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

P Prudhvikar Reddy and S Galab

The IUP Journal of Agricultural Economics, 2005, vol. II, issue 1, 7-17

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.

Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:icf:icfjag:v:02:y:2005:i:1:p:7-17

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