cliapter distribution of area and output of...

Cliapter 5. DISTRIBUTION OF AREA AND OUTPUT OF

BASMATI BY FARM SIZE CATEGORIES

A critical review of past studies related to Basmati cultivation was undertaken in

Chapter 3. These studies dealt only partially with issues related to Basmati production

in India. However, it is important to critically study issues in a comprehensive

manner. Since Basmati rice is an important crop to farmers in Punjab and Haryana,

this study gives emphasis on the methodology used to calculate the cost of cultivation

of the various Basmati varieties, examine the production and marketing system, and

their competitiveness in the global market. A field survey was undertaken to carry out

an in-depth analysis of the situation of Basmati growing farmers.

In this chapter data collected through field survey has been used extensively

for detailed analysis of area, prices, yields, and gross output of Basmati. This chapter

has been organised into six sections namely Basmati varieties in the study area,

sample households cultivating paddy, area allocation to Basmati, Basmati paddy farm

harvest prices, Basmati yields in physical terms and Basmati yields in value terms or

Basmati gross output.

5.1. Basmati Varieties in Study Area

As explained in Chapter 3, there exist several Basmati varieties both traditional as

well as hybrid. In the field survey it was seen that farmers are cultivating several

varieties of Basmati rice, though the number of Non-Basmati varieties cultivated is

much higher (Appendix Table E-l and Appendix Table E-2).

Table 5.1: Basmati Varieties in Field

Regions Traditional Varieties Modern Varieties

Punjab Pakistani Basmati (B-386) -

Haryana Pakistani Basmati (B-386) and Pusa Basmati (Mucchal

Taraori Basmati (HBC-19) CSR-30 and Sugandh Source: Pnmary Field Survey

The farmers in Punjab are growing only the traditional B-386 variety locally

called 'Pakistani Basmati', while those in Haryana are growing many varieties of

Basmati. Traditional varieties cultivated in Haryana are B-386 and HBC-:I 9 (locally

called 'Taraori Basmati'). Modern varieties cultivated in Haryana include CSR-30,

Pusa-Basmati (locally called 'Mucchal') and Sugandha. Among these modern

Chapter 5: Distribution of Area and Output of Ba~mati by Farm Size Categories 85

varieties CSR-30 was developed by the Central Soil Salinity Research Institute

(CSSRI) at Kamal. CSR-30 is stated to be a variant or an improved form of the

traditional HBC-19. However. this improved variety was released only in 2001 and

has not yet been notified by APEDA and hence is not exportable. Pusa Basmati is a

hybrid variety (a cross of low yielding traditional Basmati variety with high yielding

semi-dwarf Non-Basmati variety). It was developed by the Indian Agricultural

Research Institute (JARI) and released in 1985. Sugandha also developed by IARI is a

hybrid variety but is an improved form of Mucchal and is a relatively new variety ..

S.2. Farming Households Cultivating Paddy

From Table 5.2 it is observed that the share of farmers cultivating Basmati in Punjab

is 81.25 per cent while in Haryana it is 86.25 per cent. In case of Non-Bas mati 65 per

cent farmers are cultivating it in Punjab as against 63.75 per cent farmers in Haryana.

Further, it is seen that in Haryana all large farmers (100 per cent) are growing Basmati

whereas 80 per cent of small farmers and 92.06 per cent of medium farmers are

growing Basmati. However, in Punjab a slightly different trend is observed. Medium

farmers are the largest growers of Basmati (88.41 per cent) followed by large farmers

(83.33 per cent). Similar to Haryana, lowest percentage of small farmers (75.29 per

cent) are growing Basmati in Punjab as well.

Table 5.2: Farming Households Cultivating Rice as a Percentage of Total Farming Households in Each Category

Farm Size Non- Only Only States Basmati Non- Both F Categories Basmati Basmati Basmati Ho

a Total rming

useholds Small 64 (75.29) 41 (48.24) 41 (48.24) 18(2l.l8) 23 (27.06) 85

Punjab Medium 61 (88.41) 57 (82.61) 12 (17.39) 8 (11.59) 49(71.01)

Large 5 (83.33) 6 (100.00) - 1 (16.67) 5 (83.33)

69

6

Total 130(81.25) 104(65.00) 53 (33.13) 27(16.88) 77 (48.13) 160

Small 68 (80.00) 39 (45.88) 45 (52.94) 16(18.82) 23 (27.06) 85

Medium 58 (92.06) 51 (80.95) 12 (19.05) 5 (7.94) 46 (73.02) Haryana

Large 12 (100) 12 (100) 12 (100) - -63 12

Total 138(86.25) 102(63.75) 57 (35.63) 21(13.13) 81 (50.63) 160

Small 132(77.65) 80 (47.06) 86 (50.59) 34(20.00) 46 (27.06) 170 Punjab Medium 119(90.15) 108(81.82) 24 (18.18) I3 (9.85) 95 (71.97)

& Large 17 (94.44) 18(100) 1 (5.56) 17 (94.44) Haryana -Total 268(83.75) 206(64.38) 110(34.38) 48(15.00) 158(49.38)

132

18

320

Source: Primary Field Survey Figures in parenthesis are percentage to total farmers in each farm size category.

In Punjab 33.13 per cent farmers are cultivating only Basmati while 16.88 per

cent farmers are cultivating only Non-Basmati. In Haryana 35.63 per cent farmers are

Chapter 5: Distribution of Area and Output of Bas mati by Farm Size Categories 86

cultivating only Basmati as against 13.13 per cent fanners who are cultivating only

Non-Basmati. The rest around 49 per cent fanners are growing both Basmati and

Non-Basmati varieties.

In both states around 50 per cent small fanners are cultivating only Basmati

and around 20 per cent are cultivating only Non-Basmati. Similarly around 18 per

cent of the medium fanners are growing only Basmati and around 10 per cent are

growing only Non-Basmati. None of the large farmers in both states are cultivating

only Basmati. In the case of Non-Basmati it was seen that only in Punjab around

16.67 per cent of large fanners are cultivating only Non-Basmati.

Table 5.3: Farmers Cultivating each Basmati Variety as a Percentage of Total Basmati Farmers by Farm Size Category (%)

Punjab Haryana

Farm Size Farmers Categories Cultivating 8-386 HBC-19 CSR-30 Muccbal

8-386 in Punjab

Small 64(100) 38 (5588) 17

29 (42.65) - (25.00)

Medium 61 (100) 35 (60.34) 2(345) 29 18(31.03) (5000)

Large 5 (100) 6 (5000) 2 (16.67) 4 (33.33) 4 (33.33)

Total 130 (100) 79 (57.25) 4 (2.9) 50 51(36_96) Farmers (36.23)

Yields 10.26 iO.33 9.74 11.27 16.75 (QtVAc)

Prices 1386.99 1322.68 1754.59 1532.88 908.76 (Rs/Qtl)

Source: PrImary Field Survey Figures in parenthesis are percentage share of each farm size to total.

Sugandba

-

-

1 (8.33)

1 (0.72)

20.00

700.00

Basmati Farmers

Tot al of Punjab Bas mati & Far mers Haryana

6 8 132.00

:) 8 119.00

I 2 17.00

n 8 268.00

11. 90 11.36

1317 .52 1338.05

Notes: The percentages in Haryana will not amount to 100 per cent as there is an overlap of farmers cuitivating several Basmati varieties.

From Table 5.3 it can be observed that all sample fanning households in

Punjab cultivated the B-386 variety of Basmati and in Haryana 57.25 per cent of

fanning households cultivated this variety. Thereby, B-386 seems to be the most

important Basmati variety in both states because this is a traditional variety that is a

pure line cultivar which fetches high prices compared to some hybrid varieties. Time

series data on variety wise Basmati prices is unavailable in the mandis, but then it can

be assumed that being a traditional variety B-386 might be less prone to price

fluctuations compared to the modern varieties and are hence more dependable. HBC-

19 is also a traditional variety which fetches very high prices but then only 2.90 per

Chapter 5: Distribution of Area and Output of Basmati by Farm Size Categories 87

cent farmers are cukwatina it because among the traditional varieties. HBC-19 is very

susceptible to lodging during the stage of crop maturation whereas B-386 is less

susceptible to lodging. HBC-19 is a tall plant having higher, heavier ears and

abundant late season rains followed by high winds create the most likely scenario for

these plants to droop down22• Discussions with farmers revealed that in years before

the present survey was carried out lodging of these plants resulted in crop failures and

so lesser number of farmers devoted their areas to HBC- 19 compared to other

varieties.

Among modem varieties, 36.96 per cent farmers are cultivating Mucchal and

36.23 per cent farmers are cultivating CSR-30. CSR-30 is most popular among

farmers in Kamal district as majority of farmers are cultivating this variety (Table

5.4). Since large numbers of rice traders operate in and around Kamal, there is better

trade network in this region that has created a lot of awareness of different Basmati

varieties especially modem ones. Unlike HBC-19, CSR-30 is found to be less

susceptible to lodging and also fetches highest prices among modern varieties.

Table 5.4: Farming Households Cultivating Basmati in the Sample Districts of Punjab and Haryana

Basmati Varieties Amritsar Gurdaspur PUNJA B

8-386 - Punjab 69 61 130 Kamal Panipat HARYAI 'JA

8-386 25 54 79 H8C-19 4 - 4 CSR-30 40 10 50 Mucchal 5 46 51 Sugandha 1 - 1 Total Basmati - Haryana 65 73 138

Source: Pnmary FIeld Survey

The yields of Mucchal are much higher than other Basmati varieties (16.75

Qtl/ac). However, lesser percentage of farmers grow this variety compared to B-386;

the reason being that firstly they fetch lower prices (Rs.908.76/Qtl) compared to

traditional varieties and secondly these improved varieties are comparatively new and

have a shorter life span compared to the traditional varieties like B-386. Their

adaptability to the regions microclimate reduces with time. Other earlier improved

varieties of Basmati such as Gaurav and Terricot, are not being cultivated by farmers

22 Information received from Central Soil Salinity Research Institute (CSSRI), Kamal


~. Mucchal was released by IARI in 1985 and over time it seems to be becoming

inadaptable to the micro-climate of the region. It will be observed in Chapter 6 that

while estimating the cost of cultivation of Mucchal, requirements of fertilizer,

irrigation and pesticide costs are very high for Mucchal amongst all the varieties

{Table 6.5: Basmati Paddy Variety Cost Structure (Rs/Ac). Further, Mucchal could

have lost its place also because of its acceptance by trade only as a surrogate or a

'duplicate' variety. Therefore, it is also called 'Duplicate Basmati'.

Sugandha is a: variant or an improved form of Mucchal and has been newly

evolved as an improved variety. Only 0.72 per cent farmers are cultivating this variety

as this has not caught on with the farmers due to lack of awareness.

Further, the farm size category wise analysis show that in Punjab B-386 is the

only Basmati variety being cultivated by all farmers and therefore its household share

in each farm category is 100 per cent. But amongst all households in Punjab, B-386 is

being cultivated by 49 per cent of small farmers, 47 per cent of medium fanners and 4

per cent of large farmers. Among small farmers in Haryana 55.88 per cent are

cultivating B-386, 42.65 per cent are cultivating Mucchal and 25 per cent are

cultivating CSR-30. Among medium farmers 60.34 per cent are cultivating B-386

followed by 50 per cent cultivating CSR-30 and 31.03 per cent cultivating Mucchal.

Most large farmers 50 per cent of them are also cultivating B-386 followed by 33.33

per cent each cultivating CSR-30 and Mucchal.

Thus, it is seen that most farmers across farm size categories are cultivating B-

386 due to its high prices as it is a traditional variety and a pure line cultivar. Even

HBC-19 is a traditional variety but the share of farmers cultivating it is less because it

is highly susceptible to lodging. Most large farmers (l6.67 per cent) are cultivating

this variety despite the risk of lodging as it fetches comparatively higher prices

(Rs.l754.59/QtI) than other varieties (Table 5.3). Most small farmers are cultivating

Mucchal (42.65 per cent) as it gives better yields and can also be used for purposes of

adulteration in Basmati grain. Most medium and large farmers are cultivating CSR-30

as well as Sugandha due to better awareness.

23 Infonnation received from APEDA


5.3. Area Allocatioa to Basmati

The cropping pattern of the farmers of Punjab and Haryana has already been

discussed in Chapter 4 but in this chapter Basmati being a kharif crop, the cropping

pattern of only the kharif season has been discussed. From Table 5.5 it is seen that in

Punjab the area allocated to Basmati is 29.46 per cent of the net cultivated area and

the area allocated to Non-Basmati is 51.71 per cent, whereas in Haryana 50.46 per

cent area is being allocated to Basmati and 40.15 per cent to Non-Basmati.

Table 5.5: Area Allocated to Basmati and Non-Basmati in the Kharif Season According to Farm Size Categories (%)

States Farm Size

Basmati Non-Basmati KharifFo Categories dder

Small 45.47 29.06 22.83

Punjab Medium 28.49 55.48 12.30 Large 14.22 64.44 8.00 TOTAL 29.46 51.71 13.67 Small 58.48 32.36 9.85

Haryana Medium 51.61 39.17 7.55 Large 43.76 46.42 4.70 TOTAL 50.46 40.15 7.10 Small 52.29 30.79 16.02

Punjab & Medium 39.87 47.45 9.96 Large 34.45 52.10 5.74 Haryana TOTAL 40.92 45.41 10.09

Source: Pnmary FIeld Survey

The percentage area allocated to Basmati is lower than Non-Basmati in Punjab

whereas reverse is the case of Haryana. The relatively backward agricultural districts

selected in Punjab might be the reason that Punjab farmers do not have the knowledge

or do not prefer newly developed varieties of Basmati and are cultivating only the

traditional B-386 variety. Secondly, farmers in Punjab also complained of crop

diseases of Basmati which might have lowered acreages. While Punjab used to be a

major Basmati cultivating region in the late 1970s, the scenario changed with the

Khalistan agitation and beginning of terrorism as major sheller industries like Satnam

Overseas (,Kohinoor' brand Basmati rice) 24 was closed and moved out to the

neighbouring state of Haryana. The law and order problem forced mills to set up their

businesses in Haryana, which in tum, encouraged farmers in Haryana to expand

acreages (Damodaran, 2003). However, in recent years mills have restarted their

businesses in Punjab. In fact, now big mills like Satnam Overseas have their

establishments both in Punjab and Haryana and also have their head offices in Delhi.

24 Information received from APEDA.


On the other hand, Haryana farmers are devoting a higher proportion of area

towards Basmati than Non-Basmati and are also growing many Basmati varieties both

traditional and modem. The reason Haryana farmers are cultivating many rice

varieties is because large numbers of rice traders operate in and around Kamal and

that area has emerged as a specialized pocket in the emergence of different varieties

especially those of Basmati. It seems that the better trade network has created lot of

awareness of hybrid varieties of rice and farmers are trying different varieties

developed in the state rather than sticking to only the traditionai variety. Since there is

greater awareness of improved varieties of Basmati, farmers in Haryana are devoting

a larger proportion of their areas towards Basmati cultivation.

When Punjab and Haryana were combined the area allocated to Basmati in the

net cultivated area was 10 per cent lesser than Non-Basmati. Another reason for the

overall lower area allocation towards Basmati than Non-Basmati is that Basmati being

highly priced is targeted for the elite hence its demand in the domestic market may be

less as compared to ordinary rice, which is more affordable for the common man.

Secondly, in the international market Basmati has limited takers (mainly Middle-East

countries and European Union (EU)) while Non-Basmati is exported 110 several

countries25• Moreover there are serious adulteration issues with the quality of Basmati

rice exported from India causing the EU to be sceptical of Indian Basmati and hence

less demand. Thereby to increase area allocation as well as production of this crop

more advertising, propaganda and an emphasis on quality is needed.

Through the tabular analysis it is seen that the area devoted to Basmati as a

percentage of net cultivated area reduces with farm size and this decline is statistically

significant at 1 per cent level in Punjab and at 10 per cent level in Haryana .. Further, it

is also seen that the area devoted to Non-Basmati as a percentage of net cultivated

area rises with farm size and this increase is statistically significant at 1 per cent level

in both states. The same trends were observed in Chapter 4, Table 4.6: Cropping

Pattern as Percentage of GCA (%) and Appendix Figure B-2. In both Punjab and

Haryana small farmers are devoting a larger proportion of area towards Basmati

compared to other categories. Firstly, since Basmati gives better returns compared to

Non-Basmati, small farmers try to maximize their returns from their small holdings

by allocating more acreages to high value Basmati whereas large farmers hedge their

25 Shall be studied in detail in Chapter 8

Chapter 5: Distribution of Area and.output of Bas mati by Farm Size Categories 91

bets by growing several types of crops and devoting large areas to Non-Basmati

which give them minimum assured returns through MSP. Secondly, Basmati is a

labour intensive crop compared to Non-Basmati. Basmati harvesting is done by labour alone while Non-Basmati harvesting can be done by both labour and combine

harvester. Management by small farmers is better as they put in more family labour

that they have at their disposal (Table 5.6). Thus, one of the hypotheses mentioned in

Chapter 1 that large farmers are devoting a higher proportion of area towards Basmati

as it is a high value crop, is thereby rejected.

Table 5.6: Labour Involved in Paddy Cultivation (Mandays/Ac) 26

Farm Size Basmati Non-Basmati

Categories Hired Attached Family Total Hired Labour Labour Labour Labour Labour

Attached Family Total Labour Labour Labour

Small 15.64 0.34 3.40 19.39 12.25 1.11 2.02 15.37

Medium 15.69 1.66 1.94 19.29 8.59 2.27 1.40 12.25

Large 15.91 3.01 0.17 19.09 8.16 3.10 0.42 11.68

Punjab 15.69 1.37 2.25 19.31 8.91 2.31 1.26 12.48

Small 15.69 - 2.56 18.26 13.02 2.16 15.18

Medium 15.83 - 1.83 17.66 11.72 1.99 13.71

Large 16.04 - 1.43 17.48 10.18 1.76 11.94

Haryana 15.86 - 1.88 17.74 11.37 1.93 13.30

Source: Primary Field Survey

Based on the above results it clearly indicates that Basmati uses more labour

than Non-Basmati in both states. For Basmati, it is noticed that small farmers are

putting in more family labour compared to other categories of farmers in both states.

It is also noticed that for Basmati cultivation the large farmers have higher

expenditure on hired labour and attached labour (farm servants) compared to small

farmers in both states. In total labour for all class of farmers in both states are nearly

same, although the labour use of small farmers tend to be little higher mainly due to

the involvement of family labour.

For Non-Basmati, labour required is substantially lowr;:r than Basmati in both

states. Overall it is noticed that for Non-Basmati small farmers in both states use more

hired labour compared to large farmers, and this is because of higher usage of labour

displacing machinery by large farmers. However, large farmers still use more attached

labour only in Punjab (Haryanil farmers did not report employment of attached

26 Calculation of Labour Charges (Mandays/Ac) = (Labour ChargeslPrevailing Average Wage Rate Per Person Day) / Crop Area. Methodology for calculation procedures of labour charges referred in Chapter 2

. Chapter 5: Distribution of Area and Output of Basmati by Farm Size Categories 92

labour). It is also noticed that family labour involved in agriculture is substantially

higher for smaller farmers compared to larger farmers in both states.

fable 5.7: Percentage Share of Attached Labour used in Punjab Agriculture

I Farm Size Cultivating Households Categories employing Attached Labour

Small 4 (4.71) Medium 20 (28.99)

I Large 6 (100.00)

i Total 30 (18.75) Source: Pnmary FIeld Survey

Tot al Farming ouseholds HI

85

69 6

160

Figures in parenthesis are percentage share of each farm size to total

Punjab farmers reported employment of attached labourers. From the above

Table 5.7, it is seen that in Punjab only 18.75 per cent farmers have kept attached

labourers. Further, large farmers have the highest share of attached labour than the

medium and small farming households.

Table 5.8: Area under each Basmati Variety as a Percentage of Total Basmati Area by Farm Size Category (%)

Farm Size Punjab Haryana

Categories 8-386 8-386 HBC-19 CSR-30 Mue ebal Sugandba

Small 100 42.46 - 19.33 38. 21

Medium 100 35.49 1.44 49.40 13. 67

Large 100 22.43 14.95 51.40 9.3 5 1.87

Total 100 33.49 4.74 43.53 17: 74 0.50

75 20.00 Yields

10.26 10.33 9.74 11.27 16: (QtIlAc)

Prices 1386.99 1322.68 1754.59 1532.88 908.

(Rs/Qtl) 76 700.00

Source: Pnmary FIeld Survey (AppendIX Table E-5)

From Table 5.8 it is observed that in Punjab B-386 is the only Basmati variety

cultivated in the selected districts and therefore its area share in each farm category is

100 per cent. But the share of area devoted by small, medium and large farmers in the

total B-386 area in Punjab is 30.90 per cent, 60.90 per cent and 8.21 per cent

respectively.

In Haryana B-386 occupies the second position (33.49 per cent) in terms of

area after CSR-30 (45.53 per cent). HBC-19 is also a traditional variety but the share

of total acreage under this (4.74 per cent) is lesser than other varieties (except

Sugandha) because among the traditional varieties, HBC-19 is very susceptible to


lodging. Among improved varieties CSR-30 has the highest share of acreage (43.53

per cent) and is cultivated mostly in Kamal. Mucchal is the third most popular variety

in terms of area (17.74 per cent) mainly because of very high yields (16 .. 75 QtVAc).

However, the area devoted to Mucchal is lesser than B-386 or CSR-30: the reason

being that firstly their prices are low (Rs.908.76IQtl) compared to traditional varieties

and secondly the adaptability of hybrid varieties like Mucchal to the regions

microclimate reduces with time. Sugandha is a variant of Pusa Basmati and is a

relatively new evolved variety and so it has the least acreage. So, part of the

hypothesis that new varieties improve prospects of area expansion along with better

returns is true as it will be seen in the ensuing cost of cultivation analysis that most of

the modern varieties are earning greater profits than the traditional B-386 (Appendix

Table E-l and Appendix Table E-2). But over time only the traditional varieties can

survive as the modern ones tend to lose more vigour.

As pointed out earlier, the proportionate area under B-386 to the net cultivated

area in Punjab reduces with farm size. It is 45.47 per cent for small farmers, 28.49 per

cent for medium farmers and 14.22 per cent for large farmers. Similarly the

proportionate area under each Basmati variety to total Basmati area in Haryana show

that small farmers are devoting a larger proportion of their Basmati area to B-386

(42.46 per cent) followed by the modern varieties like Mucchal (38.21 per cent) and

CSR-30 (19.33 per cent) (Table 5.8). Small farmers seem to be devoting more area to

B-386 because it is a traditional variety that fetches high prices. Secondly, being a

traditional variety it might also be less prone to price fluctuations compared to the

modern varieties. These farmers seem to be wary of HBC-19 because of its

susceptibility to lodging. Higher yields of Mucchal (16.75 Qtls lAc) also lure small

farmers to devote more area to this particular variety. Another possible reason as to

why small farmers are devoting a larger proportion of area towards Mucchal is that it

can be used for adulteration in the Basmati grain.

Medium and large farmers are devoting a larger proportion of area towards the

modern CSR-30 followed by the traditional B-386. They are de\'oting a larger

proportion of area towards CSR-30 because they may be more aware of this variety

compared to the small farmers and also because it fetches very high prices

(Rs.1532.88/Qtl). Large farmers are also devoting a larger proportion of area towards

HBC-19 (14.95 per cent) as they are being lured by its comparatively high prices


•

(Rs.J154.59/QtJ) despite the risk of lodging. Once again large farmers are cultivating

Sugandha due to greater awareness.

Table 5.9: Avenge Area ander each 83smati and Non-Ba"lmati per Farming Household (Basmati ArealHousebold)

Punjab Haryana Punjab & Har: ana

FllrmSia 0- 0 ';; '" . '" I '" - ..c .= = • '; = '; Categories ~ • co ~ ~ '? ..c "0 . '" :; ~ " = .. '" = = ~ ~ = e ... ... a: " '" e C o e c Z ; = Z '" = = '" = "" '" '" Z '" '" '" = ::c u ~ = ~::c ~::c = = '" Small 1.9 1.8 1.9 - 1.9 2.3 - 2.5 2.4 2.2 2.1

Medium 3.9 8.1 4.2 3.0 7.1 3.2 - 7.2 6.2 5.5 7.2

Large 6.4 24.2 8.0 16.0 27.5 5.0 4.0 17.8 18.9 14.5 20.7

Total 3.0 6.6 3.4 9.5 6.9 2.8 4.0 5.8 6.3 4.4 6.4

Source: Primary Field Survey (Appendix Table E-3 and Appendix Table E-4)

From Table 5.9 it is observed that the average Basmati area per household is lower

than the average Non-Basmati area per household in both the states. The average

Basmati area per household for Haryana is 5.81 acre and that of Punjab are 3 acre. B-

386 variety has a slightly higher acreage per household in Haryana (3.4 Ac) than

Punjab (3 Ac). Among Basmati varieties in Haryana, HBC-19 has the highest average

acreage per household (9.50 Ac) even though very few farmers grows this variety.

HBC-19 is followed by CSR-30 (6.98 Ac), Sugandha (4 Ac), B-386 (3.40 Ac) and

Mucchal (2.79 Ac). Further, it is seen that the acreage per household of all Basmati

varieties in both states increases across farm size categories (Table 5.9). This is

natural because large farmers will devote larger areas to their crops hence per

household data reflects that.

5.4. Basmati Paddy Farm Harvest Prices

Table 5.10: Basmati Paddy Farm Harvest Prices across Farm Size Categories (Rs/Qtl)

Punjab Haryana Average of Farm Size Haryana Categories Sugandh Punjab &

8-386 8-386 HBC-19 CSR-30 Mucchal Basmati Haryana a .Averaee

Small 1398.06** 1308.63 - 1621.60 901.27 - 1181.01** 1257.84 Medium 1387.04 1323.01 1775.00 1542.04 882.46 - 1347.85 1360.87

Large 1343.09 1346.38 1749.66 1481.22 997.44 700.00 1385.67 1380.63

TOTAL 1386.99 1322.68 1754.59 1532.88 908.76 700.00 1317.52 1338.05 Source: Pnmary Field Survey (Appendix Table E-3, Appendix Table E-4 and Appendix Table E-5) ** Statistically significant at 1 per cent level of significance Notes: Basmati prices are only of the main product and not by-products


In Punjab, the average Basmati paddy farm harvest price is Rs.1386.99/Qt1 and the

average Non-Basmati paddy farm harvest price is Rs.516.54/Qtl. In Haryana the

average Basmati paddy price is Rs. 1317 .52/Qt1 and the average Non-Basmati paddy

price is Rs.566.94/Qtl (Appendix Table E-3 and Appendix Table E-4).

From Table 5.10 it is seen that the Basmati paddy price In Punjab

(Rs.1386.99/Qtl) is higher than that of Haryana (Rs.1317.52/QtI) because Punjab

farmers are cultivating only one traditional Basmati variety as against Haryana

farmers who are cultivating several varieties including expensive traditional and

relatively less expensive modem varieties. Thus, the average price of Basmati

cultivated in Haryana is lesser than Punjab. Amongst Basmati varieties cultivated in

Haryana it is seen that HBC-19 (Rs.1754.59/Qtl) followed by CSR-30

(Rs.1532.88/QtI) receive the highest price. This is because these are the most valued

traditional as well as a modem variant of the traditional Basmati variety respectively.

Mucchal (Rs.908.76/Qtl) and Sugandha (Rs.700/Qtl) receive comparatively lesser

prices as these are hybrids i.e., a cross of low yielding traditional Basmati varieties

with other high yielding semi-dwarfNon-Basmati varieties.

The prices of B-386 cultivated in Punjab (Rs.1386.99/QtI) are high~:r than

those cultivated in Haryana (Rs.1322.68/Qtl) by 4.86 per cent because the region

surveyed in Punjab is a traditional Basmati cultivating area and hence farmers here

are maintaining purity. The traditional trust between farmers and traders n:sult in

these farmers receiving better prices. On the other hand, the large number of Basmati

varieties being cultivated in Haryana might be leading to adulteration resulting in

lower B-386 prices there.

Unpaired 't' tests have been prepared to test the difference in mean levels

between prices of B-386 of Punjab and average combined Basmati prices of Haryana.

It is found that the average B-386 prices are higher in Punjab than the averag{~ B-386

and average combined Basmati prices of Haryana but these differences are not

statistically significant. Even across farm sizes the differences are not statistically

different except in case of small farmers. It is observed from table Table 5.10 that the

average B-386 price of small farmers in Punjab (Rs.1398.06/Qtl) is significantly

higher than the combined average Basmati price of small farmers in Haryana

(Rs.l181.0IlQtl) at I per cent level. However, average B-386 prices of Punjab are not

significantly different from the average B-386 prices of Haryana across all farm size

categories.


furthennore, it is seen from Table 5.10 that, in Punjab the average B-386

prices decreases across farm sizes but this decrease is not statisltically significant

(Appendix figure C-I). Small farmers work very efficiently on Basmati cultivation in

order to maximize their returns as they operate close to subsistence level and secondly

they can provide surplus family labour as Basmati is a labour intensive crop. Thus,

they produce better quality grains, which receive good prices. The situation however,

is just the reverse for Haryana. The price of all Basmati varieties taken together in

Haryana increase with farm size but this increase is not statistically significant

(Appendix Figure C-I) i.e., small farming households earn lesser price than other

categories because it was found that most small farming households in Haryana

cultivate Mucchal (42.65 per cent) which has very high yields in physical terms

(15.91 QtI/ac) but at the same time earns lesser price (Rs.90 1.2 7/Qtl) than other

varieties (Appendix Table E-5). Thus, the average combined Basmati prices of small

farmers in Haryana (Rs.1181.0 I / Ac) became lesser than that of Punjab

(Rs.1398.06/Ac) and therefore this difference in prices is statistically significant at I

percent level.

Variety prices in Haryana show that the prices of B-386 increase across farm

size categories but this increase is not statistically significant (Appendix Figure C-I).

Just like B-386 prices of Punjab the prices of HBC-19 of Haryana decrease across

farm size categories though the decline is also not statistically significant. For CSR-30

the decline in prices is statistically significant at 10 per cent level. According to the

tabular analysis Mucchal prices do not show any particular trend, but regression

analysis shows that its prices increase across farm size categories that are statistically

significant at 1 per cent level. The price of Sugandha also does not show any trend as

only one farmer is cultivating it.


5.5. Yields of Basmati Paddy in Physical Terms

Table 5.11: Total Basmati Paddy Yields by Farm Size Categories (QtIIAc)

Punjab Haryana Average Farm Size Haryana of Punjab Categories 8-386 8-386 HBC-19 CSR-30 Mucchal Sugandha Basmati &

Avera~e Haryana

Small 10.32** 11.I0 - 12.91 15.91 - 13.29** 12.06 Medium 10.28** 10.21 12.00 11.44 17.00 - 11.77** 11.23 Large 9.89** 9.50 9.31 10.45 18.75 20.00 11.02** 10.88

TOTAL 10.26** 10.33 9.74 11.27 16.75 20.00 11 .. 90** 11.36 Source: Pnmary FIeld Survey (AppendIx Table E-3, AppendIx Table E-4 and AppendIx Table E-5) ** Statistically significant at I per cent level of significance Notes: Yields in physical terms of Basmati are only of the main product and not by-products

It has been observed that in Punjab the average yield in physical terms of Basmati

(10.26 QtII Ac) is lesser than Non-Basmati (21.25 QtII Ac). Similarly in Haryana too

the average yield in physical terms of Basmati (11.90 QtIIAc) is lesser than Non

Basmati (21.47 QtIIAc) (Appendix Table E-3 and Appendix Table E-4).

From Table 5.11 it is seen that the average Basmati yield in Punjab is 10.26

Qtll Ac and in Haryana it is 11.90 QtII Ac. The overall Basmati yields of Haryana are

higher than Punjab by 15.93 per cent because apart from traditional varieties, Haryana

farmers are also growing modem varieties which have higher yields than the

traditional varieties. Secondly, the yields of B-386 cultivated in Haryana (10.33

Qtl/Ac) is marginally higher than Punjab (10.26 QtVAc).

Unpaired 't' tests have been prepared to test the difference in mean levels

between yields of B-386 of Punjab and combined Basmati yields of Haryana. It is

found that the average B-386 yields in Punjab are lesser than the average combined

Basmati yields of Haryana across all farm size categories and this difference is

statistically significant at 1 per cent level. However, average B-386 yields of Haryana

are not significantly different from the average B-386 yields of Punjab across farm

size categories.

From the Table 5.11 it is also seen that the yields of all Basmati varieties

decline across farm size categories with an exception of Mucchal in Ha.ryana. The

decline in yields ofB-386 in Punjab and Haryana is not statistically significant. While

the yields of HBC-I9 decline significantly at I per cent level. For CSR-30 the decline

in yields is statistically significant at 10 per cent. The yields of Mucdlal variety

increases significantly across farm size categories at 1 per cent. The yields of Basmati


varieties taken together in Haryana declines signiflCalllly at J per cent level.

(Appendix Figure C-2).

The reason for such an anomalistic behaviour of Mucchal may be explained by

its geographic pattern. Only 33.33 per cent large farmers are cultivating Mucchal and

these farmers are located mostly in the Kamal area (Table 5.3). It has been mentioned

in Chapter 2 that Pusa Basmati is a stronghold mainly in the Panipat region. This

variety might not have suited the micro-climate of Kamal as the large farmers of

Kamal reported higher usage of fertilizers, insecticide and growth regulators resulting

in higher costs for them in case of Mucchal (Chapter 6, Table 6.12: Mucchal Paddy

Costs C2 & H across Farm Size Categories in Haryana (Rs/Ac)). The investment

made by large farmers in cultivating Mucchal in the form of greater usage of plant

nutrients and plant protection chemicals resulted in better yields in physical terms

(Table 5.10 and Table 5.11).

5.6. Gross Output from Basmati Paddy Cultivation

In Punjab, the yield levels of Basmati in terms of value or the gross output per acre of

Basmati is Rs.16079.71/Ac and that of Non-Basmati is Rs.14660.6/Ac. Similarly in

Haryana the gross output per acre of Basmati is Rs. 17814.24 and that of Non

Basmati is Rs.16037.88 (Appendix Table E-3 and Appendix Table E-4). Herein gross

output per acre also includes the value of by-products.

5.6.1. Farm Size and Productivity Relation in Basmati Paddy Cultivation

Table 5.12: Basmati Paddy Gross Output across Farm Size Categories (Rs/Ac)

Punjab Haryana .. -

Fann Size Categories 8-386 8-386 HBC-19 CSR-30 Mucchal Sugandba

Haryana Average

Small 16278.24** 16518.62 - 23256.97 17200.92 - 18081.64**

Average of

Punjab &

Haryana 17335.51

Medium 16115.79** 15353.05 23460.00 19704.79 18061.75 - 17989.73** 17309.73

Large 15064.30** 14500.63 17970.00 17367.27 22077.00 17600.00 17258.93**

TOTAL 16079.71** 15515.39 18836.84 19303.91 18231.42 17600.00 17814.24**

C.V (%) 19.71 20.55 16.16 19.64 16.40 21.91

Basmati Paddy Gross Output (Rs/QtI) Small 1578.06 1488.63 - 1801.60 1081.27 - 1361.01

Medium 1567.04 1503.01 1955.00 1722.04 1062.46 - 1527.85

Large 1523.09 1526.38 1929.66 1661.22 1177.44 880.00 1565.67

TOTAL 1566.99 1502.68 1934.59 1712.88 1088.76 880.00 1497.52

Source: Pnmary Field Survey (Appendix Table E-3, Appendix Table E-4 and Appendix Table E-5) ** Statistically significant at 1 per cent level of significance Notes: Basmati gross returns includes those of main and by-products


16973.45

17246.61

21.66

1437.84

1540.87

1560.63

1518.05

The gross output per acre is higher for Basmati than Non-Basmati even though

its yields per acre in physical terms are low. This is due to the fact Basmati is a high

value crop; its prices are much higher than Non-Basmati rice. In Haryana the gross

output per acre taking all Basmati varieties together is Rs.17814.24/ Ac and in Punjab

it is Rs.l6079.711Ac (Table 5.12). The gross output per acre are higher in Haryana

than Punjab by 10.79 per cent because the yields per acre in physical terms and prices

of some Basmati varieties cultivated in Haryana are more than those of Punjab (Table

5.10 and Table 5.11).

However, when B-386 between both states are compared it is seen that the

gross output per acre of B-386 cultivated in Haryana are lesser than Punjab by 3.51

per cent mainly due to low prices of B-386 in Haryana (Table 5.10 and Table 5.11).

Unpaired '1' tests have been prepared to test the difference in mean levels

between per acre gross output ofB-386 of Punjab and combined Basmati gross output

of Haryana across different farm size categories and it is found that the gross output

per acre for Basmati are higher in Haryana than Punjab across farm size classes and

these differences are statistically significant at 1 per cent. However, the per acre gross

output ofB-386 of Haryana are not significantly different from Punjab.

From the Table 5.12 it is seen that Basmati gross output pt:T acre for all

varieties except Mucchal decrease gradually as farm size increases. However, more

detailed analysis using regression methods shows that no firm relationship exists

between farm size and Basmati productivity in value terms (Appendix Figure C-3).

From these regressions it is seen that the decline in the productivity in value terms of

B-386 across farm size categories is not statistically significant in Punjab and Haryana

whereas the decline in productivity of HBC-19 and CSR-30 and increase in

productivity of Mucchal are statistically significant at 1 per cent level of significance.

The reasons for such trends are that in case of B-386 both its prices and yields in

physical terms did not show a statistically significant decline in both states. But for

HBC-19 its yields declined significantly at 1 per cent. In case of CSR-30, its prices

and yields showed a significant decline at 10 per cent level. For Mucchal, its prices

and yields showed significant increase at 1 per cent level across farm size categories.

The regression for Sugandha could not be run as only one farmer is cultivating it. For

all Basmati varieties taken together in Haryana the decline in gross output per acre is

not statistically significant and this can be primarily attributed to the increasing


returns to scale of Mucchal. Thus. from the analysis of Basmati productivity in value

terms it is seen that a statistically non-significant inverse relation between farm size

and Basmati productivity exists.

Sometimes it is argued that land owned by small farmers is superior in quality

and therefore more possibilities exist for the intensive use of inputs including land

itself. Another important example of more intensive use of inputs by small farms is

that the availability of more family labour per acre enables them to maximize output

which is their main objective since they are operating very close to subsistence level

(Sharma, 1992). In case of Basmati cultivation it is seen that the productivity or yields

in both physical and value terms of small farmers is higher than other categories as

they are able to utilize their family labour in labour intensive Basmati cultivation.

Further, the high value status of the crop, the lure of receiving high prices for it, along

with the dignity of the family labour to work on their own farm with freedom, results

in more efficient farming, which in turn accounts for their greater productivity

compared to the larger farms. The pride/dignity/love of family labour and the fact that

a small farmer and his family are cultivating their own land and are mainly dependent

on it for subsistence leads them to provide additional care and effort which is difficult

to quantifY by conventional techniques27• Small farmers also use hired labour but the

additional usage of family labour allows supervision and management which is key

towards their higher productivity of Bas mati.

From the Table 5.12 it is observed that the coefficient of variation (CV) of

total Basmati gross output per acre cultivated in Haryana (21.91 per cent) is higher

than those of Punjab (19.71 per cent). This is because the different Basmati varieties

that are cultivated in Haryana have different physical yield and price levels. The

coefficient of variation of gross output of B-386 cultivated in Haryana (20.55 per

cent) is also slightly greater than Punjab (19.71 per cent) mainly because the yield

levels in physical terms especially for small farmers are greater for B-386 in Haryana

than Punjab (Table 5.11). Among Basmati varieties cultivated in Haryana the

coefficient of variation of CSR-30 is 19.64 per cent because the differences in both

yields in physical terms as well as farm harvest prices between falm size categories

are high for this particular variety (Table 5.10 and Table 5.11).

27 In this study the cost of family labour has been computed based on imputed values of prevalent casual wage rates as reported by farmers. However the extra effort and quality that family labour brings in is difficult to measure quantitatively.


5.7. CODeluding Remarks

This chapter undertook a detailed analysis of the sample households who cultivated

paddy, their area, prices, yields, and gross output of Basmati.

It was observed during the field survey that farmers were cultivating several

varieties of Basmati rice, though the number of Non-Basmati varieties cultivated was

much higher. Farmers in Punjab were growing only the traditional B-386 variety

while those in Haryana were growing traditional varieties like B-386 and HBC-J9 as

well as modern varieties such as CSR-30, Mucchal and Sugandha.

In both states it was observed that farmers who cultivated Basmati were higher

(around 80 per cent) than those who cultivated Non-Basmati (around 60 per cent).

Further, the share of small farmers who cultivated Basmati as a percentage of total

small farmers in both states was the least while that of the medium and large farmers

was higher.

In Punjab all sample farming households cultivated the B-386 variety and in

Haryana 57.25 per cent of farming households cultivated it. Thus, in both states it was

seen that the share of farmers who cultivated B-386 was the highest be:cause this was

a traditional variety which received high prices and was also considered to be less

prone to price fluctuations compared to the modern varieties. In Haryana, only 2.90

per cent farmers cultivated the other traditional variety HBC-J9 because it was prone

to lodging. Among modern varieties CSR-30 was cultivated by 36.23 p~:r cent farmers

and Mucchal was cultivated by 36.96 per cent. Sugandha being a recently developed

evolved variety had not caught on much with the farmers due to lack of awareness.

In Punjab the area allocated to Basmati was 43 per cent lower than Non

Basmati. In contrast, the area allocated to Basmati in Haryana was 26 per cent higher

than Non-Basmati. Relative backwardness of the districts selected in Punjab was the

reason for lower allocation of area towards Basmati as these farmers lacked the

knowledge or did not prefer newly developed varieties of Basmati and had been

cultivating only the traditional B-386 while Haryana farmers had cultivated several

due to better awareness. Moreover, crop diseases were a major problem in Punjab

which might have lowered acreages.

Small farmers in both states had devoted a larger proportion of their net

cultivated area towards Basmati (Punjab - 45.47 per cent and Haryana - 58.48 per

cent) compared to medium and large farmers. This was firstly because as Basmati

Chapter 5: Distribution of Area and Output of Basmati by Farm Size Categories J 02

gave better returns compared to Non-Basmati. small farmers &ricd 10 ma.'(imiu their

returns from their small holdings by allocating more acreage to high value Basmati

whereas large farmers hedged their bets by growing several types of crops and

devoted large areas to Non-Basmati which gave them minimum assured returns

through MSP. Secondly, Basmati was a labour intensive crop compared to Non

Basmati and management by small farmers was better as they put in more family

labour that they had at their disposal. Thus, one of the hypotheses that large farmers

are devoting a higher proportion of area towards Basmati as it was a high value crop

was thereby rejected.

In Punjab only the traditional B-386 variety was under cultivation and in

Haryana it occupied the second position (33.49 per cent) in terms of area after CSR-

30 (43.53 per cent). The share of total acreage under HBC-19 was much less (4.74 per

cent) because it was prone to lodging. Among modem varieties CSR-30 had the

highest share of acreage (43.53 per cent) because being a new variant of HBC-19 it

was less susceptible to lodging. Mucchal was popular mainly because of very high

yields but in spite of that the area devoted to Mucchal was less (17.74 per cent)

compared to other varieties because of lower prices (Rs.908.76/Qtl) and also because

these evolved varieties had a shorter life span compared to the traditional varieties.

Their adaptability to the regions microclimate tended to reduce with time. Sugandha

had least acreage (0.50 per cent) because it had not caught on with the farmers due to

lack of awareness. So, part of the hypothesis that new varieties improved prospects of

area expansion along with better returns was true as most of the modem varieties were

earning greater profits than the traditional B-386. But over time only the traditional

varieties could survive as the modem ones tended to lose more vigour.

In Punjab all farmers had cultivated B-386. In Haryana small farmers had

devoted a larger proportion of their Basmati area to B-386 (42.46 per cent) followed

by the hybrids Mucchal (38.21 per cent) and CSR-30 (19.33 per cent). Medium and

large farmers had devoted a larger proportion of area towards the hybrid CSR-30

(around 50 per cent). Large farmers are also devoted a larger proportion of area

towards HBC-19 (14.95 per cent) followed by Sugandha (1.87 per cent).

The average Basmati area per household for Haryana was 5.81 acre and that of

Punjab was 3 acre. Among Basmati varieties in Haryana, HBC-19 had the highest

average acreage per household (9.50 Ac) followed by CSR-30 (6.98 Ac), Sugandha (4

Ac), B-386 (3.40 Ac) and Mucchal (2.79 Ac). The acreage per household of all


Basmati varieties in both states increased across farm size categories. This was natural

because large farmers' devoted larger areas to their crops hence per household data

reflected that.

Average Basmati paddy prices were higher in Punjab (Rs.1386.99/Qtl) than

Haryana (Rs.1317.52/QtI) because Punjab farmers cultivated only one 8asmati

variety i.e., the traditional 8-386 as against Haryana farmers who cultivated several

that included high priced traditional as well as relatively low priced hybrid varieties.

Thus, the average prices of Basmati cultivated in Haryana became lesser than those of

Punjab. 8-386 prices cultivated in Punjab (Rs.1386.99/Qtl) were higher than that

cultivated in Haryana (Rs. 1322.88/Qtl) as Punjab was a traditional 8asmati growing

area and farmers were maintaining purity. On the other hand, the large number of

Basmati varieties being cultivated in Haryana might have lead to adulteration that had

resulted in lower B-386 prices. Amongst Basmati varieties cultivated in Haryana it

was observed that HBC-19 (Rs.1754.59/Qtl) followed by CSR-30 (Rs.1532.88/Qtl)

received the highest prices. This was because these were the most valued traditional

as well as the modem variant of the traditional Basmati variety respectively. The

hybrids Mucchal (Rs.908.76/Qtl) and Sugandha (Rs.700IQtl) received comparatively

lesser prices.

Furthermore, in Punjab the average prices of B-386 were higher for small

farmers and decreased across farm sizes though this decrease was not statistically

significant. Small farmers utilized their surplus family labour that worked very

efficiently on Basmati cultivation and thereby produced better quality grains, which in

tum fetched high prices. The prices of all Basmati varieties taken together in Haryana

increased with farm size but this increase was also not statistically significant. Small

farming households earned lesser price than other categories because it was found that

most small farming households i.e., 42.65 per cent in Haryana cultivated Mucchal

which earned lesser price than other varieties. Thus, the average Basmati prices of

small farmers in Haryana became lesser than that of Punjab.

The yields in physical terms of B-386 variety cultivated in J-Iaryana (10.33

QtlI Ac) were marginally higher than that of Punjab (10.26 QtlI Ac). Overall Basmati

yields in Haryana (11.90 QtI/Ac) were also higher than Punjab. The yields in value

terms or gross output of B-386 cultivated in Haryana (Rs.15515.39IAc) were lower

than Punjab (Rs.16079.711Ac) by 3.51 per cent. Overall Basmati gross output in

Haryana (Rs.l7814.24/Ac) was higher than Punjab by 10.79 per cent. This was

Chapter 5: Distribution of Area and Output of Basmati by Farm Size Categorie~ 104

because apan from traditional varieties. Haryana farmers were also growing hybrid

varieties which had greater yields in physical tenns than the traditional ones.

From the tabular analysis it was seen that the yields in physical and value

tenns of all Basmati varieties declined across fann size categories except Mucchal.

But the regression analysis did not show a finn relationship between farm size and

Basmati productivity in value tenns. It was observed that there existed a statistically

non-significant inverse relation between fann size and Basmati productivity in both

states. Except for Mucchal the yields in physical and value terms of small fam1ers was

higher than other categories as they were able to utilize their family labour in labour

intensive Basmati cultivation. Further, the high value status of the crop, the lure of

receiving high prices for it, along with the dignity of the family labour to work on

their own fann with freedom had resulted in more efficient fanning which in tum

accounted for their greater productivity compared to the larger fanns.

Chapter 5: Distribution of Area and Output of Basmati by Farm Size Categorie8 105

cliapter distribution of area and output of...

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