Economics of paddy (Oryza sativa) production: A comparative study of Bihar and Punjab

Abstract

Rice (Oryza sativa L.) is a staple food for about 65% of the population in India. It plays a vital role in strengthening food and livelihood security. Despite having stagnant area during the last decade, the rice production has registered an increase of 18%. But there is a common concern about declining profitability in paddy production. This article explores the trends in the cost of cultivation and profitability in rice production in two rice growing Indian states of Bihar and Punjab, which have almost contrasting scenario in productivity and use of inputs. Bihar is a traditional paddy growing state, whereas paddy emerged as principal crop in Punjab after the green revolution. Analysis of data for the last 30 years revealed that the per hectare cost of paddy cultivation increased at faster rate in Bihar but it was still double in Punjab, mainly due to more use of fertilizers, agro-chemicals and machine power. Use of human labour in paddy cultivation declined due to mechanization in Punjab but wages paid to human labour increased by more than 22 times during the period under study. Farmers realized very little income over total cost of cultivation in Punjab whereas farmers of Bihar encountered even losses in paddy cultivation during the last decade, mainly due to low productivity caused by inadequate use of manures and fertilizers, low adoption level of modern technologies, less mechanization and insufficient irrigation. However, Bihar’s performance in paddy cultivation in context of gross income to the total cost has improved during recent past which needs further improvement for increasing profitability in paddy cultivation. There is an urgent need to create an enabling environment to ensure adequate income from paddy cultivation to farmers for improving their livelihoods.