An Economic Analysis of Farm Income Distribution on Potato Specialised Farms in Agra District of Uttar Pradesh
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Ind. in. ofAgri. Econ. Vol.57, No.4, Oct.-Dec. 2002 An Economic Analysis of Farm Income Distribution on Potato Specialised Farms in Agra District of Uttar Pradesh Virendra Singh, S.P.R. Chaurasia and J.S. Sharma* INTRODUCTION The state of Uttar Pradesh ranks first in area and production of potato among the Indian states. This state alone accounted for 40 per cent of area and 44 per cent of potato production in the country during the year 1996-97. Western Uttar Pradesh is the major potato-producing region of the state accounting for 48 per cent of area and 54 per cent of production of the state during the same year. Potato is relatively higher yielding, labour and capital intensive short-duration high-value crop having widespread popularity. This crop has predominance in the areas where physical and economic resources are suitable for its production. Though potato is produced by all the categories of farmers, the participation of large farmers was relatively more because of the capital intensive nature of the crop and rich resource position and better access to technology, input, and capital markets, etc. The full use of modern technology is more pronounced on large farms and hence, the gains from the same are tilted in favour of them (Saini, 1976). The small farmers do not get adequate incentives to exploit the full potential of the available modern technology and thereby increase in the level of income. Thus it becomes pertinent to examine the effect of modern technology on the pattern ofincome distribution among potato growing farmers, which may be helpful in formulating appropriate policy for attaining the goals of agricultural development. The present study has been undertaken in an agriculturally progressive region of Uttar Pradesh with a view to accomplishing the following objectives:(i) to study the sources and pattern of income generation on potato specialised farms,(ii) to examine the income distribution among farmers of different size-groups, and (iii) to quantify the disparities in income distribution among potato specialised farmers. METHODOLOGY Sampling Scheme The study was conducted in Agra district of Western Uttar Pradesh. Out of 15 development blocks in the district, one development block, namely, Khandoli having the highest area under potato was selected purposively. This block has 10 Village District Office (VDO) circles. A sample of about 33 per cent of VDO circles (three * Post-Doctoral Fellow, Professor and Retired Professor, respectively, Department of Agricultural Economics, G. B. Pant University of Agriculture and Technology, Pantnagar-263 145 (Uttar Pradesh). 742 INDIAN JOURNAL OF AGRICULTURAL ECONOMICS VDO circles) was taken randomly. To select the villages from these VDO circles, a list of leading potato-growing villages was prepared by consulting the respective VDOs and two villages from each circle were selected randomly. Before selecting the sample farmers, a tentative survey was made to identify the sampling units in all the six villages. Those farmers were identified as potato specialised farmers whose 50 per cent or more farm income was derived from the potato crop alone. In all 97 farmers were identified as the potato specialised farmers. These farmers were classified into three groups on the basis of their size of operational holding, viz., small (<2 ha), medium (2-4 ha) and large (> 4 ha). The required data were collected for the year 1995-96. Analytical Tools The descriptive analysis was done using percentage, means, etc., to fulfill the first and second objectives. For computing the cost of production of potato, the value of all the inputs incurred in the production process was taken into account, while the gross returns was estimated by using the average price received by the farmers of different size-groups. The net returns were worked out by subtracting paid out total cost from gross returns. The term farm income as used in the present study refers to net returns and the whole analysis has been made on the basis of net returns rather than gross returns. In order to fulfill the third objective, i.e., to estimate the disparities in income distribution among potato specialised-farmers, the Gini concentration ratio of Lorenz curve was estimated by Kakwani and Podder's new co-ordinate system approach. The Lorenz curve is the relationship between F(x) and Fi(x). The equation of the line F1 = F is called the line of equality, which is the diagonal through the origin of Unit Square. Let P be any point on the curve with co-ordinates (F, F1) and 1 f.,„ , 1 f.„.r rt = r, ana x t —,_ — r1) ....(1. ) 2 2 where, rt is distance of ordinate along the line of equality and Yt is the length of the ordinate from (P) on the line of equality. Hence, the equation of Lorenz curve in terms of r, and Yt can be written as: Y t = f(r)1 ....(2) where, rt ranges from 0 to 42. On the basis of the above discussion, the proposed equation of Lorenz curve in its applicable form, can be written as Yt = a rta _ rt y —(3) However, for computational purposes, it is presented in log form as Log Y,= log a + a log rt +13 log — where, a> 0, a > 0 and 3 > 0 (constants). ECONOMIC ANALYSIS OF FARM INCOME DISTRIBUTION ON POTATO SPECIALISED FARMS 743 The additional properties of Lorenz curve hypothesised in equation (3) are as follows: (a) It will be symmetrical if a = 13; (b) it will be skewed toward (1,1) if p > a and,(c) it will be skewed toward (0,0) if a 13. The Gini concentration ratio can be estimated from equation 3 as: GCR = 2 [a rta - rt yi dr, ....(4) 0 or GCR =- 2 a Ort+P + OC, 1 -113) where B(l+a, 1+ p) is the beta-function which has been widely tabulated. The equation of Lorenz curve,' developed in equation (4) was estimated in this study separately for income from potato crop, on-farm income and total farm income (including off-farm income). RESULTS AND DISCUSSION Resource Position Reflecting Investment on Various Size ofPotato Specialised Fanns The resource position of different size-groups offarmers reflecting investment per farm is given in Table 1. From Table 1 it is evident that investment on improved machinery and implements like tractor, cultivator, harrows, trailer, potato planter, TABLE I. RESOURCE POSITION REFLECTING LEVEL OF INVESTMENT ON VARIOUS CATEGORIES OF FARMS Small Medium Large Sr. Percentage of Per farm Percentage Per farm No. Particulars Percentage Peil farm farmers investment of farmers investment of farmers investment owning (Rs.) owning (Rs.) owning (Rs.) (1) (2) (3) (4) (5) (6) (7) (8) A. Farm size(ha) 1.654 3.013 5.114 B. Machinery I. Tractor, cultivator and harrow 26.09 31,833 50.00 47,833 76.92 90,231 2. Trailer 17.39 2,826 41.67 7,583 69.23 12,385 3. Potato planter 4.35 522 25.00 3,396 46.15 4,538 4. Potato digger 4.70 1,522 16.67 2,271 38.46 5,577 5. Seed drill 8.69 674 29.17 1,729 76.92 5,500 6. Thresher 8.69 1,565 41.66 6,833 76.92 13,115 7. Sprayer and duster 56.52 311 54.16 285 84.61 573 8. Winnowing fan 8.69 122 29.16 371 38.46 515 9. Others* 4,334 3,878 5,904 Total(B) 43,708 74,180 1,38,339 C. Irrigation structure, etc. 1. Pumpsets and 91.30 5,972 100.00 15,930 100.00 24,076 tubewells 2. Irrigation channels 17.39 1,756 29.17 2,966 46.15 5,693 Total(C) 7,728 18,896 29,769 D. Farm buildings 66,317 82,221 96,538 Total B+C+D 1,17,754 1,75,297 2,64,646 * Indicates conventional implements. 744 INDIAN JOURNAL OF AGRICULTURAL ECONOMICS . potato digger, thresher, sprayer, etc., was more pronounced on large farms as compared to the small and medium farms. The position of investment with regard to irrigation structure indicated that all the categories of farmers had their own secured source of irrigation. Expenditure Pattern on Modern Production Technology The expenditure on various production technologies like high-yielding variety (HYV)seeds, fertiliser consumption and plant protection chemicals has been given in Table 2. The Table reveals that the expenditure on seed incurred is higher on small and medium farms as compared to large farms because of the fact that small and medium farmers were using largely traditional seeds purchased from markets whose higher quantity had to be used and prices were high while the large farmers were using their own seeds kept in cold storage. It also reveals that the proportionate expenditure on HYV seeds in the total expenditure made on seeds was substantially higher on large farms as compared to the small and medium farms, indicating that small and medium farmers were not in a position to make higher expenditure on HYV seeds due to their financial constraints. There was no conspicuous difference in the expenditure made on fertiliser. The expenditure on plant protection chemicals was found to be increasing with the size of farm. TABLE 2. EXPENDITURE PATTERN ON MODERN PRODUCTION TECHNOLOGY (Rs./ha) Items Size-group Small Medium Large (1) (2) (3) (4) Expenditure on seed 20,972 21,115 19,832 HYV seed 2,705 4,289 6,774 (12.90) (20.31) (31.16) Fertiliser consumption 9,357 9,757 9,774 Plant protection chemicals 397 549 663 Notes:(i) Figures in parentheses indicate percentages to total expenditure on seed.(ii) Figures have been rounded off to the nearest rupee.