Comparative Economic Analysis of Organic and Inorganic Wheat Production in District Matiari Sindh Pakistan

Abstract

The production of wheat crop for the year 2012-13 is estimated to be 24.2 million tons against last year’s production of 23.4 million tons. The major reasons for this enhanced production were increase in support price from Rs.1050 to Rs.1200 per 40 Kg which encouraged improved seed usage and fertilizers. There was also better weather and comparatively more water available from the reservoirs. The target for wheat production for 2013-14 has been fixed at 25.0 million tons.  The fertilizer has raised the expenses of the inorganic farmers, which are not, used in organic farming. Cash cost in case of organic and inorganic farming is Rs. 23053.00 and 25846.00 respectively. The non-cash cost of organic and inorganic are Rs.19389.65 and 18815.10 respectively. Total cost is the combination of cash and non-cash costs that is Rs.42442.65 and 44661.00 in organic and inorganic farming. Gross margin (GM) is obtained by subtracting the cash cost from the gross value of product. GM is Rs.33142.65 and 36182.00 in organic and inorganic farming system. Net income is obtained by subtracting the total cost from the gross value of product. It is Rs.13752.35 and Rs.17367.00 in organic and inorganic farming, respectively showing a difference of Rs.2615.35. The analysis shows that low net income in organic farming than the inorganic farming is due to the low yield and high labor cost in organic system. Secondly health and environmental costs are not included in the analysis, because in the study site farmers are unaware of these costs.

Keywords: Wheat, organic, Inorganic, support price, environmental costs, Pakistan