Developing Risk Efficient Farm Plans Under Different Dry Farming Situations in Semi Arid Tracts of Ariyalur District, Tamil Nadu- A Programming Approach

The present study focuses on developing the risk efficient farm plans for the rain fed farms across scale of farming in Ariyalur district. The farmers were stratified into small, medium and large farms based on farm size. The farm plans include both crop and animal husbandry enterprises. The optimum plans were derived for each size group of the farms using the MOTAD risk programming model and the existing plans were parameterized for capital and gross income and three plans were derived and compared with the existing farm plan. The results revealed that plan I for small dry farms was superior compared to other plans, with a gross income of Rs.14534 and the mean absolute deviation income of Rs.1853.42. With respected to medium dry farms, Plan III was found superior with a gross income of Rs. 28908.00 and an income variability of Rs. 5980.70. As regards the large dry farms, plan II was proved to be the best and the gross income and income variability were Rs.48840 and Rs.3726.51, respectively. The E-A frontiers involving plan I to Plan III for all the three modal farms were plotted and it concurrently coincides with the theory that as the expected income increased risk also increased. The E-A frontier for small farm is less steep, showed a weakened trade -off between expected income and income variability, indicating the susceptibility of small farms to risk and its steepness towards the end of frontier indicated the need for bridging the credit gap fully, so as to minimize the risk and to improve its income. The E-A frontier for medium farm is steeper than small farm, indicating better risk assumption capacity and expanding credit in medium farm would decrease the risk of income variability. The E-A frontier for large farms was steeper than small and medium farms, indicating the sound risk assumption nature of large farms and expansion of credit would still improve its ability to minimize the income variability.