The present study is an attempt to analyze the possibilities and prospects of increasing the net farm income by better resource allocation through optimum enterprise system. Somasila command area was purposively selected for the present study, as it is one of the agriculturally advanced command area of Andhra Pradesh. A multi stage stratified purposive cum random sampling procedure was adopted to the present study. The entire command area divided into three regions viz., head, middle and tail regions. From each region first two mandals with maximum command area were purposively selected. From each mandal two villages were selected. From 12 villages, five each from small and large farmers were selected at random. The number of farmers selected from each village was ten and that total number of farmers selected for purpose of present study was 120. The results of the study revealed that there exists sub-optimal allocation of resources in the existing plans of small and large farmers. The process of optimization under different water supply conditions resulted in the improvement in the net farm returns of both the categories of farmers in the study area. However, the optimum model developed at existing water availability resulted in higher net farm returns as compared to other models developed at 10, 20 and 30 percent reduction in the water supply on small and large farms of head, middle and tail regions.

Highlights

• There is greater scope for increasing the net farm returns and resources through systematic farm planning under the existing water supply and resource base on the farms of the three regions.
• The process of optimization under different water supply conditions resulted in the improvement in the net farm returns of both the categories of farmers.