TOPIC:

PRODUCER’S SURPLUS

Prepared By,
Dr. Sandip S. Thakare
Assistant Professor
Shri Shivaji Agriculture College, Amravati
Email Id- drsandipthakare@gmail.com
Mob No. 9767824381
PRODUCE’S SURPLUS:

It is the quantity of produce which is, or can be, made

available by the farmers to the non farm population.

The Producer’s Surplus is of two types

1) Marketable Surplus

2) Marketed Surplus
1. MARKETABLE SURPLUS: It is the residual left with the producer
– farmer after meeting his requirements for family
consumption, farm needs for seeds and feed for cattle,
payment to labour in kind, payment to artisans, carpenters,
blacksmith, potter, and mechanic, payment to landlord as rent,
and social and religious payments in kind.
This may be expressed as follows
MS = P- C
(Where, MS= Marketable Surplus
P = Total Production
C = Total Consumption (Total Requirements)

2. MARKETED SURPLUS: Marketed surplus is the quantity of the

produce which the producer-farmer actually sold in the market,
irrespective of his requirements for family consumption, farm
needs and other payments.
EXAMPLE ON ESTIMATION OF MARKETABLE AND MARKETED SURPLUS
There are six adult units in the family of farmer. He also maintain two
milch animals. Farmers sold 120 quintals of wheat, 15 quintals of barley, 48
quintals of mustard, 40 quintals of gram, 60 quintals of bajra and 30 quintals of
guar at different times. Workout marketed surplus and percentage of Marketable
and Marketed surplus with total Production with help of following data.

Crops Area Productivity Seed Consumption Other

Under (Qtl./ha) requirement requirement per requirements
crop (Ha) (Qtls) adult (Qtl)
Wheat 8 20 6.0 2.0 2.0 for artisans
Barley 2 12 1.0 0.5 -
Mustard 5 10 0.4 0.1 -
Gram 5 10 2.5 0.25 1.0 for artisans
Bajra 15 6 3.0 1.0 -
Guar 5 8 2.0 -- 2.5 per milch
animal
The marketable and marketed surplus of different products for this farm are
as follows:

Crops Total Total Marketable Marketed As percentage of production

Production Consumption Surplus Surplus Marketable Marketed
(Qtls) (Qtls) surplus surplus

Wheat 160 20 140 120 87.50 75.00

Barley 24 4 20 15 83.33 62.50

Mustard 50 1 49 48 98.00 96.00

Gram 50 5 45 40 90.00 80.00

Bajra 90 9 81 60 90.00 66.67

Guar 40 7 33 30 82.50 75.00

 RELATIONSHIP BETWEEN MARKETED AND MARKETABLE SURPLUS
The marketed surplus may be more, less or equal to the
marketable surplus.

Marketed ˃ Marketable
surplus ˂ surplus
˭

1. The marketed surplus is more than the marketable surplus when

farmers retains a smaller quantity of the crop than his actual
requirements for family and farm needs. This is true especially for small
and marginal farmers, whose need for cash is more pressing and
immediate. The situation of selling more than the marketable surplus is
termed as distress or forced sale.
2. The marketed surplus is less than marketable surplus when farmer
retains some of the surplus produce.
a) Large farmers generally sell less than the marketable surplus because of
their better retention capacity.
b) Farmers may substitute one crop for another crop either for family
consumption purpose or for feeding their livestock because of the
variation in prices.

3. The marketed surplus may be equal to marketable surplus when farmer

neither retains more nor less than his requirement. This hold true for
perishable commodities and for the average/Medium farmer.
 FACTORS AFFECTING MARKETABLE SURPLUS

1. Size of Holding
2. Production
3. Price of commodity
4. Size of family
5. Requirement of seed and feed
6. Nature of commodity
7. Consumption Habit