Sugarcane, cotton, wheat gave maximum returns to farmers, shows study

The analysis was limited only to crops for which government determines Minimum Support Price

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Ever wondered which crop has given the maximum return to farmers in the past few years, or cultivation in which state is most profitable for the growers? A recent study by the Commission for Agriculture Costs and Prices (CACP), seeks to find the answers.

According to a analysis done by CACP, in absolute terms, sugarcane has given the highest average gross return per hectare to farmers between 2008-09 and 2010-11, followed by cotton and then by wheat. The analysis was limited only to crops for which the government determines the minimum support price (MSP) and excludes high-value crops such as fruits, vegetables, poultry, etc. The study has been done by Ashok Vishandass and B Lukka from the CACP.

The study showed that sugarcane gave an average return of Rs 82,800 for each hectare of land, the highest among all the crops. The worst performer during this period (2008-09 to 2010-11) was sunflower, which gave a negative return to the farmers in relation to its cost of production during the same period. Sunflower gave a gross return which was around 40 per cent less than its cost of production.

In absolute terms, the average returns per hectare for a cotton farmers between 2008-09 and 2010-11 works out to be around Rs 29,100 per hectares, while for those cultivating wheat was Rs 24,300 per hectare.

“In the last decade as well, out of the 22 crops analysed, eight crops (wheat, barley, tur, lentil, rapeseed and mustard, sesame, cotton and sugarcane) have reaped 100 per cent or more gross profit, another 10 crops (paddy, maize, bajra, gram, urad, moong, soyabeans, ragi and groundnut), could post a profitability of 50-100 per cent and only three crops (jowar, ragi and groundnut) could post a profitability of less than 50 per cent,” noted the CACP study. The worst performer in this period also was sunflower.

The analysis shows that state-wise, Haryana, Kerala, Punjab and Uttarakhand gave the highest profitability to farmers, which was in excess of Rs 30,000 a hectare for all crops between 2008-09 and 2010-11, while Andhra Pradesh, Gujarat, Tamil Nadu and Uttar Pradesh gave farmers a profitability, which was more than the national average. The worst was Jharkhand, Assam and Chhattisgarh as these states had higher cost of production.

“The analysis takes into account only those crops for which MSP is declared and not the broad agriculture sector and excluded high valued horticulture, fruit and vegetables crops, animal husbandry and fisheries,” the study noted.

According to the study, there have been allegations of skeweness in price determination and lack of transparency by the CACP, while determining the cost of production. It said the government should immediately constitute an expert group to assign suitable numerical weight to each determinant of MSP such as labour, diesel, etc. in accordance with their relative importance.