The economics of direct-seeded rice in eastern India

The private costs and benefits of dry-seeded rice (DSR) were investigated using data from on-station trials at Pantnagar, Uttaranchal, for 2002 and 2003. Results showed that DSR was profitable for farmers, giving net returns of Rs. 13,350 per ha for dry-seeded rice and Rs. 11,592 per ha for wet-seeded rice compared with Rs. 10,343 per ha for transplanted rice. Net labor savings with DSR averaged 27 days per ha. A provisional cost-benefit analysis suggests that DSR was also profitable nationally. Transplanted rice was as socially profitable as DSR only if (1) labor was assumed to have zero opportunity cost, (2) yields were halved, or (3) environmental and health-related costs were twice as high as private costs. DSR was also profitable according to the compensation principle of welfare economics. However, these analyses did not take into account equity issues. DSR reduces equity because it transfers income from labor to farmers without a compensating increase in output. Gender segmentation in the labor market and the absence of alternative employment at the local level impose additional social costs.