An Empirical Study of Economics on Cultivation of Groundnut in Kadapa District Andhra Pradesh

India is the second-largest groundnut producer in the world. India produces 84 lakh tonnes of it annually on an area of about 85 lakh hectares. In the fiscal year 2021, India was expected to produce 10.25 million metric tonnes of ground-nuts (statista.com). Almost thirty three percent of India’s groundnut production mainly comes from the Gujarat, followed by Telangana (5%), Rajasthan (21%), Tamil Nadu (14%) and Andhra Pradesh (7%). The State of Gujarat produces around 1190 kg/ha of groundnut, while Tamil Nadu produces a maximum of 1604 kg/ha (Anonymous, 2021-ANGRAU). Karnataka led the states with 1.28 lakh hectares covered, followed by Telangana (0.73 lakh ha), Tamil Nadu (0.48 lakh ha), Odisha (0.44 lakh ha) and Andhra Pradesh (0.35 lakh ha) (Anonymous, 2021-PJTSAU). The leading state in India for groundnut production is Andhra Pradesh. It accounts for 7% of India’s total groundnut production. The highest groundnut productivity (3.44 lakh tonnes) and area (4.09 lakh acres) in the state of Andhra Pradesh are found in the Ananthapur district, followed by Kurnool and Chittor districts. Groundnut productivity is highest in the Nellore area, with 4072 kg/ha (Anonymous, 2021-ANGRAU).
       
Kadapa is one of the most productive districts in the state of Andhra Pradesh for groundnut production. Furthermore, with a productivity of 1754 kg/ha, the Kadapa district produced 0.73 lakh tonnes of groundnuts in 2021. With a 19.1% area share, groundnut production makes up 21.3% of all oilseeds produced in India. The 2020 saw the production of 30.2% of the total and 2021 saw the prod-uction of 37.1% (Anonymous, 2021-ANGRAU). Ground-nut cultivation in Kadapa district of Andhra Pradesh is taken up by more farmers and Kadapa is the fourth leading producer of groundnut in the Andhra Pradesh.
       
Therefore, the present investigation was taken up to analyze the costs and returns structure in cultivation of groundnut in Kadapa district of Andhra Pradesh.

The research was conducted in Kadapa district of Andhra Pradesh during 2020-21. Kadapa district was selected purposively for the study as it is one the leading producer of groundnut in Andhra Pradesh with 41882 ha and production of 73461.4 MT in 2020-21. There are 51 mandals in Kadapa district. Out of 51 mandals, 4 mandals were selected purposively namely Duvvuru, Vempalli, Pendlimarri and Pulivendula because of the soil type in this mandals were suitable for the cultivation of groundnut and the area, production and productivity in these mandals are higher when compared to other mandals of Kadapa district. The selection of villages was done purposively based on the availability of groundnut growers. (kadapa.ap.gov.in). From each mandal 2 villages were selected. From Duvvuru-mandal, Duvvuru and Chintakunta villages were selected. From Vempalle mandal, Vempalle and Alavalapadu villages were selected. From Pendlimarri mandal, Pendlimarri and Vellatur villages were selected. From Pulivendula mandal, Pulivendula and Erraballe villages were selected. A total of 8 villages were selected purposively. From each village, the list of farmers who were growing groundnut for more than 3 years were obtained, from which 13 farmers were randomly selected. A total of 26 respondents from each mandal were selected. Thus, altogether 104 respondents from four mandals were selected. The selected respon-dents were then categorized into 5 groups namely marginal, small, semi medium, medium and large based on their area of groundnut and it is a standard classification of farmers (kadapa.  ap. gov.in).
 
Cost and return analysis of groundnut
 
Cost concept
 
Cost concept used for cost evaluation and to estimate profitability in groundnut production. The following costs were calculated:
 
Cost A₁ = Value of hired human labor, owned labor, seed, fertilizers, land revenue, depreciation of implements and farm buildings, irrigation charges, interest on working capital, miscellaneous expenses.
Cost A₂ = Cost A₁ + Rental value of leased in land.
Cost B₁ = Cost A₂ + interest on value of owned capital assets (excluding land).
Cost B₂ = Cost B₁ + rental value of owned land.
Cost C₁ = Cost B₁ + imputed value of family labor.
Cost C₂ = Cost B₂ + imputed value of family labor.
Cost C₃ = Cost C₂ + 10 per cent of Cost C₂.
 
For estimating the returns, the following formulae were used:
 

Gross income = Value of farm output (main product and by product)

Farm labor income = Gross Income - Cost B₂
 
Farm business income = Gross Income - Cost A₁ or Cost A₂ in case of land, leased in farm
  
Net income = Gross income - Cost C₁ or Cost C₂ or Cost C₃
 
Intensive income = Net income + Rental value of owned land + interest on fixed capital.

 Benefit cost ratio (B:C ratio) was calculated by dividing the gross farm income by total cost.

Cost and returns structure in cultivation of groundnut
 
Cost and return analysis evaluate and compares all of costs and returns of the environmental, social and economic positive and negative impacts of the adaptation approaches which are expressed in monetary term based on its general information. A systematic study on the cost incurred on particular farm activity acts as a guide in the short run as well as long run. In the short run, it directs the reallocation of resources, in the long run it acts as guide for the farmers in reformulating the production plans.
 
Cost of groundnut production
 
The results laid out in Table 1 shows the cost of groundnut production for different categories of sampled respondents.



In marginal farm size category, the total cost for groundnut production was accounted as Rs. 70286.07 per ha, out of which total variable cost was Rs.52023.41 and total fixed cost was Rs.18262.66. The highest cost was incurred on rental value of owned land (20.07 per cent). The second highest cost was incurred on cost of seeds (17.43 per cent), followed by hired human labor (12.15 percent), cost of fertilizers (12.13 per cent), cost of manures (6.99 per cent), cost of plant protection (6.59 per cent), owned human labor (6.00 per cent), irrigation charges (5.05 per cent), interest on working capital (4.19 per cent), depreciation (3.50 percent), machinery (3.49 per cent) and lastly interest on fixed capital assets excluding land (2.41 per cent).
       
In small farm size category, the total cost for groundnut production was accounted as Rs. 67611.34 per ha, out of which total variable cost was Rs.49076.41 and total fixed cost was Rs.18534.93. The highest cost was incurred on rental value of owned land (21.39 per cent), followed by cost of seeds (16.91 per cent), hired human labor (12.18 percent), cost of fertilizers (11.76 per cent), cost of manures (6.89 per cent), cost of plant protection (6.64 per cent), owned human labor (5.83 per cent), irrigation charges (4.92 per cent), interest on working capital (4.11 per cent), depreciation (3.46 per cent), machinery (3.33 per cent) and interest on fixed capital assets excluding land (2.57 per cent).
       
In semi medium farm size category, the total cost for groundnut production was accounted as Rs.65385.42 per ha, out of which total variable cost was Rs.46583.75 and total fixed cost was Rs.18801.67. The highest cost was incurred on rental value of owned land (22.72 per cent), followed by cost of seeds (16.46 per cent), hired human labor (12.19 per cent), cost of fertilizers (11.56 per cent), cost of manures (6.85 per cent), cost of plant protection (6.51 percent), owned human labor (5.58 per cent), irrigation charges (4.81 per cent), interest on working capital (4.03 per cent), depreciation (3.30 per cent), machinery (3.24 per cent) and interest on fixed capital assets excluding land (2.73 per cent).
       
In medium farm size category, the total cost for groundnut production was accounted as Rs.62899.4 per ha, out of which total variable cost was Rs.43946.4 and total fixed cost was Rs.18953. The highest cost was incurred on rental value of owned land (24.10  per cent), followed by cost of seeds (16.08 per cent), hired human labor (12.23 percent), cost of fertilizers (11.52 per cent), cost of manures (6.61 per cent), cost of plant protection (6.33 per cent), owned human labor (5.36 per cent), irrigation charges (4.69 per cent), interest on working capital (3.96 per cent), depreciation (3.15 per cent), machinery (3.09 per cent) and interest on fixed capital assets excluding land (2.89 per cent).
       
In large farm size category, the total cost for groundnut production was accounted as Rs. 6157.097 per ha, out of which total variable cost was Rs. 42357.57 and total fixed cost was Rs. 19213.6. The highest cost was incurred on rental value of owned land (25.12  per cent), followed by cost of seeds (16.05 per cent), hired human labor (11.94 per cent), cost of fertilizers (11.34 per cent), cost of manures (6.33 per cent), cost of plant protection (6.31 per cent), owned human labor (5.06 per cent), irrigation charges (4.67 per cent), interest on working capital(3.89 per cent), depreciation (3.07 per cent), machinery (3.05 per cent) and  inter-est on fixed capital assets excluding land (3.01 per cent).
       
The overall cost of production for marginal sized farms was Rs. 70286.07 per ha out of which the total variable was accounted for Rs. 52023.41 and total fixed cost was accoun-ted for Rs. 18262.66. Similarly, the overall cost of production for small sized farms was Rs. 67611.34 per ha out of which the total variable cost was accounted for Rs. 49076.41 per ha and total fixed cost was accounted for Rs. 18534.93 per ha. In semi medium size of farm, the overall cost of production was Rs. 65385.42 per ha out of which the total variable cost was Rs. 46583.75 per ha and the total fixed cost was Rs. 18801.67 per ha. In medium size of farm, the overall cost of production was Rs. 62899.4 per ha out of which the total variable cost was Rs. 43946.4 per ha and the total fixed cost was Rs. 18953 per ha. In large size of farm, the overall cost of production was Rs. 61570.97 per ha out of which the total variable cost was Rs. 42357.37 per ha and the total fixed cost was Rs. 19213.6 per ha. The overall cost of groundnut production per ha was Rs. 65529.45 per ha out of which the total variable cost was Rs. 46776.27 per ha and the total fixed cost was accounted for Rs. 18573.18 per ha.
       
Similar findings were obtained by Choudary et al., (2017) in a study on production and marketing of groundnut in Porbandar district of Gujarat and revealed that total cost incurred on rental value of land for small farm was 20.36 per cent, for medium farm 19.15 per cent and for large farms 20.81 per cent. Naidu et al., (2019) also reported that for small, medium and large farms the rental value of land was high i.e., Rs. 10000 for all three categories in Andhra Pradesh. Similar outcomes also reported by Perumal (2000) and Rajput et al., (2000).
 
Cost of groundnut production by different categories of cost (Rs)
      
Farm management cost was worked out for different categories of sampled farms which is shown in Table 2 Cost A₁, Cost A₂, Cost B₁, Cost B₂, Cost C₁, Cost C₂ and Cost C₃ were worked out.


 
Cost A₁
 
All the actual expenses incurred by the farmer comprise Cost A₁. In marginal farm size category, the Cost A₁ was Rs. 54484.39. In small farm size category, Cost A₁ was Rs. 51416.45. In semi medium farm size category, the Cost A₁ was Rs. 48744. In medium farm size category, the Cost A₁ was Rs. 45926.56. In large farm size category, the Cost A₁ was Rs. 44247.71 and an overall farm was estimated as Rs. 48942.62.
 
Cost A₂
 
Cost A₂ was calculated by summing Cost A₁ and the rent paid for leased in land. It was estimated to be same as Cost A₁ because all the respondents’ practice farming in their own land and hence cost incurred for leased in land was zero.
 
Cost B₁
 
Cost B₁ was calculated by Cost A₁ and the interest on value of capital assets (excluding land). In the marginal farm size category Cost B₁ was Rs. 56177.42. In small farm size category was Cost B₁ was Rs. 53151.62. In semi medium category Cost B₁ was Rs. 50527.01. In medium farm size category Cost B₁ was Rs. 47745.08. In large size farm category Cost B₁ was Rs 46103.77 and overall farms was estimated as Rs. 50227.58.
   
Cost B₂
 
Cost B₂ was calculated by Cost B₁ and the rental value of owned land. In the marginal farm size category Cost B₂ was Rs. 70286.07 In small farm size category Cost B₂ was Rs. 67611.34. In semi medium category Cost B₂ was Rs. 65385.42. In medium farm size category Cost B₂ was Rs. 62899.4. In large size farm category Cost B₂ was Rs. 61570.97 and overall farms was estimated as Rs. 65037.24.
   
Cost C₁
 
Cost C₁ was calculated by Cost B₁ and the addition of imputed value of family labor. In the marginal farm size category Cost C₁ was Rs. 60396.39. In small farm size category Cost C₁ was Rs. 57100. In semi medium farm size category Cost C₁ was Rs. 54178.53. In medium size farm category Cost C₁ was Rs. 51117.27. In large farm size category Cost C₁ was Rs. 49216.19 and overall farms was estimated as Rs. 5388.29.
 
Cost C₂
 
Cost C₂ was calculated by Cost B₂ and the addition of imputed value of family labor. In the marginal farm size category Cost C₂ was Rs. 74505.04. In small farm size category Cost C₂ was Rs. 71559.72. In semi medium farm size category Cost C₂ was Rs. 69036.94. In medium size farm category Cost C₂ was Rs. 66271.59. In large farm size category Cost C₂ was Rs. 64683.42 and overall farms was estimated as Rs. 68697.95.
 
Cost C₃
 
Cost C₃ was calculated by Cost C₂ and the addition of 10% of Cost C₂. In the marginal farm size category Cost C₃ was Rs. 81955.54. In small farm size category Cost C₃ was Rs. 78715.63. In semi medium farm size category Cost C₃ was Rs. 75940.63. In medium size farm category Cost C₃ was Rs. 72898.75. In large farm size category Cost C₃ was R.s 71151.76 and overall farms was estimated as Rs. 75567.73.
       
Similar findings were obtained by Naidu et al., (2019) in Ananthapur district of Andhra Pradesh and revealed that small farm size group spent more on all times, showing decreased use of all components with increase in farm size. Similar results reported by Sawant et al., (2020).
 
Farm efficiency measures
 
Farm efficiency measures help in identifying the farm enterprises performing against farm expectations and thus helps in taking positive measures to overcome and strengthen the profitability of enterprise.
       
To know the efficiency of groundnut production average gross income, farm labor income, farm business income, net income, intensive income was calculated for the five categories of the respondents. Accordingly, benefit cost ratios were also obtained. Table 3 shows the results obtained from return analysis of groundnut for different categories.


       
For marginal farm category, the gross income was estimated as Rs. 84651.9. The farm labor income was estimated as Rs. 14365.83 and the farm business income was estimated as Rs 30167.51. The net income was esti-mated as Rs. 10146.86 and intensive income was estimated as Rs. 25948.54. The benefit-cost ratio was estimated as 1.20.
       
For small farm category, the gross income was estimated as Rs. 86758.3. The farm labor income was estimated as Rs. 19146.96 and the farm business income was estimated as Rs. 35341.85. The net income was esti-mated as Rs. 15158.58 and intensive income was estimated as Rs. 31393.47. The benefit-cost ratio was estimated as 1.28.
       
For semi medium farm category, the gross income was estimated as Rs. 89150.43. The farm labor income was estimated as Rs. 23765.01 and the farm business income was estimated as Rs. 40406.43. The net income was estimated as Rs. 20113.49 and intensive income was estimated as Rs. 36754.91. The benefit-cost ratio was estimated as 1.36.
       
For medium farm category, the gross income was estimated as Rs. 90925.9. The farm labor income was estimated as Rs. 28026.5 and the farm business income was estimated as Rs. 44999.34. The net income was estimated as Rs. 24654.31 and intensive income was estimated as Rs. 41627.15. The benefit-cost ratio was estimated at 1.45.
       
For large farm category, the gross income was estimated as Rs. 92803.21. The farm labor income was estimated as Rs. 31232.24 and the farm business income was estimated as Rs. 48555.5. The net income was estimated as Rs. 28119.79 and intensive income was estimated as Rs. 45443.05. The benefit-cost ratio was estimated as 1.51.
       
On an average basis, gross income was estimated as Rs. 88857.95. The overall farm labor income was esti-mated as Rs. 23820.7 and the farm business income was estimated as Rs. 39915.33. The overall net income was estimated as Rs. 20160 and intensive income was estimated to be Rs. 36746.82. The overall benefit cost ratio was estimated as 1.36.
       
The benefit cost ratio for marginal and small farms were comparatively lesser i.e. 1.20 and 1.28 when com-pared to semi medium, medium and large farms. The benefit cost ratio for semi medium farm was 1.36. The benefit cost ratio for medium farm size was 1.45 and for the large farm size it was 1.51. Since the benefit cost ratio of all the five categories shows more than 1, therefore, it can be said that the respondents are benefitted from groundnut production.
       
Similar finding was obtained by Naidu et al., (2019) for groundnut cultivators in Andhra Pradesh where benefit cost ratio for small farm was 1.31 which was lesser than medium and large farms i.e. 1.40 and 1.51.

The total cost of groundnut production was Rs. 65529.45 per ha, out of which the total variable cost was accounted for Rs. 46776.27 per ha and total fixed cost was accounted for Rs. 18573.18 per ha. The overall gross income was Rs. 88857.95, farm labor income was Rs. 23280.7, net income was Rs. 20160, intensive income was Rs. 36746.82, farm business income was Rs. 39915.33 and the overall benefit cost ratio was 1.36. More farmers should be encouraged for groundnut cultivation and existing farmers to increase the cultivable area by providing necessary knowledge about groundnut cultivation as the study area is most suitable for groundnut cultivation. The funding agencies should promote the farmers by providing all the necessary inputs to increase their groundnut production and ensuring the farmers in better returns by promoting the product. Aware-ness should be conducted on the availability of subsidies by the state government for groundnut cultivators in the State. 

The present study was supported by School of Agricultural Sciences, Nagaland University, Medziphema Campus, Medziphema, Nagaland The authors acknowledge the groundnut farmers of Kadapa district-Andhra Pradesh, for their support throughout the survey. 
 
Disclaimers
 
The views and conclusions expressed in this article are solely those of the authors and do not necessarily represent the views of their affiliated institutions. The authors are responsible for the accuracy and completeness of the information provided, but do not accept any liability for any direct or indirect losses resulting from the use of this content.

The authors declare that there are no conflicts of interest regarding the publication of this article. No funding or sponsorship influenced the design of the study, data collection, analysis, decision to publish, or preparation of the manuscript.