Year: 2017 | Month: October | Volume 10 | Issue 5
An Economic Analysis of Net Returns from Major Crops in Central Dry Zone of Karnataka under Different Valuation Approaches
Abstract:
The economic distortions introduced by systems of subsidies, incentives for inputs, products, services, mis-allocation of resources and inefficiency can affect the economically optimal crop pattern. Present study explored the analysis of net returns under different valuation approaches viz., market price approach, economic price approach and natural resource valuation approach in central dry zone of Karnataka. A total of 90 structured questionnaires were used to gather the data necessary for analysis. Results reveal that, net returns were positive based on all the three approaches of market prices, economic prices and natural resources valuation without inclusion of cost of water, except in ragi. The more reduction in the net returns at economic prices was observed in case of paddy under borewell irrigation, indicating that the distortion was more due to subsidies on fertilizers (` 8883 per crop) and energy for pumping irrigation water (` 7930 per crop). The net returns from groundnut under natural resource valuation was higher (` 10,450) without considering the value of ground water, when compared to the net returns at economic prices because of inclusion of nitrogen value in net returns from the crop (` 1107). The net returns were negative with inclusion of water cost in all the crops except irrigated groundnut. This shows that, due to prohibitive cost of groundwater, the net returns are not remunerative for crops like paddy, maize and ragi.
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