COSTING OF SUGARCANE - Inputs by CMA.B.V.Prabhakar
The profitability of sugarcane depends on many factors - the farm size, cropping pattern, varietals adoption, labour and input costs, credit sources, transportation and processing costs. In addition, profit of other competing crops need to be analysed to know the opportunity cost. The number of analytical techniques such as, farm cost analysis, gross margin analysis need to be used to access the profitability of sugarcane.
In short, the farm cost is based on cane production and its competing crops. The costs consist of expenses from the profit and loss account (cash costs such as labour, input costs like fertilisers, depreciation on farm implements, etc.), and opportunity costs for farm-owned factors of production (family labour, own land, own capital). The estimation of these opportunity costs must be considered carefully because the potential income of farm owned factors of production in alternative uses is difficult to determine.
Further, the cost of sugarcane also depends on the yield - fresh crop or second crop. Further the yield in one state to another varies because of fertility of the land.
Sugarcane is a perishable crop and the cost of production in the sub-tropical region is found to be more than in the tropical region of India on account of lower yield per acre due to unfavourable climatic conditions.
Sugarcane output is subject to variations due to natural factors such as changes in the agro-climatic conditions, rainfall, pests and diseases
Output & yield can also be improved by following improvised and modern methods of farming leading to consequent reduction of farm cost.
COSTING OF SUGARCANE
A)COST OF CULTIVATION/HECTARE (Rs.)
Land preparation - Rs.5,000/-
Seed & Planting - Rs.7,000/-
Manure & Manuring – Rs. 6,000/-
Fertilizers – Rs.9,500/-
Weeding & Interculture – Rs.5,000/-
Irrigation – Rs.7,500/-
Plant protection (Insecticide, etc.) & others – Rs.3,000/-
Total Cost of cultivation/Hectare – Rs.43,000/-
Average Yield/Hectare – 100 Tonnes / 1000 Quintals
Cost of cultivation/Quintal – Rs. 43.00
B)Cost of Harvesting & Loading/hectare – Rs.5,000/-
Per/Quintal – Rs.5
C)Interest on Loans – Rs.3,000/-
Per/Quintal – Rs.2/-
Total Cost/Quintal = Rs.50/-
ADD:
D)Transportation for 100 Tons – Rs.30,000/-
Per Quintal – Rs.30/-
TOTAL – Rs.80/- per Quintal
Assuming the SAP is fixed at Rs.150/- , the Profit per Quintal will be Rs.70/- per Quintal or Per hectare it will be Rs.70,000/- (Annual income for the farmer family/hectare).
Note:
1) Normally seeding is made in one year which will yield three crops - in the first year-early maturing, second year - mid maturing & third year - late maturing. The cost of seeds is averaged.
2) The above costing is approximate typical for a farmer based in Tamilnadu typically with one hectare holding with conventional farming.
3)The farmer faces the default risk in payment from Sugar mills and can fall into debt trap, if not paid in time.
4) Rental, if Leased Lands (or opportunity cost if own land) – Rs.15,000/- per hectare (Per/Quintal – Rs.15)
4)By following better farming measures, there is a scope for further cost cutting/reduction.
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