ISHS Acta Horticulturae 55: IV Symposium on Horticultural Economics
INFRA-STRUCTURE FOR THE ECONOMIC EFFICIENCY OF HORTICULTURAL PRODUCTS |
| Author: | D. Srivastava |
| Abstract:
Although physical concepts are basic in production, most producers in our economic society find it desirable to consider their input-output problems in monetary terms. They think not only of physical inputs and outputs but also of the costs and returns associated with these units. To the individual producers, the maximization of economic returns is more important than the maximization of physical output. In other words, an individual producer is more concerned about the economic productivity of his resources than about their physical productivity. Economic productivity is dependent on the prevailing prices of factors and products. In a perfect market, at any point of time, the prices of a particular commodity would be uniform throughout the area after due allowance has been made for the marketing costs involved in transporting the commodity concerned to various points of consumption. However, in practice, due to imperfections of the market and other rigidities, such a situation is rarely visualised. This is especially true of horticultural products, which by and large are highly perishable and need proper handling. Between regions, wide disparities of prices for horticultural products, prevail, with the result that the value productivity of the farms producing those products gets inflated or deflated accordingly. Such a situation often compels the farmer to substitute the production of other food crops in place of horticultural crops. The horticultural products may have a very high physical productivity but fail to yield high economic productivity due to market imperfections and other rigidities. Thus the location and production of horticultural products in agro-climatic regions most suitable for them get sacrificed. Hence, it is very important that all possible efforts be made to remove such market imperfections and rigidities by introducing suitable infrastructure, so that the farmers are not compelled to sacrifice their comparative advantage of producing horticultural products on their farm. It may be emphasized that, unlike very many industrial products, agricultural products and especially horticultural products, are subject to natural decay, attack of insects and pests, etc. Further, since the production of horticultural products is seasonal and consumption is | |
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