Costs and returns in groundnut cultivation: A spatio-temporal analysis

Abstract

Groundnut acreage in the country is shrinking significantly year by year. To find out the possible reason for such narrowing acreage profitability in groundnut cultivation was estimated from 1996 to 2015. All major groundnut growing states namely, Andhra Pradesh, Gujarat, Karnataka, Maharashtra and Tamil Nadu were analyzed as they jointly contribute around eighty-five per cent of groundnut area and production to the country. Based on the CACP cost of cultivation information costs and returns analysis was carried out. Results pointed out that farmers incurred losses over cost C2 in twelve and more years out nineteen studied years except in Gujarat. Farmers in Gujarat earned maximum times profits over cost C2 in seventeen years and incurred losses to a maximum of fifteen years in Karnataka. Cost of production was found more than Minimum Support Prices from nine to seventeen years. Maximum share to total cost was contributed by human labour, calls to increase mechanization in groundnut cultivation. Cost of production was found to decrease significantly with an increase in productivity in all the states indicated that profitability in groundnut can be increased with yield enhancement. The results implied that there is a need for policy intervention in term of higher MSP to attract more area towards this crop.