Comparative economics of soybean cultivation among FPO member and non-member farmers in Latur district of Maharashtra

Introduction

Agriculture plays an important role in the Indian economy by providing employment, income and livelihood to a large section of the rural population. A large proportion of Indian farmers are small and marginal farmers who face difficulties in purchasing inputs, adopting improved technologies, accessing markets and obtaining remunerative prices. Limited production and marketable surplus often reduce their bargaining power and increase their dependence on intermediaries. Collective action through Farmer Producer Organisations (FPOs) can help farmers overcome some of these constraints by facilitating collective input purchase, aggregation, marketing, processing, value addition and better market linkages. Among the important oilseed crops, soybean (Glycine max L.) occupies a significant place in Indian agriculture. It is an important source of edible oil and protein and is widely cultivated as a commercial crop. Soybean cultivation requires the use of various resources such as human labour, machinery, seed, fertilizers, manure and plant protection inputs. The profitability of soybean cultivation therefore depends on efficient resource utilization, proper management of cultivation costs, productivity and the price received by farmers. Maharashtra is one of the important soybean-growing states of India, and soybean has become a major crop in the Marathwada region. Latur district is an important agricultural district of Marathwada where soybean forms an important part of the cropping pattern. The economic performance of soybean farmers depends on production conditions, input use, cost of cultivation, productivity and market price. Therefore, estimation of the cost of cultivation and returns is important for assessing the profitability and economic viability of soybean production in the district. The cost of soybean cultivation includes expenditure on hired and family labour, bullock and machine labour, seed, manure, fertilizers, herbicides, plant protection chemicals and other farm expenses. Efficient utilization of these resources is essential for reducing the cost of production and improving farm income. Similarly, gross returns, farm business income, family labour income, net returns and output-input ratio are important indicators for evaluating the economic performance of soybean cultivation. The comparison of costs and returns helps in understanding the profitability of the crop and identifying opportunities for improving farm efficiency. In recent years, Farmer Producer Organisations have emerged as an important institutional mechanism for strengthening farmers' economic position. FPOs enable farmers to collectively purchase inputs, obtain technical guidance, aggregate produce and undertake marketing and value addition. Collective marketing can improve bargaining power, reduce dependence on intermediaries and provide better market opportunities. The Government of India has also promoted FPOs through various programmes, particularly the Central Sector Scheme for Formation and Promotion of 10,000 FPOs. The economic performance of soybean cultivation may differ between FPO member and non-member farmers because of differences in access to inputs, technical information, collective services and markets. FPO member farmers may benefit from collective procurement, extension support, aggregation and improved marketing linkages, whereas non-member farmers generally undertake these activities individually. Hence, comparison between FPO member and non-member farmers is useful for examining differences in resource use, cultivation costs, returns and profitability. Marketing is another important component of soybean economics. Farmers incur expenses on transportation, loading, unloading and other marketing activities, while the marketing channel determines the share received by producers and the costs and margins involved in the movement of produce. Collective marketing through FPOs may provide better opportunities for aggregation and direct market linkages. Therefore, analysis of marketing along with production costs and returns provides a broader understanding of the economic performance of soybean farmers. In view of the importance of soybean in the agricultural economy of Latur district and the growing role of FPOs in improving farmers' access to inputs and markets, the present study was undertaken to examine the cost and returns of soybean cultivation among FPO member and non-member farmers in Latur district of Maharashtra. The study focuses on the socio-economic characteristics, resource use, cost of cultivation, returns, profitability and marketing performance of selected farmers. The findings are expected to be useful to farmers, FPOs, agricultural agencies, researchers and policymakers for improving resource-use efficiency, reducing cultivation costs, strengthening collective marketing and enhancing farm profitability

Objectives

To estimate the cost of cultivation and returns of soybean among FPO Member and Non-Member Farmers.

Materials and Methods

The study was conducted in Latur district of the Marathwada region of Maharashtra, which is predominantly an agricultural district with favourable conditions for diversified crop production, including soybean. The district is characterized mainly by black soils and soybean is an important Kharif crop cultivated by farmers in the region. Soybean provides an important source of farm income and employment to farming households. The availability of suitable soil conditions, agricultural resources and established marketing facilities makes Latur an appropriate location for analysing the cost and returns of soybean cultivation among FPO member and non-member farmers. A multistage sampling procedure was followed for the selection of soybean growers for the present study in Latur district of Maharashtra. Latur district was purposively selected considering the importance of soybean cultivation and the presence of Farmer Producer Organisations (FPOs) undertaking soybean-related activities. FPOs which had completed five years were considered eligible for selection. From the eligible FPOs, the required FPOs were selected randomly. Since soybean was an important crop undertaken by the selected FPOs, soybean cultivation was selected for the present study. Subsequently, 60 FPO member farmers and 60 non-member farmers were selected randomly from the same study area to maintain comparable production and climatic conditions. Thus, a total sample of 120 soybean farmers, comprising 60 FPO members and 60 nonmembers, was selected for the study.

Estimation of cost and returns

The cost and return structure of Soybean cultivation was analysed using the cost concepts recommended by the Commission for Agricultural Costs and Prices (CACP). Both actual and imputed costs were considered to obtain a comprehensive assessment of the economics and profitability of Soybean cultivation. The analysis was carried out on a per-hectare basis.

Cost concepts

The following cost concepts were used for estimating the cost of Soybean cultivation:

Cost A 1:

Cost A 1 comprises the actual paid-out expenses incurred by the farmer in cash and kind for Soybean cultivation. It includes expenditure on hired human labour, bullock and machine labour, seed, farmyard manure, fertilizers, plant protection chemicals, land revenue, depreciation on farm assets and interest on working capital.

Cost C3 = Cost C2 + 10% of Cost C2

The above cost concepts were used to determine the complete cost structure of Soybean cultivation, from paid-out expenses to the imputed value of family resources and managerial functions.

Returns from soybean cultivation

The economic returns from Soybean cultivation were estimated using the following measures: 1) Gross Returns: Gross returns represent the total monetary value of Soybean production obtained per hectare.

Gross Returns ( ₹/ha ) = Quantity of Output ( q/ha ) × Price Received ( ₹/q ) Gross returns indicate the total income generated from Soybean cultivation before deducting the cost of production.

2) Net Returns: Net returns represent the surplus obtained after deducting the total cost of cultivation from gross returns.

Net Returns ( ₹/ha ) = Gross Returns -Total Cost of Cultivation Net returns were used as an important indicator of the profitability of Soybean cultivation.

Income measures

1) Farm Business Income: Farm business income represents the return available to the farmer after meeting the paid-out costs of cultivation.

Farm Business Income ( ₹/ha ) = Gross Returns -Cost A1 (or A2)

It reflects the return to land, owned capital, family labour and management after meeting the paid-out expenses.

2) Family Labour Income: Family labour income represents the return remaining after accounting for Cost B 2 .

This measure indicates the return accruing to family labour and farm management.

Profitability measure 1) Benefit-Cost Ratio (BC Ratio):

The benefit-cost ratio was used to assess the economic efficiency and profitability of Soybean cultivation. It was calculated as:

BC Ratio = Gross Returns/Total Cost of Cultivation

A BC ratio greater than 1.00 indicates that the gross returns obtained from Soybean cultivation are higher than the total cost incurred, indicating economic profitability.

Assessment of economic viability

The different cost concepts, returns measures and profitability indicators were used collectively to assess the economic viability and profitability of Soybean cultivation among the selected Soybean growers in Latur district of Maharashtra.

Results and Discussion

Soybean is a relatively short-duration Kharif crop, generally requiring around 3 to 4 months for completion of its production cycle. It requires the timely use of human labour, machinery, seed, fertilizers, herbicides and other production inputs. Consequently, the expenditure on these inputs constitutes an important component of the total cost of soybean cultivation. Throughout the production process, physical inputs are converted into the final soybean output. Since the level of output and profitability depends considerably on the quantity and efficiency of resources used, proper management of inputs is essential. Therefore, it is important that these inputs are utilized optimally, avoiding both excessive use that increases cultivation costs and inadequate use that may adversely affect productivity and returns. Table 1 presents the per hectare physical quantity of various inputs utilized by soybean cultivators, along with the output obtained by FPO member and non-member farmers. Regarding labour and machinery, soybean cultivation required 10.70 male and 18.33 female man-days of hired labour per hectare among member farmers, compared with 11.09 male and 20.09 female man-days among non-member farmers. Family labour utilization was 7.14 male and 8.17 female man-days for members, whereas it was 8.18 and 9.04 man-days, respectively, among non-members. The average machine labour used was 12.18 hours per hectare for members and 13.21 hours for nonmembers, while seed requirement was 69.62 and 73.85 kg per hectare, respectively. In terms of other inputs, member farmers used 4.85 tonnes of manure, 25.00 kg nitrogen, 59.14 kg phosphorus and 30.04 kg potassium per hectare, compared with 6.12 tonnes, 28.78 kg, 66.04 kg and 32.70 kg, respectively, among non-members. Herbicide and plant protection chemical use was also comparatively lower among members. The main produce obtained was 24.36 q/ha for member farmers compared with 22.56 q/ha for non-member farmers, while by-produce was 3.45 and 3.32 q/ha, respectively.

Per hector cost of cultivation of member farmers

The cost of cultivation encompasses all direct and indirect expenses such as labour, seed, fertilizers, and machinery required to grow a crop. It is essential for calculating profitability, optimizing resources, and guiding agricultural policies.

Per hector cost of cultivation of non-member farmers

The cost of cultivation encompasses all direct and indirect expenses such as labour, seed, fertilizers, and machinery required to grow a crop. It is essential for calculating profitability, optimizing resources, and guiding agricultural policies. Table 3 reveals the per hectare cost of cultivation, yield, and income of soybean non-member farmers. The total cost of cultivation (Cost C 3 ) was calculated at Rs 97,892.69 per hectare. The analysis shows that soybean cultivation involves considerable expenditure on operational inputs. Among the working expenses, machinery charges (Rs 16,303.39) and hired human labour (Rs 12,375.25) were the major cost contributors, followed by seed (Rs 9,157.40) and fertilizer. The total working cost was estimated at Rs 55,327.56 per hectare. Additionally, the rental value of owned land accounted for a fixed cost of Rs 17,992.48.

Comparative analysis of cost and returns between member and non-member farmers

The cost of Soybean cultivation was estimated to assess the expenditure incurred by farmers in the production process. The total cost was classified into different cost concepts based on the nature and components of expenditure incurred per hectare. These cost concepts provide a systematic basis for analysing the cost structure and profitability of soybean cultivation. The major cost concepts considered were Cost A 1 , Cost A 2 , Cost B and Cost C, which include various paid-out expenses, rental value of owned land, interest on fixed capital and the imputed value of family labour.

Conclusion

The analysis of input use, cost structure and profitability of soybean cultivation revealed that soybean is an important and economically viable crop in the study area. FPO member farmers used comparatively lower quantities of labour, machinery, seed, fertilizers and plant protection inputs than non-member farmers, while obtaining a higher main produce yield of 24.36 quintals per hectare compared with 22.56 quintals among non-members. This indicates comparatively efficient resource utilization among member farmers. The profitability analysis showed that FPO member farmers incurred a lower total cost of cultivation

References

1. Chopde et al. Price spread and marketing channels of soybean in Amravati district of Maharashtra. 2023.
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5. Sudhir et al. Comparative economics of chickpea cultivation among FPO member and non-member farmers in the Bundelkhand region. 2023.
6. How to cite this article: Tundare S, Perke D, Shelke R, Kamble S, Jadhav E. Comparative economics of soybean cultivation among FPO member and non-member farmers in Latur district of Maharashtra. International Journal of Research in Agronomy. 2026;SP-9(9):391-397. doi: https://www.doi.org/10.33545/26180 60X.2026.v9.i9Se.6636