161

Chapter - V

SALES BEHAVIOUR AND MARKETED SURPLUS

Section-VJ: INTRODUCTION

This chapter consists of ten sections attempting to focus our attention to

the magnitude of production, techniques of production, application of

fertilizers and pesticides, retention, prices, sales behavior of the farmers,

pattern of land input, infra-structure facilities and education of the

farmers according to size groups. These are the considered factors whose

magnitude can influence the level of marketed surplus directly or

indirectly. These factors are analyzed with the help of data collected from

the farmers of the select area with a view to satisfy the objectives set for

the study.

Considering the volume of output as the sole determinant of marketed

surplus, the present chapter focuses its attention to the analysis of per

capita, per household and per hectare productivities as the indicators of

farmers' efficiency and hence marketed surplus. The techniques of

production, crop rotation and cost of production are assessed in relation

to output with the objective of reaching the conclusion whether these

factors influence the level of output or not. Since the application of

fertilizers and pesticides in cultivation is an integral part of the new

agricultural strategy, these variables have been put in a separate section

to examine their impact on the output level. The analysis of the

behavioral pattern of retention and marketed surplus in accordance of

size groups also constitutes an important section in this chapter. Total

retention has been divided into retention for future consumption,

162

retention for future sale and retention for seed requirements which are

analyzed in individual figures. This is because all forms of retention may

not contradict with marketed surplus without any condition of constancy

o^ the variables, i.e., output, productivity, etc. Further, infra-structure

facilities, such as, irrigation, credit, storage & ware-housing, transport &

communication and marketing facilities have been considered as

important indicators of production and marketed surplus of paddy. Some

of these factors are evaluated in numerical figures of information and

some in attributes depending upon the possibility of data collection.

While analyzing marketing facilities to the farmer-sellers, an analysis of

sales behaviour of the farmers receives due importance in this chapter

both with respect to size-class as well as of different agricultural seasons.

Attention is also given to the analysis of seasonal prices of paddy and

marketed surplus based on the hypothesis that higher prices lead to

higher volume of marketed surplus and vice-versa. Since higher

remunerative prices indicate better margin to the farmers which in turn

inspire them to generate more marketed surplus, the pattern of margins

with respect to size class is analyzed to understand its affect on the

quantum of marketed surplus. Moreover, it is the proportion of area

brought under cultivation of paddy which plays a significant role in

determining the level of output and hence marketed surplus. Therefore,

the chapter provides a necessary space for analyzing the pattern of land

input and proportion of area devoted to paddy cultivation according to

size-class and its impact on marketed surplus.

In addition to this, the present chapter draws attention to highlight the

significance of literacy and level of education of the farmers in

augmenting higher quantum of marketed surplus. Since educated

farmers are assumed to be more efficient and less susceptible to be

exploited by the middlemen, the level of education can really affect the

volume of marketed surplus. However, without capital investment

163

education alone cannot make the farmers to employ modern inputs.

Hence, the analysis of income-saving pattern of the farmers also receives

due importance besides analyzing their levels of education while

determining marketed surplus.

Section- V.2: OUTPUT, COSTS OF PRODUCTION AND

MARKETED SURPLUS

The marketed surplus of an agricultural produce largely depends upon

the level of production. Producers under subsistence cultivation cannot

think of marketed surplus without having minimum amount of

production for their survival. The subsistence farmers carry on their

productive activities primarily with the objective of satisfying their

consumption needs. They derive net marketed surplus from the available

quantity of marketable surplus which is the excess of production over

and above the consumption requirements and other retentions. Prof. Raj

Krishna maintains that output level acts as a sole determinant of

marketed surplus (Krishna, 1965). Further, Kalpana Bardhan, Jagdish

Prasad, M. Upender, Praduman Kumar, and D.S Thakur argued that the

proportion of marketed surplus increases with the increase in production

(Bardhan, 1970, Prasad, 1989, Upender, 1990, Praduman-

Mruthyunjaya, 1989, Thakur et.al, 1997). However, it is not only the

level of production but also the productivity per capita and per hectare

which is assumed to be more effective while determining marketed

surplus (Sengupta, 1998). By agricultural productivity it is meant that

the efficiency with which agricultural inputs are transformed into

agricultural output with the given production process (Said-Said-Ishak,

2006). This makes us to examine the pattern of production and

productivity according to holding sizes coupled with the pattern of

164

production costs. The study of the costs of production is needed to

understand the relative influence of costs on the pattern of production

and thereby marketed surplus.

The wide practice of paddy cultivation in Barak Valley is done mainly in

two seasons depending upon the nature of the monsoon. These two

seasons are Kharif Season (April to September) and Rabi Season (October

to March). For the valley as whole the total production of kharif paddy

stands at 4137.8 quintal only, whereas the production of rabi paddy is

21295.3 quintal. So the total production including kharif and rabi stands

at 25433.1 quintal. In terms of percentage figure it is found that size

class-I of 0-1 hectare contributes only 15.70 per cent to total kharif

production of all the groups, which marginally increases to 20.86 per

cent for size class-II. But a significant contribution is made by size class-

Ill showing 29.79 per cent against 33.65 per cent for the largest class.

This indicates that size class with 2.01-3.0 hectare has a relatively better

share in the production of kharif paddy than the size class of 3.01

hectare and above. The increase in percent contribution of the largest

class is very marginal relative to their size of land holding and better

economic condition, indicating the apathetic attitude of the farmers

belonging to this group. Farmers of this largest group with sound

financial position could have contributed a much better share in the

production of kharif paddy. But most of them arc satisfied only with the

production of rabi paddy which reflects the absence of commercial

attitude of such farmers. A relatively very marginal increase in

production of the largest group compared with the third group may be

due to the practice of share cultivation with small and poor farmers, as

well as the engagement of the farm members in non-agricultural

activities. On the contrary, the contributions (better in relation to their

holding sizes and poverty) made by the first two groups are because of

their direct engagement on land with more personal interest in

165

cultivation, keeping other factors constant. Since due to poverty and the

consequent lack of education and skills the members of the small farms

do not get better sources of income in non-farm sector, they have to carry

out cultivation with sincere effort. This results in higher productivity of

those groups (table -6). A relatively better contribution by size class-Ill

reflects commercial attitude of these farmers which can be substantiated

by their highest level of net marketed surplus as per cent of output

(Table -1).

However, the share contribution of the largest group in total production

of rabi paddy in the valley is very satisfactory and stands at 39.87 per

cent. Whereas it is 21.99 per cent for the third group, and 21.33 per cent

and 16.81 per cent for the second and the first group respectively. From

this it is observed that both the second as well as the third group

contribute nearly the same proportion of rabi production, while in case of

kharif production there exists a considerable gap between them. This

indicates that size class-11 has relatively higher potential in rabi

production, whereas size class-I to some extent holds the same position

as it was in the kharif production. The contribution of the largest class of

3.01 hectare and above occupies the highest rank in total production of

rabi paddy of all the groups. A possible explanatory factor for lower

contribution by the third group of 2.01-3.0 hectare in rabi season

compared with kharif season of paddy production could be the maximum

extent of time needed for re-cleaning and re-ploughing the cultivated plot

due to poor methods of cultivation. This practice does not leave them

with sufficient time for cultivation of rabi crops at the maximum level of

efficiency. Consequently, cultivation is done at the last moment of sowing

season which in turn results in less than the optimum level of output.

166

Table-6

PRODUCTION AND COSTS PATTERN OF PADDY

Size c lass

Net marketed surplus as per cent of output

Production (in quintal)

Production in Kharif Season(quintal)

Percent share in total Kharif production

Production in Rabi Season (quintal)

Per Cent share in total Rabi production

P.C. share of production of the group to total

production

Production per capita (quintal)

Production per household(quintal)

Production per hectare (quintal)

I 0 -

1 h

ecta

re

0.52

4230.6

649.8

15.70

3580.8

16.81

16.63

23.25

48.63

48.44

11

1.01

- 2

.0

hec

tare

19.38

5404.9

86.3

20.86

4541.9

21.33

21.25

26.76

58.75

38.50

III

2.0

1 -

3.0

h

ecta

re

36.43

5915.4

1232.8

29.79

4682.6

21.99

23.26

46.58

96.97

42.89

IV

3.01

hec

tare

&

abo

ve

35.22

9882.2

1392.2

33.65

8490

39.87

38.86

82.35

164.70

35.74

To

tal/

Ag

gre

gat

e

26.36

25433.1

4137.8

100

21295.3

100

100

40.31

84.78

39.60

167

Costs of production per quintal (Rs.)

Cost of production per hectare (Rs.)

176.09

8530.40

176.15

6782.26

163.65

7018.57

175.38

6267.37

172.94

6849.02

Source: Field Survey

Ultimately the crop output becomes poor both in quantity as well as in

quality. The first two groups exhibit their share contribution in rabi

season almost equal to kharif season. This reflects equal emphasis given

by small and marginal farmers in production of both kharif and rabi

paddy, because of the fact that paddy cultivation is their single and

prime source of livelihood. Hence they get involved themselves directly in

cultivation and draw keen interest to increase paddy output for satisfying

their overall consumption needs.

Switching over our analysis to the share contribution in aggregate of

both kharif and rabi paddy, it is revealed that the percent share of

production of the group to total production increases with respect to the

size class. The share of the smallest group is only 16.63 per cent whereas

it is 21.25 per cent for the next group. The third group contributes only

marginally more than the second group being as much as 23.26 per cent.

The contribution of the fourth size class is to the extent of 38.86 per cent

which is the highest among all the size classes. It is also seen that the

total production including both of kharif and rabi seasons increase with

respect to the increase in size class of holdings. The level of production

increases from 4230.6 quintal for size class-1 to 5404.9 quintal for size

class-II, then to 5915.4 quintal for size class-Ill and thereafter increases

to 9882.2 quintal for the largest class. Similarly, the net marketed

surplus as per cent of output records an increasing rate showing 0.52

per cent, 19.38 per cent, 36.43 per cent and 35.22 per cent for first,

168

second, third and the largest class respectively. Likewise, there exists a

direct relationship between the per capita and per household

productivities and the size class. As the size group increases both per

capita and per household productivities increase though with a

considerable differences between higher two classes. The smallest group

shows its per capita productivity as 23.25 quintal against 26.76 quintal

for the second group. The per capita productivity for the third group is

46.58 quintal, whereas the same is 82.35 quintal in case of the largest

group. The average per capita productivity for the valley as whole

constitute only 40.31 quintal. It is thus revealed that per capita

productivity of the farmers rises sharply in accordance with increase in

size class. The rate of increase is very marginal for smaller two groups

and quite higher for larger groups. Regarding per household productivity

the same positive relationship can be observed (table-6). The productivity

per household for size class-I and size class-Il are 48.63 quintal and

58.75 quintal respectively. The per household productivity for the third

and the largest group are 96.97 quintal and 164.70 quintal respectively.

Thus it is seen that productivity per household also increases with the

increase in size class at a low rate for smaller two groups and at a high

rate for larger groups. This indicates that larger two groups perform

much better in terms of per capita and per household productivities than

smaller groups. The possible factors explaining the better position of

larger groups are the use of power tillers, pump sets and harvest

machines (however not widely) which replaces labour units in the farm

on one hand, and on the other large scale possession of cultivated lands

which are found uncommon among the farmers of smaller two groups.

Because, with large area of cultivation and less units of farm labour

engaged due to the application of machineries, per capita productivity

will naturally be higher. The higher extent of per household productivity

for larger two groups may also possibly be due to area availability and

the consequent level of production.

169

However, the study assumes per hectare productivity as the most reliable

measure of farmer's efficiency rather than per capita and per household

productivities which are considered as weak measurements of efficiency.

Though per capita and per household productivities show a direct

relationship with size holdings, it is per hectare productivity which has a

different behavioural pattern. It is noticed that the smallest group marks

the highest level of per hectare productivity to the extent of 48.44 quintal

against 38.50 quintal and 42.89 quintal for the second and third group

respectively. The production per hectare for the largest group is as low as

35.74 quintal reflecting lack of efficiency and disinterest of the

cultivators belonging to this group. This indicates that smaller two

groups attain a better degree of efficiency with regards to productivity per

hectare than larger groups. Of course, this is not due to the improved

methods of cultivation and use of chemical fertilizers and pesticides, but

due to their direct engagement and commitment of hard labour for

farming activities. This reflects that efficiency level of the farmers does

not have either positive or negative relationship with farm size of holding

rather it shows a fluctuating trend. It thus implies that productive

efficiency or per hectare productivity is not influenced by size class but

by some other factors like personal interest in cultivation coupled with

practical engagement of farmers.

An extension of our analysis to the costs of production reveals that there

is very little variation in per quintal cost of production among the size

classes except the third group. The third group shows its production cost

as Rs. 163.65 per quintal of paddy. It is interesting to note here that the

per quintal costs of production for larger two groups are lower than the

smaller groups. This could be due to greater economies of scale availed

by larger size groups in comparison to smaller groups. Due to small

holding sizes the small farmers cannot have access to economies of scale

170

inspite of greater degree of efficiency. The costs of production therefore

tend to be much higher in case of smaller groups. Besides, the small

farmers also have higher running costs as they have to hire power tillers,

pump sets, etc., since they arc unable to invest for the purchase of these

essential agricultural inputs. Though the smallest class registers one of

the highest per quintal costs of production and higher per hectare cost of

production, yet it shows the highest level of per hectare productivity. The

quantity of production per hectare for the largest group is found to be the

lowest with the lowest level of its per hectare cost of production.

However, with the lowest per quintal and a slightly higher per hectare

costs of production the third group shows its per hectare productivity to

be 42.89 quintal which is higher than the largest group. The productivity

per hectare for the second group is also higher than the largest class

with almost similar level of per quintal and per hectare costs of

production. This confirms the reality that larger classes and more

particularly the largest one are not much efficient as far as productivity

per hectare is concerned, reflecting the disinterest of hired labourers as

well as the apathetic attitude of the farmers. Conversely, the small

farmers without depending on hired workers take personal interest in

cultivation with much more hard work. In turn they achieve the highest

level of per hectare productivity with a relatively less costs combination.

Thus, it is clear that farmers belonging to smaller groups are much more

efficient in cultivation compared to the hired workers working on large

sized holdings. The production costs of smaller two groups can be said as

relatively lower, because the costs of production for maximum farmers

belonging to larger size holdings are borne by their share cultivators (who

are from smaller groups) which have not been taken into account in their

(large farmers) cost combinations. It is only the per hectare productivity

which reflects the actual efficiency of the farmers belonging to different

size holdings. The per capita and per household productivities are not

such reliable indicators of farmer's efficiency. The reason being that they

171

arc calculated by dividing the total production by the number of family

members engaged in cultivation and the households respectively. So far

it is observed that in larger two classes persons engaged in the field and

the number of households are relatively less than smaller classes

wherein more households and family members including children are

engaged in cultivation.

Thus from the above analysis it is revealed that net marketed surplus

increases with respect to an increase in the level of production according

to size class. This substantiates the findings drawn by Krishna, Bardhan,

Prasad, Upender, Praduman and Thakur that production is the sole

determinant of marketed surplus as there is positive relationship

between production and marketed surplus (Krishna, 1965, Bardhan,

1970, Prasad, 1989, Upender, 1990, Praduman-Mruthyunjaya, 1989,

and Thakur et al., 1997). It has also been traced that there is a direct

relationship between the per capita as well as per household

productivities of paddy (Table-6) and the per capita as well as per

household marketed surpluses (Table-1) according to size holdings. As

the productivity increases the level of marketed surplus also increases

with respect to size class and vice-versa. The production share of the

group to total production of all the groups also relates positively with

marketed surplus in accordance with size class. Our findings here

confirm Sengupta's realization that per capita and per household

productivities as well as the share of size class in total production has a

positive association with marketed surplus (Sengupta, 1998). However,

no such positive relationship between per hectare productivity and per

hectare marketed surplus is found to exist according to holding sizes

(table-6 & table-1). This supports the realization made by G.P Reddy,

P.G. Chengappa and L. Achoth that productivity has a negligible

contribution to affect marketed surplus (Reddy et al., 1995). Both

productivity per hectare and marketed surplus per hectare decline

172

suddenly in case of the largest class compared to its immediate

preceding class. All gross marketed surplus, net marketed surplus and

per hectare marketed surplus increases with the increase of size holdings

up to size class-Ill, with a marginal deceleration for the largest group.

But the same relationship is not exactly followed by the pattern of per

hectare productivity rather it shows a fluctuating trend.

Section-V.3: TECHNIQUES OF PRODUCTION, CROP ROTATION AND

MARKETED SURPLUS

It is a well known fact that better and improved techniques of cultivation

results in higher productivity and the consequent marketed surplus in

agriculture. Further, crop rotation can possibly improve the quantity of

marketed surplus that can be done well with favourable condition of

monsoon, irrigation facilities and adoption of scientific tools and

techniques. The study of production techniques and crop rotation has

been undertaken here to understand the prevailing methods of

cultivation and the pattern of crop rotation with respect to size class of

holdings in the select area.

An examination of the techniques of production and marketed surplus

reveals that an average of 87.33 per cent of total farmers of all size

groups are using traditional wooden plough and bullock pair or buffalo

for ploughing the land. Out of this almost all farmers belonging to the

smallest group use this kind of traditional method figuring 95.40 per

cent of the group concerned. The percentage of farmers using wooden

plough is the lowest in third group showing 80.33 per cent, whereas the

same is 85.87 per cent and 85 per cent for the second and the largest

173

group respectively. It is thus clear that still traditional practice of using

wooden plough is very popular among the farmers of all size groups and

its use is found to be the highest amongst the smallest group.

It has, however, been found that though the practice of using wooden

plough is very wide in the study area, there are as many as 70 per cent of

the farmers on an average among all the groups who use some modern

implements mainly power tillers, tractors, pump sets and harvest

machines. The largest class shows the highest proportion of its farmers

as much as 86.66 per cent using some of the modern implements,

followed by size class-Ill as 83.61 per cent and size class -II as 77.17 per

cent. The smallest class exhibits the lowest proportion of its farmers

using such implements constituting 41.38 per cent. This trend is an

expected pattern and indicates that farmers in Barak Valley use not only

the wooden plough but also some modern tools and implements which

are mostly on hired basis exhibiting dualism in agricultural cultivation.

Though the process of production is done with such mixed efforts of

traditional and modern tools, yet a large-scale prevalence of the use of

wooden plough still reflects the backward nature of cultivation. It is also

found that the practice of using HYV (High Yielding Variety) seeds

increases with the increase in size holdings. An average of 31.66 per cent

farmers in the valley is found as HYV users and the rests are dependent

on traditional seeds. Though there is wide practice of using traditional

seeds in paddy cultivation, it is seen that even the small and marginal

farmers recently started to use HYV seeds. Out of the total farmers

belonging to the smallest group 19.54 per cent employ HYV seeds,

whereas the percentage is 29.35 for the second group. The same is 32.79

174

Tabic - 7

TECHNIQUES OF PRODUCTION AND CROP ROTATION

Holding Size

Net Marketed Surplus as p.c. of output

P.C. of farmers using wooden plough

P.C. of farmers using tractors/ power tillers/ pump sets / Harvest

machines

P.C. of farmers using HYV seeds

P.C. of farmers cultivate once in a year

P.C. of farmers cultivate twice in a year

P.C. of farmers cultivate thrice in a year

P.C. of farmers produce the crop, other than paddy

I 0

-1

hec

tare

0.52

95.40

41.38

19.54

48.28

50.57

1.15

11.49

II

1.0

1-2

.0

hec

tare

19.38

85.87

77.17

29.35

54.35

43.48

2.17

21.74

III

2.0

1

-3.0

h

ecta

re

36.43

80.33

83.61

32.79

32.79

60.66

6.56

24.59

IV

13.0

1 h

ecta

re &

ab

ove

35.22

85.00

86.66

51.66

38.33

J J . J J

8.33

36.66

Agg

rega

te

26.36

87.33

70.00

31.66

45.00

51.00

4.00

22.33

Source: Field Survey

175

per cent and 51.66 per cent for the third and the fourth group

respectively. So it is observed that larger groups witness the maximum

use of HYV seeds which may be due to their better financial position

compared to smaller two groups. But the use of HYV seeds does not have

meaningful implication in affecting the level of marketed surplus for the

largest group. Despite the highest, use of HYV seeds among the farmers of

the largest group, its marketed surplus is less than the third group who

use a comparatively lower proportion of HYV seeds. The correlation is

positive up to size class-Ill indicating that marketed surplus increases

along with the increase in use of HYV seeds among the farmers.

Somehow the tendency of the farmers to use HYV seeds is increasing

because of awareness campaigns organized by some NGOs and Krishi

Vigyan Kendhra operating in the valley.

Thus it is observed that adoption of modern farm practices among the

farmers increases with the increase in size class. However, the farmer's

efficiency does not increase along with the percentage increase in modern

farm practices according to size groups. Because the finding reveals that

productivity per hectare shows a fluctuating trend throughout the size

classes with the highest productivity of the smallest group and the lowest

productivity of the largest group (table-6). In other words, there is no

such positive relationship between modern farm practices and

productivity per hectare. Therefore, our finding goes in conformity with

the conclusion drawn by N.C. Rao that the use of high technological

inputs is not a contributory factor in raising the efficiency level of the

farmers (Rao, 2004), and so does not support the observation made by

R.P Pradhan and P.P. Reddy (Pradhan, 2003, Reddy, 1997)

Crop rotation has been found to be very weak especially in paddy

cultivation of the study area. The frequency in crop rotation is vital for

176

raising the level of production for a particular agricultural year and in

turn marketed surplus. But crop rotation is very seldom practiced in the

valley which may be due to unfavourable agro-climatic condition, poor

methods of production and of course the pessimistic attitude of the big

farmers. The study reveals that an average of 45 per cent farmers in the

valley as a whole cultivate only once in a year. Farmers cultivating twice

in a year constitute 51 per cent which is the highest, while only 4 per

cent farmers reportedly cultivate three times in a year. Of course, the

valley's atmosphere is not suitable for cultivating thrice in a year because

of the fact that during winter season usually the area experiences

absence of rainfall and irrigation facilities are extremely poor in the

valley. In addition to this, third time cultivation is done for the crop

known as 'baruah' only in the vicinity of rivers, marshes (locally known

as bheels), big ponds etc. by irrigating the water from them which is

costly and time consuming. However, it is seen that a minor proportion

of farmers of all the groups practice such cultivation. As much as 8.33

per cent of farmers belonging to the largest group cultivate thrice in a

year figuring the highest level. The percentage is 6.56 for the third group,

2.17 for the second group and 1.15 per cent for the smallest group. This

indicates that as the size class increases more and more farmers take

interest to cultivate the land three times in an agricultural year.

The proportion of farmers cultivating twice in a year is 50.57 per cent for

size class-I, 43.48 per cent for size class-II, 60.66 per cent and 53.33 per

cent for size class-Ill and size class-TV respectively. This reveals that

maximum number of farmers who cultivate twice in a year belong to the

third group which shows the highest level of net marketed surplus. The

proportion of farmers cultivating twice in a year for the largest group is

lower than the third and similarly the group's marketed surplus is less

than the third group. It may be therefore because o[ maximum

177

proportion of farmers of the third group cultivating twice in a year the

marketed surplus for the same group is maximum.

Since paddy cultivation in the valley takes place mainly in two seasons -

Kharif and Rabi season, cultivation of the crop twice in a year has much

relevance in marketed surplus. It is therefore found that the highest

percentage of total farmers in the valley cultivate twice in a year. But this

does not contribute in generating marketed surplus for the first and the

second groups. The second group, with comparatively less percentage of

crop rotation twice in a year than the first group, shows a far better level

of marketed surplus than the first group. However, the third group with

the highest proportion of two-time' cultivators witness the highest level of

marketed surplus followed by the fourth group. This indicates that crop

rotation twice in a year influences the augmentation of marketed surplus

for larger two classes. The proportion of farmers practicing crop rotation

thrice in a year is not much effective in the generation of marketed

surplus. Because, the third time crop rotation has been a rare practice in

the valley which is done only in the inferior quality of land with old

methods of production. It has been found that each and every size group

under study shows the practice of three times cultivation while the

proportion of farmers under such practice is very small. The proportion

is only 1.15 per cent for the smallest group, 2.17 per cent for the second

group 6.56 per cent and 8.33 per cent for the third and the largest group

respectively. This pattern again depicts the positive relationship with

marketed surplus up to size class-Ill. Although the highest proportion of

farmers undertaking crop rotation thrice in a year is found in the largest

class, its net marketed surplus as per cent of output is little bit smaller

than the third group.

178

Section-VA: THE APPLICATION OF FERTILIZERS AND PESTICIDES

The consumption of fertilizers and pesticides has great implications in

the production pattern of paddy. Since the application of chemical

fertilizers helps in increasing the productive capacity of the land and the

use of pesticides protects the crop from the attack of pests and insects,

consumption of these will increase the quantity of production. This in

turn helps in generating higher level of marketed surplus. The practice of

using chemical fertilizers is found common among all classes of farmers

under study. Table-8 reveals that fertilizer consumption of the farmers

both in volume and in value terms varies from size class to size class.

The smallest class consumes the lowest quantity and the largest class

consumes the highest quantity of fertilizers both in terms of per quintal

as well as per hectare of cultivated land. However, there is not much

variation in fertilizer consumption of the groups in terms of either value

or quantity with respect to per quintal and per hectare consumptions.

This is another indication of the keen interest taken by the small and

marginal farmers to increase the productivity of land. Though larger two

groups comparatively use higher volume of fertilizers, their productivity

per hectare (Table- 6) is not up to the satisfactory level (even smaller

than the smallest group) to influence the level of marketed surplus. This

may be due to the fact that they employ hired labourers in cultivation

and many of them do share cultivation with the landless labourers,

wherein, hired workers cannot draw the utmost attention in cultivation as

the farm workers can.

Further, an analysis of the use pattern of pesticides and insecticides

reveals that the largest class achieves the highest use in value terms,

while the smallest class shows the lowest use, both with respect of per

179

quintal of paddy and per hectare of the cultivated land. There is no

considerable variation found between the second and the third group

with respect to both per quintal and per hectare use of pesticides and

insecticides. But there exists a significant difference between them in

respect of marketed surplus. Table-8 presents the application pattern of

chemical fertilizers and pesticides/insecticides by the farmers of different

size groups. It has been found that as much as 73.66 per cent of the

total farmers in the valley consume chemical fertilizers in cultivation and

49 per cent of the farmers consume pesticides and insecticides.

Out of the total farmers consuming fertilizers 55.17 per cent belong to

the first group and 79.35 per cent belong to the second group. The third

group shows its proportion as 73.77 per cent which is less than the

second group, whereas the fourth group constitutes the highest

proportion of its farmers using chemical fertilizers showing 91.66 per

cent. This indicates that majority of the farmers in each group use

chemical fertilizers for the purpose of increasing the productivity of the

land. But the proportion of farmers using fertilizers does not vary

positively with the increase in size-class, showing a sudden decline in

size class-Ill. The same non-linear relationship is also followed by per

quintal consumption of fertilizers both in volume and in value terms. The

aggregate use of chemical fertilizers for all the size groups under

consideration constitutes only 1.00 kg per quintal, out of which the

smallest group consumes 0.53 kg per quintal at the cost of Rs.5.39. The

per quintal use of the second group is 0.91 kg at Rs. 10.37, while the

same for the third group is 0.89 Kg at the cost of Rs. 10.34. The per

quintal consumption of the largest group is 1.33 kg with the expenditure

of Rs.14.08.

180

Table - 8

APPLICATION PATTERN OF FERTILIZERS AND PESTICIDES

i

Size Class

Net Marketed Surplus as p.c. of output

Amount of Chemical fertilizers used (kg)

Use of fertilizers per quintal of output (Kg.)

Use of fertilizers per hectare (Kg.)

Amount spent on fertilizer per quintal of

output (Rs.) Amount spent on

fertilsers per hectare (Rs.)

Amount spent on pesticides per quintal

(Rs.) Amount spent on

pesticides per hectare (Rs.)

P.C. of farmers use chemical fertilizers

P.C. of farmers use pesticides /insecticides

I 0

-1

hecta

re

0.52

2241

0.53

25.66

5.39

260.87

1.24

60.21

55.17

37.93

II

l.O

l -2

.0

hecta

re

19.38

4903

0.91

34.93

10.37

399.24

1.71

65.75

79.35

46.74

" " " "

O CO u

a ' -2 9 3

36.43

5248

0.89

38.05

1

10.34

443.57

1.44

61.77

73.77

50.82

c8

u

o CO

35.22

13127

1.33

47.47

14.08

bfi a> u bJD W <

26.36

25519

1.00

39.74

10.98

503.13 | 434.68 j

2.26

80.65

91.66

66.66

1.78

70.56

73.66

49

Source: Field Survey

181

However, the per hectare use of fertilizers presents a linear positive

relationship with the size class both in volume and in value terms. It is

seen that the first group consumes only 25.66 kg fertilizers with an

expenditure of Rs.260.87 per hectare against the consumption of 34.93

kg at Rs.399.24 by the second group. The per hectare consumption of

fertilizers for the third group is 38.05 kg at the cost of Rs.443.57,

whereas for the largest group the same is 47.47 kg constituting an

expenditure to the extent of Rs. 503.13.

So far as the application pattern of pesticides and/or insecticides is

concerned, it is found that an aggregate of 49 per cent farmers in the

valley are involved in using the same to save crops from the attack of

pests and insects. Of this 37.93 per cent farmers of the smallest group,

46.74 per cent of the second group, 50.82 per cent of the third group and

66.66 per cent of the largest group use pesticides and/or insecticides.

This means as the size of holdings increases, more and more farmers

apply pesticides/insecticides revealing a positive relationship. But this is

not so in case of per quintal and per hectare use of pesticides in value

terms. The first group spends only Rs.1.24 per quintal and Rs.60.21 per

hectare for the use of pesticides or insecticides. Similarly the second

group spends Rs.1.71 per quintal and Rs.65.75 per hectare for the same.

Whereas the per quintal and per hectare application of pesticides or

insecticides in value terms are Rs.1.44 and Rs.61.77 respectively for the

third group, and to the extent of Rs.2.26 and Rs.80.65 respectively for

the largest group.

It is, therefore, observed that only the smallest group consumes

fertilizers and pesticides at a level far below the other groups both in

physical quantity as well as in value terms. The proportion of farmers

using fertilizers and pesticides belonging to the smallest group is also

182

very low. This is owing to their poverty due to which they cannot afford

for high priced quality fertilizers and pesticides. Though the aggregate

consumption of chemical fertilizers is quite appreciable, majority of the

farmers use low priced poor quality fertilizers which do not increase

productivity. On the other side, the application of pesticides or

insecticides in aggregate is not that much appreciable in relation to large

scale damage of the crops in each and every year due to pests and

insects in the field. This is reportedly due to high purchase cost of

pesticides and insecticides which even many of the large farmers cannot

afford. The smaller use of pesticides and insecticides (per quintal and per

hectare) by the third group compared to the second group is the evidence

here.

Moreover, the smallest group with the lowest consumption of fertilizers

and pesticides has the highest level of per hectare productivity (Table-6).

And the third group with lower level of such consumptions than the

second group achieves higher per hectare productivity than the latter.

While the largest group with the highest application level of fertilizers

and pesticides reveals both lower productivity per hectare and lower level

of marketed surplus than the third group. Thus, it is realized that the

consumption of fertilizers and pesticides does not influence the levels of

productivity and marketed surplus directly. Rather this seems to have a

positive response in affecting the volume of production which is an

important determinant of marketed surplus. However, marketed surplus

is affected not only by the volume of production but also some other

important factors like farm consumption and retentions which are

discussed under separate heads. Notwithstanding, there is an indication

of high interest of the farmers belonging to the first two groups in

cultivating the land for higher quantity of production. This is reflected in

their consumption patterns of fertilizers and pesticides that in spite of

their unsound economic condition they could use a good amount of

183

fertilizers and pesticides in relation to their size of land holding and

poverty. Though there exists a considerable use of the same among the

farmers belonging to larger groups, this however does not indicate any

good performance in productivity per hectare, as their per hectare

productivity is even smaller than the smallest group reflecting poor

efficiency of higher groups. Besides the third group, using smaller value

and quantity of fertilizers and pesticides than the largest group, shows

higher productivity per hectare than the largest group. It is to be

mentioned here that the group's (third group) marketed surplus is also

found at the highest level. All these led us to conclude that the

application level of fertilizers and pesticides/insecticides contribute as a

factor determining per-hectare productivity in average of smaller two

groups. This is however not so relevant for larger two groups in raising

per hectare productivity as well as marketed surplus.

Section -V.5: THE PATTERN OF RETENTION AND MARKETED SURPLUS

It is a well established fact that marketed surplus of an agricultural

produce particularly crops which are used as staple food and its

retention by the producers are contradictory to each other. M. Upender

maintains that the proportion of output retained for domestic

consumption declines with an increase in the farm size (Upender, 1990).

To Sengupta, the volume of retention for the purpose of family

consumption is inversely related to marketed surplus according to size

groups (Sengupta, 1998). In this study total retention of paddy consists

of the retention for farm consumption, future sales and seed

requirements by the farmers. Higher volume of retention implies lower

quantum of marketed surplus and vicc-vcrsa. With a view to understand

the relative influence of retention on marketed surplus of paddy it is

184

pertinent here to analyze the pattern of retentions by different size

groups. Table-9 presents the retentions of paddy by the farmers for

various purposes and their percentage distribution among the size

classes.

The retention as a proportion of gross output of the group is found

highest among the largest size class showing 29.66 per cent, while its

marketed surplus is less than the third group. But the third group with

lower level of retention as 22.37 per cent generates the highest

proportion of marketed surplus. This reveals a negative relationship

between retention and marketed surplus as lower retention results in

higher marketed surplus and vice-versa. However the same finding is not

confirmed in case of smaller two groups. The first group with 9.58 per

cent of output as retention shows the lowest level of marketed surplus,

whereas the second group with much higher level of retention as 19.85

per cent exhibits a better marketed surplus than the first group. This

indicates that total retention works as a determining factor of marketed

surplus only for larger two groups. Here total retention comprises o^

retention for future consumption, future sales, and seed requirements.

However, in case of smaller two groups total retention does not determine

their level of marketed surplus. This is because both retention and

marketed surplus of the second group are much higher than the first

group.

With a relatively lower volume of output smaller two groups retain the

produce mostly for consumption purpose and for seed requirement.

Therefore, it is not the total retention but the retentions for consumption

and seed requirement which may determine marketed surplus of smaller

groups. It has been observed that retentions for farm consumption as

well as for seed requirement are much lower in proportion for larger two

groups compared to smaller groups. Whereas, the retention by larger

185

groups for the purpose of future sale is much higher than the first two

groups. An analysis of the proportion of retention for consumption to

total retention reveals that the smallest group retains as much as 66.29

per cent for consumption purpose while the same is 49.45 per cent for

the second group. In case of the third and the fourth group the

proportions of retention for consumption are 32.26 per cent and 18.15

per cent respectively. This reflects a negative relationship between

retention for consumption and marketed surplus throughout the size

class. The same relationship is also found between retention for seed

requirement and marketed surplus according to size class up to the third

group. A very marginal and sudden decline in marketed surplus for the

largest group is because of its highest level of retention for future sale

which is as high as 76.82 per cent. In case of the retention for seed

requirement it is found that the proportion of retention by the smallest

group is the highest to the extent of 13.96 per cent of its total retention.

Whereas the same is 9.57 per cent, 7.17 per cent and 5.03 per cent for

the second, the third, and the largest class respectively. This reveals that

smaller groups mostly use traditional seeds rather than high yielding

varieties, which again strengthens our observation of the wide practice of

old and poor methods of cultivation followed by them. Despite the use of

high yielding varieties found among many farmers of larger two groups

the pattern of retention for seed requirement reveals that they are not

totally free of using traditional seeds. This confirms an overall existence

of traditional practice of paddy cultivation in the valley as whole.

In aggregate pattern, out of the total retention of all the size groups 30.67

per cent is retained for farm consumption, 62.33 per cent is for market

sales, and only 7 per cent is for seed requirement. Thus in overall

retention the share component of retention for sales purpose is fairly

significant. This may be due to higher retention power possessed by

larger two classes for the purpose of making future sales in the market.

186

T a b i c - 9

THE PATTERN OE RETEMONS AND MARKETED SL'PLUS

S i z e C l a s s

Net Marketed Surplus as p.c. of output

0.52

Total Retention of the Group (in quantity)

Total retention as a p.c. of output

Retention for future consumption (quantity)

P.C. of total retention

Retention for future sales (quantity)

P.C. of total retention

Retention for seed requirement (quantity)

P.C. of total retention

405.

9.58

<u

O

Xi T H

1 O

<u u rt -M

o Xi

t-H O

1

o i-t

u u a 4->

o xi

a o i—< CO

1

o M

19.38 36.43

1072.9

19.85

268.7

66.29

80.0

19.74

56.6

13.96

530.6

49.45

439.6

40.97

102.7

9.57

1323.0

22.37

426.8

32.26

801.4

60.57

94.8

7.17

" """ '

eg

a>

> 2 o "•Sfl

o CO

35.22

2931.4

d M u bfl

<

tal

o

26.36

5732.6

29.66

532.0

18.15

2252.0

76.82

Source: Field Survey

187

The highest proportion of retention for sales purpose is shown by. the

largest class as 76.82 per cent. The third class shows 60.57 per cent of

such retention against 40.97 and 19.74 per cent for size class-II and size

class-I respectively. So, the lowest level of retention for future sale is

found among the farmers of the smallest group, which is because.of their

higher level retentions for self consumption and seed requirement on the

one hand, and lower level of output on the other. Hence, there exists a

direct and positive relationship between retention for future sales and

the size-group. As a result total retention relates positively with the size

class. The total retention as a proportion of output constitutes only 9.58

per cent for size class-I and 19.85 per cent for size class-II. For size

class-Ill and IV the proportion of retention is 22.37 per cent and 29.66

per cent respectively. It is thus seen that the proportion of retention for

future sales to total retention increases with the increase in size

holdings, reflecting higher and higher potentiality of larger classes in

augmenting the marketed surplus. However, this power of retention

largely depends upon the expectation of higher remunerative prices

during the mid-season and lean season. The possible factors responsible

for not possessing high retention power for the purpose of market sales

by smaller two groups are distress sales and immediate cash

requirements owing to their poor financial conditions.

Therefore, our hypothesis of contradiction between retention and

marketed surplus is confirmed in case of retention for domestic

consumption as well as in case of retention for seed requirement. Thus it

validates the observation made by M. Upender and K. Sengupta as an

inverse association between retention for domestic consumption and

marketed surplus with respect to size class (Upender, 1990, Sengupta,

1998). However, the same inverse relationship between retention and

marketed surplus is not satisfied particularly in case of retention for

sales. The study observes that retention for market sales of the produce

188

increases at an increasing rate as the holding size increases. This

positive relationship between retention for market sales and size class

works as a factor responsible for establishing a positive association

between total retention and marketed surplus according to size class.

Hence, there exists a positive association between total retention as a

proportion of gross output and holding sizes which is also observed by

Sengupta's study (Sengupta, 1998). Therefore, it is not the total retention

rather the retentions for domestic consumption and seed requirement

which play important part in the determination of marketed surplus.

Section -V.6: THE MARGIN, STORAGE FACILITY, IRRIGATION

FACILITY AND HIE CREDIT FACILITY

The margin of profit that the farmers receive from the sale of surplus

agricultural produce is extremely important for determining the level of

marketed surplus. Farmers get incentives to generate higher volume of

marketed surplus if and only if they could receive higher and

remunerative rate of margins. Therefore, a proportionally better rate of

margin means greater incentive to offer more for sales just as lower

margin may discourage them to dispose off more in quantity. The study

defines margin as the difference between the costs of production per

quintal and the price received per quintal. It is revealed that the per

quintal margin in case of the smallest group is not only the lowest but it

shows a negative figure as well, showing a loss of Rs. 107.67, whereas the

same is the highest for the largest group showing a profit of Rs. 121.17.

The negativity in the margin implies loss after selling the produce which

is also incurred by the second group showing a loss of Rs.32.48 per

quintal. The margin per quintal for the third group is Rs.97.47. The

highest level of margin received by the largest class and the negative

189

margins for the first two classes are also revealed in case of per hectare

and per household margins. The appreciated levels of profit margin for

larger two classes can be substantiated by the fact that the economically

well off farmers belonging to these classes have a better bargaining power

than the poor farmers of smaller two groups. It is because of this reason

they could manage to receive maximum prices for their produce by

selling at the time when prices are higher. Conversely, it is not only due

to the weak bargaining power possessed by smaller groups but mainly

due to indulging in distress sales they have to be contended with lower

price and thereby lower margins. Besides, the better retention power of

larger two groups makes them possible to release their produce during

lean season when prices reach the peak. The maximum number of

farmers in smaller groups is bound to dispose off their produce during

harvest season at the lowest level of prices which is the basic cause of

their negative rates of margin. It is the ongoing system of agricultural

marketing in the valley which is perhaps the responsible factor of such

deplorable condition of margins for the small and marginal farmers.

The existing agricultural marketing system in the Barak Valley is largely

influenced by the middlemen. The operations of middlemen in the village

markets of the valley can be classified into three groups - village traders

locally known as 'bhepari', commission agents or big traders and rice-

millers, and the itinerant traders. The village traders appear as the most

common purchasers during the post-harvest season either from 'hats' or

from the 'farm houses' at much lower prices. The itinerant traders

ramble from village to village to collect paddy from the farm houses and

sell them in the nearest markets after converting into rice. The small and

even some of the large farmers always remain satisfied by offering their

produces to the itinerant traders at a relatively low price due to the

absence of quick and low cost transport facilities, storage capacity and

fear of being cheated by the middlemen in market centers. Paddy in the

190

form of rice is also sold by small and marginal farmers weekly and

fortnightly in the periodical markets located in rural areas to meet their

urgent cash requirements. Another kind of selling appeared among the

small and poor farmers termed as distress sales in which case still

money lenders have considerable influence on the marketing of paddy.

The poor farmers generally borrow money from the money lenders on an

oral agreement of selling their produce to them just after the harvest at a

price much below than the prevailing market price. This way the

marginal and small farmers are obliged to make distress sales which

constitute a good share of paddy marketing. However distress sales

generally do not prevail among the large farmers who dispose off their

produce normally during the mid-season and the lean-season at higher

prices because of their capacity to wait for better prices. Many of them

sell their produce without converting into rice to the middlemen at their

door level, because they think that higher price received from market sale

of the produce would not be beneficial after incurring transport cost,

marketing charges and the cost of conversion. They, therefore, remain

contend with door selling behaviour at. a lower price than the market

centers. This in turn calls for a radical change in the prevailing system of

agricultural marketing which is the need of the hour to improve the

condition of the poor farmers.

The storage facility available to the farmers and their capacity of storage

is yet another considerable factor determining marketed surplus. It is

revealed that not even a single farmer under study is reported to be

availing the facility of scientific storage for paddy from the government.

Barring some rich farmers all other farmers store their produce in a

fragile storage made of bamboo and plastered with clay in which the crop

may be either damaged easily or eaten up by rats and other insects.

Some farmers possessing sound economic conditions have made their

storage cemented (pucca) which though not scientific, is more secured

19]

from getting easily damaged. It is generally presumed that farmers with

good quality of storage facility may have higher will of retention for future

sales at higher prices, which in turn encourage their volume of marketed

surplus. An analysis of the proportion of farmers possessing self pucca

storage facility reveals that no farmers belonging to the smallest class

own such kind of storage capacity. However, about 7 per cent of farmers

of the size class next to the smallest class possess the same facility. The

third group shows that about 20 per cent of its farmers avail the facility,

while for the largest group the proportion is exactly 25 per cent which is

the highest. For the valley as a whole an average of 11 per cent of the

farmers are found to possess self-pucca storage facility. It can, therefore,

be traced that higher the size groups more and more farmers are able to

acquire themselves good and secured storage for their produce at farm,

which is due to their better economic bases according to the size class.

On the contrary, coupled with the factors of poor economic conditions

and distress sales, absence of good and secured storage capacity is still

another factor determining unhealthy level of marketed surplus for small

and marginal farmers. On the other hand, because of their high power of

retention with secured storage capacity at farm the farmers belonging to

larger two groups are able to wait for better remunerative prices that

cause their attainment of healthy level of marketed surplus. It may be

mentioned here that there are only two cold storage facilities located in

the valley run by private management which are basically meant for the

crops other than paddy.

Though irrigation facility has been introduced by the Government of

Assam to facilitate the farmers during the shortage of rainfalls and for

operation of multiple crop rotations, the study reveals that not a single

farmer avails of this facility. The irrigation department of the government

is almost inactive especially in all the three districts of Barak Valley. One

192

Tabic- 10

MARGIN, INFRA-STRUCTURE FACILITIES AND MARKETED SURPLUS

Size group

Net Marketed Surplus as p.c. of output

Margin per quintal (Rs.)

Margin per household (Rs.)

Margin per hectare (Rs.)

P.C. of farmers with irrigation facility (Govt.)

P.C. of farmers with private micro irrigation

P.C of farmers with scientific storage facility

P.C. of farmers borrowed for production purpose

P.C. of farmers borrowed from banks and other

institutions

P.C. of farmers borrowed from moneylenders and

others

I 0

-1

hecta

re

0.52

-107.67

-5235.86

-5216.08

Nil

9.19

Nil

35.63

2.29

" "1

II

1.0

1 -

2.0

hecta

re

19.38

-32.48

-1908.09

-1250.49

Nil

7.61

Nil

33.69

9.78

23.91

III

2.0

1 -

3.0

hecta

re

36.43

97.47

9451.93

4180.15

Nil

19.67

Nil

31.15

11.48

19.67

IV

3.0

1 h

ecta

re 8

B ab

ov

e

35.22

121.17

19956.87

4329.98

Nil

16.66

Nil

28.33

21.66

16.66

Ag

gre

gat

e

26.36

44.94

3809.72

1779.74

Nil

12.33

Nil

32.66

10.33

22.33

193

PC. of production costs borrowed

12.13 22 11

f

13.74 19.62 17.59

Source: Field Survey

of the examples of this is the irrigation office located at Barjatrapur of

Cachar district which has now become the grazing field of animals with

all its office buildings in a dilapidated condition. In this plight some

farmers under study create themselves micro irrigation facility using the

water from ponds, rivulets and marshes with the help of pumping

machines or through other means to utilize under surface water for

irrigation purposes. But this venture also needs capital investment which

the small and marginal farmers cannot afford and so they are

discouraged to continue crop rotation. An analysis of the private micro

irrigation facility availed by the farmer shows that the highest proportion

of farmers using such facility belongs to the third group figuring only

19.67 per cent of total farmers of the group. Following this 16.66 per

cent farmers belonging to the largest size group use such micro irrigation

facilities. The proportion of the smallest group is 9.19 per cent which is

however higher than the lowest proportion of the second group showing

only 7.61 per cent. This indicates that there is no positive relationship

between the use of micro irrigation and the size-class reflecting less

interest in paddy cultivation by higher and economically potential

groups. Although such micro irrigation is costly yet a minor proportion of

the farmers belonging to the first two groups create such benefits

showing sincere attention in cultivation which may be due to their urgent

need for food and cash requirements. It is also found that an average of

12.33 per cent farmers of all the groups use such facility in the absence

of any macro irrigation facility from the government. With the existence

of inactive irrigation department of the government which causes some

194

unproductive public expenditure, not a single a farmer is reported to

have benefited from this scheme. Since the agro-climatic condition of the

Barak Valley is not stable and conducive every year and since maximum

farmers are poor in nature irrigation facility from the government is

assumed to be an important means of infrastructure in raising

agricultural productivity. However, our present study finds no such

facility available to the farmers under consideration which restraints

agricultural productivity even after adoption of modern farm practices.

This shows conformity with the finding drawn by M.P Bezbaruah and

Niranjan Roy as the poor system of irrigation and extension services act

as constraints in increasing the levels of agricultural productivity in the

Barak Valley of Assam (Bezbaruah-Roy, 2002).

In modern times capital is the most important factor of production and

agricultural product is not an exception. But the agri-sector in India is

generally a capital starved sector in which most of the producer-sellers

belong to the poor category. This is because of the fact that farmers

cannot produce better quantity and quality of the crops which is more

particularly the case of Barak Valley, for which the overall marketed

surplus in the valley is unsatisfactory. Therefore, credit facilities to the

farmers and the manner of credit availed by them is a very important

factor determining marketed surplus. It has been realized that an

average of only 32.66 per cent farmers in the valley fall under credit

arrangement (institutional and non-institutional), confirming that

maximum farmers are still not covered under credit facilities or not

encouraged to avail such facilities for production purposes.

The study expresses the amount of credit money utilized by the farmers

in terms of percentage of production costs to reflect the actual pattern of

credit facilities availed by different size groups. An analysis of this reveals

that credit used by the second group is the highest to the extent of 22.1 1

195

per cent of production costs. For the largest group the proportion is

19.62 per cent and for the third group the same is 13.74 per cent. The

proportion of credit to the costs of production is the lowest in case of the

smallest group showing 12.13 per cent. This indicates that there is no

direct and positive relationship between the use of credit money in

production and the size class. However, generally it is expected that

farmers of larger size holdings have the tendency of availing greater

amount of credit to improve their methods of production and thereby

productivity. An opposite experience of this, revealed in the study,

reflects the lack of commercial attitude of the big farmers. This is also

confirmed by our finding that an aggregate of merely 17.59 per cent

production costs are borrowed by the farmers for the valley as a whole in

the presence of insufficient capital possessed by the farmers to invest in

agricultural sector.

Switching over our analysis to the proportion of farmers taking loans for

production purposes, it is revealed that the smallest group attains the

highest level to the extent of 35.63 per cent, whereas the largest group

shows the lowest proportion as 28.33 per cent. The proportions of the

second and the third group are 33.69 per cent and 31.15 per cent

respectively, indicating that as the farm size increases less and less

number of farmers are willing to take loans. A relatively higher

proportion of loans taken by smaller two groups are because of their poor

economic conditions who mostly indulge in non-institutional sources of

credit especially from money lenders. On the other hand, due to the lack

of commercial attitude of big farmers the proportion of farmers borrowing

for production purposes is lower in case of larger two groups.

However, there is a tendency of big farmers to avail the credit money

from institutional sources. The institutional credit sources imply the

loans taken from Government, Commercial Banks, Regional Rural

196

Banks, Co-operative Banks, etc., whereas the money lenders, landlords,

relatives and friends, etc. are termed as non-institutional sources. The

proportion of farmers availing the institutional credit is found to be the

highest in the largest group showing 21.66 percent, whereas the same is

the lowest of only 2.29 per cent among the smallest group. For the

second and the third group the percentage is 9.78 and 11.48

respectively. On the contrary, the proportion of farmers availing non-

institutional credit is the highest to the extent of 33.33 per cent for the

smallest class while the same is the lowest in case of the largest class

being only 6.66 per cent. The proportion is 23.9 1 per cent for the second

class and 19.67 per cent for the class next to the second class. Thus, it is

evident that the small and marginal farmers largely take loans from

money lenders, traders, etc. at a very high rate of interest. Consequently,

they are in the cobweb of distress sales which deepens their vicious circle

of poverty due to which their level of net marketed surplus is very

negligent. In reverse case, farmers belonging to larger two groups avail of

credit mostly from institutional sources at a comparatively low rate of

interest. This may be due to their better economic position and perhaps

their level of education. Because the institutional loans are subject to

security in the form of borrower's property and complexity for which the

uneducated farmers are scared of taking such loans. As a result, there

exists a direct relationship between the farmers with institutional credit

and the size-class, and an inverse relationship is revealed between the

farmers with non-institutional credit and the size-class.

Section - V. 7: SALES BEHAVIOUR OF HIE FARMERS

The marketing system of an agricultural produce and the sales behaviour

of farmers are very crucial in determining marketed surplus. This is

because the farmers who sell the produce in the market places are aware

197

of prevailing prices and existing market: conditions, and are therefore

expected to be less exploited by the middlemen. Consequently, they may

receive better prices by selling at the market centers. Higher prices

inspire them to generate more surpluses for the purpose of sale in the

market. Contrary to this, farmers who sell their produce at the village

level do not know the actual prices that exist in the market, and so there

is a greater possibility of being exploited by beparies, commission agents,

etc. at the village level. Moreover, if the local markets and mandies are

not regulated by the government arid if the markets are more influenced

by the middleman, then even the farmers selling their produce in the

market centers would be more exploited in spite of having their

knowledge and consciousness about the prices. Again the distance of

market places from the farmers' house and mode of transportation to the

market centers are still another considerations that affect the market

access of the produce. If the market place is far away from the farm

household and the mode of transportation is very poor and costly, then

the farmers instead of bringing their produce in the market centers

dispose off the produce at their doors. Further, in the absence of usual

character of paddy (without converting into rice) sales in the market

centers and in the absence of warehousing facilities, the market access of

paddy are discouraged specially in case of the farmers who are willing to

sell paddy only.

Table-11 depicts the picture of sales behaviour of the paddy farmers,

marketing costs and distance of the market place in the Barak Valley of

South Assam. It is revealed that marketed surplus of paddy mostly

depends upon the production in the rabi season. Similar to the entire

state of Assam there are two main seasons - Kharif and Rabi during

which the paddy cultivation is generally carried out in the valley. Kharif

season starts from April to September and the Rabi season takes place

over the period from October till March. It has been found out that an

198

average of 73.33 per cent farmer-sellers dispose off paddy (rice) in the

rabi season while only 23.66 per cent dispose off their produce in the

kharif season. The percentage of farmers selling rabi paddy is the lowest

with 52.87 per cent in size class-I, while it is the highest being 95.08 per

cent for size-class-IIl. The percentage for the largest class is little bit less

than the third class showing 93.33 per cent and for the second class it is

65.22 per cent. Whereas, the percentage of farmers selling kharif paddy

is only 8.05 per cent for size class-1 which is also the lowest, but the

highest percentage is found in case of the largest class to the extent of 40

per cent. This indicates that not even a fifty per cent of large farmers

dispose off kharif paddy or rice. This may be due to low volume of

production during the kharif season governed by the factors like vagaries

of monsoons, e.g., flood, drought, late rains, etc., apathetic attitude of

farmers, and absence of modern tools and scientific methods of

production. Besides, high costs and tough task of harvesting and re-

cultivating the plot in the kharif season, sometimes due to heavy rains

and sub-merging of plots, cause discouragement to the farmers. For the

second group the percentage of farmers selling Kharif paddy is 18.48 per

cent and for the third group the same is 37.70 per cent. Thus there is a

positive relationship between the percentage of farmers selling kharif

paddy and the size-class. Whereas the same positive relationship in case

of the farmers selling rabi paddy with the size class is valid only up to

size class-Ill. However, the farmers selling rabi paddy is very high in

percentage with a maximum of 95 per cent and a minimum of 52 per

cent. This is because of higher volume of production during the rabi

season supported by favourable condition of the monsoon, easy process

of harvesting during winter season and above all the personal interest of

the farmers. It is observed that larger two classes show higher percentage

of farmers selling kharif paddy which is possibly because of their

economic power to hire labourers and machineries as well as favourable

condition of their land situation. Low-lying paddy fields around the

199

marshlands cannot: be brought under cultivation during rainy season.

The larger classes reportedly possess more lands covering the up-lying

areas which are favourable for cultivation during the khanf season.

Conversely, the paddy fields of many of the farmers belonging to smaller

two groups are located in the interior and inferior areas, which often

discourage them to cultivate in the kharif season, although they are

needy and interested to cultivate. Because these lands always remain

sub-merged at the time of rainy season where cultivation becomes very

difficult. It is, therefore, due to these reasons the volumes of production

for smaller two groups are very low and so the proportions of farmers

belonging to these groups disposing off kharif paddy or rice is also very

negligible.

An analysis of the marketing behaviour of the farmers reveals that

majority of the farmers sell their produce to the village traders (beparies),

rice millers, etc. instead of bringing them in the market places. For the

valley as a whole an aggregate of only 26 per cent farmers under study

bring their produce (paddy/rice) in the market centers for sale, whereas

60.33 percent farmers regularly sell at the door levels. This indicates that

out of the total quantum of marketed surplus market arrival of paddy or

rice is very negligible for which the farmers do not receive any

remunerative prices. This in turn becomes the cause of lower level of

marketed surplus. Interestingly, it is found that the highest percentage of

farmers who bring their produce in the market places belong to the

smallest group being as high as 41.38 per cent, while the same is only

13.33 per cent for the largest group which is the lowest. This reveals that

market arrivals of paddy (rice) decreases with the increase of size-

holdings. As against this there is an increasing relationship between door

200

Table-11

MARKETED SURPLUS AND SALES PATTERN OE EARMERS

Holding Size

Net Marketed Surplus as p.c. of output

P.C. of farmers sold rabi paddy/rice

P.C. of farmers sold KJiarif paddy/rice

P.C. of farmers sold in the market places

P.C. of farmers sell to middlemen at the door

level

Mean distance to the market places (km)

Marketing cost per quintal of output sold (Rs.)

Marketing cost as per cent of total costs

I 0

-1

hec

tare

0.52

52.87

8.05

41.38

28.74

2.98

12.35

0.93

01 -

2.0

hec

tare

r-<

19.38

65.22

18.48

25.00

50.00

3.44

8.23

1.14

III

01 -

3.0

h

ecta

re

<N

36.43

95.08

37.70

18.03

90.16

3.05

5.54

1.23

IV

3.0

1 h

ecta

re &

ab

ov

e

35.22

93.33

.._.

40.00

13.33

91.66

4.05

5.59

1.12

Ag

gre

gat

e

26.36

73.33

23.66

26.00

60.33

3.38

6.54

1.12

Source: Field Survey

201

level sales and size holdings. This is substantiated by the findings that

28.74 per cent farmers belonging to the smallest group, 50 per cent of

the second group, 90.16 per cent of the third group, and 91.66 per cent

of the largest group sell paddy or rice at their homes in the villages. It is

thus revealed that farmers possessing door selling behaviour are the

highest among the largest group and the lowest among the smallest

group. It can, therefore, be seen that small and marginal farmers of the

first two groups dispose off their produce mostly in the market centers.

However, this is not mainly for the purpose of receiving better prices but

because of the fact that the amount they sell is very small in quantity,

viz. 5 kg/ 10 kg/20 kg/ 50 kg, etc., for which they do not get customer in

their villages. Further the sale of paddy (without conversion into rice) in

small quantity in the market places is not customary in the study area

and therefore the small farmers convert paddy into rice and bring it to

the market. However, even in the market places they do not sell to the

ultimate consumers at maximum prices, but mostly to the middlemen,

i.e. dalals, commission agents, local beparies etc. It has been observed

that almost all the prevailing markets in the Barak Valley are fully or

partially occupied by the middlemen for whom the farmer-sellers are

always exploited. Due to this reason the price spread for paddy (rice) is

very high and producer's share in consumer rupee is quite low which

discourages the farmers to produce for market sales. With this we can

validate Rao's finding that high margins received by various

intermediaries involved in the crop marketing is the main reason for

having small producer's share in consumer rupee which causes

disincentives to the producer in generating marketed surplus (Rao, 1991-

92). But these small and poor farmers have no option rather to sell their

produce to the middlemen in the market at lower prices on account of

their immediate cash requirements.

202

In reverse case, a considerable number of farmers belonging to larger two

groups do not sell customarily in the market places, rather they dispose

off their produce to either beparies or rice millers or others. Reportedly

most of them sell paddy only instead of converting them into rice. They

are not interested to sell either paddy or rice in the market centers. This

is because they think that the cost of converting process of paddy into

rice and the cost of transportation to the market will be equal or almost

equal to the better prices which they would have received from the

market. This can be substantiated by Singhal's conclusion that farmers

averse to selling their produce in market centers, because the prices

received from middlemen are not much different from the prevailing

market price after adjusting for possible transport and marketing costs

(Singhal, 1989). Further it has been observed that majority of such

farmers are not commercial and they do not have the concept of cost-

benefit analysis due to lack of education. They are satisfied with the

prices slightly higher than the harvest price in the absence of proper

bargaining. Besides, nobody knows the actual prices of paddy prevailing

in the market, because there is neither standard system of paddy sales

in the marts or mandies, nor any uniform units of measurement across

the valley. As an outcome, these big farmers have to remain contended

with such door selling behaviour and the surplus they dispose off is not

mainly due to their commercial attitude rather due to more cultivable

lands under their possession, because their per hectare productivity is

found even lower than the smaller groups (Table - 6).

In addition to these, distance of the market places from the farm-

households and marketing charges are the factors which may be

considered responsible for lower quantum of market arrivals. An analysis

of this reveals that mean distance to the market places is about 3 km.

each for the first two groups (2.98 km for size class-I and 3.44 km for

size class-II). Similar case of mean distance is also found for the third

203

group showing 3.05 km, while for the fourth group it is 4.05 km. This

means that there is no significant variation in distances from the farms

to the market places among the size-groups. Since the average distance

is about 3 km up to size class-Ill, an average of only 1 km more distance

for the largest group is not a causative factor for discouragement to the

farmers while bringing their produce in the market centers. However, in

case of some individual farmers it is found that their households are

situated far away from the market places. Another problem faced by the

farmers is that for maximum time in a year the roads remain muddy or

sub-merged in flood waters due to which it is not only costly but also

difficult for them to bring their produce to the market. Therefore, for the

valley as a whole irrespective of the farm-sizes, the physically interrupted

communication system viz. Katcha or muddy roads, poor means of

transportation, less accessibility of farmers to market information and

inadequate market infrastructure have been the crucial factors

responsible for the small volume of market arrivals. However, in case of

small farmers who marketise the paddy or rice in small quantity and in

dry season (Dec-March), these factors are not influential. Because they

incur least costs of marketing on account of easy means of

transportation during the dry season. Most of them carry rice on head-

loads or with the help of bi-cycle or hired/owned hand-puller or hired

rickshaw/auto-rickshaw which involve less costs of marketing.

Sometimes small trucks like auto-truck are used to carry rice if the

amount is more subject to the financial capacity of the farmers and

favourable road condition.

Another usual character of selling behaviour found among the small and

marginal farmers is that most of them sell their produce just after the

harvest under unwritten agreements. This kind of sales takes place with

the local landlords, professional money-lenders, small employees and

businessmen who have the available cash money with them. During the

204

sowing season the poor farmers borrow money from them either to

purchase chemical fertilizers or pesticides or for their own consumption

purposes. They borrow with the contractual obligation that just after the

harvest they must sell paddy or rice to the lenders at a price much below

the prevailing market price. Such kind of sales behaviour is termed as

distress sales which are found common among the farmers belonging to

the first two groups.

It has, however, been observed that due to their higher retention power

to wait for better prices, most of the farmers belonging to larger two

classes dispose off their produce during mid-season or lean season.

These two seasons are naturally rainy seasons in the valley.

Consequently, the farmers of interior places face transportation

problems. Only those who are at the pucca road-side carry their produce

by 407-truck or auto-truck or hand-puller. Even some big farmers from

remote areas use bi-cycles or hand-pullers or boats especially at floods

with a view to sell their produce in the market places. It is because of

this troublesome job the farmers of remote areas have to remain satisfied

with door level sales of paddy or rice. Even those who are not from

remote areas are also contended with such door selling behaviour

because of their lack of commercial attitude and disinterest to process

the paddy into rice. On the other hand, traders and rice-millers persuade

the farmers to sell paddy (without converting into rice) to them. On their

part while purchasing paddy they come at the farm houses and borne

the entire costs of transportation of the produce. In this case, beparies

and small traders use hand-pullers, while rice-millers and big-merchants

use small trucks (if the road condition is favourable) while carrying out

the paddy from farmer's home.

A further analysis of the impact of marketing costs on market arrivals

reveals that marketing charge is not a factor influencing market sales of

205

paddy or rice. Table-11 shows that even the smallest group, showing the

highest percentage of farmers selling in the market centers, incur the

highest level of marketing costs to the extent of Rs. 12.35 per quintal of

paddy. The second group incurs the marketing costs of Rs.8.23 per

quintal, whereas the per quintal marketing costs for the third and the

fourth group are Rs.5.54 and Rs.5.59 respectively. This shows that in

spite of higher marketing costs of smaller two groups the percentage of

farmers selling rice in the market places belonging to these two groups is

higher (table-11). Though per quintal marketing costs for larger two

groups is lower, yet a very small percentage of farmers belonging to these

groups bring their produce in the market (table-11). A comparatively

lower level of marketing costs for larger two groups is not because of

cheap transportation and other marketing facility but because they sell

their produce at their home places where the entire marketing costs is

borne by the buyer himself. Only a few number of farmers belonging to

these groups dispose off their produce in the market places after

converting paddy into rice wherein the farmers themselves borne the

marketing charges. Therefore, marketing costs in the study area is not at

all a determining factor of market arrivals of paddy or rice either in case

of smaller groups or in case of larger groups of farmers.

Section -V.8: SEASONAL PRICES AND MARKETED SURPLUS

It has been hypothesized that price is one of the most important

determinants of marketed surplus of agricultural produces. Higher

remunerative prices provide incentives to the farmers to produce more

for sale with a view to earn higher returns. Conversely, lower prices

create disincentives to the farmers and they will be contended with lower

level of output which is only sufficient for their family consumption

206

needs. Since agricultural crops are seasonal in nature and their prices

also vary from season to season it is pertinent here to analyze marketed

surplus behaviour with respect to seasonal variation in prices. There are

three main seasons identified as related to the sales of paddy or rice in

the Barak Valley. These are:

(i) Post-harvest Season: It happens just after the crop harvest with

an extension of 2 /3 months,

(ii) Mid Season: It is the time period after 2 /3 months of the

harvest and before 2 /3 months of the next harvest,

(iii) Lean Season: The time period just before the harvest extending

to 3/4 months, which is otherwise called pre-harvcst period.

Naturally it is the post-harvest season during which the price of paddy

(rice) comes down at the lowest level since the aggregate supply happens

to be the maximum during the same season. This is because almost all

the small and poor farmers are in a rush to sell their produce in that

season for their immediate cash requirements. The price becomes higher

in the mid-season and reaches the peak level during the lean season.

An examination of the seasonal prices of paddy (rice) and the volume of

sales in different seasons reveals that both prices and sales are the

lowest during post-harvest season. The marketed surplus (net actual

sales) during post harvest season is found as low as 21.74 per cent of the

total marketed surplus in the valley. This lowest level of sales takes place

at the lowest price of Rs.493.00 per quintal of paddy. It is observed that

the volume of sales during this period is the lowest despite greater

tendency of small and marginal farmers to sell the produce. Since this

tendency is due to their cash requirements the lower prices are

responsible for lower level of net sales during the post harvest season.

The marketed surplus during mid-season is revealed as 37.59 per cent

207

which is much higher than post-harvest season at a better price of

Rs.555.00 per quintal. Whereas during lean-season the selling price

reached at the top level of Rs.600.00 per quintal at which the marketed

surplus of paddy takes place at the highest level of 40.67 per cent.

Table-12

SEASONAL PRICES AND SALES OF PADDY

Season

Selling Price of paddy

(Rs. per quintal)

Net Marketed

Surplus as p.c.

of total

Marketed Surplus

Post-harvest

Season

493.00

21.74

Mid Season

555.00

37.59

Lean Season

600.00

40.67

Source: Field Survey

Thus, it is realized that higher prices lead to higher level of sales

confirming the hypothesis that marketed surplus is an increasing

function of price. The level of marketed surplus increases from post-

harvest season to mid-season and further to lean-season with respect to

a rise in the price level. This positive response of marketed surplus to its

price change confirms the realization made by Kumar-Mruthyunjaya and

Reddy-Chengappa-Achoth that the response of marketed surplus of the

produce to its price changes is positive (Kumar-Mruthyunjaya, 1989,

Reddy-Chengappa-Achoth, 1995). The present nature of finding however

does not corroborate with the conclusion drawn by Kalpana Bardhan

that marketed surplus as a proportion of production as well as in

208

absolute terms shows negative response to changes in food grain price

(Bardhan, 1970).

The per cent share of marketed surplus during post-harvest season is

the lowest due to the poorest level of prices on the one hand, and on the

other greater retention power of the economically well off farmers

belonging to larger two groups. The rich farmers can wait for better

prices and so they do not sell just after the harvest. Except a few,

farmers of larger groups sell their produce either in mid-season or in

lean-season subject to their powers of retention. These farmers with the

ownership of large size of land achieve higher volume of production and

hence can offer more quantity for sale in the market. Therefore, it is

found that marketed surplus is higher when price is higher in the mid-

season and it becomes the highest when price reaches the highest. So, it

can be concluded that price is one of the most important determinants of

marketed surplus. It is due to the availability of paddy just after the

harvest the market demand for this by the poor farmers (Who have to

repurchase during lean season) is minimized. At the same time, almost

all the poor farmers are bound to sell their produce for their immediate

cash requirements. As a result, supply of paddy (rice) in the local

markets increases which brings down the prices in post-harvest season.

Due to this low price the rich farmers are averse to selling in the market

and consequently the marketed surplus becomes the lowest among all

other size-groups during the same period. But in the mid-season there is

small quantity of the produce left with small and marginal farmers to sell

in the market and some of them even starts repurchasing rice for their

own use from the market. Consequently, demand for rice or paddy rises

in the local markets and supply starts declining. The market price by

that time also rises which becomes attractive to the rich farmers and

hence there is higher level of marketed surplus in the mid-season.

During lean season, stock of the farmers gets reduced due to the

209

previous sale in the absence of any fresh production. Only those farmers

who have the highest power of retention can wait for this season with the

expectation of receiving higher prices for their produce. Again during lean

season there is a fear of shortage of supply in the market, because the

average farmers customarily dispose off their produce before the arrival

of lean season. On the other hand, the quantity demanded by the

repurchaser is also at the highest level. Consequently, the price rises at

the peak level which gives incentives to the farmers to dispose off the

amount of surplus left with them. Therefore, marketed surplus as a per

cent of total marketed surplus during the lean season is found to be the

highest at maximum level of prices.

An analysis of the seasonal sales behaviour of the farmers reflects that

percentage of farmers selling their produce during post-harvest season is

the highest among the smallest group. The proportion is 45.98 per cent

of the total farmers of the group. The percentage of farmers selling in the

mid-season is highest among the third group showing 63.93 per cent.

During lean season the highest percentage of farmers selling paddy (rice)

belong to the largest group constituting 70 per cent of the farmers in the

group. In the second group the percentage of farmers selling the produce

is 34.78 per cent each in the post-harvest season as well as in the mid-

season. This means that an equal percentage of farmers of this group sell

in both the seasons reflecting the absence of maximum concentration in

sales for a particular season. This implies that most of the small farmers

sell their produce during post-harvest season. Maximum farmers of the

second largest group sell in the mid-season. Whereas majority of the

farmers belonging to the largest group sell during the lean-season.

However, an aggregate figure for the valley as a whole reflects that

percentage of farmers selling in the mid-season is the highest. It is found

that farmers selling in the post-harvest season constitute 31 per cent of

the total farmers of all the groups, whereas for mid-season and lean-

210

season the same is 40.66 per cent and 31 per cent respectively. Thus

maximum farmers unde r s tudy have an inherent tendency to dispose off

their produce dur ing the mid-season.

One of the possible reasons for having maximum tendency of the farmers

to dispose off in the mid-season is the price factor. During mid-season

majority of the small and poor farmers are left with no surplus on

account of their general selling behavior in post-harvest season for

urgent cash requirement. Some of them who committed distress sales

s tart to repurchase during mid-season. As a resul t of this market

demand for paddy rises up , while in the absence of any fresh production

market supply comes down which ultimately lead to increasing price

level. This higher level of price a t t racts the farmers belonging to all size

groups who have disposal capacity to sell in the marke t during mid-

season. Some farmers with retention capacity even from smaller two

groups abs ta in themselves from post-harvest selling in order to receive

better price in the mid-season. Again, a lmost all the farmers belonging to

larger two groups have their general tendency to dispose off the produce

during mid-season. Some of the large and economically well off farmers

who attain the max imum power of retention wait for selling in the lean-

season. Because, they know very well tha t dur ing lean season

repurchases by the poor and small farmers will be maximum and sales

by medium-sized farmers will be minimum. Consequently, the paddy

prices reach to the maximum level which a t t ract such large and

economically well off farmers to sell at higher prices. However, even some

large farmers averse to take risk in selling during lean season by fearing

that if they are fail to sell their produce in the lean-season, they cannot

receive expected price in the next agricultural year for the same produce.

Because, the lean-season in agriculture is followed by the next post-

harvest season recording the lowest price. Hence, there is a convergence

211

Table-13

SEASONAL SALES, PRICES AND MARKETED SURPLUS

Size Class

Net Marketed Surplus as p.c. of output

P.C. of farmers sold in post-harvest season

P.C. of farmers sold in mid-season.

P.C. of farmers sold in the lean season

Mean price at which sold (Rs. Per quintal of

paddy)

Average expected prices at which the farmers want to sell (Rs. Per

quintal of paddy)

Mean prices at which the fanners repurchase (Rs.

Per quintal of paddy)

P.C. of farmers conscious about the

prevalent market prices

I 0

-1

hec

tare

0.52

45.98

19.54

3.45

473.00

628.00

546.00

28.74

II

1.01

-2

.0

hec

tare

19.38

34.78

34.78

15.22

513.00

633.00

545.00

35.87

III

2.01

-3

.0

hec

tare

36.43

16.39

63.93

55.74

542.00

654.00

551.00

67.21

IV

3.01

hec

tare

&

abov

e

35.22

18.33

56.66

70.00

554.00

708.00

550.000

75.00

Ag

gre

gat

e

26.36

31.00

40.66

31.00

521.00

656.00

548.00

48.00

Source: Field Survey

212

among the farmers of all the groups in general and medium-sized groups

in particular to dispose off their produce in the mid-season. It is due to

this fact the proportion of farmers selling in the mid-season is found to

be the highest, whereas the proportions of farmers selling in the post-

harvest season as well as in the lean-season are minimum.

All these reveal that price is a determining factor of marketed surplus

which is also confirmed by the positive relationship between marketed

surplus and prices according to size-class. It has been found that the

smallest group attains the lowest level of marketed surplus of 0.52 per

cent of output at the lowest price of Rs.473.00 per quintal of paddy. The

second group offers a higher quantity of marketed surplus of 19.38 per

cent at a higher price of Rs.513.00 and the third group sells a much

higher amount of 36.43 per cent at further better price of Rs.542.00 per

quintal. Though the largest group's marketed surplus is slightly lower

than the third group which receives the highest price of Rs.554.00 per

quintal, still it is far better than the first two groups. However, farmers of

all the classes are not satisfied with these prices, arguing that such

prices are not remunerative and do not cover the costs of production in

many cases. It is also observed that small farmers who incur high costs

of production would have nothing left with them as profit at such low

level of selling prices during post-harvest season. Since the small farmers

indulge in post-harvest selling, many of them are compelled to accept

losses instead of earning profit at such low prices. Therefore, it is the

prevailing system of low-priced marketing of paddy (rice) in Barak Valley,

which could be a possible factor for the absence of scientific methods of

cultivation and non-commercial mood of farmers and hence the

existence of lower quantum of marketed surplus in aggregate.

There is a strong support from the farmers' side to receive higher

remunerative prices than the prevailing price level. Based on the

213

information received from the selected farmers it; is found that size class-I

expects an average of Rs.628.00 per quintal of paddy, while the expected

price of size class-11 is Rs.633.00. This means that the expected levels of

prices for the first two groups are almost equal and lower than other two

groups, since both these groups indulge in post-harvest selling. The price

expectation by size class-Ill is Rs.654.00, whereas the same is Rs.708.00

for the largest class. Thus, there is considerable difference between price

expectations of larger two groups indicating that larger and larger groups

want to sell at better and better prices which vary from mid-season to

lean-season. For the valley as a whole the aggregate selling price is found

to be Rs.521.00 per quintal of paddy, whereas the aggregate expected

price of selling is Rs.656.00. This again confirms that farmers in the

valley get frustrated due to low price of their produce in each and every

season, which is quite a disturbing factor for generating marketed

surplus and increasing their sales. So, there is a scope of increasing the

levels of marketed surplus if and only if the selling prices are increased

up to the expected levels of the farmers.

But higher prices during mid-season and lean-season would deteriorate

the living condition of the poor farmers who indulge in distress sales.

These farmers possessing a common behaviour of selling their produce

during post-harvest season have to repurchase paddy or rice either in

mid-season or in lean-season. An examination of the percentage of

repurchase to total consumption reveals that the smallest group shows

the highest level to the extent of 24.05 per cent. The group next to the

smallest one shows 12.34 per cent as repurchase, while for the third and

the fourth group the same is only 1.93 per cent and 1.58 per cent

respectively. This shows that repurchase takes place mostly in case of

small and marginal farmers, and for large farmers it is almost said to be

nil. As the size class increases the proportion of repurchase declines and

vice-versa. Such a nature of finding corroborates with the observation

214

made by Gupta and Majid that the proportion of repurchases for family

consumption to the total paddy output declines with the increase in size

class (Gupta-Majid, 1965). The prices of repurchase for the first and the

second group have been detected as Rs.546.00 and Rs.545.00 per

quintal of paddy respectively, which are much higher than their selling

prices of Rs.473.00 and Rs.513 respectively.

This is the indication of their pathetic condition of living. However, for

the third and the fourth group the repurchase prices are Rs.551.00 and

Rs.550.00 respectively which are even less than their selling prices of

Rs.542.00 and Rs.554.00. Since the proportion of repurchases for larger

two groups are very little in amount and at lower prices than their selling

prices, any increase in the level of selling prices will not frustrate them

rather it will give incentives to them in generating more surplus.

Conversely, any increase in the price level particularly during mid-season

and lean-season will cause high costs of subsistence for the poor farmers

(who repurchase) which in turn discourage them to invest in agriculture

for maximizing marketed surplus.

Section -V.9: MARKETED SURPLUS AND THE PATTERN OF LAND

INPUT

According to the finding of G.P. Reddy, P.G. Chengappa and L. Achoth, it

is not the productivity but the expansion of area under the crop which is

the important determinant of marketed surplus (Reddy-Chengappa-

Achoth, 1995). More area brought under cultivation means more amount

of production which in turn causes higher quantum of marketed surplus

and vice-versa. It is a general perception that in subsistence agriculture

farmers who devote more land under cultivation will receive higher

215

volume of production if the productivity of land does not diminish. Due

to this higher production farmers will be able to generate more marketed

surplus on the condition that the level of farm consumption is up to the

satisfactory level. However, the same may not be true in case of small

and marginal farmers belonging to the first two classes, since these

farmers consume far below their satisfactory level of consumption which

is reflected in their deplorable condition of distress sales and

repurchases.

An analysis of the pattern of land input under paddy cultivation shows

that the smallest group owns only 55.62 hectare of cultivable land,

followed by the second group as 133.16 hectare. The third group has

153.36 hectare under its possession, while the largest group possesses

the highest amount of 325.33 hectare available for cultivation. However,

it is not the total available area owned by the farmers, but the proportion

of area devoted for paddy production which is considered as a

determining factor of production and hence marketed surplus. It has

been found that the smallest group devotes as high as 95.83 per cent of

their cultivable area for paddy, whereas it is the lowest for the largest

group being 83.03 per cent only. The group next to the smallest group

devotes 88.48 per cent followed by the third group which stands at 86.79

per cent. Therefore, it is revealed that there is an inverse relationship

between area devoted for rice production and size-class as against the

direct relationship between land availability and size-class. As the

holding size increases area devoted for paddy cultivation declines,

confirming a negative relationship between them. The smallest group

with the lowest amount of land ownership devotes the highest percentage

of area for cultivation which reflects their personal interest. Though the

proportion of area devoted by the second group is less than the first

group, it is somewhat better than the third group. The high level of

personal interest (in cultivation) of the farmers belonging to the first two

216

groups is also confirmed by their per hectare productivities which is even

better than the largest group (Table-6). But it is observed that in spite of

devoting time and energy for cultivation the farmers of smaller two

groups are not able to generate a good volume of marketed surplus. This

may be because of poor availability of cultivable land under their

possession. It is revealed that though the percentage of area devoted by

larger two groups is smaller than the first two groups, yet their marketed

surplus is far better than smaller two groups. This means that marketed

surplus of smaller two groups is not affected by the percentage of area

devoted, but by availability of cultivated area under their possession.

However, the marketed surplus of the third group is better than the

fourth group which may not be due to area available, but due to the

percentage of area devoted for rice cultivation. The third group,

possessing 153.36 hectares of land as against 325.33 hectare for the

fourth group, shows a higher level of net marketed surplus than the

fourth group. Whereas the percentage of area devoted by the third group

is found to be 86.79 per cent which is better than the fourth group

showing 83.03 per cent. However, the marginally lower marketed surplus

of the largest group compared to third group is not because of its lower

proportion of area devotion but because of their higher retention power

for sale purpose as reflected earlier.

The analysis reveals that total area available for cultivation increases

along with the increase in size class. It is also observed that marketed

surplus relates positively with the area available according to holding

sizes. However, the proportion of area devoted for paddy cultivation

declines with an increase in size class and shows an inverse relationship

between area owned and area devoted for paddy cultivation according to

size class. The possible explanatory factors for lower proportion of area

217

Table-14

PATTERN OF LAND INPUT ACCORDING TO HOLDING SIZES

Size Class

Net Marketed Surplus as p.c. of output

Total owned area available for cultivation

(hectare)

Area devoted to rice cultivation (hectare)

P.C. of area devoted to rice cultivation

Area hired for rice cultivation (hectare)

P.C. of area hired for rice cultivation to total

devoted area

I 0

-1

hecta

re

0.52

55.62

53.30

95.83

34.03

38.97

II

1.01

-2

.0

hecta

re

19.38

133.16

117.82

88.48

22.56

16.07

2.0

1

-3.0

h

ecta

re

36.43

153.36

133.10

86.79

4.83

3.50

IV

3.0

1 h

ecta

re &

ab

ov

e

35.22

325.36

270.73

83.03

6.39

2.31

Ag

gre

gat

e

26.36

667.43

574.35

86.05

67.81

10.56

Source: Field Survey

devoted by larger groups are lack of commercial attitude, 50-50 product-

share basis of cultivation, lack of practical engagement of the big farmers

in cultivation, and to some extent land situation of some big farmers. It is

218

inferred that many of the farmers belonging to larger size groups do not

keep them personally engaged in cultivation and let their plots to be

cultivated by small and poor farmers on such 50-50 product-share basis.

In this way sometimes they do not get share cultivators at the right time

due to which some portion of their total area remain uncultivated. They

are not even interested to cultivate by themselves either because of non-

farm business or because of apathetic and non-commercial attitude.

Moreover, some cultivable areas belonging to large farmers situated in

interior and low lying areas having poor fertility level which often the

farmers do not cultivate. It is because of these reasons the proportion of

area devoted for cultivation by larger size groups is relatively lower. In

contrast, small farmers with small-scale ownership of cultivable area put

their maximum possible effort in bringing all the available areas under

cultivation. In absence of any such non-agricultural sources of income

they keep themselves personally engaged in cultivation with their

personal interest. Because they know that paddy cultivation is their

single means of livelihood on which their survival and economic

condition depend. Hence they put every effort in cultivating the total

available land under their possession even if it is located in interior and

low lying areas. Due to these reasons the proportion of area devoted by

smaller groups is relatively better than larger groups. It is therefore

because of the above explanatory factors proportion of available area

devoted for paddy cultivation declines with respect to size class.

Therefore, it is not the proportion of area brought under cultivation but

the area available under the crop which plays important role in

determining marketed surplus of paddy. This nature of finding supports

the observation made by B. Kumar and S.K. Mishra that the area under

particular crop has significant role in determining the marketed surplus

of t h a t particular crop directly (Kumar-Mishra, 1985). It also goes in

conformity with the conclusion drawn by M. Chattopadhyay and I. Sen

219

that marketable surplus of any subsistence crop depends on the per

capita land availability under that crop (Chattopadhyay-Sen, 1988).

Out of the total available area for paddy cultivation in the Barak Valley it

has been estimated that an aggregate of 86.05 per cent land is brought

under cultivation. However, it is due to the absence of scientific

cultivation, frequent floods and droughts, as well as illiteracy and

ignorancy of the- farmers that the valley's present pattern of marketed

surplus is not satisfactory. Barak Valley would be a potential area for

generating sufficient amount of marketed surplus if adequate funds are

available to the poor farmers for facilitating them to avail more cultivable

lands, besides using scientific tools and techniques, chemical fertilizers

and pesticides on the one hand, and on the other introduction of the

motivational campaign for conducting agriculture on commercial lines

with proper marketing facilities and price incentives. Since the small and

marginal farmers are always in need of cash it will be very convenient to

encourage them to conduct their business on commercial lines by

providing them all the need-based facilities during the process from

production till marketing of the produce. But for rich farmers belonging

to larger two groups proper motivation is required either with attractive

price incentives or with the supply of low cost modern inputs.

This will certainly help them to change their attitude towards commercial

lines of cultivation. This is important because such farmers with the

possession of large amount of cultivable lands (potential for generating

higher marketed surplus than the present level) devote comparatively a

less proportion of area than smaller two groups. More particularly it is

the largest group in our study which shows the lowest ratio of area

devoted with ownership of the highest amount of cultivable lands. A

possible explanatory factor for this is the leasing out of land by the rich

farmers to the small and poor farmers. Because, in some cases the

220

members of the economically well off farm family earn incomes not only

from agriculture but also from other non-agricultural sources, due to

which they remain busy in non-farm sector. They have to either lease out

the land or perform product-share cultivation mostly with the poor and

marginal farmers. This is reflected in the proportion of area hired for rice

cultivation to total devoted area with respect to size-class. It has been

realized that the proportion of area hired by the smallest group is the

highest to the extent of 38.97 per cent of the total area devoted by the

group. Following this the second group devotes 16.07 per cent, as hired

land, whereas for the third and the largest group the proportion is only

3.50 per cent and 2.31 per cent respectively. Thus, it is revealed that the

proportion of hired land devoted to rice cultivation is the lowest in case of

the largest group followed by the third group. This shows that large

farmers in general do not hire land for cultivation except few. However,

for smaller groups the magnitude of land hiring almost constitutes a

characteristic feature of their land input. The pattern of land hiring also

indicates that available lands which cannot be devoted by the big farmers

goes at the hands of small farmers either through product-share

cultivation or through lease out system. Often the rich farmers ask the

small and poor farmers to cultivate their lands on unwritten agreement

of 50-50 share of the crop after the harvest.

It is not that large farmers do not hire lands at all. A few of them who

conduct cultivation on commercial basis undertake land hiring for

cultivation but in different style. They do not hire the land on 50-50

share of the crop, rather they lend money to the needy farmers with the

agreement of mortgaging the land to them. This agreement is signed on a

stamped paper with a declaration by the borrower that until and unless

he is able to repay the debt, the land would remain under the possession

of the lender. In this way large farmers hire the land and devote for

cultivation. It is thus found that there is an absolute difference in the

221

ways of hiring the land between the smaller two groups and larger

groups. Since land hiring by the small farmers is on purely temporary

basis (based on the sympathy of land owners) with the agreement of fifty-

fifty crop share, these farmers do not take much interest in cultivating

the hired lands due to which marketed surplus for larger groups is

hampered to some extent. Nonetheless, land hiring in case of large

farmers is very negligible both in actual figures as well as in percentages

and so this is not a causative factor for influencing their levels of

marketed surplus. The only factors are their disinterest in commercial

cultivation which is also reflected in their lower proportions of area

devoted (Table-14) and lower productivity reflected in their per hectare

productivities (Table-6).

Section - V.10: MARKETED SURPLUS, LITERACY AND SAVING-INCOME

PATTERN OF THE FARMERS

Literacy and the level of education of the farmers have been considered

as important indicators of marketed surplus. They are expected to be

aware about the prevailing prices and norms and procedures for taking

loans from the institutional sources at subsidized rate for production

purpose. As a result, it is possible for them to introduce scientific

methods of production along with the use of irrigation facility, HYV

seeds, chemical fertilizers and pesticides. By this their per hectare and

per capita productivities will be higher which would maximize their

volume of marketed surplus. S. Subhas, P. G. D. Bino and Ramanathan

maintain that education is the crucial factor determining the efficiency

variations in rice production (Subhas-Bino-Ramanathan, 2004).

Therefore, the study is based on the hypothesis that farmers with

222

education and farming knowledge are capable of generating higher

marketed surplus, unlike the farmers with no education.

It is revealed that an average of 59.33 per cent of the sample farmers

throughout the valley is literate. Farmers who acquire formal education

ranging from primary to intermediate levels are categorized as literate

farmers. It has been found that an extent of 52.87 per cent farmers of

size class-I and 57.61 per cent farmers of size class-11 have formal

education. Whereas for size class-Ill literate farmers constitute 62.29 per

cent and the same for the largest group is 68.33 per cent. It is thus

observed that as the size class increases the percentage of literate

farmers of the group also increases showing a positive relationship

between farmer's literacy and size class. Similarly the marketed surplus

as a proportion of output also records an increasing trend with respect to

the size group from the lowest to the largest group. The lowest group

shows only 0.52 per cent of output as marketed surplus followed by the

second group as 19.38 per cent. The marketed surplus for the third and

the largest group are observed as 36.43 per cent and 35.22 per cent

respectively. Hence there exists a positive relationship between literacy of

the farmers and marketed surplus.

Table-15 shows that the first group with the lowest literacy rate also

offers the lowest level of marketed surplus. The marketed surplus of the

second group is much better than the first group with higher ratio of

literate farmers. Similar is the case for the third group which shows

better marketed surplus with higher ratio of literate farmers than the

first two groups. However for the largest group the same does not hold

good. The group with the highest ratio of literacy shows the level of

223

Table- 15

LITERACY LEVEL AND MARKETED SURLUS OF THE FARMERS

Size Class

Net Marketed Surplus as p.c. of output

Number of literate farmers

P.C. of literate farmers to total farmers of the group

Number of higher educated farmers

P.C. of higher educated farmers to total farmers of

the group

I 0

-1

hec

tare

0.52

46

52.87

02

2.29

II

1.01

-2

.0

hec

tare

19.38

53

57.61

09

9.78

III

2.01

-3

.0

hec

tare

36.43

38

62.29

07

11.48

IV

3.01

hec

tare

&

abov

e

35.22

41

68.33

17

28.33

To

tal/

Ag

gre

gat

e

26.36

178

59.33

35

11.66

Source: Field Survey

marketed surplus as 35.22 per cent which is less than the third group.

But this is mainly because of the maximum power of retention by the

largest group for sales purpose. Therefore, it is revealed that literacy of

the farmers certainly affect the level of marketed surplus of all the size

groups. Moreover, since marketed surplus of the largest group is not

much lower than the third group we can deduce a positive association

224

between literacy of the farmers and marketed surplus according to size

class. And since we have already confirmed a positive association

between per capita productivity and marketed surplus per capita (table-

6) we can substantiate here the findings drawn by Mittal-Kumar,

Siddiqui-Ahmed and Ghosh revealing the positive relationship between

literacy and crop productivity (Mittal-Kumar, 2000, Siddiqui-Ahmed,

2004, and Ghosh, 2006). However, it is seen that the magnitude of

variation in literacy ratio from size-class to size-class is almost equal for

each and every class, as against the wide variations in marketed surplus

as a proportion of output according to size class. This leads us to

conclude that though farmer's literacy has positive association with

marketed surplus it does not play crucial part in determining the

marketed surplus level of paddy in Barak Valley.

Further, in recent times due to the spread of higher educational

institutions all over the valley some members of the farming families

have access to higher education. The study defines higher education as

the pursuance of under-graduate and post-graduate degrees by the

members of farm households either in general or in technical division. It

is considered that persons with higher education in the farming sector

are supposed to be efficient in improving their per capita and per hectare

productivities than the mere literate or matriculate or intermediate ones.

It is revealed that merely 2.29 per cent farmers of the smallest group

attain higher education which is the lowest against the highest figure of

28.33 per cent as shown by the largest group. The proportions of higher

educated farmers for the second and the third group are 9.78 per cent

and 11.48 per cent respectively. This again shows a positive relationship

between higher education and marketed surplus in accordance with the

size class except for the largest group. The proportion of higher educated

farmers for the largest group is more than double the third group,

225

whereas its marketed surplus is lower than the latter group. This

indicates that for the largest group farmers' access to higher education

does not influence the level of marketed surplus. A possible factor for

this is that the farm members with higher education belonging to this

particular group are mostly engaged in non-agricultural practices to earn

their livelihoods. They do not have enough time to carry out their

agricultural activities and many of them undertake cultivation through

crop sharing basis with the small farmers. But the same is not true in

case of the third group. Farmers having higher education in the third

group keep themselves engaged mostly in agricultural sector and hence

their marketed surplus reaches the highest level among all the groups.

Therefore, it is not merely the higher education of the farmers but the

direct engagement of higher educated farmers in agriculture which plays

crucial part in determining the level of marketed surplus.

The engagement level of educated farmers in agriculture and

non-agricultural sector is reflected in the earning pattern of the

farmers (Table-16). It is found that the income of the third group from

agricultural source is 42.99 per cent of their total income and from non-

agricultural sources it is 18.90 per cent of the total non-agricultural

incomes of all the groups. This reveals lower engagement of farmers of

the group in non-agricultural sector. Whereas, the income of the largest

group from agricultural sector is slightly higher than the third group

showing 44.02 per cent and from non-agricultural sources the same is

34.35 per cent. This is the indication of higher level of farmers'

engagement among the fourth group in non-agricultural activities in

comparison to the third group. Since the level of marketed surplus for

the first two groups is lower than larger groups, their agricultural

incomes are also low, revealing 18.35 per cent for the smallest group and

17.21 per cent for the second group. However, the non-agricultural

226

incomes of the second group is appreciable showing even better than the

third group, but the same is extremely small in case of the first group.

Table- 16

INCOME-EXPENDITURE AND SAVING PATTERN OF THE FARMERS

Size Class

Net Marketed Surplus as p.c. of output

P.C. of income earned from agriculture

P.C. of income earned from sources other than agriculture to total non-

agricultural incomes of all the groups

P.C. of income spent on food, cloth, health,

electricity and daily livings

P.C. of income spent on education

Saving as P.C. of income of the group

I 0

-1

hecta

re

0.52

18.35

12.07

96.27

7.67

Nil

n 1.

01

-2.0

h

ecta

re

19.38

17.21

33.68

46.21

8.64

5.15

III

2.0

1

-3.0

h

ecta

re

36.43

42.99

18.90

48.31

7.61

44.08

IV

3.0

1 h

ecta

re &

ab

ov

e

35.22

44.02

34.35

33.21

7.97

58.82

To

tal/

Ag

gre

gate

26.36

33.85

100

46.29

8.05

45.66

Source: Field Survey

227

The incomes from non-agricultural sources for the smallest and the

second group is 12.07 per cent and 33.68 per cent of the total non-

agricultural incomes of all the groups respectively. This might be the

reason due to which distress sales of the second group is lower than the

first group and consequently the net marketed surplus of the former

group is much better than the latter.

The saving pattern of the farmers is also delineated in the table-16 which

is being computed after deducting total consumption expenditures from

their total incomes. The total expenditure comprises of expenditure on

food, cloth, electricity, health and daily livings, as well as expenditure on

education for the family members of the farmers. It has been realized

that the costs of living (expenditure on food, cloth, health, electricity and

others) for the first group is the highest, as a proportion of their income

which is to the extent of 96.27 per cent. In addition to this the group's

educational expenditure is 7.67 per cent of their income. Thus the total

expenditure exceeds their level of income and so there is zero saving

shown by the smallest group.

There is not much difference between the costs of living and between the

expenditures on education of the second and the third group. The

proportion of income spent on food, clothing, health, electricity and daily

livings constitute 46.21 per cent for the second group and 48.31 per cent

for the third group, showing little difference between the costs of living of

the two groups. Further, the proportion of income spent on education by

the second group and the third group is 8.64 per cent and 7.61 per cent

respectively. This again shows a minor difference between educational

expenditures of the two groups. But since the total incomes (both

agricultural and non-agricultural) of the third group is far better than the

second group, its saving is also better showing 44.08 per cent of its total

income against the saving of 25.15 per cent for the second group. It is

228

interesting to note here that though marketed surplus for the third group

is at the highest level, yet its total income is less than the largest group.

This is, however, not because of small earnings of the group from

agriculture but because of poor earnings from non-farm sector which

results in its lower level of saving in comparison to the largest group. The

saving of the largest group is 58.82 per cent of its income which secures

the highest position among all other groups.

However, this highest level of saving of the largest group does not give

them stimuli to generate more marketed surplus and hence their level of

marketed surplus is relatively less than the third group. Similarly the

saving level of the second group docs not encourage their marketed

surplus. This is due to the fact that per cent share of incomes from non-

agricultural sector both for the second and the fourth groups is much

better than the first and the third groups. Thus the higher saving level of

these two groups is mainly due to the contribution of non-agricultural

incomes. Since their savings are not as a result of effective contribution

by their agricultural incomes, they do not encourage the farmers to

invest in agriculture for increasing their levels of marketed surplus.

Though the smallest group earns income from agricultural sector

equivalent to the second group, but due to its poor earnings from non-

agricultural sector the group has zero saving which indicates no capital

is available to them for investment in maximizing the quantum of

marketed surplus. It is only the third group whose saving is generated

mostly from their incomes received from agriculture. This in turn

inspires the farmers belonging to this group to invest their capital in

achieving higher quantum of marketed surplus. As a result, marketed

surplus of this particular group is found to be the highest to the extent of

36.43 per cent of output among all the groups.

229

Our analys is t h u s reveals that farmer's response of marketed surplus is

positive to both price and non-price factors except retention factor. The

seasonal prices of rice have positive association with marketed surplus in

accordance of size class . Similarly, the non-price factors like paddy

output , profit margin of the farmer-sellers, area availability under paddy

crop, a s well a s literacy and education level of the farmers have positive

relat ionship with marketed surp lus according to size groups. The study

however t raced a negative association between marketed surplus and

retent ions for farm consumpt ion and seed requirement , besides finding a

direct relat ionship between marketed surp lus and retention for sales

purpose. Finally, the saving-income pattern of the farmers reflects that

saving from agricultural income encourages farmers to generate more

marketed su rp lus , whereas the saving from non-agricul tural income does

not work a s a sensitive factor in raising the level of marketed surp lus .

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