Journal of Research, SKUAST-J, Vol. 10, No.

1, pp 93-99 (2011)

An Economic Analysis of Basmati Rice Production

in Jammu District of Jammu and Kashmir
Sudhakar Dwivedi, M.C. Dwivedi and Tarunvir Singh
Division of Agricultural Economics and Statistics,
SKUAST-J, Main Campus, Chatha-180009

ABSTRACT
Basmati rice is highly flavored variety of superfine paddy grown in sub-tropical area of the state Jammu and
Kashmir namely Jammu, Samba and Kathua districts. Cultivation of Basmati Rice under diversified cropping
system is ideally suitable due to its low water requirement and very less attack of insects- pests and diseases.
There is good scope for area expansion under this crop. To increase the production of Basmati Rice in the State
and generate more potential for export of the scented of crop is possible presently and area of 0.85 lack hectare
is under Rice cultivation in all these three Districts of the State, including both coarse as well as fine Rice
Verities. The area under Basmati can be increased further by about 25% by replacement of coarse varieties,
which comes around to 50 thousand hectares. Local Basmati and Basmati 370 are the most popular varieties
grown in the said area. These varieties have a great potential for export. In this context the present study has
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been taken to know the input and output structure of Basmati Rice with two objectives viz. (i.) To examine
the cost structure of Basmati Rice on different farm size group, and (ii) To analyze the return structure of
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different farm size groups. This study was confined to three villages namely Chakroi,Gharana and Gharani of
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C.D. Block R.S.Pura, district Jammu purposely on the basis of almost all the farmers in these villages grow
Basmati Rice on their farms. Farmers were categorized in to three categories on the basis of owned holdings viz.
small, medium and large. Thus a sample of 60 farmers consisting 20 samples from each category were selected
and studied. The per hectare cost of cultivation came to Rs. 20914.02 in small farms, Rs. 20960.87 on medium
farms, Rs. 18824.73 in large farms and Rs. 20233.21 in over all farms. The net income from Basmati rice per
hectare came to Rs.32450.62 on small farms, Rs. 29887.78 on medium farms, Rs. 29505.78 on large farms and
Rs. 30608.06 on overall farms respectively.
Key word: Cost concept, family labour income, farm business income, B-C ratio

Introduction
India is one of the largest exporters of Basmati rice in the world, in addition
to being home to a large number of quality rice varieties, both aromatic and non-
aromatic. Basmati rice is highly flavored variety of superfine paddy grown in sub-
tropical area of the state namely Ranbir Singh Pura, Bishnah, Jammu, Akhnoor, Samba,
Hiranagar and Kathua Tehsil of Jammu division. Cultivation of Basmati rice under
diversified cropping system is ideally suitable due to its low water requirement and
very less attack of insect- pests and disease. There is good scope for area expansion
under this crop. The cropping season extends from mid June to end of November
(175 days). More than 100 sellers are functioning in the sub-tropical plains of Jammu,
where Basmati is being cultivated on large scale. To increase the production of Basmati
rice in the state and generate more potential for export of the scented varieties of this
crop is possible provided some central export agency like APEDA or some other agri-
export organization in the public or private sector extends its technical expertise in the
formulation of a project for development of agri-export zone with special reference to

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the quality improvement to meet international standards for its exports outside the
country.
Area, production and per hectare yield of Basmati rice in three important
districts are as under:

Table 1.: Area, production and productivity of Basmati Rice in Jammu Division.
S.No. Name of the District Area Production Yield
(000 ha) (000 Tonnes) (Qlt./ha)
1. Jammu 26.091 171.75 27.50
2. Samba 2.650 6.678 25.50
3. Kathua 3.250 8.289 25.50
Total 31.991 86.797 27.13

In order to open up the yield and income possibilities on the farms, one needs
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detailed information on the level and distribution of farm resources, their utilization
pattern, production and income levels. The present study makes an effect to study the
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resource structure, cost and returns in Basmati rice production on sampled farms.
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materials and methods

The study is confined to the three villages namely, Chakroi, Gharana and
Gharani of C.D. Block R.S. Pura, district Jammu purposively on the basis of almost all
the farmers in these villages grow Basmati rice on their farms. For the selection of the
respondents a list of farmers was prepared along with the area owned by the farmers.
Then farms were categorized into three categories on the basis of owned holdings
viz-small (1 – 2 ha), medium (2.01 – 4 ha) and large (above 4.01 ha). Then a sample of
60 farmers consisting 20 samples from each farm size groups were selected randomly.
Required data from sample farmers were collected through a set of schedule and
questionnaires by personal interview method. Tabular analysis has been used to obtain
the results of this study. The reference year of this study is agricultural year 2008-09.

Results and discussion

The following table shows total number of paddy growers and number of
samples selected for the present study. The selected sample has been classified into
three categories viz, small (1-2 ha.), medium (2-4 ha.) and large (above 4 ha.). Then
60 cases were selected randomly from different strata based on purposively selection
method for detailed investigation. The final number of cases selected for both the
zones was as given below in Table2.

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 Economic analysis of basmati rice production

Table 2. Total number of farmers and selected number of farmers in each size group.
Farm size groups Size of holding (in ha) Total farms Selected farms
Small 0.01-2.00 82 20
Medium 2.01-4.00 66 20
Large 4.01- above 42 20
Total 190 60

Table 3. Family composition of selected farms under study (Member / farm)

Farm size groups Male Female Children Total
Small 3.40(37.37) 2.40(26.37) 3.30(36.26) 9.10(100.00)
Medium 2.80(40.00) 2.30(32.86) 1.90(27.14) 7.00(100.000
Large 3.90(42.86) 2.40(26.37) 2.80(30.72) 9.10(100.00)
Overall 3.36(38.53) 2.70(30.96) 2.66(30.51) 8.72(100.00)
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Note: Figures in bracket indicate percentage to total.

Table 4. Farm asset structure on different farm size groups.(Rs./farm)

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S.no. Assets Farm size groups

Small Medium Large Overall
1. Farm building 6500.00 12900.00 25020.00 14816.67
(12.40) (18.53) (11.42) (13.05)
2. Farm machinery 16330.00 29868.00 158100.00 68099.33
and equipment (31.15) (42.90) (72.09) (59.99)

3. Livestock
a) Milch animals 22700.00 25000.00 30680.00 26126.67
(43.30) (35.90) (13.99) (23.01)
b) Draft animals 5680.00 - - 1893.33
(10.83) (1.67)
c) Other animals 1220.00 1860.00 5490.00 6500.00
(2.33) (2.67) (2.50) (12.40)
Total 52430.00 69628.00 219320.00 16330.00
(100.00) (100.00) (100.00) (31.15)

Table 3 reveals information regarding family composition in different farm

size groups under study. In study area small farms were having 9.10 persons, out of
which 3.40 (37.37 per cent) were males, 2.40 (26.37 per cent) were females and about
3.30(36.26 per cent) were children. In medium farms, total farm family size was of
7.00 persons, out of whom 2.80 (40.00 per cent) were males, 2.30 (32.86 per cent) were
females and 1.90 (27.14 per cent) is children. In large farms, total farm family size was

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of 9.10 persons, out of which about 3.90 (42.86 per cent) were males, 2.40(26.37 per
cent) were females and children accounted for 2.80(30.72 per cent). Overall, family
size of Jammu district was of 8.72 persons, with 3.36(38.53 per cent) males, 2.70 (30.96
percent) females and 2.66 (30.51 per cent) children. It can be noted on the facile view
that the proportion of the males was quite high in overall family size under all the
farm size groups in comparison to females and children.

Table 5. Item wise breakup of cost of cultivation (Rs./ha)

S.No. Item of cost Farm size groups
Small Medium Large Overall
1. Human labour
a) Hired 2010.38 3559.66 4049.45 3206.50
b) Owned 3480.43 1821.20 1210.92 2170.85
Total human labour 5490.81 5380.86 5260.37 5377.35
2. Bullock Labour 625.00 - - 208.33
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3. Machinery labour 3850.00 3920.00 3898.00 3889.00

4. Seed 880.00 800.00 800.00 826.67
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5. Manure and fertilizer 1481.00 1432.00 1402.70 1438.57

6. Irrigation 1145.45 1102.80 1072.20 1106.82
7. Plant protection 528.20 512.10 502.16 514.15
measures
8. Interest on variable cost 437.51 410.87 404.23 411.03
Total variable cost 14437.97 13558.63 13339.66 13772.25
9. Land revenue 50.00 50.00 50.00 50.00
10. Estimated rental value 5000.00 5000.00 5000.00 5000.00
of land
11. Depreciation 570.75 1069.20 1608.26 1082.74
12. Interest on fixed capital 855.30 1283.04 1826.81 1321.72
Total fixed cost 6476.05 7402.24 8485.07 7454.46
Total cost (V.C + F.C.) 20914.02 20960.87 18824.73 20233.21

The per hectare cost of cultivation of paddy was Rs. 20914 in small farms, Rs.
20960.87 in medium farms, Rs. 18824.73 in large farms and Rs. 20233.21 in overall
farms. Total variable cost constituted was Rs. 14437.97, Rs. 13558.63, Rs. 13339.66 and
Rs.13772.25 for small, medium, large and overall farms respectively. Expenditure
on human labour, machine labour, fertilizer + manure, irrigation, seeds and plant
protection chemicals was the important component of total variable cost.

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 Economic analysis of basmati rice production

The expenditure incurred on the human labour was the highest and the number
of human labour (casual and family labour) used for performing the operations like
transplanting, harvesting and weeding worked out to be Rs. 5377.35/ha on an overall
farm. Similarly rental value of owned land, interest on fixed capital and depreciation
charges were the major components of fixed cost, which accounted for Rs. 6476.05,
Rs. 7402.24, Rs. 8485.07 and Rs. 7454.46 for small, medium, large and overall farms
respectively. In case of fixed cost, the expenditure on rental value of owned land and
interest on fixed capital (excluding land) was highest and worked out to be Rs. 5000/
ha and Rs. 1321.72/ha on overall farms respectively. It was evident from the Table
6 that all the costs i.e. A1, A2, B1, B2, C1, C2 and C3 were varying for all the farm size
groups. On overall farms A1 cost was equal (Rs.8995.60) to A2 (Rs.8995.60).

Table 6. Cost of cultivation of basmati rice. (Rs./ha)

Cost concepts Farm size groups
Small Medium Large Overall
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A1 7728.29 9150.47 10108.05 8995.60

A2 7728.28 9150.47 10108.05 8995.60
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B1 8583.59 10433.51 11934.86 10317.32

B2 13583.59 15433.51 16934.86 15317.32
C1 12064.02 12254.71 13145.78 12488.17
C2 20914.02 20960.87 18824.73 20233.21
C3 22272.38 22504.22 20518.22 21764.94

These cost were lower than B1 (Rs.10317.32), B2 (Rs. 15317.32), C1 (Rs. 12488.17)
and C2 (Rs. 20233.21). The C3 came to Rs. 21764. The high cost in the B2 and C2 was due
to the high rental value of land and cost B2 + imputed value of family labour.

Table 7. Production and gross income of basmati rice on different farm size groups.

Main product By product

Farm size
Total value
groups Quantity Quantity
Value (Rs.) Value (Rs.)
(qtls.) (qtls.)
Small 29.68 50286.00 44.37 4437.00 54723.00
Medium 28.32 48144.00 42.48 4248.00 52392.00
Large 27.04 45968.00 40.56 4056.00 50024.00
Overall 28.31 48127.00 42.46 4246.00 52373.00

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The above table shows that the average value of output in case of basmati
rice came to Rs. 52373.00, of which Rs. 48127.00 was contributed by main product
and Rs. 4246.00 by byproduct. The value of main product and by product was higher
on small farms i.e., Rs. 54723.00 followed by medium farms (Rs.52392.00) and large
farms (Rs. 50024.00) respectively. The average yield of main product worked out
to 28.31 quintal and byproduct was 42.46 quintal on sampled farms under study.
Table 8 gives the detailed income of basmati rice on different farm size group under
study. The overall per hectare gross income worked out to Rs. 52373.00, which varied
from Rs. 54723.00 on small farms, Rs. 52392.00 on medium farms and Rs. 50024.00
on large farms respectively. The overall per hectare farm investment income came to
Rs. 31929.78; while it was highest on small farms (Rs. 33305.92) followed by medium
farms (Rs.31170.82) and large farms (Rs. 20518.22) respectively.

Table 8. Income of basmati rice on different farm size groups. (Rs./ha)

S.No. Particulars Small Medium Large Overall
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1 Gross income 54723.00 52392.00 50024.00 52373.00

2 Total cost 22272.38 22504.22 20518.22 21764.94
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3 Farm investment income 33305.92 31170.82 20518.22 31929.78

4 Family labour income 35931.05 31708.98 31332.59 32778.91
5 Farm business income 36368.56 32119.85 31120.93 33189.94
6 Net income 32450.62 29887.78 29505.78 30608.06
7 B-C ratio 1: 1.46 1:1.33 1:1.44 1:1.41

In case of family labour income again small farms received higher as compared
to medium and large farms. Table further reveals that per hectare overall farm business
income came to Rs. 33189.94, while it was Rs. 36368.56 on small farms followed by
Rs. 32119.85 on medium farms and Rs. 31120.93 on large farms respectively. In case
of net income from basmati rice per hectare again small farms obtained highest i.e.
Rs. 32450.62 followed by medium farms (Rs. 29887.78) and large farms (Rs. 29505.78)
respectively. The overall per hectare benefit-cost ratio came to 1:1.41, which shows
that every one rupee spent on basmati production yield return of Rs. 1.41.

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 Economic analysis of basmati rice production

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