The arrangements for marketing and the expansion of markets have to be made only for the surplus quantity available with the farmers and not for the production The producers surplus is of two types ID: 1028216
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1. PRODUCER’S SURPLUSThis is the quantity, which is actually made available to the non-producing population of the country. In the marketing point of view, this surplus is more important than the total production of commodities. The arrangements for marketing and the expansion of markets have to be made only for the surplus quantity available with the farmers and not for the production. The producer’s surplus is of two types.Marketed SurplusMarketable Surplus
2. Marketed Surplus is the quantity of produce which the farmer actually sells in the market, irrespective of the requirements for consumption, farm needs and other payments.This situation is called as distressed or forced sale.Marketable Surplus is that quantity of the produce which can be made available to the non-farm population of the country. It is a theoretical concept of surplus. The marketable surplus is the residual left with the producer-farmer after meeting his requirements for family consumption, farm needs for seeds and feed for cattle, payment to labour in kind, payment to landlord as rent and social and religious payments in kind.Marketable Surplus = Total Yield - Requirements
3. Relationship between Marketed and Marketable Surplus.The Marketed Surplus is more than the Marketable Surplus.Marketed Surplus>Marketable SurplusThe Marketed Surplus is less than the Marketable Surplus.Marketed Surplus<Marketable SurplusThe Marketed Surplus is equal to the Marketable Surplus.Marketed Surplus=Marketable Surplus
4. Factors affecting (or) influencing Marketable Surplus.Size of Holding; Marketable Surplus is directly influenced by the size of holdings. Larger the size of holding, greater is the quantum of marketable surplus.Level of Production: Higher levels of production help to generate larger marketable surplus. Higher productivity results in higher production. Productivity is influenced by efficient use of various resources employed on the farm.Family Consumption Requirements: Higher consumption requirements for the family members reduce quantum of marketable surplus.Other Requirements: The requirements of products for seed purpose, kind payments, payments for religious and social purposes, etc., influence the marketable surplus. Higher the requirement for these purpose, lower the level of marketable surplus.Prices of the Products: Prices exhibit a direct relationship with the marketable surplus. Higher prices always encourage the farmers to produce and sell more and converse is the case when prices are low.