Impact of Custom Hiring Centers on Cost, Profitability, and Efficiency in Crop Production in Anantapur District of Andhra Pradesh, India

Abstract

This study examines the impact of custom hiring centers (CHCs) on agricultural mechanization and productivity of groundnut of cultivation in Anantapur District of Andhra Pradesh in 2021. CHCs, established under the Submission on Agricultural Mechanization (SMAM) scheme, aim to address challenges faced by small-scale farmers in accessing improved machinery. Through farm business analysis, data envelopment analysis (DEA), and binary logistic regression, the study evaluates the adoption of improved farm machinery, changes in costs, profitability, and efficiency in crop production due to CHCs. Utilizing purposive sampling, data was collected from 160 beneficiary and non-beneficiary farmers in villages. Cost concepts were used to compare costs and returns in groundnut cultivation among CHC beneficiaries and non-beneficiaries. Findings indicate that CHC beneficiaries demonstrate lower input costs and higher net returns, signaling improved efficiency and profitability. DEA analysis reveals higher technical, allocative and cost efficiency among beneficiary farms compared to non-beneficiary ones. Additionally, binary logistic regression identifies significant factors influencing farmers' decisions to hire machinery from CHCs, including machine labor, net income, hired human labor, irrigation, and yield. Overall, the study underscores the pivotal role of CHCs in enhancing agricultural productivity and efficiency, particularly among small-scale farmers. It suggests that policymakers prioritize expanding CHCs and promoting mechanization to further improve agricultural outcomes and address challenges faced by marginalized farmers.