Question

As per cost concept, the value of fertilizers, seed, pesticides comes under:

• A. Cost \(A_1\)
• B. Cost \(A_2\)
• C. Cost B
• D. Cost C

Hint:

Remember the progression of farm costs:
Cost \(A_1\) = All direct paid-out expenses (inputs, labor, depreciation).
Cost \(A_2\) = Cost \(A_1\) + Rent paid for leased-in land.

Answer 1

The Correct Option is A

Step 1: Understanding the Concept:
The Commission for Agricultural Costs and Prices (CACP) uses standard cost concepts (\(A_1\), \(A_2\), B, C) to evaluate the cost of cultivation of crops for declaring Minimum Support Price (MSP).

Step 2: Detailed Explanation:
Cost \(A_1\) represents the actual paid-out cash and kind expenses incurred by the owner-cultivator.
It includes expenditures on:
- Hired human, animal, and machine labor.
- Purchased or home-saved seeds.
- Manures, fertilizers, and plant protection chemicals (pesticides).
- Irrigation charges and land revenue.
- Interest on working capital.
- Depreciation on farm implements.

Step 3: Final Answer:
Since seeds, fertilizers, and pesticides are direct operational inputs, their value is accounted for under Cost \(A_1\), which corresponds to option (A).