UPMSP Int Agricultural Economics key terms

A branch of applied economics that studies how farmers and rural households allocate scarce land, labour, capital and water among competing production and consumption uses to maximise welfare.

The value of the next best alternative forgone when a resource such as land, labour or money is committed to one use instead of another.

A technical relationship showing the maximum output obtainable from given quantities of inputs under a specified technology, holding other things constant.

The principle that as more units of a variable input are applied to fixed inputs, the additional output eventually falls, so marginal product declines after a certain point.

The extra output obtained from employing one additional unit of a variable input while all other inputs remain unchanged.

Total output divided by the number of units of a variable input used; it measures output per unit of input such as yield per hectare or per worker.

The change in output when all inputs are increased proportionately; returns may be increasing, constant or decreasing depending on the production technology.

The basic resources used in farming, conventionally classified as land, labour, capital and management, each earning rent, wages, interest and profit respectively.

The science and art of organising and operating a farm unit to achieve the farmer's objectives, usually profit and family welfare, through efficient use of resources.

The process of deciding in advance the combination of crops, livestock and resource uses that best meets the farmer's goals subject to land, labour, capital and water constraints.

An expense that does not vary with the level of output in the short run, such as land revenue, depreciation on buildings or interest on a long-term loan.

A cost that changes directly with the quantity produced or the area cultivated, including seed, fertiliser, irrigation charges and casual labour wages.

The total expenditure incurred in raising a crop per hectare, often reported in A2, A2+FL and C2 categories by official cost-of-cultivation surveys.

Gross output value minus variable costs for an enterprise; it indicates the contribution of that enterprise towards covering fixed costs and profit.

A farm planning technique that compares estimated costs and returns of alternative enterprises or plans to guide resource allocation decisions.

The quantity of a farm product or input that consumers or producers are willing and able to buy at a given price during a given period.

The quantity of a commodity that producers are willing and able to offer for sale at a given price during a specified period, other things remaining equal.

A measure of how responsive quantity demanded is to a change in price, calculated as the percentage change in quantity divided by the percentage change in price.

The percentage change in quantity demanded of a good divided by the percentage change in consumer income; low values are typical for staple foodgrains.

The observation that as household income rises, the proportion of income spent on food declines, though absolute food expenditure may still increase.

The price and quantity at which the quantity demanded equals the quantity supplied, so there is neither excess demand nor excess supply.

All activities and services involved in moving farm produce from the producer to the final consumer, including assembling, grading, storage, transport, processing and retailing.

The sequence of intermediaries and transactions through which a commodity passes from the farmer to the ultimate consumer, such as village trader, wholesaler, retailer.

The difference between the price paid by the final consumer and the price received by the producer, covering the costs and profits of intermediaries.

The gap between the retail price and the farm harvest price of a commodity, expressed in money terms or as a share of the consumer rupee.

The portion of a farm household's output that is sold in the market after meeting family consumption, seed, feed and other on-farm requirements.

A wholesale market notified under state law where transactions in specified commodities are conducted under prescribed rules, with licensed traders and auction systems.

A statutory body constituted under state agricultural produce marketing legislation to manage regulated markets, license traders and supervise fair trading practices.

A price announced by the government before the sowing season at which it will procure specified crops, intended to protect farmers from sharp price falls.

The national body that recommends minimum support prices for major crops after considering cost of cultivation, supply-demand conditions and terms of trade for farmers.

The price at which designated government agencies actually purchase a commodity from farmers, usually equal or close to the announced support price.

A government-run network of fair price shops that supplies subsidised essential foodgrains to eligible households, mainly using procured wheat and rice.

Loans and advances provided to farmers for production, investment or consumption needs, supplied by institutional and non-institutional sources.

A central bank mandate requiring banks to direct a minimum share of their lending to specified sectors, including agriculture, small enterprises and weaker sections.

A scheme providing farmers with a card-based revolving credit facility for short-term crop and allied needs, with simplified documentation and flexible repayment.

The system of rights and obligations governing who owns, uses and transfers agricultural land, including ownership, tenancy and sharecropping arrangements.

State policies to restructure land ownership and use, including abolition of intermediaries, tenancy regulation, ceilings on holdings and consolidation of fragments.

The total area of land actually operated or managed by a farm household, whether owned, leased in or otherwise possessed, counted as one unit.

An operational holding of one hectare or less, a size class that accounts for the large majority of Indian farm holdings.

Workers engaged in crop and livestock operations for wages, distinguished from cultivators who mainly work on their own or leased land.

A law guaranteeing rural households a fixed number of days of unskilled wage employment per year on public works, serving as a rural safety net.

Paid work available to rural people in agriculture, allied activities and rural non-farm enterprises, including public employment programmes.

A member-owned institution that mobilises savings and provides short-term and medium-term loans to farmers at reasonable rates under cooperative principles.

The village-level unit of the short-term cooperative credit structure, providing crop loans and deposit services to member farmers.