Sources of Growth of Returns in Paddy Cultivation under Natural Farming v/s Conventional Farming: An Economic Analysis

Abstract

Aim: This study aims to analyze the economics of paddy cultivation under natural farming and conventional farming systems and seeks to provide insights into the profitability and cost-efficiency of natural farming while identifying the factors contributing to differences in net returns between the two methods. Study Design: Purposive multistage random sampling technique was employed to select districts, mandals, villages, and various stakeholders. The primary data collection was based on a total sample of 80 farmers, comprising 40 natural farmers and 40 conventional farmers from four villages across two mandals and two districts. Place and Duration of Study: The study was taken up in Parvathipuram Manyam and Alluri Seetha Ramaraju districts of North coastal region of Andhra Pradesh during the agriculture year 2022-23. Methodology: To study the economics of paddy grown under natural and conventional farming, cost and return analysis was taken up and Bisaliah’s Output Decomposition Model was used to study the sources contributing to difference in net returns between two groups. Results: The cost of cultivation per acre of paddy was found to be 15 per cent higher in conventional farming (Rs. 47,503.89) compared to natural farming (Rs. 40,164.98) which was majorly due to the differences in material cost. The cost of production per quintal of paddy was lower in conventional farming (Rs. 1,898.64) than natural farming (Rs. 2,042.98). The operational costs such as costs incurred on human labour were found to be higher in case of naturally grown paddy. The gross returns from conventional farming (Rs. 60,234.44) were about six per cent higher than natural farming (Rs. 56,398.33) but, the net returns from natural farming (Rs. 16,224.35) were 27 per cent higher than conventional farming (Rs, 12,730.54). The returns per rupee of expenditure was also found to be higher in natural farming (1.40) than conventional farming (1.27) exclusively attributable due to reduced costs in natural farming in spite of underproduction. The total observed difference in net returns was 25.98 per cent, reflecting the overall benefit of adopting natural farming practices over conventional farming. The breakdown of sources of increase in net returns consists of two major components i.e., the technology component and the input contribution. The technology component, accounted for 20.25 per cent of increase in net returns and inputs contributed to the extent of 5.73 per cent with varied contributions from different inputs. Conclusion: Natural farming demonstrates economic advantages over conventional farming despite lower yields, primarily due to reduced material costs. While gross returns were higher in conventional farming, natural farming achieved 27 per cent higher net returns and higher returns per rupee of expenditure. The increased net returns from natural farming was largely driven by technological improvements and optimized input usage.