Forecasting the profitability of sugarcane farming in major states of India

This study on forecasting the profitability of sugarcane farming is based on the data of cost of cultivation sugarcane in different states of India for the period 1990–2001. Multiple regression models have become the methods of choice in the area of forecasting. Undoubtedly, the regression analysis is a very powerful tool of forecasting, however, this study has been based on two questions: Could other methods, such as smoothing techniques, be used with equal effectiveness in place of a regression analysis?, and Could a smoothing technique produce a forecasting of greater or, at least equal, accuracy? These questions assume on added importance in cases where the effectiveness of regression analysis is questionable due to unavailability of data for certain appropriate explanatory variables, or where time appears to be the most important independent variable. In this study, the Holt's two-parameter Model (Exponential smoothing adjusted for trend) has been used. The study has revealed an increasing trend in sugarcane production in India.