Economic Analysis of Maize Production and Marketing in Khammam District, Telangana

Abstract

Maize is the most important cereal and it is mostly used as grain, feed, fodder, starch and industrial products. In the present study, an attempt was made to calculate the cost of cultivation, find out resource use efficiency, price spread and market efficiency of maize in different marketing channels and to find out constraints in production and marketing of hybrid maize in the study area. The study area selected was Chinthakani mandal of Khammam (dist.). A multi-stage sampling method involving a combination of purposive and random sampling procedures was employed in drawing up the sample block, villages and farmers for collecting primary data. Sixty farmers (23 marginal, 20 small and 17 large) were selected at random by proportional probability sampling technique. In the study Maximum likelihood Estimation (MLE) technique was used in stochastic frontier production for finding out the technical efficiency. The coefficients of stochastic regression model were used to calculate the Marginal Value Product of Variable Inputs (MVP) and its ratio R with Marginal Factor Cost (MFC) used to determine resource use efficiency (RUE). The price spread was applied to measure the degree of pricing efficiency, marketing costs; market margins to calculate Index of the marketing efficiency (MEI). Total fixed cost for marginal, small and medium farmer are Rs.7337.43, Rs.7281.84 and Rs.7261.11 respectively .The benefit cost ratio is Maximum in case of medium farmers with at 2.7:1, followed by small farm (2.5:1) and marginal farmers (1.5:1). The gross returns from a hectare land are highest in case of medium farm with Rs 89364.63, followed by small (75396.54) and marginal (64845.89). A significant difference indicates sub-optimal allocation of resource. Labour, fertilizer and machine are under-utilized in the study area. The study suggested that a well-built strong infrastructure provision with efficient use of inputs and without marketing malpractices would show the way to an economically well-built maize economy.