首页|Supply Response of Farmers in Tamil Nadu: A Farm-Profit Function Analysis
Supply Response of Farmers in Tamil Nadu: A Farm-Profit Function Analysis
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NSTL
Supply response due to price incentives is one of the major contributions to agricultural production. It is therefore appropriate to try and determine how responsive farmers are to the resulting price incentives. The influencing factors can be categorized as price and non-price factors. The key non-price factors that condition the farmers' response, such as rainfall and infrastructure, are rarely taken into account. In this context, a study has been attempted with the objective of finding farmers' responsiveness to price and non- price factors in Tamil Nadu.In the estimation, three crops, two variable inputs, chemical fertilizer and labour, and three fixed inputs, land (adjusted for quality), animal power and farm capital, are used in the final estimation. Two 'exogenous' controls are also included viz. market access, and rainfall. The system of three output supply equations and one input demand equation (fertilizer) is estimated using iterative Seemingly Unrelated Regression.Given the features of farming community in the state, getting prices right is not in itself an adequate policy to increase output and productivity in agriculture. Outputprices are clearly an important part of the incentive structure, but non-price factors are the binding constraints. Therefore, in addition to price incentives, effective policies that improve farmer's access to land, credit and inputs, and public investment in roads and irrigation, are required. Such policies are likely to have a directeffect on output, facilitating increased profitability, but equally important are the indirect effects by encouraging usage of recommended dose of fertilizer.
S. Muraligopal、K. Govindarajan、T. R. Shanmugam
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Department of Agrl. Economics, Tamil Nadu Agrl. University, Coimbatore-3
NSTL
