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Why is economic valuation of family labour necessary in agriculture?

Answer and explanation

Correct answer: To estimate the actual cost of production and the family’s labour contribution

Family members contribute time and effort to farm work. Even when no cash wage is paid, this labour has an opportunity cost. Valuing it gives a realistic estimate of production cost, net income, and farm profitability. Treating family labour as free would understate cost and make profit appear artificially high. Exam tip: include both paid and unpaid labour when analysing farm costs.

Related tags

Home ScienceFamily LabourAgricultural EconomicsProduction CostFarm ProfitabilityOpportunity CostTraditional Occupations In India AgricultureWorkLivelihood And Career

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