7127 1419 363 443 2226 23007 16494 6233 1344 153 436 1933

YAMUNANANAGR 20260 15041 4819 1314 0 156 1470 19989 14771 4918 1286 974 193 2452 20182 14962 5120 1393 785 205 2382 20144 14925 4952 1331 586 185 2102

ALL DISTRICT 19943 14800 4722 1282 71 478 1831 20695 15810 4620 1288 505 348 2141 20994 15209 5685 1354 546 370 2271 20544 15273 5009 1308 374 399 2081

108


Subsidy %ofc2

810 17.76 1488 13.07 2605 15.58 1634 15.33

4515 10.35 3486 11.30 4900 13.48 4300 11.72

3348 9.78 2466 16.60 2738 15.92 2851 14.08

2891 12.37 2480 13.54 3414 14.93 2928 13.62


Small 17 Medium 19

Large 25 Total 61

Small Medium Large Total

Small Medium

Large Total

Small 17 Medium 19

Large 25 Total 61



COTTON

Profit Total Cost After Total Value C2 Selling cost Fertiliser Electricity Irrigation Subsidy.

BHIWANI 15373 13903 1320 1084 -3 287 1368 17178 15637 1414 1221 57 286 1564 17303 15068 2133 1250 114 265 1629 16618 14869 1622 1185 56 279 1520

PANIPAT

Y AMUNANANAGR

ALL DISTRICT 15373 13903 1320 1084 -3 287 1368 17178 15637 1414 1221 57 286 1564 17303 15068 2133 1250 114 265 1629 16618 14869 1622 1185 56 279 1520

109


Subsidy %ofc2

-48 9.84 -150 10.00 504 10.81 102 10.22

-48 9.84 -150 10.00 504 10.81 102 10.22

small (Rs.1320) fann sIze group. Average per acre profit recorded by all sample

households was Rs. 1622.

Average per acre total input subsidy for the small, medium and large fann size group was

Rs. 1368, Rs. 1564 and Rs. 1629 respectively. Thus, large fann size group utilised the

highest input subsidy followed by the medium and the small fann size group. The highest

subsidy to the fanners was in the fonn of fertiliser followed by canal irrigation and

electricity. Per acre input subsidy utilised by all sample households was Rs. 1520.

Average per acre profit (without subsidy) for the small, medium and large fann size

group was Rs. -48, Rs. -ISO and Rs.504 respectively. Without input subsidy, small and

medium fann size group had recorded losses, where as large fann size group earned

marginal profit. As a percentage of cost, total input subsidy for small, medium and large

fann size groups was 9.84, 10.00 and 10.81 percent respectively. For the entire sample

households, the input subsidy accounted for 10.22 percent of the cost of cultivation (C2).

Thus, withdrawal of input subsidy would increase the cost of cultivation by 10.22 percent

and severely affect the profitability of cotton crop across different farm sizes.

4.2.6 Mustard

Table 4.6 provides infonnation about per acre profitability of mustard crop (with and

without input subsidy). Out of total sample households, only 40 households had sown

mustard during the reference year. Number of farmers wno had sown mustard were

highest in Bhiwani (35) district followed by Yamunanagar (4) and Panipat (I) district. In

all the three districts, fanners with different farm sizes had registered profits (with input

subsidy). For all the three districts, the average per acre profitability was highest for large

fann size group (Rs.1202) followed by small (Rs. 903) and medium (Rs. 740) fann size

groups. For all the sample households, per acre profit in Bhiwani, Panipat and

Yamunanagar districts was Rs. 1205, Rs. 85 and Rs.1144 respectively.



110



Small Medium Large I Total I

Small 0 Medium 3 Large I Total 4




MUSTARD

Profit Total Cost After Total Value C2 Selling cost Fertiliser E I ectri ci ty Irrigation Subsidy

BHIWANI 12656 11610 903 486 37 265 788 11456 10167 1148 595 13 241 849 12657 10993 1564 730 19 251 1001 12257 10924 1205 604 23 253 879

PAN1PAT

12950 15765 85 1250 0 270 1520 12950 15765 85 1250 0 270 1520

YAMUNANANAGR

15642 15209 332 785 287 64 1136 14570 12514 1956 1250 432 0 1682 15106 13862 1144 1018 360 32 1409

ALL DISTRICT 12656 11610 903

" 486 37 265 788

13549 12688 740 690 150 152 992 13392 13091 1202 1077 150 174 1401 13199 12463 948 751 113 197 1061

111

Rs IAcre Profit Subsidy After Asa

Subsidy %ofc2

115 6.79 299 8.35 563 9.10 326 8.05

-1435 9.64 -1435 9.64

-804 7.47 274 13.44 -265 10.17

115 6.79 -252 7.82 -199 10.70 -112 8.51

large fann size group was Rs. 788, Rs. 992 and Rs. 1401 respectively. Therefore, the

highest per acre subsidy was utilised by the large fann size group followed by the

medium and the small fann size groups. Per acre total input subsidy was highest for

Panipat (Rs. 1520) district followed by Yamunanagar (Rs. 1409) and Bhiwani (Rs.879)

districts.

Average per acre profit (without subsidy) recorded by small, medium and large fann size

group in the three districts was Rs. 115, Rs. -252 and Rs.-199 respectively. Average per

acre profit (without subsidy) was negative in Panipat and Yamunanagar. As a percentage

of cost, total input subsidy for small, medium and large farm sizes was 6.79, 7.82 and

10.70 percent respectively.

4.2.7 Barley

Out of 324 sample households, only 20 sample households had sown barley during the

reference year. Out of this, 19 households were from Bhiwani district and one from

Panipat district. For the total sample households in three districts, per acre profitability

was highest for medium (Rs. 1688) fann size group followed by large (Rs.l 061) and

small (Rs.674) fann size groups. Per acre profit recorded by entire sample was Rs. 1005.

Average per acre total input subsidy for the small, medium and large fann size group

was Rs. 1106, Rs. 1418 and Rs. 1272 respectively. Thus relatively, large farm size group

utilised the higher input subsidy than small and medium fann size group. The highest

subsidy to the fanners was in the fonn of fertilisers followed by canal irrigation and

electricity.


groups was Rs. 583, Rs. -744 and Rs.-211 respectively. Without any input subsidy,

medium and large farm size groups had recorded losses, whereas small farmers earned

nominal profit. For the total sample households, per acre profit after withdrawal of input

subsidy was Rs. -124. As a percentage of cost, total input subsidy for small, medium and

large farm size groups was 11.81, 11.01 and 9.54 percent respectively_ For the entire

112



Small Medium

Large I Total I





BARLEY


BHIWANI 11502 9363 1688 843 67 195 1106 13759 12880 674 1157 11 250 1418 13063 11706 1257 1100 42 283 1425 12775 11317 1206 1033 40 243 1316

PANIPAT

15920 14955 865 930 0 188 1118 15920 14955 865 930 0 188 1118

YAMUNANANAGR

ALL DISTRICT 11502 9363 1688 843 67 195 1106 13759 12880 674 1157 11 250 1418 14492 13331 1061 1015 21 236 1272 13251 11858 1141 1005 33 227 1265

113

Rs./Acre Profit Subsidy After Asa

Subsidy %ofc2

583 11.81 -744 11.01 -168 12.17 -110 11.63

-253 7.48 -253 7.48

583 11.81 -744 11.01 -211 9.54 -124 10.67

sample households, the input subsidy accounted for 10.67 percent of the cost of

cultivation (C2). Thus, withdrawal of input subsidy would significantly affect the

profitability of barley crop across different farm sizes groups.

4.2.8 Pulse

Table 4.8 provides the information about per acre profitability of pulses (with and

without input subsidy). Out of 324 sample households, only II households had sown

pulses during the reference year. Out of this, 10 households were from Bhiwani district

and one from Panipat district. Average per acre profitability was highest for large farm

size group (Rs.1534) followed by medium (Rs. 1008) and small (Rs. 970) farm size

groups.



large farm size groups was Rs. 1044, Rs. 1298 and Rs. 1449 respectively. Therefore, the

highest per acre subsidy was utilised by the large farm size group followed by the

medium and the small farm size groups.

Average per acre profit (without subsidy) recorded by the small, medium and large farm

size groups was Rs. -74, Rs. -291 and Rs. 85 respectively. As a percentage of cost, total

input subsidy for small, medium and large farm sizes in all three districts was 11.18,

11.23 and 13.09 percent respectively. Thus, withdrawal of input subsidy would

significantly increase the cost of cultivation and thereby negatively affect sthe

profitability of pulses.

4.2.9 Gram

Only 7 sample households had sown gram during the reference year and all those farmers

were from Bhiwani district (table 4.9). For the total sample households in Bhiwani

district, per acre cost of cultivation and return from gram was Rs. 10809 and Rs. 11694

respectively. Per acre profitability was highest for large (Rs. 1406) farm size group

114



Small 0 Medium I

Large 0 Total I

Small Medium

Large Total

Small 2 Medium 4 Large 5 Total II


PULSE

Profit Total Cost After Total Value C2 Selling cost Fel1iliser Electricity Irrigation Subsidy

BHIWANI 10763 9342 970 785 0 259 1044 12367 10852 1181 940 84 147 1171 12710 11076 1534 1006 179 264 1449 11946 10424 1228 910 88 223 1222

PANIPAT

13225 12266 834 1250 0 175 1425

13225 12266 834 1250 0 175 1425 YAMUNANANAGR

ALL DISTRICT 10763 9342 970 785 0 259 1044 12796 11559 1008 1095 42 161 1298 12710 11076 1534 1006 179 264 1449 12089 10659 1171 962 74 228 1264

Source: PrImary Survey

115


Subsidy %ofc2

-74 11.18 10 10.79 85 13.09 7 11.72

-591 11.62

-591 11.62

-74 11.18 -291 11.23

85 13.09 -93 11.86


Small 1 . Medium 3

Large 3 Total 7

Small Medium

Large Total


Small 1 Medium 3

Large 3 Total 7


TABLE 4.9 COMPARISION OF PROFITABILITY WITH AND WITHOUT INPUT SUBISY

GRAM


BHIWANI 9750 9188 562 640 0 293 933 13517 12830 687 882 90 262 1234 11817 10410 1406 930 67 260 1257 11694 10809 885 817 52 272 1141

PANIPAT

YAMUNANANAGR

ALL DISTRICT 9750 9188 562 640 0 293 933 13517 12830 687 882 90 262 1234 11817 10410 1406 930 67 260 1257 11694 10809 885 817 52 272 1141

116


Subsidy %ofc2

·522 10.16 ·647 9.62 50 12.07

·373 10.56

·522 10.16 ·647 9.62 50 12.07

·373 10.56

followed by medium (Rs.687) and small (Rs.562) fann size groups. Average per acre

profit recorded by all sample households was Rs. 885.


Rs. 933, Rs. 1234 and Rs. 1257 respectively. Thus, large farm size group utilised the

highest input subsidy followed by the medium and the small fann size group. The highest

subsidy to the fanners was in the fonn of fertiliser followed by canal irrigation and

electricity. Average per acre input subsidy utilised by all sample households was Rs.

1141,

Average per acre profit (without subsidy) for the small, medium and large fann size

groups was Rs. -522, Rs. -647 and Rs.50 respectively. Without any input subsidy, the

small and the medium fann size groups had recorded losses, whereas, the large fann size

group earned marginal profit. For the entire sample households, the input subsidy

accounted for 10.56 percent of the cost of cultivation (C2). Thus, withdrawal of input

subsidy would increase the cost of cultivation by 10.56 percent and severely affect the

profitability of gram crop across the different farm sizes.

4.2.10 Bajra

Table 4.10 presents the comparison of per acre profitability of bajra before and after the

withdrawal of subsidy. Out of total sample households, 69 fanners had sown bajra during

the reference year and all these households were from Bhiwani district. Per acre cost of

cultivation and return from bajra for the total sample households was Rs. 9944 and Rs.

11480 respectively. Per acre profitability of bajra for small, medium and large fann size

groups was Rs. 1520, Rs. 1185 and RS.1520 respectively. Average per acre profit recorded

by all sample households was Rs. 1408,


Rs. 626, Rs. 750 and Rs. 759 respectively. Thus, large fann size group utilised the

highest input subsidy followed by medium and small fann size group. The highest

subsidy to the fanners was in the form of fertilisers followed by canal irrigation and

117



Small Medium

Large Total





BAJARA


BHIWANI 11161 9493 1520 368 12 245 626 11257 9939 1185 438 27 285 750 12023 10399 1520 439 53 267 759 11480 9944 1408 415 31 266 712

PANIPAT

YAMUNANANAGR

ALL DISTRICT 11161 9493 1520 368 12 245 626 11257 9939 1185 438 27 285 750 12023 10399 1520 439 53 267 759 11480 9944 1408 415 31 266 712

118

RS./Acre Profit Subsidy After Asa

Subsidy %ofc2

894 6.59 435 7.54 761 7.30 697 7.16

894 6.59 435 7.54 761 7.30 697 7.16

electricity. The average per acre input subsidy utilised by all sample households was Rs.

712.


group was Rs. 894, Rs. 435 and Rs.761 respectively. Even without any input subsidy,

farmers of different groups had recorded profit. As a percentage of cost, total input

subsidy for small, medium and large farmers was 6.59, 7.54 and 7.30 percent

respectively. For the entire sample households, the input subsidy accounted for 7.16

percent of the total cost of cultivation (C2).

4.2.11 Fodder

Out of 324 sample households, 202 farmers had sown fodder during the reference year

(table 4.11). Farmers of different farm size groups had recorded profit in all the three

districts. Per acre profitability was highest for small farmers followed by large and

medium farmers. Per acre profit recorded by all sample households in Bhiwani, Panipat

and Yamunanagar districts was Rs. 1220, Rs. 982 and Rs.1229 respectively. For the

entire sample households in all the three districts, per acre gross return, cost (C2) and

profitability was Rs. 13743, Rs. 12600 and Rs. 1143 respectively.

Per acre fertiliser and electricity subsidy was highest in the case of large farm size group

followed by medium and small farm sizes in all the three districts. The highest subsidy to

the farmers was in the form of fertiliser followed by canal irrigation and electricity.

Average per acre total input subsidy for the small, medium and large farm size group was

Rs. 558, Rs.742 and Rs.930 respectively. For the entire sample households, per acre total

input subsidy was highest for Yamunanagar (Rs. 900) district followed by Bhiwani (Rs.

736) and Panipat (Rs.593) districts.


groups was Rs. 800, Rs. 155 and RS.245 respectively. Even without any input subsidy,

farmers of different classes had recorded profit. However, after the withdrawal of input

subsidy, medium farm size group had shown losses in Bhiwani district (Rs - 43). As a

119


Small 5 Medium 2

Large 3 Total 10




Source: Pnmary Survey


FODDER CROPS

Profit . Total Cost After Total Value C2 Selling cost Fertiliser Electricity Irrigation Subsidy

BHIWANI 10800 9147 1653 128 0 357 485 13500 12847 653 393 0 303 696 12750 11396 1354 589 172 267 1028 12350 11130 1220 370 57 309 736

PANIPAT 14275 13058 1217 384 35 147 566 14107 13241 866 340 92 146 578 14166 13304 862 347 138 148 634 14183 13201 982 357 89 147 593

YAMUNANANAGR 13968 12763 1205 362 150 111 623 15031 13859 1172 542 336 74 952 15090 13781 1309 745 278 104 1127 14696 13468 1229 550 255 96 900

ALL DISTRICT 13014 11656 1358 291 62 205 558 14213 13316 897 425 143 174 742 14002 12827 1175 560 196 173 930 13743 12600 1143 425 134 184 743

120


Subsidy %ofc2

1167 5.31 -43 5.42 326 9.02 483 6.62

651 4.34 287 4.37 228 4.76 389 4.49

583 4.88 220 6.87 182 8.18 328 6.69

800 4.79 155 5.57 245 7.25 I 400 5.90

percentage of cost, total input subsidy for small, medium and large farm size group was

4.79, 5.57 and 7.25 percent respectively. For the entire sample households, the input

subsidy accounted for 5.90 percent of the cost of cultivation (C2).

4.2.12 Vegetables

In all the three districts, farmers with different farm sizes group had registered profit

(table 4.12). Average per acre profitability was highest for large farmers (Rs. 4992)

followed by medium (Rs. 4344) and small (Rs. 3622) farmers. Per acre profit in Bhiwani,

Panipat and Yamunanagar districts was Rs. 4200, Rs. 3969 and Rs.4789 respectively.



large farm size group was Rs. 1501, Rs. 1598 and Rs. 1533 respectively. Per acre total

input subsidy was highest for Yamunanagar (Rs. 1666) district followed by Panipat (Rs.

1639) and Bhiwani (Rs.1328) districts.

For the small, medium and large farm size groups, average per acre profit (without

subsidy) was Rs. 2121, Rs. 2746 and Rs.3459 respectively. Farmers with different farm

sizes had registered profit in all the three districts. The average per acre profit (without

subsidy) was highest in Yamunanagar district followed by Bhiwani and Panipat district.

As a percentage of cost, total input subsidy for small, medium and large farm size groups

in all the three districts was 9.01, 9.71 and 9.32 percent respectively. For the entire

sample households, the input subsidy was 9.34 percent of the cost of cultivation (C2).

Therefore, withdrawal of input subsidy would significantly increase the cost of

cultivation of vegetables and so adversely affect the profitability.

4.3 COMPARISON OF CROP WISE SUBSIDY AND PROFIT ABILITY

Table 4.13 gives information on the comparison of crop wise subsidy across the different

farm size group in selected districts of Haryana. At the aggregate level, per acre input

subsidy was highest for paddy (Rs. 2456) crop followed by sugarcane (Rs. 2144) and

basmati (Rs. 2081) crops. These crops are water intensive and also need heavy doses of

121


Small 1 Medium 2

Large 1 Total 4

Small 9 Medium 12 Large II Total 32

Small 14 Medium 19

Large 25 Total 58




VEGETABLES

Protit Total Cost After Total Value C2 Selling cost Fertiliser Electricity Irrigation Subsidy

BHIWANI 17000 14004 2546 930 181 256 1367 18000 13280 4270 1090 10 293 1393 19000 13117 5783 930 0 293 1223 18000 13467 4200 983 64 281 1328

PANIPAT 21600 16996 4154 1250 127 249 1626 21867 17892 3688 1186 210 207 1603 21905 17740 4065 1250 200 238 1687 21790 17543 3969 1229 179 231 1639

YAMUNANANAGR 23500 18983 4167 1191 226 94 1511 23583 18195 5073 1262 463 72 1797 23741 18513 5128 1294 253 142 1689 23608 18564 4789 1249 314 103 1666

ALL DISTRICT 20700 16661 3622 1124 178 199 1501 21150 16456 4344 1179 228 191 1598 21549 16457 4992 1158 151 224 1533 21133 16525 4319 1154 186 205 1544

122

Rs.IAcre Profit Subsidy After Asa

Subsidy %ofc2

1179 9.76 2877 10.49 4560 9.33 2872 9.86

2528 9.57 2085 8.96 2377 9.51 2330 9.34

2655 7.96 3276 9.88 3439 9.12 3123 8.97

2121 9.01 2746 9.71 3459 9.32 2775 9.34 '1

Table 4.13 COMP ARISION OF CROP WISE INPUT SUBSIDY

Rs IAcre Fann size Wheat Sugarcane Paddy Basmati Cotton Mustard Barley Pulses Gram Bajra Fodder Vegetables

BHIWANI Small 1444 ...... 2472 2359 1368 788 1106 1044 933 626 485 1367

Medium 1528 2102 2666 2061 1564 849 1418 1171 1234 750 696 1393 Large 1624 2401 2593 2204 1629 1001 1425 1449 1257 759 1028 1223 Total 1532 2252 2577 2208 1520 879 1316 1222 1141 712 736 1328

PANIPAT Small 1475 1515 1953 1664 ...... ...... ...... . ..... . ..... 566 1626

Medium 1601 2260 2340 1908 ...... ...... . ..... 1425 . ..... ...... 578 1603 Large 1658 2459 2548 2226 ...... 1520 1118 ...... ...... 634 1687 Total 1578 2078 2280 1933 ...... 1520 1118 1425 . ..... . ..... 593 1639

YAMUNANAGAR Small 1438 1867 2077 1470 ...... ...... ...... ...... ...... . ..... 623 1511

Medium 1640 2450 2595 2452 ...... 1136 ...... ...... . ..... . ..... 952 1797 Large 1723 2552 2860 2382 ...... 1682 ...... ...... ...... . ..... 1127 1689 Total 1600 2290 2511 2102 ...... 1409 ...... ...... ...... . ..... 900 1666

ALL DISTRICTS Small 1452 1691 2167 1831 1368 788 1106 1044 933 626 558 1501

Medium 1590 2271 2533 2141 1564 992 1418 1298 1234 750 742 1598 Large 1668 2471 2667 2271 1629 1401 1272 1449 1257 759 930 1533 Total 1570 2144 2456 2081 1520 10'61 1265 1264 1141 712 743 1544


123

fertiliser. Other major crops which utilised input subsidy in descending order were wheat

(Rs. 1570), vegetables (Rs. 1544), cotton (Rs. 1520), barley (Rs. 1265), pulses (Rs.

1264), gram (Rs. 1141) and mustard (Rs. 1061). Due to low requirement of fertiliser and

water, per acre input subsidy was lowest for bajra (Rs.712) and fodder (Rs. 743) crop.

Table 4.14 reveals the profitability of different crops after the withdrawal of input

subsidy across different farm size in selected districts of Haryana. Per acre profit was

highest in sugarcane (Rs. 11357) followed by basmati (Rs. 2928) and vegetables (Rs.

2775). Due to high yield of sugarcane, per acre profit in Yamunanagar (Rs. 15215)

district was higher than the profit in Panipat (Rs. 12177) and Bhiwani (Rs. 3984)

districts. It is important to note that, the cropping period of sugarcane is one year. In case

of wheat, cotton, gram and fodder crop, the sample households earned marginal profit. It

is noteworthy that per acre profit in vegetables (Rs. 2775) was higher than the dominant

crop of Haryana i.e. common paddy (Rs. -334) and wheat (Rs. 700). However many

sample households across different farm size groups reported that vegetables were very

risky as the fluctuations in the productivity and the price of vegetables was too high. At

the aggregate level, the sample households registered losses in paddy (Rs.-334), mustard

(Rs.-112), barley (Rs.-124), pulses (Rs.-93) and gram (Rs.-373).Therefore, the

profitability of many crops across different farm size groups had declined significantly

after the withdrawal of input subsidy.

4.4 PROFITABILITY OF AGRICULTURE SECTOR (WITHOUT SUBSIDy)

Table 4.15 provides the information about per acre profitability of agriCUlture sector

(with and without input subsidy). In all the three districts, farmers with different farm

sizes had registered profit. Average per acre profitability was highest for large farm size

group (Rs.5170) followed by medium (Rs. 3749) and small (Rs. 2946) farm size group.

For all the sample households, per acre profit in Bhiwani, Panipat and Yamunanagar

districts was Rs. 2163, Rs. 3882 and Rs.5820 respectively.

About the composition of input subsidy, fertiliser subsidy accounted for the major share

of total input subsidy followed by electricity and canal irrigation. Average per acre total

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Table 4.14 COMPARISION OF CROP WISE PROFITABILITY (WITHOUT INPUT SUBSIDy)

RS.IAcre Farm size Wheat Sugarcane Paddy Basmati Cotton Mustard Barley Pulses Gram Bajra Fodder Vegetables

BHIWANI Small 31 ...... -1035 810 -48 115 583 -74 -522 894 1167 1179

Medium 579 5314 -53 1488 -150 299 -744 10 -647 435 -43 2877 Lar~e 1513 2654 904 2605 504 563 -168 85 50 761 326 4560 Total 708 3984 -62 1634 102 326 -110 7 -373 697 483 2872

PANIPAT Small -121 10719 -1040 4515 ...... ...... ...... ...... . ..... . ..... 651 2528

Medium 910 10833 -512 3486 ...... ...... . ..... -591 . ..... . ..... 287 2085 Large 1942 14979 -106 4900 ...... -1435 -253 ...... ...... 228 2377 Total 910 12177 -553 4300 ...... -1435 -253 -591 ...... . ..... 389 2330

YAMUNANAGAR Small -170 13424 -186 3348 ...... ...... ...... ...... . ..... . ..... 583 2655

Medium 179 15196 -1147 2466 ...... -804 ...... ...... ...... . ..... 220 3276 Large 1436 17026 172 2738 ...... 274 ...... ...... . ..... . ..... 182 3439 Total 481 15215 -387 2851 ...... -265 ...... ...... ...... . ..... 328 3123

ALL DISTRICTS Small -87 12072 -754 2891 -48 115 583 -74 -522 894 800 2121

Medium 556 10448 -571 2480 -150 -252 -744 -291 -647 435 155 2746 Large 1630 11553 323 3414 504 -199 -211 85 50 761 245 3459 Total 700 11357 -334 2928 102 -112 -124 -93 -373 697 400 2775


125


Small 36 Medium 36

Large 36 Total 108

Small 36 Medium 36

Large 36 Total 108





WHOLE AGRICULTURE SECTOR

Profit Total Cost After Total Value C2 Sellin,g cost Fertiliser Electricity Irrigation Subsidy

BHIWANI 14667 12756 1597 880 81 282 1243 16458 14129 2050 1012 132 268 1412 17317 14346 2842 1034 228 259 1522 16147 13743 2163 1006 180 265 1451

PANIPAT 21973 18566 2951 1192 65 287 1544 22597 18716 3528 1244 224 287 1755 24285 18999 5168 1256 319 287 1862 22952 18760 3882 1244 257 287 1787

YAMUNANANAGR 24323 19515 4291 1146 280 123 1549 25876 19811 5669 1243 561 136 1940 27713 20035 7501 1301 592 143 2036 25971 19787 5820 1260 536 138 1934

ALL DISTRICT 20321 16946 2946 1063 137 234 1435 21644 17552 3749 1162 298 233 1693 23105 17793 5170 1186 363 236 1785 21690 17430 3955 1162 312 235 1708

126

Rs IAcre Profit Subsidy After Asa

Subsidy %ofc2

355 9.74 638 9.99 1320 10.61 771 10.56

1407 8.31 1773 9.38 3306 9.80 2162 9.53

2742 7.94 3729 9.79 5465 10.16 3979 9.77

1501 8.47 2047 9.65 3364 10.03 2304 9.80

input subsidy for the small, medium and large farm size groups in the three selected

districts was Rs. 1435, Rs. 1693 and RS.1785 respectively. Per acre total input subsidy

was highest for Yamunanagar (Rs. 1934) district followed by Panipat (Rs. 1787) and

Bhiwani (Rs.1451) districts. Average per acre subsidy for the entire sample household

was Rs. 1708.

For the small, medium and large farm size groups, average per acre profit (without

subsidy) was Rs. 1501, Rs. 2047 and Rs.3364 respectively. Farmers with different farm

sizes had registered profit in all the three districts. Average per acre profit (without

subsidy) was highest in Yamunanagar (Rs. 3979) district followed by Panipat (Rs. 2162)

and Bhiwani (Rs. 771) districts. As a percentage of cost, total input subsidy for small,

medium and large farm size groups was 8.47, 9.65 and 10.03 percent respectively. For

the entire sample households, the input subsidy was 9.80 percent of the cost of cultivation

(C2). Thus, withdrawal of input subsidy would significantly increase the cost of

cultivation and adversely affect the profitability of agriculture sector.

4.5 PROBLEMS IN ACCESSING INPUT SUBSIDY

Table 4.16 shows the problems faced by sample households in accessing input subsidy

during the reference year. At the aggregate level, 76.23 percent of sample households

reported the problem of high price of fertiliser, whereas 73.46 percent reported the

problem of low capacity to buy in accessing fertiliser subsidy. Many farmers had

mentioned that price of inputs increased at a higher rate than the growth rate of output

prices during last few years. This directly affects their capacity to buy inputs like

fertiliser. The other major problem in accessing fertiliser subsidy was long distance

reported by 24.07 percent sample households.

In case of electricity subsidy, all the sample households reported the problem of

fluctuations in voltage and irregular supply of electricity in accessing subsidy. Per day,

average number of hours for which supply of power remains for agriculture purpose was

4.10 hour only (average of hours reported by all sample households). Due to this, many

farmers owned both diesel and electrical pumpsets which increased the cost of cultivation

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Table 4.16 PROBLEMS IN ACCESS TO SUBSIDIES

(%) FERTILISER ELECTRICITY CANAL IRRIGATION Problem Low Capacity Not at the Not at the Time Ready to Of Soil

Farm Size High Price to Buy Distance Fluctuation Time of Need of Need Tail Ender Pay More Salinity

Small 83.33 88.89 41.67 100.00 100.00 100.00 25.00 100.00 83.33 Medium 75.00 72.22 27.78 100.00 100.00 100.00 19.44 100.00 72.22

Large 69.44 63.89 13.89 100.00 100.00 100.00 16.67 100.00 83.33 All 75.93 75.00 27.78 100.00 100.00 100.00 20.37 100.00 79.63

Small 77.78 69.44 33.33 100.00 100.00 100.00 33.33 100.00 27.78 Medium 80.56 69.44 27.78 100.00 100.00 100.00 25.00 100.00 30.56

Large 66.67 66.67 19.44 100.00 100.00 100.00 22.22 100.00 19.44 All 75.00 68.52 26.85 100.00 100.00 100.00 26.85 100.00 25.93

Small 88.89 91.67 22.22 100.00 100.00 77.78 16.67 100.00 0.00 Medium 66.67 83.33 16.67 100.00 100.00 83.33 11.11 100.00 0.00

Large 77.78 55.56 13.89 100.00 100.00 77.78 11.11 100.00 0.00 All 77.78 76.85 17.59 100.00 100.00 79.63 12.96 100.00 0.00

Small 83.33 83.33 32.41 100.00 100.00 95.56 26.67 100.00 37.04 Medium 74.07 75.00 24.07 100.00 100.00 96.67 20.00 100.00 34.26

Large 71.30 62.04 15.74 100.00 100.00 95.56 17.78 100.00 34.26 All 76.23 73.46 24.07 100.00 100.00 95.93 21.48 100.00 35.19


128

of different crops. All sample households were totally dissatisfied with the poor quality of

power, which led to the high degree of motor burnouts. Many sample households also

mentioned cumbersome administrative procedure for a new electricity connection and

high initial cost to install electric tubewells.

In the case of canal subsidy, 95.93 percent of sample households complained about the

poor quality of service. Due to this many sample households had resorted to costlier

alternatives like diesel pumpset or buying water from other farmers. The problem of tail

ender was reported by 21.48 percent of sample households. All the farmers had agreed to

pay high irrigation charges if the quality of service improves. It is due to the fact that

canal irrigation is much cheaper than other alternative sources of irrigation such as diesel

pumpset or buying water from other farmers.

It is noteworthy that 35.19 percent of sample households reported the problem of soil

salinity. This percentage was highest for Bhiwani (dry area) district followed by Panipat

district. In Yamunanagar district, not a single sample household reported the problem of

soil salinity.

4.6 SUMMARY

Per acre input subsidy was highest for the paddy crop followed by sugarcane and basmati

crop. These crops are water intensive and need heavy doses of fertiliser. Due to low

requirement of fertilise~ and water, per acre input subsidy was lowest for bajra and fodder

crop. Per acre profit after the withdrawal of input subsidy was highest for sugarcane

followed by basmati and vegetables. At the aggregate level, the sample households

registered losses in paddy, mustard, barley, pulses and gram. In case of wheat, cotton,

gram and fodder crop, the sample households earned marginal profit. About the

profitability of agriculture sector (without input subsidy) it was found that farmers with

different farm sizes had registered marginal profit in all the three selected districts.

However, the withdrawal of input subsidy had significantly reduced the profitability of

agriculture sector.

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Documents

CROP WISE INPUT SUBSIDY - Shodhgangashodhganga.inflibnet.ac.in/bitstream/10603/18141/12... · CROP WISE INPUT SUBSIDY The objective of this chapter is to estimate crop-wise subsidy