Input and Output Prices of Cereal Crops in Western Maharashtra

Agriculture is the most important sector of Indian economy. Agriculture sector employs more than 58% of population and contribute 14.3% of GDP in economy during the 2010-11. The producers have always been alleging that increase in the prices of their produce were not in proportion to increase in the input prices. A sound price policy is one that ensures remunerative prices to the producers and also reasonable prices to the consumers and which reduces the regional imbalances in agricultural income by maintaining parity between costs, prices and income of different agricultural commodities. The objectives of the study were to examine the changes in input-output prices of selected crops and to evaluate the parity between the costs, prices and income from these crops. The present investigation was based on the secondary data of the state cost of cultivation scheme, Got. of Maharashtra. The data pertains to the 18 years, i.e., from 1991-91 to 2008-09 were considered for the said study. The results indicated that the indices at current and constant prices of major input for selected crops shown tremendous increase during the period under consideration. The parity indices of gross income to per quintal cost of production of jowar and wheat affected the profitability adversely. Compound Growth Rates (CGR) of input prices were more than double to the prices of output at MSP and FHP, except at MSP for wheat. The price-cost ratio of cereals were less than unity, indicating that output prices were not covering the costs. Thus the increase in MSP, FHP and thereby income of the crop is not sufficient to cover the cost of cultivation of all cereals.