Sustaining Soybean Acreage in India with Break-Even and Iso-Return Analysis of Crop Dynamics in Madhya Pradesh and Maharashtra

Abstract

Soybean is a major kharif oilseed crop in India, with Madhya Pradesh and Maharashtra together accounting for about 85% of the country's soybean area. However, soybean acreage has declined in these states in recent years, alongside the expansion of competing crops, particularly maize. This study assessed the economic competitiveness of soybean vis-à-vis maize and paddy in Madhya Pradesh and Maharashtra using secondary data for 2023–24. Break-even price analysis and an iso-return framework were used to estimate the soybean price required to generate returns equivalent to those of competing crops under Cost A2, Cost A2+FL, and Cost C2. The results revealed a considerable competitive disadvantage for soybean relative to maize in both states. At a maize price of ₹2,090/qtl, the break-even soybean price under Cost A2 was ₹5,710/qtl in Madhya Pradesh and ₹7,065/qtl in Maharashtra, compared with the soybean MSP of ₹4,600/qtl. Against paddy priced at ₹2,183/qtl, the corresponding break-even soybean price in Madhya Pradesh was ₹6,719/qtl. In contrast, soybean was relatively competitive with paddy in Maharashtra under the specified price, cost and yield conditions. The analysis also showed that the soybean-to-competing-crop price ratio required for equal returns is not constant but varies with relative prices, yields and production costs. The findings support a cross-commodity approach to soybean price policy, supplemented by region-specific interventions to improve productivity and reduce production costs.

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References

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