1.

MARKETABLE SURPLUS:
Marketable surplus refers to the difference between
the total output produced by a farmer and his
self-consumption from that output. In other words, it
is that portion of the total produce that the farmer
sells in the market.
Measured as:
Marketable surplus = Total farm output produced by
farmer - Own consumption of farm output
MS = P - C

Marketed surplus was defined as "gross quantity of

produce actually sold by the farmers", and production
included output from own and mortgaged in land and
half of the output from rented in and rented out land.

■ Distinguished between Marketed and

marketable surplus:
There is a thin line of difference between marketed
surplus and marketable surplus.

● Marketable surplus:
Marketable surplus refers to the difference between
how many crops a farmer produces and how much he
or she consumes on-farm. The portion of the farmer's
produce that is sold in the market is what we are
referring to.
Farm output that is sold on the market is equal to the
total amount of output produced by the farmer minus
the amount of consumption the farmer makes of his
own output.

● Marketed surplus:
Marketed surplus is the that quantity of which the
producer or farmer actually sells in the
market,irrespective of the requirements for family
consumption , farm need and other payments.

■ What is the relationship between prices and

marketed surplus?

★ Inverse RELATIONSHIP:
There is an inverse relationship between prices and
the marketable surplus. They postulate that the
farmers' cash requirements are nearly fixed and given
the price level, the marketed portion of the output is
determined.This relationship is accurate for
perissable commodities.

★ Direct RELATIONSHIP:
Direct relationship is also exist here because if the
commodities are not perishable then the producer
will not sell his commodities he will wait for price
increase so that he can get profit.

◆ How does price affect marketed surplus?

1.A lower price means that a larger quantity will be
sold to meet some fixed cash requirements.
 2. The marketed surplus is less than the marketable
surplus when the farmer retains some of the surplus
produce because of the low prices

■ Relationship between Marketed and Marketable

Surplus:
The marketed surplus may be more, less or equal to
the marketable surplus, depending upon the condition
of farmer and type of the crop.
a) Marketed Surplus > Marketable Surplus – this
situation arises when the farmer retains a smaller
quantity of the crop than his actual requirement for
family and farm needs. This holds true especially for
small and marginal farmers, whose need for cash is
more urgent and immediate. This situation of
selling more than marketable surplus is termed as
distressed or forced sale. The quantity of distress
sale increases with the fall in the price of the product.
A lower price means that a larger quantity will be sold
to meet some fixed cash requirement.
b) Marketed Surplus < Marketable Surplus – this
occurs when the farmer retains some of the surplus
produce. The situation holds true under two
conditions: First, large farmers generally sell less than
the marketable surplus because of their better
retention capacity, which is done in the hope of
getting higher prices in later periods (at times up to
the next production season). Second, because of
variation in prices farmers may substitute one crop
for another either for family consumption or for
feeding their livestock. With the fall in the price of the
crop relative to a competing crop, the farmers may
consume more of the first and less of the second
crop.
c) Marketed Surplus = Marketable Surplus – this
occurs when farmer neither retains more nor less
than his requirement. This holds mostly true for
perishable commodities.

■ Factors Affecting Marketable Surplus and

Marketed Surplus :
The Marketable Surplus differs from region to region,
within the same region, and even from crop to crop.
Some of the factors affecting marketable surplus on
a particular farm are:
i. Size of Holding: There is a positive relationship
between the size of the holding and marketable
surplus.
ii. Production: The higher the production, the larger
will be the marketable surplus.
iii. Price of the Commodity: There exists both
positive and negative relation between both,
depending upon whether one considers short run or
long run.
iv. Size of Family: There is a negative relationship
between family size and marketable surplus.
v. Requirement of Seed and Feed: The higher the
requirement for seed and feed, the smaller the
marketable surplus.
vi. Nature of the Commodity: The marketable surplus
of non-food crops is generally higher than that of for
food crops, as in case of former family consumption
is either very small part of the total output or is
negligible. Among various food crops,
consumption of sugarcane, spices and oilseeds
etc., require some kind of processing before final
consumption; so marketable surplus as a proportion
of total output is larger for such crops than for other
food crops.
vii. Consumption Habits: Marketable surplus is
inversely related to the consumption habits of people.
The fictional relationlship between the marketed
surplus of a crop and factor effecting marketed
surplus can be expressed as:
M=f(X1,X2,X3,......)
where
M=Total marketed surplus of a crop in quintals.
X1=Size of holdings in hectars.
X2=Size of family in adult units.
X3=Total production of the crop in quintals.
X4=Price of crop.
Marketed Surplus also differs from region to region
and from crop to crop, depending upon the place of
sale and the agents to whom the surplus is being
sold. Price is the main factor that affects marketed
surplus and there exists a direct relationship
between price and marketed surplus. If higher
prices are given for a particular crop, farmers sell
most of their produce in order to earn profit. In
addition to price, a number of other factors are
there to influence marketed surplus, i.e., farm size,
production, income, wealth, family size, risk and
uncertainty, debts and obligations, desire for leisure
etc. Both concepts are important in determining
the status of farmers in terms of their farm
production, quantity sold, and their income which
further determines their standard of living.
● How to increase marketed or marketable surplus?
Monetisation of the rural economy and
encouragement of savings have been suggested as
other methods to increase the marketable surplus
'Monetisation will encourage sale of crops in the
markets and encouragement of savings will put a
check on the domestic consumption of the farmers.

■ Conclusion:
A surplus describes the amount of an asset or
resource that exceeds the portion that's actively
utilized. A surplus can refer to a host of different
items, including income, profits, capital, and goods. In
the context of inventories, a surplus describes
products that remain sitting on store shelves,
unpurchased.The important point to be recognized is
that agricultural surpluses can be used to stimulate a
sounder and more rapid economic development than
is now taking place in the less advanced countries of
the free world.