Economics of summer paddy-jute substitution: A profile of environmental cost

Sustainable agricultural practices are not only necessary but also sufficiently urgent since global environment being at stake due to the large-scale pollution of air, water and soil. Global warming and climate change as a consequence affect supply of agricultural goods. The valuation of environmental cost of agricultural production is a problem since sufferers are not being paid any kind of compensation. In our present study the substitution between summer paddy and jute has also failed to estimate the external cost of a public bad, entire profile is being market determined, and the market not providing the best possible sustainable solution. In a similar way, the on going practice of exclusion of environmental cost of production and consumption of non-degradable synthetic goods, substitute of jute goods, could be avoided by revived large scale usage of natural fibre low cost technology. A long-range time series data (53 years) on jute/summer paddy acreage, prices of Nadia and Burdwan districts, West Bengal, are used to assess the farmers’ real life behaviour with Nerlovian price expectation model. The jute acreage in the current period is positively dependent on jute acreage in the previous year in both the districts signifying that non market factor becomes proactive. The effect of price of jute relative to the price of summer paddy of the previous year in decision making for jute acreage in the current year is significant for Nadia district only. The epilogue suggests noninternalization of external cost of producing/consuming pollution-intensive synthetic goods perhaps generate potential market bargains in favour of the revival of jute industry in India and revival of jute market at the international level in turn likely to displace the synthetic goods for sustenance and employment generation is the other offshoot.