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The climatic data for 17 years from 1988 to 2004 of the rainfed hill plateaus of Kandhamal district of Orissa (India) were analyzed to find out the monthly climatic index from the calculated values of effective rainfall and evapotranspiration. The 80% dependable monthly climatic index was correlated with crop coefficient and suitable cropping period and sequences for the study area were suggested based on it. The extent of investment, net return and soil loss from agriculture were estimated as per the present condition and for the suggested cropping patterns. A mathematical model was formulated for optimal allocation of area to different crop sequences with different objectives viz. minimization of soil loss, minimization of investment and maximization of net return from agriculture and was solved using linear goal programming technique. The model suggested to take up food crops in area of 1,30,777 ha and perennial grass cover in 3223 ha with a cropping intensity of 1.61 resulting in a net return of Rs 1064.775 millions sustaining soil loss to a tune of 9489.67 thousand tons per year. The model was found to be favourable in respect of higher net return of Rs 8862.34 and lesser soil loss of 23.41 tons/ha than the corresponding present values. But more investment of Rs 4489.01 per ha was required to fulfill the objectives
