Cost Management of Agriculture Farming: A Comparative Study of Traditional and Modern Farming Systems Introduction

The traditional paddy cultivation was oldest method of paddy cultivation. The traditional paddy cultivation practices also had under gone changes due to changing times,where the cumbersome practices where placed. The intrest of the formers in cultivating paddy cultivation by using traditional method as decreased as large number of formers where using fertilizers and pesticides in the method of traditiona method. the formers adopting conventional methods could increse their production only by using expensive inputs such as chemicals fertilizers,pesticides,and hybrid seeds.in the present days all the costs of inputs are growing due to the living cost of the people.so that farmers finding the different paddy cultivation methods for the decreasing of cost of the inputs.the modern method of paddy cultivation adopting some formers because of reducing the inputs costs by using machinery and also they follow some extent of

Objective of the Study 1. To compare and analyze the cost and returns of paddy cultivation in traditional and modern Methods. 2. To find out the productivity differences between traditional and modern method of paddy cultivation. 3.To examine the cost allocate efficiency in paddy cultivation under traditional and modern methods. 4. It understanding the farmers in the means of how they are minimizing the costs for cultivating paddy. 5.To know the technique of calculation of individual costs in briefly manner Review of Literature an attempt has been made to review the past literature pertaining to the present study. By considering various methods for evaluating cost of each operation stage in paddy cultivation. Previously some farming systems are done by the some farmers and researcher under various methods.

In briefly there are five farming systems which are implemented by various formers and researchers. They are following; 1.Traditional farming 2.Organic farming 3.Precision farming 4Contract farming 5Corporate farming 6.Systamatic rice intensification(SRI) farming Cost refers to the money value of effort expended or sacrifice made in producing a commodity or rendering a service or achieving a specific objective. Costs and revenues are the two major factors that a profit maximizing farm needs to monitor continuously. It is the level of cost relative to revenue that determines the farms overall profitability. In order to maximize profits, a farm tries to increase its revenue and lower its cost. The firms output level is determined by its cost.

The purpose of this exercise is to explore cost and its relevance to decision-making. There is a some sort of information regarding minimization of cost under following Nag raj (1993) analyses the economics of cropping system In Tungabhadra project command area. He reported that cost of cultivation (cost C) for paddy was higher for middle reach (Rs. 12,605) when compared to that for head reach (Rs. 12,138) farmers. The gross returns and the net returns were Rs26,170 and Rs. 14,031 for head reach and Rs. 24,291and Rs. 13,685 for middle reach respectivelySuresh (2001) conducted research on performance of organic farming in Shimoga district of Karnataka. His study revealed an average level of technical efficiency of 0.89 for organic farmers and 0.85 for inorganic farmers. The results suggested that farmers could increase output and thereby, gross income through better use of available resources

Ramarao et al. (2003) analyzed the technical efficiency of rice farms of West Godavari district of Andhra Pradesh. The average level of technical efficiency was estimated to be about 85 per cent indicating that it was possible to improve yield by 15 per cent by following the efficient crop management practice

The profitability aspect of both the methods of paddy cultivation in the study area has been analyzed by computing per hectare cost and returns under analysis of sivanagaraju p. by conducting research on traditional and sri methods of paddy cultivation The per hectare cost of cultivation (Rs. 28088.63) for SRI paddy was more when compared to that (Rs. 26655.51) of traditional paddy. The share of human labor in total cost was 26.52 per cent (Rs. 7069) for traditional paddy farmers and 33.05 per cent (Rs. 9283) for SRI paddy farmers. The expenditure made on machine labor was 16.61 per cent and 16.21 per cent, respectively for traditional paddy farmers and SRI paddy farmers. The next important item of expenditure in both the methods of paddy cultivation was the expenditure made on fertilizers, which worked out to be 13.99 per cent and 12.28 per cent, respectively for traditional and SRI paddy farmers. The rental value of land was the major expenditure contributing to the fixed cost

(12.97% and 12.06%, respectively for traditional paddy farmers and SRI paddy farmers). The share of variable cost was 84.46 per cent (Rs. 22513) to the total cost in traditional paddy and 84.89 per cent (Rs. 23846) in SRI paddy cultivation. The variable cost was found to be less by about Rs. 1333 in traditional method, when compared to that in SRI method. The share of fixed cost was 15.54 per cent (Rs. 4143) and 15.11 per cent (Rs. 4243) for traditional and SRI paddy farmers, respectively . The yield per hectare realized in traditional method was 6.07 tones. The paddy yield realized by SRI paddy farmers was 8.51 tones per hectare.

Material and Methods Sample The present study is undertaken in Warangal and karimnagar districts of Andhra Pradesh .modern method of paddy cultivation was widely practiced in these two districts. Therefore, these two districts were selected on non probability basis for the present study. These districts gaining water from sri ram sagar project ,ramappa lake and lacknavaram lake.. Sources of Data The study is based on the input-output data obtained from sample farmers in Warangal and karimnagar districts. For selection of farmers, multi-stage sampling design was employed. In this procedure, at first stage, two major paddy growing districts following both traditional and modern method of paddy cultivation were selected on non probability basis. From each district, two paddy growing mandals following both the methods of rice cultivation were selected at second stage. Then at third stage, three paddy growing villages following traditional and modern methods of paddy cultivation were selected from each mandal. In the final stage, ten farmers were randomly selected from each village comprising five farmers for modern method and five farmers for traditional method of rice cultivation. Thus, the total sample size was 120. Time Frame Work For evaluating the specific objectives of the study, necessary primary data were obtained from the sample farmers through personal interview with the help of pre-tested and well structured questionnaires . The data so collected pertained to the kharif season of the agricultural year 2012-13. The data relating to general information about the sample farmers, their machinery position, cropping pattern, details on various inputs used in paddy cultivation like chemical fertilizers, plant protection chemicals, seed materials and labor and cultivation practices such as land preparation, transplanting, irrigation, intercultivation and harvesting along with labor requirement were collected. Analysis of Data For the purpose of achieving the objectives of the study, the data collected were subjected to the statistical analysis.

Data Analysis and Interpretation Table No Computation Of Total Cost and Returns Under Traditional and Modern Method (Rs per acre) Particulars Traditional method Modern method Advisable (without using (with using of (combination of both machinery machinery & methods will reduce &technology) fertilizers) cost ) 1.land preparation 1750 2100 Traditional method

2.nursery management

900

500

Traditional method

3.transplanting

1600

890

Modern method

4.manures/fertilizers

600

1980

Traditional method

5.intercultivation

1400

1400

6.plant protection

700

400

Modern method

7 .irrigation

500

700

Traditional method

8.harvesting&treshing Cost A

6200 13650

1900 9870

Modern method

Interest on working capital(10%cost A) 1365 Imputed(rental) value of 8000 own land 24015

987 8000

18877

Cost B

super vision(5%of cost B) 1200

943

Cost C returns yield(quintals)(main product +by product)

25215

19820

(22q*1800) 39600

(26q*1800) 46800

net income over variable costs 25950 net income over (fixed costs+variable costs) 14385

36930

26980

Source: primary data From the above table it can be conclude that if we are using combination of both methods farmers gaining profit in the means of minimizing the cost of each operation and also explain gross returns and net returns of the one acre paddy crop under traditional and modern method and the reasons for differs of profit under both method showing by calculation of cost for each operation in separately. the total cost of cultivation of one acre paddy cultivation higher in traditional method in the amount of 539Rs. It is advisable that doing farming with combination of both methods will reducing the cost in effectively manner.

Table No.2 Calculation of Cost of Land Preparation For One Acre paddy under traditional method

Particulars Ploughing : Stage 1: ( primary)

Units/ quantity

Rate

calculations

Amount ( Rs)

1.5 bullocks pair 1.5 men labor Stage 2: (before planting) 3 bullock pairs 3 men labors Stage3: Preparation of bed for planting 1 bullock pair 1 men labor Total Source: primary data

100 200

1.5*100=150 1.5*200=300

450

100 200

3*100=300 3*200=600

900

100 300

1*100=100 1*300=300

400 1750

The table explain brief discussion about calculation of exact cost of ploughing under traditional method . if we are using bullocks pairs in cultivation it leads minimizing the cost in the means of reduction of unnecessary utilization of machinery. Calculation for actual cost on one pair bullock for cultivating one acre plouging: Working Note: Depreciation on bullocks=30000*100/20=15 Interest on investment of 30000Rs=30000*2*12/100*100=72 So, total cost to be charged for one bullock pair for cultivating one day =97 i.e 100Rs Where cost of one bullock pair (average)=30000 No of life years=20

Table No3 Calculation of Cost for Ploughing of One Acre Field Under Modern Method Particulars Unit/quantity Rate Calculations Amount(Rs)

Plouging; 1st stage: 2nd stage:

One time sowing 700/hr by tractor

1*700

700

Two sowing tractors

times by 700/hr

2*700

1400

Total Source: primary data

2100

The above table explain brief discussion about calculation of exact cost of.ploughing under modern method .utilization machinery leads saving cultivating time but the efficiency of soil will decrease in proportionately. Farmers taking machinery for rent on the basis of time so there is a chance to increase the cost And loss of opportunity cost .if farmers purchase the machinery in the way subsidy from Government they entitle gaining lot money .the following points are discussed for calculation of actual amount or net cash flow paid by farmer for cultivating of one acre field Working Note no. 2: Cost of machinery (tractor) =530000; Depreciation charged on machinery per year =cost of machinery/no of life years =530000/20=26500 Depreciation charged for one acre field=depreciation for one year/no of acres cultivated in year =26500/300=75Rs Intrest charged for investment of machinery for one year=53000*2*12/100=127200. Interest charged for one acre field=127200/300=424 Rs Total cost to be charged for one acre field=75+424+100=599 Cost of save=(2100-599*3)=179 If farmers purchase machinery they save amount =179Rs so it is advisable to the farmers doing transplanting operation by using machinery

TABLE NO.4 Calculation of Cost for Nursery Management of One Acre Field Under Traditional Method Particulars Unit/quantity Rate Calculations Seeds 20kgs 25per kg 20*25=500

Amount(Rs) 500

P Preparation of 1Man labor

200

300

nursery field Manures fertilizers and

I bullock pair

100 100

900 Total Source: primary data The above table explain brief discussion about calculation of exact cost of nursery management under traditional method .if we are using bullocks pairs in cultivation it leads minimizing the cost in the means of reduction of unnecessary utilization of machinery. TABLE NO:5 Calculation of Cost for Nursery Management of One Acre Field Under Modern Method Particulars Seeds Unit/quantity 12kgs Rate 25per kg Calculation 25*12=300 Amount(Rs) 300

Preparation of 1Man labor 200 nursery field (By tractor default by sowing)

200

Total 500 Source: primary data the above table explain brief discussion about calculation of exact cost of .ploughing under modern method .utilization machinery leads saving cultivating time but the efficiency of soil will decrease in porprtionately.he total cost of cultivation of one acre paddy cultivation higher in traditional method in the amount of 400 Rs. so it is advisable to the farmers doing nursery management operation by using machine TABLE NO.6 Calculation of Cost of Transplanting for One Acre Paddy Under Traditional Method Particulars Unit/quantity Rate Calculations Amount(Rs)

Labor for 8 women labor transplanting Cutting of lines 2 men labor

150

8*150=1200

1200

200

2*200=400

400

Total: Source: primary data

1600

The above table explain brief discussion about calculation of exact cost of transplanting for one acre paddy under traditional method .utilization machinery leads saving cultivating time but the efficiency of soil will decrease in proportionately Table No.7 Calculation of Cost for Transplanting of One acre Field Under Modern Method particulars Unit/quantity Rate calculations Amount(Rs)

Machinery for Depreciation on transplanting machinery 90per acre Interest investment machinery 2 men labor on 400per acre for

90 400

200 per men

2*200=400

400

total Source: primary data

890

The above table explain brief discussion about calculation of exact cost of transplanting for one acre paddy under modern method .utilization machinery leads saving cultivating time but the efficiency of soil will decrease in proportionately the cost of transplanting under traditional method higher than the cost of transplanting under modern method. Working Note 3: Depreciation on machinery = cost of machinery/ no of life years =500000/20=25000 Depreciation charged for one acre trans planting =depreciation for year / no of acres transplanting for year =25000/ 300= 83, ie90Rs Intrest on investment for machinery = 500000*2*12/100=120000 per year

Interest charged for one acre transplanting=12000/300=400 Rs per acre the total cost of cultivation of one acre paddy cultivation higher in traditional method in the amount of 700 Rs. so it is advisable to the farmers doing transplanting operation by using machinery. Table no.8 Calculation of cost for manures of one acre field under traditional method Particulars Manures/ biofermi Maintenance for preparing bio 3 men labors Fermi compost Unit/quantity Rate Calculations Amount(Rs)

200

3*200=600

600

Source: primary data The above table explain brief discussion about calculation of exact cost of.ploughing under traditional method . utilization manures and chemicals leads saving cultivating time but the efficiency of soil will decrease in proportionately. the cost of transplanting under traditional method lower than the cost of transplanting under modern method in the amount of 1380rs so it is advisable to the farmers doing transplanting operation by using machinery.

Table No. 9 calculation of cost for manures/fertilizers of one acre field under modern method Particulars Unit/quantity Rate Calculations Amount(Rs)

Manures/fertilizers:: 1st stage 50kgs(20-20-013) 25Kgs(urea) 940 per 50kgs bag 300 per 300/50*25 50Kgs bag 300 per50 kgs bag 250 per 5Kgs bag 300 per 50 kgs bag 980 150

50Kgs(urea) 5Kgs(Biogyne) 50Kgs(urea) total

300 250 300 1980

Source: primary data

The above table explain brief discussion about calculation of exact cost of ploughing under modern method .utilization chemicals leads reducing the efficiency of soil will decrease in proportionately

Table No.10 Calculation of Total Returns for One Quintal Paddy Under Both Method Particulars % of quantity in Rate per kg quintal Calculations Amount(Rs)

1.raw rice 2.broken rice 3.rice (ban) 4.rice crush 5.rice polish 6. cost charged by miller for quintal paddy total

65% 5% 20% 8% 2%

35 12 20 1 10 90Rs per quintal

35*65 5*12 20*20 8*1 2*10

2275 60 400 8 20 (90)

2673

Source: primary data

Definitions and Concepts used Human labor Human labor was estimated in terms of eight hours of work per day. The women labor days were converted into man days on the criterion that one women day is equal to0.60 man day on the basis of wage rate equivalent. The prevailing wage rates in the study area were Rs. 50 per male labor and Rs. 30per female labor. Bullock labor Bullock labor is defined in bullock pair days, both owned and hired were charged at the prevailing rate paid per day (8 hours) in the study area . Machine labor The cost of machine labor both owned and hired was calculated at the different rates for the different type of operations prevailed in the study area . Seeds The cost of the seed was calculated at the local market price for the farm produced seeds and actual expenditure incurred in the case of purchased seeds

Farm Yard Manure (FYM) The quantity of FYM used in the cultivation of paddy was measured in terms of tractor load. The cost was imputed at the market price in the village including cost of transportation and other incidental charges if any.

Fertilizers and plant protection chemicals Cost of fertilizers and plant protection chemicals were based on the actual prices paidby the sample farmers including the cost of transportation and other incidental charges if any. Irrigation charge Per crop irrigation charges as fixed by the government was taken for computing irrigation charge. Land revenue Land revenue was charged at the rates levied by the government It was imputed by taking the prevailing rents in the study area per acre per annum.

Interest on working capital Interest on working capital was calculated at the rate at which banks were advancing short-term loans. The prime lending rates during the agriculture year were 8.00 per cent for crop loan of paddy. It was charged for a period of six months for paddy crops. Interest on fixed capital Interest charges on fixed capital was calculated at the rate of 11 per cent per annumas it was the rate of interest charged on long-term loans by commercial banks. This interest was worked out on the values of fixed assets, after deducting depreciation for the year. It was apportioned on the basis of the area of land under each crop grown by the farmer during the study period. Depreciation The depreciation was calculated by the straight line method. The charges on account of minor repairs of implements and machinery during the year were added to the depreciation charges. It was apportioned on the basis of area of land under each crop grown during the year.

Total cost of cultivation Cost of cultivation included variable costs and fixed costs. Variable costs included the cost of human labor, bullock labor, machine labor, seeds, farmyard manure, plant protection chemicals, irrigation charge and interest on working capital. Fixed costs comprised depreciation, land revenue, rental value of land and interest on fixed capital . Gross return

The gross returns was computed by multiplying the quantity of main product and byproduct obtained with respective prices received. CONCLUSIONS Modern paddy farmers are found to be of younger age group as compare with traditional farmers. The average family size of traditional paddy farmers and traditional paddy farmers was medium. All the modern paddy respondents were found to be educated. . The livestock and machinery position of the modern paddy farmers found to be more than that of the traditional paddy farmers. Modern paddy farmers were growing more number of crops per season and per year than the traditional paddy farmers. Major conclusions for traditional method paddy and modern method paddy cultivations are listed below Land preparation cost for modern method (Rs. 3000) was considerably higher than that of the Traditional method (350rs), expenditure made on seed (Rs. 400) contributed substantially to the high nursery cost in traditional method. The differences also occur in harvesting stage in the means of utilization of machinery(harvester) . In the operation stage of harvesting modern method saving amount (4300 ) Costs and returns structure in traditional paddy and modern paddy production 1. The quantities of seed, fertilizer use was more in modern paddy cultivation whereas human labor, bullock labor, use was more in traditional paddy cultivation. 2.Fixed costs like rental value of land and interest on fixed capital were found to be more for modern paddy farmers. 3. Depreciation cost was more for modern paddy farmers. However, land revenue remained same for both the methods of paddy cultivation. 4..The share of human labor in the total cost was more in both the methods. 5.The least contributing item to the total cost was land revenue in both the methods. 6.The rental value of land was the major contributing expenditure to the fixed cost in both the methods. Acknowledgements The author is grateful to the anonymous referee for his valuable suggestions which helped in bringing the paper in its present form References KUMAR, L. R., SRINIVAS, K. AND SINGH, S. R. K., 2005, Technical efficiency of rice farms under irrigated conditions of northwest Himalayan region A non-parametric approach. Indian Journal of Agricultural Economics, 60(3) : 483-493. KUMAR, S. AND BISALIAH, S., 1991, Technical and allocative efficiency of contact of fellow farmers under new agricultural extension project in Karnataka. The Asian Economic Review, 23 : 103-122.

NAGARAJ, T., 1993, An economic analysis of cropping systems in TungabhadraProject

Command Area (Karnataka). M. Sc. (Agri.) Thesis, University of Agricultural Sciences, Dharwad. Ravi Kumar, K.N., Bapuji Rao, B. and Sree Lakshmi, K. (2004) Economics of major farming systems in North Coastal Zone of Andhra Pradesh. Extension Research Review, National Institute of Agricultural Information Management (MANAGE), V(1):10-32. RAMARAO, C. A., CHOWDRY, K. R., REDDY, Y. V. AND KRISHNARAO, G. V., 2003, Measuring and explaining technical efficiency in crop production in Andhra Pradesh. Indian Journal of Agricultural Economics, 58(4) 768-780 Kiresur, V., Balakrishnan, R. and Prasad, M.V.R (1996) A model for estimation of economic sustainability of improved oilseed crop production technologies. Indian Journal of Agricultural Economics, 51:328-341.

RADHA, Y. AND CHOWDRY, K. R., 2005, Comparative economics of seed productio visvis commercial production of cotton in Andhra Pradesh. Indian Journal of Agricultural Economics, 60(1) : 94-102. YERRISWAMY, J., 1999, An economic analysis of selected agricultural systems in Tungabhadra project area, Karnataka. M. Sc. (Agri.) Thesis, University of Agricultural Sciences, Dharwad. Rajendra Prasad, V. (2008) Evaluation of economic and yield sustainability in SRI cultivation of rice in AndhraPradesh. Andhra Agricultural Journal, 55(4):527-532.

Limitations The entire study pertaing to paddy cultivation in warangal districts only. The study condusted during one year period i.e 2012-2013. Hypothesis H:Paddy cultivation profitable if we are using both methods of cultivation i.e modren method and traditional method H1: Paddy cultivation not profitable if we are not using combination of both methods of cultivation i.e modren method and traditional method Assumptions In traditional farming method farmers did not use machinary and fertilizers but where as in modren method farmers use machinary and fertilizers.