** The paper is mainly hased on the work done by the author under an ad-hoe ICAR researeh project on ‘Capital Requirement for Selective Modernisation of Indian Farms’ Author is grateful to Dr. C.C. Maji, Director, National Centre tor Agricultural Eeonomics und Policy Research, New Delhi, for his valuable comments on an earlier draft of the paper.
Estimation of capital requirement for modernisation of Indian farms of different sizes over different agroc-climatic-zones in India is an important and long felt need. The present paper has made an effort to estimate capital requirements while optimizing the resource use on marginal and small farms in the old alluvial zone of West Bengal. The district of Burdwan showing the minimum divergence between the districts's crop yield index and zonal average (i.e. 100) in absolute term was selected for the study. A total total of farm households (small and marginal) formed the primary units of this study.
Linear programming approach was applied considering that it might handle best the problem of estimation of capital requirement, among all other approaches.
The return over variable cost (ROVC), generatecl from the optimum plans was lound to be inereased with the change in the level of technology in the order of existing to progressivc and to recomended, technology; Obviously capital requirement and ROVC inereased with the increase in size of farms. It was also noticed that the capital requirement tor optimum plans prepared considering progressive farmers' technology was comparatively lower than those in the plans prepared considering both existing technology and recomended technology in the study area. It was suggested that those optimal plan(s) required less capital and generated more ROVC in other words having higher ratio belween ROVC and capital requirement)might be chosen tor implementation.
