Economics of Some Dryland Agricultural Technologies


Enhancing the productivity of dryland is essential to achieve sustainably and more widely spread growth in Indian agriculture. The Drylands are characterized by poor soil and water resource availability and shelter a majority of rural poor in India. Unlike with irrigated agriculture, achieving dramatic yield gains is difficult in dryland farming (Katyal et al., 1996). Therefore, it is required to plan for gradual increases in crop yields by making a more efficient use of available resources. Development and transfer of technologies for enhancing crop yields under dryland conditions is the key mandate of the Central Research Institute for Dryland Agriculture.

Economics of technology is one of the important determinants of technology adoption and as such economic viability is a necessary condition for technology to be adopted. Technologies, which are energetically viable and profitable, will have the self-replicating ability. It is, therefore, important to assess the technologies for their economic viability before they are transferred to the farmers. The broad range of rainfed technologies includes the development of an improved set of practices, appropriate intercropping system, integrated pest management, soil and water conservation measures. This bulletin intends to put together the information on the economics of some important dryland agricultural technologies.


Economics of Improved Production Practices

Use of poor quality seed, inadequate nutrient supply, high weed growth, and incidence of pests and diseases are the four principal reasons for low productivity of rain-fed crops. Keeping these problems in view, improved package of practices comprising use of high-quality seed of improved varieties, application of moderate doses of chemical fertilizers, and appropriate weed and pest management practices were developed for various rainfed crops (Reddy and Rastogi, 1985).

These technologies were evaluated for their viability at different locations in India (Table 1). Based on three-year (1985-88) data collected from on-farm experiments at various AICRPDA locations, the incremental benefit cost ratios (IBCRs) were computed to examine whether the additional investments required adopting these technologies would result in enough additional benefits. Thus IBCR indicates the economic viability of the technology under consideration.The results showed that use of recommended practices improved the profitability of rainfed crops significantly.

However, the increase in profitability is not uniform across crops and locations. The Incremental Benefit Cost Ratios (IBCRs) associated with a recommended package of practices for Kharif (rainy season) sorghum varied between 1.08 in Kovilpatti to 2.98 in Hyderabad (Table 1). Thus, the additional costs involved in adopting the recommended technologies were just recovered in Kovilpati whereas in Hyderabad every rupee invested earned a net profit of Rs. 2/-.

Similarly, in case of rabi (post rainy season) sorghum, IBCR was 1.64 in Rahuri and 2.81 in Solapur. In pearl millet, the profitability of recommended practices varied across locations. In three out of four areas, it was not profitable. In Hyderabad, adoption of improved practices increased the returns by Rs. 913/- without involving any additional expenditure. Castor in Hyderabad recorded highest IBCR of 4.98, which explains the quick spread of castor in the southern Telangana region of Andhra Pradesh.


Economics of Improved Planting Techniques

Planting method was considered as one of the crucial elements for improved productivity of rain-fed crops. Various improved farming methods were evaluated for pearl millet and castor by the dryland research network in India. The changes in returns and costs from the traditional methods of planting were worked out, and then IBCRs were computed to test their economic viability.


Economics of Intercropping Systems

Rainfed farmers traditionally practice intercropping as a risk minimizing strategy. Farmers hope to harvest a good crop of at least one component of the intercropping system in years of unfavorable rainfall. Other benefits of the intercropping system include improvement in soil fertility (with legumes as intercrops), better resource utilization, and increase in income.


Economics of Alternate Land Use Systems

Cultivation of coarse cereals, pulses and oilseeds predominate rainfed regions. Low-income groups mostly consume These crops, especially, coarse cereals and millets, and as a result, the income elasticity of demand is relatively small. The consumption of oilseeds is also responsive to relative prices and any increase in the prices tends to reduce the need. These factors make it difficult to ensure remunerative prices to the rainfed farmers. On the other hand, soil erosion and degradation are the major problems threatening the sustainability of rainfed agriculture.

Various alternate land use systems that help conserve soil resources and meet multiple needs of the farmer were developed. These systems were examined for their economic viability vis-à-vis arable crops using the data collected from farmers’ fields. Agri-horticulture and Agri-silvi culture are the two important alternate land use systems developed by CRIDA. Most of these systems were found to be more profitable than arable cropping.


Economics of Integrated Pest Management

Insect pests are one of the major factors carrying heavy yield losses in rainfed crops especially pigeon pea and cotton. To develop means for achieving pest management in a manner that does not harm the environment and is cost-effective, efforts were made to develop integrated pest management (IPM) modules. The effectiveness and economics of such IPM modules in pest management in case of pigeon pea are described here. Different components of IPM were evaluated individually and in combination to identify most efficient module for managing the major pests in pigeon pea at HRF, CRIDA. Application of NPV, NSKE, HPV, mechanical collection, erection of bird perches and chemical sprays are the components that were included in the IPM. Two different IPM modules were specifically tested with the sequential application of effective treatments (Giraddi et al., 1994) and compared with chemical control of pests


Economics of Water Conservation Technologies

Simple conservation technologies were evaluated for their impact on crop yield and economics at AICRPDA centers at Bijapur and Solapur during 2002-03. The findings from the on-farm experiments are presented hereunder.The study region received about 600 mm of rainfall (normal rainfall 594 mm) in 18 rainy days during the year 2002-03. Two major treatments – conservation furrow (T1) and deep plowing, conservation furrow and residue incorporation (T2) were evaluated in the groundnut and pigeon pea inter cropping system. These practices require additional labor inputs. These two technologies were compared with the existing farmers’ practice for their impact. These technologies were evaluated at ten mon-farm trials.


Economics of Farm Pond

Soil and water conservation is the most important aspect of sustainable rain-fed agriculture. Among various soil and water conservation practices, farm pond is the most remunerative technology to harvest and utilize rainwater. An ex-ante economic evaluation was done for a typical farm pond of 500m3 capacity in an Alfisol at Hayathnagar Research Farm of the Central Research Institute for Dryland Agriculture (CRIDA). An examination of historical data indicated the occurrence of 8-10 runoff events during an average rainfall year. This particular farm pond gets filled twice a year.

The water so stored can be utilized to give one life-saving irrigation to 1 ha of sorghum and to grow 0.1 ha of vegetables such as tomato and okra. The returns were calculated by considering the above and the various viability measures given below were computed by generating cost and income flow for 20 years( Mishra et al., 1998). The economic analysis was conducted by assuming that the current yield levels will be maintained
moreover, using a discounting rate of 12 per cent, which is the standard lending rate for agricultural loans


Economic Efficiency in Production of Rainfed Crops

It is as important to use the available resources and technologies efficiently as it is to develop appropriate technologies (Kalirajan et al., 1996). It was further observed that improving the economic efficiency is one important source of achieving further productivity growth in Indian agriculture (Kalirajan and Shand, 1997). Economic efficiency is comprised of technical efficiency and allocative efficiency. A farmer is said to be technically efficient if he or she produces maximum possible output with the given level of resources and technology.

The farmer is allocative efficient when he or she maximizes profit by choosing those levels of inputs given the relative prices of inputs and outputs (Datta and Joshi, 1992). The economic efficiency in the production of three major rainfed crops, viz., sorghum, groundnut, and castor was computed by fitting a deterministic frontier production function to farm level data (Rama Rao et al., 1996). At average levels of input use, the technical efficiency is relatively low in groundnut and castor compared to that in sorghum.

The allocative efficiency is however comparatively high in groundnut (88%) and castor (92%) as against 76 per cent in sorghum (Fig 2). This indicates that farmers invest relatively more on inputs in commercial crops such as groundnut and castor than in food crops such as sorghum (Katyal et al., 1993). A relatively high degree of technical efficiency (86%) in sorghum indicates that there is not much difference between the technically efficient farmer and average farmer.





  • Central Institute of Dryland Agriculture


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