Wheat Cultivation in India: An Assessment of Nature and Trend of Cost of Production

Indian agriculture is experiencing low profitability due to the high cost of cultivation. There may be disparities in cultivation costs across states, as well as underestimation practices in estimating these costs. The study analyzes the concept of cost of cultivation and examines trends and patterns in costs, yield, and output for wheat, the second most important food grain in India after rice. The purpose of this paper is to estimate and compare changes in the costs and returns of wheat cultivation during 2004-05/2018-19. The results reveal disproportionate changes in costs across the six major wheat-producing states. The inelastic demand for inputs may have contributed to rising cultivation costs. Imperfect substitution between labour and machinery, combined with inadequate farm mechanization in some states, has failed to offset wage-push cost inflation in Indian agriculture. It can be apprehended that increasing cultivation costs, coupled with poor farm harvest prices, have aggravated high costs and low profitability. The analysis is based on the cost of cultivation data for wheat in the top six wheatproducing states: Uttar Pradesh, Madhya Pradesh, Punjab, Haryana, Rajasthan, and Bihar. The study draws on valuable information from the Comprehensive Scheme for Studying the Cost of Cultivation of Principal Crops in India, under the Ministry of Agriculture and Farmers Welfare, Government of India.