Profitability Analysis and Price Forecasting of Major Crops Relevant to North Gujarat: A Five-Year Data-Based Study

Abstract

This study develops a five-year crop profitability and price-risk decision model for four major crops relevant to North Gujarat—wheat, bajra (pearl millet), groundnut and mustard—using a consistent Gujarat state-level evidence base for 2019-20 to 2023-24. The model combines state Farm Harvest Price (FHP), average yield and projected A2+FL cost of production per quintal. A comparable “A2+FL surplus proxy” is calculated as the price-cost margin per quintal multiplied by observed yield per hectare. The measure is deliberately not labelled full net farm profit because it excludes the complete C2 opportunity-cost structure. Across the five-year period, groundnut recorded the highest average surplus proxy (INR 40,809/ha), followed closely by mustard (INR 40,216/ha), wheat (INR 26,547/ha) and bajra (INR 17,151/ha). However, groundnut also exhibited substantially higher yield variability (14.7%) than mustard (2.0%). An exploratory two-holdout price-forecast comparison shows that no single simple method dominates across crops. The study demonstrates a transparent framework for combining historical margin, downside and variability when discussing crop choice.