Economics of Apple Production in Different Farm Size: A Comparative Study of Jubbal and Kotkhai Tehsil of District Shimla

The process of production involves converting the raw material resources into the finished product and these resources possess the cost, which needs to be optimised with the better utilization and allocation of the resources. Farms with the best resource utilisation have more chances to gain the economics of scale therefore it is necessary to study the allocative and productive efficiency of the different farm sizes in the study area.

The field survey was conducted at Tehsil Jubbal and Kotkhai of Shimla district where data from 200 Apple-producing farming households of different farm sizes was collected with the help of a questionnaire. The collected data was analysed with the use of the Cobb-Douglas production function to analyze the resource use efficiency of different farm sizes.

The study indicates that in the case of marginal farms in Kotkhai Tehsil, land, labour and manures and fertilizers were found to be statistically significant at the 5% and 10% probability levels. However, for marginal farms in Jubbal Tehsil, the production elasticity of factor inputs such as land and manures and fertilizers is positive, while labour and seeds show a negative elasticity, although these results are not statistically significant. The MVP (Marginal Value Product) of land, labour, seeds and other inputs is statistically less than unity for small, marginal and medium farms in both Kotkhai and Jubbal Tehsils. This suggests that farmers are utilizing these resources beyond their optimal capacity. Additionally, the MVP of manures and fertilizers is negative for small and medium farms in both Tehsils, indicating that reducing their usage would lead to higher returns.