Economic analysis of growth, instability and resource use efficiency of sugarcane cultivation in India: an econometric approach

Abstract

Objectives: To find out the growth, as well as instability in area, production and productivity of sugarcane farming and to assess the resource use efficiency in major sugarcane growing states of India and trade performance of sugar. Methods/Statistical analysis: Investigation is based on secondary data of area, production and productivity of sugarcane in major sugarcane growing states of India for the period from 2000-01 to 2015-16. Efficiency of sugarcane production was estimated using plot level data obtained from website of Cost of Cultivation Scheme, Directorate of Economics and Statistics, Ministry of Agriculture and Farmers Welfare, Government of India for the year, 2014-15. Compound growth rates, instability indices using formula suggested by Cuddy- Della Valle, and resource use efficiency using Data Envelopment approach (DEA) were computed. Findings: At national level area, production and productivity of sugarcane went up during the period of investigation. Similar result was also observed in case of growth rates of sugarcane crop which were found positive and encouraging. The area under sugarcane was found stable in the states like Uttar Pradesh, Uttrakhand and Gujarat on the other hand the yield of sugarcane recorded almost stable in Uttar Pradesh, Uttrakhand and Tamil Nadu. Technical efficiency at national level in sugarcane production was found to be 66% which indicated that the production of crop may further be raised by 34% with the available technology. Allocative mean efficiencies indicated that costs may be reduced by 40% through using optimum combination of inputs keeping in mind their prices while selecting their quantities. The cost efficiency (CE) asserted that farmers may potentially reduce their overall cost of sugarcane production, upto 60% to harvest the existing level of output at least cost. Undoubtedly, the export of sugar from India has increased during the period of investigation. Applications/Improvements: State government initiatives were found appreciable making sugarcane cultivation more remunerative. Proper use of scarce resources may make it more productive and profitable and realizing the objective of doubling income and uplifting standard of cultivators.