economics of on-farm development - Institute for Social and ...

technicall~
designed to provide irrigation for commercial crops, the recalculation <strong>of</strong>
Be ratios n13Y he unreal istic.
Rise in factor costs
The rise in factor costs, viz .. costs <strong>of</strong> land, labour and materials is identified as the
major source l)f cost escalation in irrigation systems in Kerala. The costs <strong>of</strong> land
acquisitil'n .md \\ age lahour arc much higher than the material costs.
Land has become an important income generating asset rather than merely an
input in the agricultural production process in Kerala, because land owners always
look out for alternative uses other than agriculture to get higher income. For
instance. the demand for land for construction <strong>of</strong> dwellings has been growing fast.
Sl), the 0pp,'rtunit\ Cllst <strong>of</strong> land is \en high. Besides the demand for house, other
Jct\\i!le, ,~.:h ;.I, CLlnstrllctlon \11 roads. clllu\:ltion <strong>of</strong> plantation crops. like rubber
etc .. add t\' the lanJ lise dynamiCs in the state. For instance. in Muvattupuzha Valky
IrrJ~atilln Prniec\. the lll"h tr~lI1saction cost <strong>of</strong> land intlated the cost <strong>of</strong> land
acquisition~9
for canal construction. The land prices increased form Rs, 0.50 lakh
per ha. as rrO\ided in the original estimate (1975) to Rs. 3 lakhs as per the revised
estimates \)f 1'19:2
An .111 a 1\ SIS or the trl'llJs in fiSC 111 lanour costs and material COStS is
ath:mpted oascJ on the schedule <strong>of</strong> r:J!es prescribed ny the Public Works Department
("WI)) I hese LJtes arc rele\ alit as thl' irrigation works are undertaken based on
thes.: rall:, I he r~ltes ~tre l\lllll'arnl in Ilominal t.:rms for the last five decades (tabk
, .• I he land aCl.jllISitttlll at Itlghel Lltcs has oecome Illevitable and the land prices arc
sllostantiall, high due to Ihc lact IIL.I the alternate land usc is to grow rubber, which has been
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