A Comparative Economic Analysis of Resource Use Efficiency between Insured and Non-Insured Sugarcane Farms in Tamil Nadu, India

This study analysed the resource use efficiency among the insured and non-insured sugarcane farms in Kallakurichi district in Tamil Nadu, India. The research aimed to inform policy decisions and extension programs for improving productivity and sustainability in the sugarcane sector. Multistage Purposive sampling method was used by which 120 farmers (60 insured and 60 non-insured) were selected from Rishivandiyam and Thirukovillur block. Cobb-Douglas Production function was used to calculate the resource use efficiency using the ratio of Marginal Value Product (MVP) to Marginal Factor Cost (MFC) for various inputs. Results showed that for insured farmers variables such as Nitrogen fertiliser, human labour and machine labour significantly and positively influenced the yield. For non-insured farmers, human labour, nitrogen and phosphorus had significant positive effects on yield. The R2 values were 0.70 and 0.75 for insured and non insured farmers respectively. Resource use efficiency analysis revealed differences between insured and non insured farmers. Insured farmers underutilised farm yard manure and machine labour while over utilizing other inputs. Non-insured farmers only underutilised machine labour and over utilising all other inputs. The study concludes that crop insurance influences the input allocation decisions highlighting inefficiencies in resource use among both groups. These findings specify the need for targeted interventions to enhance the resource use efficiency in sugarcane cultivation. Optimizing input utilization could improve the sector's resilience, sustainability, and competitiveness that supports the India's food security and sustainable agricultural development goals. The research also provides a foundation for further studies into factors influencing resource use efficiency and the potential role of precision agriculture in promoting sustainable farming practices.