Costs, returns and profitability of soybean cultivation in India: Trends and prospects

Abstract

Soybean has emerged as a leading oilseed crop in India which accounts for 55.6 per cent of area under kharif oilseeds and 38 per cent of area under total oilseeds during TE 2012–13, 42.5 per cent of total oilseeds production, and contributing to 28.6 percent of the total vegetable oils production in the country. Input use, cost, returns and profitability of soybean cultivation for major soybean growing states was analysed by using CACP data. The results revealed that farmers use higher than recommended seed rate and lower than advised fertilizers and manures, impacting the yield realisation by the farmers. The operational cost of soybean cultivation has increased gradually indicates that soybean cultivation is turning capital intensive. Growth in real cost of cultivation of soybean outpaced the growth in real returns from soybean in all major states. The decrease in price realised was faster than the real cost of production, indicating declining profitability of soybean cultivation, though started improving recently. The inverse relationship in cost of production and productivity of soybean was observed in major growing states. As the productivity of crop is the major factor in reducing the relative cost of production government should focus on the non-price incentives to increase the productivity and also to reduce the cost of cultivation, apart from price incentives.