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Input Demand, Factor Shares and Price-cost Relation The Case of Paddy in Andhra Pradesh

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  • P Prudhvikar Reddy
  • S Galab
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    Abstract

    This study compares the input demand, factor shares and price-cost relation of the cost of cultivation of south coastal Andhra Pradesh (zone-2) with a well endowed zone in canal irrigation and Rayalaseema (zone-3) with a dry zone depending upon lift irrigation. This study uses the cost of cultivation data from 1981-82 to 1999-2000 collected under the comprehensive scheme on cost of cultivation of principal crops spread over five agro-climatic zones of Andhra Pradesh. This paper reveals that the comparison of short-run and long-run elasticities of human labor and fertilizers indicate contrasting scenarios, i.e., a rise in wage reduces the labor use per hectare relatively more in wet land zones, while a rise in the price of fertilizers reduces their use relatively more in dry land zones. Further, this study proves that there has been a more continuous increase in the use of modern inputs than traditional inputs across all the zones and at the state level. The authors conclude that the spread of yield-increasing technology with better output prices played a significant role in bringing other zones on par with zone-2, at least after the late 1980s, reducing the inter-regional variations.

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    Bibliographic Info

    Article provided by IUP Publications in its journal The IUP Journal of Agricultural Economics.

    Volume (Year): II (2005)
    Issue (Month): 1 (January)
    Pages: 7-17

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    Handle: RePEc:icf:icfjag:v:02:y:2005:i:1:p:7-17

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