Economics of Seed Spices in Gujarat: Analyzing Parity of Cost, Price, and Income

Abstract

This study analyzes the cost, price, and income parity in three major seed spices cultivated in Gujarat by examining indices of average input prices, Farm Harvest Prices, cost of production, and gross income to evaluate the profitability and challenges faced by farmers. The secondary data on input cost, cost of production and gross income were collected for the period of eleven years from 2011-12 to 2021-22 from the reports of “The Scheme for Farm Cost Studies of Important Crops in Gujarat State” and “The Scheme for Creating a Permanent Machinery for studying Cost of Cultivation/ Production of Principal crops grown in Gujarat state, further analysis of parity indices were estimated by taking 2011-12 as base year. The results indicate that for cumin crop, input prices grew significantly, while farm harvest prices exhibited a non-significant increase. Parity indices between Farm Harvest Prices and input prices remained below 100, indicating that farm harvest prices did not cover rising input costs. However, in years like 2016-17, 2018-19, and 2021-22, the farm harvest price and gross income were favorable, indicating profitability for farmers. In fennel, input prices and production costs showed significant growth, while farm harvest prices and gross income had minimal increases. Parity indices suggested that farm harvest prices were insufficient to cover rising costs in most years, though 2012-13 and 2021-22 were favorable for farmers in terms of both price and income. Coriander, with significant growth in input prices, showed a slight increase in farm harvest prices and a decrease in production costs. Parity indices indicated that the farm harvest price consistently exceeded input prices and the cost of production, ensuring favorable profitability and encouraging investment in coriander cultivation. Overall, the findings underscore the need for policy interventions to stabilize farm harvest prices and control input cost inflation, ensuring sustained profitability for farmers growing seed spices.