Impact of Groundnut Seed Subsidy on Farm Efficiency in Ananthapuramu District of Andhra Pradesh, India

Abstract

Governments used seed subsidy as an incentive to encourage crop diversification and use of high yielding varieties. In present study, an attempt has been made to study farm efficiency of groundnut seed subsidy in Ananthapuramu district of Andhra Pradesh. For this purpose, two mandals (Kanaganapalli, Gudibanda) were selected based on highest number of subsidy benefited farmers. The data pertains for the year 2021 kharif season for 64 seed subsidy beneficiary and 136 non-beneficiary farmers. The data was collected from each respondent through personal interviews with the help of structured schedules. Data Envelopment Analysis (DEA) was employed to analyze technical efficiency and scale efficiency of the farmers. For better comparison, all the farmers were divided into two categories viz. subsidized and non-subsidized and propensity score matching is also used. The empirical results observed that the overall mean Variable Returns to Scale (VRS) efficiency was 0.760, Constant Returns to Scale (CRS) efficiency was 0.70. The positive impact of seed subsidy is visible, as seed subsidy beneficiary farmers mean VRS efficiency was 0.916 which is greater than non-subsidized farmer’s i.e. 0.716. The variation is because of high input costs incurred to the non-subsidized farmers. The regression results also indicates that seed subsidy is positive influence on efficiency (VRS), efficiency (CRS) and scale efficiency to the extent of up to 20% increase in efficiency. Yet it has also been noticed that farmers still rely on non-subsidized sources for their seed requirement, because they could not meet the conditions of availing seed subsidy from the Andhra Pradesh state government.