An Analysis of Cost and Returns of Sugarcane Production in Erode District of Tamilnadu

Objective: The main purpose of the present study is to estimate the cost and returns of sugarcane production per acre on different size of farms in Sathyamangalam block of Erode district in Tamilnadu, India.

Methods: The study was confined to a sample of 120 sugarcane farmer households selected from four villages of Sathyamangalam block of Erode District. A simple percentage analysis was employed to identify the cost and returns of sugarcane cultivation for the selected sample farmers.

Findings: The study found that an average sugarcane cultivating farmer in the area spent 14.40 percent of the total cost on seed, 5.32 percent (appropriated cost) on family labour, 64.96 percent on hired labour, 5.67 percent on machinery used for different operations, 6.04 percent on chemical fertilizer and 3.61 percent on pesticide, realised a net return of Rs.26424 per acre. This might be due to the fact that the benefit of economies of scale has reached its maximum only at the farm size of 5-7.5 acres. Therefore, our generalisation on optimum farm for the area falls in the category of 5-7.5 acres.

Application/Recommendation: The study recommends that can improve cropping system and stabilizes farm income to the farmers; the Government intervention is sought in a manner that there is unbiased credit support for farms of all categories without discrimination. The general observation from the farmer’s perception in the area is that inspite of the fact that the Central and State Governments price incentives have provided them a relief to some extent, the mechanism evolved for fixing minimum price does not cover the entire cost components and the risk factors involved in the sugarcane cultivation.