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

Farming is considered mostly as a secondary activity In Kerala due to vanous
operational constraints ranging from non-viable farm holdings to heavv
dependence on hired labour I 0 coupled with high wage costs as well as
unremunerative market prices. The opportunity cost <strong>of</strong> land is determined by the
land use options for different crops. In view <strong>of</strong> the emerging crop diversification
in the irrigation commands on a large scale, assuming some notional value ll
reflecting the opportunity cost <strong>of</strong> land, has its own limitations in Kerala' s
context. In general. farmers have a perception that cultivation <strong>of</strong> any crop
becomes non-viable. if the rental or market value <strong>of</strong> land is reckoned in the cost
calculations.
III The study by Nair (1999) brings out the use <strong>of</strong> family labour is only 10.3 per cent a!ld
that <strong>of</strong> hired labour is significantly high at 89.7 per cent. Only 23 percentage <strong>of</strong> the
farmers reported farming as a primary activity. While 32 per cent <strong>of</strong> the farmers have
reported business and industry as the major activity, 17.6 per cent being salaried group.
11 George (1988) observes that using certain notional value <strong>of</strong> land would lead to
misrepresentation in Kerala as the opportunity cost <strong>of</strong> land is very high in view <strong>of</strong>
increasing speculative as well as other uses <strong>of</strong> land. including real estate or housing
purposes. Land is <strong>of</strong>ten valued as an asset and safe investment rather than as a
productive resource in agriculture. Moreover, the cost <strong>of</strong> production after considering all
the cost concepts would turn out tn be far from remunerative levels. the returns being far
below the costs.
Based on the cost <strong>of</strong> cultivation data furnished by the Bureau <strong>of</strong> Economics and
Statistics (BES), George (1988) found that the net returns per ha. (expressed as value <strong>of</strong>
output) were positive with Cost A and negative with Cost B and Cost C for all the crops,
with only exception <strong>of</strong> ginger. that too for one year. A comparison <strong>of</strong> the unit cost <strong>of</strong>
production with the farm level prices for the period 1980-81 to 1984-85 indicate that
farm level prices were far below the unit cost <strong>of</strong> production using Cost B for paddy,
coconut, pepper and tapioca for all the periods.
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