Rabi Cropping Plan Under Labour and Capital Limits
Hariram has 3 ha of irrigated land in Kota district and ₹1,00,000 of working capital. In the rabi season he can grow wheat, mustard or gram. His records show wheat yields 4.5 t/ha at a farm-gate price of ₹2,300/quintal and costs ₹45,000/ha; mustard yields 1.8 t/ha at ₹5,400/quintal and costs ₹28,000/ha; gram yields 1.5 t/ha at ₹5,300/quintal and costs ₹25,000/ha. The three crops need about 35, 20 and 15 person-days of peak labour per hectare respectively, and Hariram can hire only 60 person-days during the peak period. He also keeps two bullocks and wants some wheat straw for fodder. His neighbour advises him to grow only mustard because it has the highest gross margin per hectare. Hariram is worried about price risk and about the labor constraint.
1. Calculate the gross margin per hectare for each crop and identify the binding constraints.
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Wheat: 4.5 t/ha = 45 quintals; gross return = 45 × ₹2,300 = ₹1,03,500/ha; gross margin = ₹1,03,500 − ₹45,000 = ₹58,500/ha. Mustard: 1.8 t/ha = 18 quintals; gross return = 18 × ₹5,400 = ₹97,200/ha; gross margin = ₹97,200 − ₹28,000 = ₹69,200/ha. Gram: 1.5 t/ha = 15 quintals; gross return = 15 × ₹5,300 = ₹79,500/ha; gross margin = ₹79,500 − ₹25,000 = ₹54,500/ha. Mustard has the highest gross margin per hectare, as the neighbour says. Labour is the binding constraint: 3 ha of wheat would need 105 person-days, 3 ha of mustard 60, and 3 ha of gram 45. Capital is also binding for wheat-heavy plans: 3 ha of wheat needs ₹1,35,000, more than the ₹1,00,000 available. A pure mustard plan uses exactly 60 person-days and ₹84,000, so it is feasible on both counts, but it leaves no wheat straw and concentrates price and pest risk in one crop.
2. Propose a feasible 3 ha plan that respects the labour and capital limits and explains the trade-off between the neighbour's advice and Hariram's fodder and risk concerns.
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A feasible plan is 0.5 ha wheat, 1.0 ha mustard and 1.5 ha gram. Labour = 0.5 × 35 + 1.0 × 20 + 1.5 × 15 = 17.5 + 20 + 22.5 = 60 person-days. Capital = 0.5 × ₹45,000 + 1.0 × ₹28,000 + 1.5 × ₹25,000 = ₹22,500 + ₹28,000 + ₹37,500 = ₹88,000. Gross margin = 0.5 × ₹58,500 + 1.0 × ₹69,200 + 1.5 × ₹54,500 = ₹29,250 + ₹69,200 + ₹81,750 = ₹1,80,200. A second feasible plan is 2 ha mustard and 1 ha gram: labour = 40 + 15 = 55 person-days; capital = ₹56,000 + ₹25,000 = ₹81,000; gross margin = ₹1,38,400 + ₹54,500 = ₹1,92,900. The pure mustard plan would give ₹2,07,600 but no fodder and no diversification. The 0.5 ha wheat plan gives about 2.25 t of wheat and useful straw for the bullocks, plus three crops that spread price and pest risk. If fodder can be bought cheaply, the 2 ha mustard + 1 ha gram plan is economically stronger; if not, the three-crop plan is the better farm-level choice.
3. How could he reduce price risk and labour peak without abandoning the plan?
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Price risk can be reduced by selling part of the mustard at harvest and storing gram, which usually keeps better, for a later sale; by checking mandi prices before choosing the crop mix; and by using crop insurance where available. A contract or advance agreement with a local buyer for part of the produce can set a floor price, but Hariram should read the quality conditions before signing. Labour peak can be reduced by staggering sowing dates within the feasible window, using a seed drill to cut establishment labour, hiring a combine for wheat harvest, and exchanging labour with neighbours. Family labour should be counted honestly in the 60 person-days. He should also keep a small cash reserve from the ₹1,00,000 rather than spending it all on inputs, because mustard aphid or untimely rain can force an extra spray or irrigation. The plan should be reviewed after the season using actual yields and costs, not the budget figures alone.