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Dynamics of Costs, Returns and Prices of Paddy in Assam, India

Pinky Pathok and Nivedita Deka

Assam, an easternmost state of India has an agrarian economy with paddy as the principal crop occupying 60.87% of the cropped area. Paddy is mostly grown as rainfed crop in the state having only 15% paddy area under irrigation. Though some micro level study shows positive net return for paddy production, however, macro level data observation depicts negative net return for paddy. Still, farmers continue to cultivate paddy as it is the staple crop for the state. As no concrete analysis had been done on cost of production of paddy at the state level, an attempt has been made in this paper to understand the status and level of inputs used, costs and return from cultivation of paddy, its price in Assam based on data published by Directorate of Economics and Statistics, Government of India. The study found that the growth rate of yield per annum was low compared to cost of production and cost of cultivation. The yield could be enhanced by increasing the use of various strategic inputs up to the recommended level. Amongst all the inputs, human labour contributes higher percentage to cost of cultivation. Farmers were selling their paddy at a much lower rate than that offered by government through minimum support price (MSP) which might be due to distressed sale in the state. The study suggests replacing bullock labour by machine labour to reduce cost of cultivation at the state level. Recommended technology should be followed by the paddy growers to increase the yield that would result in higher gross and net return. Further, it could be suggested that government procurement agencies such as Food Corporation of India should buy the paddy from the farmers at MSP so that farmers’ net return become positive.