an economic analysis of mango pulp...

Ind. Jour. Agril. Mktg., 29(1), 2015 1

INTRODUCTION India is the largest mango producer, accounting for about 40% of the global mango production (Hanemann, 2006). In India, less than 5% of the produced mangoes are processed and mango pulp is the main export product both in terms of volume and value (Babitha, 2009). It accounts for about 20% of the processed fruits and vegetables exported from India.India has a large production base and is competitive in terms of production costs (Jha, 2002). There is strong governmental support in developing the infrastructure and there are improvements in the logistic sector that can be seen as major

opportunities for the mango pulp sub-sector to function properly (MFPI).

The market for mango pulp has been growing steadily since the 1990s and this trend is expected to continue. India is the largest grower of the most widely recognized variety of mango (Alphonso) used in pulp manufacturing. The country also dominates the world market for mango pulp with over 113,000 MT of production and a 67% share of world exports. The largest share of mango pulp (25%) goes to the Middle East, followed by Southeast Asia and North America. The major importers of Indian

AN ECONOMIC ANALYSIS OF MANGO PULP PROCESSING IN SOUTH GUJARAT

RUCHIRA SHUKLA, BHAVESH CHAUDHARI, GAYATRI JOSHI, A.K. LEUA AND RAHUL G. THAKKAR

ASPEE Agribusiness Management InstituteCentre for Research in Agricultural Marketing

Navsari Agricultural University, Navsari - 396450

South Gujarat is one of the important clusters of Mango Pulp in the country with a number of processing units with a good backward linkage of Alphonso and Kesar variety of mangoes. In order to understand costs and returns in mango pulp processing at different scales of production, the present study was undertaken during 2011-12. Data were collected using Personal interview of total 10 Mango pulp processors in the three districts of South Gujarat i.e. Navsari,Valsad and Surat. Majority of large and medium scale mango pulp processors were mainly targeting International market while small manufacturers served their products mainly in regional markets. Large variation in investment ranging from Rs .32.5 lakhs to Rs. 14 crores was observed across the size group of firms . The processing industry is raw material intensive with 57- 61 per cent of the total variable cost accounting for procurement of raw mango.The value of rate on return on investment varies from 0.14 for large, 0.13 for medium and 0.10 for small firms .This measure reveals that mango pulp production is profitable at all the scales of production however large firms are more efficient than small firms.

Ind. Jour. Agril. Mktg., 29(1),20152

mango pulp include Saudi Arabia, the Netherlands, UAE, Yemen and Kuwait (APEDA, 2008). The European Union buys relatively small quantities, just 4% of world exports. However, only small amounts of mango pulp are exported to Europe (Babitha, 2009). The plausible reason for limited export from India to Europe could be due to transport prices and possibly quality aspects. Mango pulp is gaining in popularity in western markets simply by virtue of the fact that more and more consumers are buying fresh mango fruit and are becoming familiar with its taste. (Anonymous, 2009) The world demand for mango pulp is projected to grow by 8%. (Anonymous, 2005)

On the other hand, there are some major weaknesses and threats that hinder the performance of the sub-sector (MFPI). The main weaknesses include a lack of marketing, low innovatively produce, few processing varieties, under capacity performance of the processing plants (on average of 50 days per year) and poor infrastructural works such as storage and cool chain facilities and repeated power cuts during the period of processing (Xavier, 2008). Furthermore, despite the fact that India is the world’s largest mango producer, so far export of mangoes and mango pulp from India has not been considerable (Jha, 2002). The growth of mangopulp industries will bring large benefits to the people by way of employment and income. (Xavier, 2008).

South Gujarat is one of the important clusters of Mango Pulp in the country with a number of processing units in the region with a good backward linkage of Alphonso and Kesar variety of mangoes. Mango pulp is an important value added product of mango. A number of processing units have been manufacturing mango pulp and marketing it in local as well as national and international markets.

In order to understand the costs and returns and to help the mango pulp processors compete more effectively in an increasingly competitive landscape, the present study was undertaken in order to achieve the below mentioned objectives:

1) To estimate the costs and returns in mango pulp processing at different scales of production.

2) To measure the financial efficiency at different scales of mango pulp processing.

METHODOLOGY Three districts of South Gujarat Navsari, Valsad and Surat were selected for the study. A total sample of 10 units was taken for the study. The sample consisted of 4 units from small scale, 3 units from medium scale and 3 large scale units. For economic analysis only those mango pulp processing units were considered who keep systematic record of their expenditures and revenues. From the processors, detailed information like ownership, pattern of investment, labour use, processing cost etc. was collected.


Primary data was collected using Personal interview of total 10 Mango pulp processors. Semi structured Questionnaire was designed to collect information from the respondents. The data pertain to the year 2011. Both quantitative and qualitative approaches were used for the data analysis. Statistical tools like mean, frequency, and percentage were used .The cost and returns in the selected processing units were estimated using cost concept of fixed and variable costs. The financial efficiency measures such as capital ratios and Expense income ratio were utilized to assess the feasibility of mango pulp processing.

(A) Financial Efficiency measures

(a) Capital Ratios

(i) Capital turnover ratio =Gross Income

––––––––––––––––––––––Average capital investment

(ii) Capital per unit of gross income =

Total capital invested on theprocessing unit

–––––––––––––––––––––––Gross income from the

processing unit

(b) Expense Income Ratio:

i) Operating ratio =

Total Operating expenses–––––––––––––––––––––

Gross income

ii) Fixed ratio =

Fixed Expenses–––––––––––––––

Gross Income

iii) Gross ratio = Total expenses

______________Gross Income

MANGO PULP PROCESSING IN SOUTH GUJARAT Gujarat ia a major producer of major fruits such as mango,banana,lime,aonla etc. Gujarat produced a total of 966.95 (000, MT) of mango in 2012-13 contributing around 6% of total mango production of India. It is among major mango producing states of India. In Gujarat a large number of mango processing plants have been set up especially in Saurashtra and South Gujarat region which are major mango producing belts of Gujarat. Mango pulp processing is important to handle bulk production in season and value addition of mango and helps provide mango farmers good prices for their produce.

Mango pulp is an important value added product having good demand in domestic as well as international market. Changing food habits in the country has increased consumption of fruit and fruit products and hence market for fruit juice/concentrates/ powder/ slices/ dices have also increased. Increasing number of nuclear families in India particularly in urban and semi urban areas, and increasing number of working women in the country has increased demand of processed


fruit products such as mango pulp and beverages. According to a report, About 80 per cent of mango pulp is consumed in fruit-based beverages, 15 per cent in dairy products and the remaining five per cent in baby foods, bakery and confectionaries segment.

India is a major exporter of mango Pulp in the world. The country has exported 147.8 thousand MT of Mango Pulp to the world worth Rs.607.9 crores during the year 2012-13. The major export destinations are Saudi Arabia, Yemen Republic, Netherland, United Arab Emirates, USA,Sudan,Kuwait,U.K., China and Japan (Table.1).

Gujarat has the necessary infrastructure of fruit processing units that can cater to the growing demand from export markets. With the global demand for mango pulp growing at the rate of

10 per cent per annum, it is necessary to promote mango pulp from premium varieties such as Kesar, Alphonso and Neelam besides Thotapuri variety.

All the sampled mango pulp processing units processed Kesar as well as Alphonso Mango pulp as the both the variety have good demand in international and domestic market, while few units also processed Totapuri , Rajapuri and other local mango varieties for pulp production. It was observed that manufacturers, who mainly serve International market, processed only two popular varieties of Mango i.e. Kesar and Alphonso for the production while other manufacturers who mainly target the domestic market also processed other variety of mango like Rajapuri, Totapuri, Desi etc. Rajapuri , Totapuri and other local variety of mango are mainly processed for making pickles and chutney.

Table 1India’s 10 Major Mango Pulp Export Destinations

(Value in Rs. Crores , Qty in (000, MT)

Sr.No.

Country

2010-11 2011-12 2012-13

Qty Value Qty Value Qty Value

1 Saudi Arabia 47.74 211.60 45.69 156.84 43.45 132.182 Yemen Republic 14.36 61.06 18.29 50.75 25.20 82.263 Netherland 18.22 4.04 16.69 92.61.9 11.24 63.914 United Arab Emirates 14.68 61.10 11.30 40.83 11.74 43.595 United States 5.43 29.05 4.04 25.14 3.8 26.686 Sudan 6.96 40.56 2.40 8.3864 6.3 26.287 Kuwait 8.00 35.18 8.67 32.60 4.8 20.988 United Kingdom 1.23 57.85 5.62 28.48 3.1 19.93

Source: DGCIS Annual Export


Processors were manufacturing mango pulp in different variants like Kesar mango pulp, Alphonso Mango pulp, Natural and sweetened mango pulp. Sweetened Mango pulp have good market acceptance than Natural mango pulp in domestic market. Nearly 70% mango pulp processors were mainly targeting International market and exporting mango pulp to various countries like UK, USA, Canada, Japan, Australia, Germany, UAE, and other gulf countries. Nearly 30% manufacturers served their products mainly in domestic market, mainly in Surat, Valsad, Navsari, Tapi and Dang districts of South Gujarat. These were small scale units who had a small production capacity and were concentrating on the local markets. Nearly 80% processing unit used tin packing in three different sizes, i.e. 450gm, 850gm and 3.1Kg for consumer segment. For institutional use they provide 25-30 Kg mango pulp in plastic jars.

Majority of the manufacturers (70 %) sold their mango pulp to institutional consumers such as food processors, ice cream manufacturers, mango juice manufacturers and also small juice and lassi points. About 30% manufacturers directly supplied their mango pulp to caterers and 40 % manufacturers supplied their mango pulp to various organized retailers in domestic market and also as private labels to overseas organized retail players in UK and USA.

Processors utilized several ways for procurement as the availability is seasonal

and they do not want to lose production days. Majority (90%) of manufacturers procure raw mangoes directly from the farmers, followed by market yards (60%), traders (40%) and commission agents (30%) only if required.

Harvesting period of different varieties is different in different places. In South Gujarat harvesting season is late as compared to Saurashtra region of Gujarat. To increase production days and to utilize maximum production capacity, manufacturers procure mangoes from different regions such as Kesar mangoes from Junagadh and Alphonso mango from Valsad, Ratnagiri, Dharwad and Hubli.

The results revealed that all the units were engaged in producing mango pulp. Around 80% of sampled units got 50-100% business from mango pulp. It indicates that certainly mango pulp is an important processed product of mango and has a large acceptance in the market. While small scale units mainly emphasized on mango pulp production to serve local market, they produce other products (in very less amount), only to utilize the available raw material and production capacity during the off seasons.

The large scale firms process different commodities namely mango, papaya, sapota , guava and vegetables. These firms work almost throughout the year. Some Medium scale firms too process other commodities and take job work to utilize capacity for a large part of the year. Other medium scale and small


scale firms, which are processing only mango, work for three to four months in a year.

INVESTMENT COST OF MANGO PROCESSING UNITS The per firm capital investment varies for each category of firm, i.e. Rs.14 crores in large firms, 3.36 crores in medium scale firms and 32.5 lakhs in small scale firms. The capacity utilization was 85 % in large scale processing units while it was 60 % for medium scale and 50 % for small units.

Large variation in investment ranging from Rs. 32.5 lakhs to Rs. 14 crores is observed across the size group of firms (Table 2).Three components of fixed assets i.e. land, building and machinery account for 93-96 % of total investment across all size of firms. Reddy and Kumar (2010) also reported land ,building and

machinery accounting for 97% of the total investment across all categories of mango pulp processing units in Chittoor. Cost of machinery (38 to 55%) is the largest element of investment cost. This is in line with the study conducted by Xavier (2008) in Krishnagiri district in Tamilnadu who also found 41 % of capital investment is towards machinery.

Variable Cost of Processing Mango Table 3 depicts per firm variable cost incurred in processing of pulp. The amount of variable cost incurred ranged from Rs. 28.20 lakhs (small firms) to Rs. 641.57 lakhs (medium firms) and 2602.49 lakhs (large firms). The processing industry is raw material intensive with 57 to 61 per cent of the total variable cost accounting for procurement of raw mango. This reflects the capacity of processing industry to generate employment opportunity and

Table 2 Investment cost of mango processing units (Rs.Lakh)

S.No. Particulars Large Medium Small

1 Land value 300(21.43)

90(26.79)

5(15.38)

2 Buildings 400(28.57)

100(29.76)

8(24.62)

3 Machinery 650(46.43)

130(38.69)

18(55.38)

4 Misc. fixed assets (Effluenttreatment plant,vehicles etc.)

50(3.58)

16( 5.76)

1.5(4.62)

Total 1400(100)

336(100.00)

32.5(100.00)


income to farmer producers. The next major component is packing and labelling cost which ranges from 16 to 20 % of total variable cost. This is in contrast to Reddy and Kumar (2010) who reported labour cost as the second major component of variable cost.

Xavier (2008) from Krishnagiri district of Tamilnadu reported that 90.4 percent of total variable cost went for purchase of mangoes, processing cost amounted to 4.7 percent and wages and bonus of the labourers amounted to

0.6 per cent of the variable cost which supports the present findings that cost of raw mangoes is the largest element of variable cost in mango processing.

FIXED COST FOR PROCESSING MANGO Per firm fixed cost of mango processing firms is depicted in Table 4.The fixed cost of establishment of processing firms varies from Rs. 5.56 lakhs (small firms) to Rs. 270.55 lakhs for large firms. Wages of permanent

Table 3 Variable Cost of Processing Mango (Rs.Lakh)


1 Raw Mango 1490(57.25)

364.3(56.74)

17.5(60.28)

2 Wages to casual labour 85(3.27)

25(3.9)

1.5(5.32)

3 Sugar 89.4(3.44)

22(3.43)

1.08(3.83)

4 Preservatives 9.5(0.37)

2.25(0.35)

0.1(0.35)

5 Utilities 60(2.31)

12(1.87)

0.36(1.28)

6 Packing and Labeling 510(19.6)

127(19.8)

4.5(15.9)

7 Transportation 110(4.23)

28(4.36)

1(3.55)

8 Misc. expenses 12(0.46)

3(0.47)

0.1(0.35)

9 Interest on variable cost @10% 236.59(9.09)

58.32(9.09)

2.56(9.09)

Total 2602.49(100.00)

641.57(100.00)

28.20(100.00)

Note: Figure in the parentheses is percent to the total.


employees and interest on fixed capital account for major share of fixed cost. Depreciation of building and machinery accounts for about 14 to 20 % of the total fixed costs across all size of firms.

COSTS AND RETURNS OF MANGO PULP PROCESSING The costs and returns for the various size class of processing firms are summarized in Table 5.It was estimated that the small firms produce 45 tonnes of mango pulp(average per unit) whereas medium firms produce 910.75 tonnes and large firms produce 3725 tonnes(average

Table 4 Fixed cost for processing mango (Rs.Lakh)


1 Depreciation on

Buildings @3% 12(4.44)

3(4.57)

0.24(4.32)

Machinery@5% 32.5(12.01)

6.5(9.89)

0.9(16.19)

Misc. fixed assets (Effluent treatmentplant,vehicles etc.) @6%

3.0(1.1)

0.96(1.46)

0.09(1.62)

2 Interest on fixed capital @9% 126(46.57)

30.24(46.02)

2.92(52.61)

3 Permanent labour 85(31.42)

20(30.44)

1.2(21.58)

4 Land revenue 0.05(0.02)

0.01(0.02)

0.005(0.09)

5 Rental value of land 12(4.44)

5(7.61)

0.2(3.6)

Total 270.55(100.00)

65.71(100.00)

5.56(100.00)

per unit) of mango pulp annually. The large and some medium firms process a number of commodities i.e mango, papaya, sapota, sitafal, vegetables etc. The small firms process mainly mango and are thus operational during small part of the year. The total revenue generated on an average varies from 37.05 lakhs for small firms to 750 lakhs and 3067.64 lakhs for medium and large scale respectively. The variable cost constitutes about 83 to 90 % of the total cost across all size of firms. However, from the Krishnagiri district of Tamilnadu, the variable cost extended to 99.3 per cent and the fixed cost was only


0.7 per cent. (Xavier, 2008). This shows that mango pulp processing requires higher operating costs and therefore corroborates the present findings.

The total cost incurred in production of pulp is Rs.33.76 lakhs for small firms, Rs. 707.29 for medium and 2873.04 lakhs for large firms, thus generating a total net revenue of Rs.3.29, 42.71 and 194.6 lakhs for small, medium and large firms.

The financial analysis ratios i.e. income-expenditure ratio and capital ratio were computed and are presented in Table

5 to further understand the operational efficiency of these firms. The operating ratio ranges from 0.76 for small firms to 0.86 and 0.85 for medium and large firms. This signifies that for every rupee of gross income a substantial portion of operation cost is incurred. Sharma et al (2010) in their study in Himachal Pradesh found the operating ratio of 0.67 for fruit and vegetable processing units while Reddy and Kumar (2010) reported the operating ratio of 0.76 for small, and 0.82 for large firms respectively.

Table 5Costs and returns of Mango Pulp Processing


1 Mango pulp (tonnes)(average per unit) 3725 910.75 45

2 Total revenue from mango pulp (Lakh Rs.) 3067.64 750 37.05

3 Total costs (Lakh Rs.)

Variable cost 2602.49(90.58)

641.58(90.71)

28.2(83.53)

Fixed cost 270.55(9.42)

65.71(9.29)

5.56(16.47)

Sub total 2873.04 707.29 33.764 Net returns (Lakh Rs.) 194.6 42.71 3.29

Financial efficiency ratioIncome expense ratioOperating ratio 0.85 0.86 0.76Fixed ratio 0.09 0.08 0.15Gross ratio 0.94 0.94 0.91Capital ratioCapital turnover ratio 2.19 2.22 1.14Rate of returns on investment 0.14 0.13 0.10


The fixed ratio varies from 0.08 for large ,0.09 medium to 0.15 for small firms indicating that for small firms relatively larger share of gross income is used in for meeting the fixed expenses. The gross ratio is less than one signifying the efficient operation of the firms. However, it is substantially high and varies from 0.91 for small firms to 0.94 for medium and large firms. This reveals that a large portion of gross income is utilized for meeting the total expenses. It also reveals that the small firms are more efficient than the other size class of firms.

The capital turnover ratio ranges from 1.14 for small firms to 2.19 and 2.22 for large and medium firms revealing that every rupee of investment by the small firms generates gross income of Rs.1.14. This measure however shows that large and medium firms are more efficient. The rate of return on investment gives a better picture of efficiency. The value of rate on return on investment varies from 0.14 for large, 0.13 for medium and 0.10 for small firms revealing that every rupee of capital investment generates a net return of 10 to 14 paisa. This measure reveals that large firms are more efficient than small firms. This is in line with Sharma et al (2010) who in their study in Himachal Pradesh also found the return of return on investment of 0.14 for fruit and vegetable processing units thus, support the present findings.

The production and marketing of mango pulp is profitable at all the scales

of production .This finding confirms with the earlier work done by Xavier (2008), Sharma et al(2010) and Reddy and Kumar (2010).

SUGGESTIONSFor mango pulp processors1. Firms should go for product

diversification for better capacity utilization and increasing the number of days of operation. Company should introduce new products like ready to drink products, mango slices, mango pieces with other fruit pieces, mango jelly, mango roll and other new products.

2. Mango pulp manufacturers should establish contacts with institutional segment for direct marketing to caterers, other food processors and organized retailers.

3. There is a good demand of mango pulp in domestic market and there is an opportunity for manufactures to expand the domestic market through campaigns and product diversification.

For Mango farmers4. Farmer should prefer growing Kesar

and Alphonso varieties of mango as it has more demand and provides good and assured price by mango pulp processors.

5. Small farmers can form farmer groups and can go for value addition through Mango pulp processing.


POLICY IMPLICATIONS1. Since the small firms are viable,

the support and incentive should be given to enable them to compete with organized industries. There is need to have a liberal credit policy to modernize small-scale processing units and to meet the high requirements of working capital.

2. Government and industry should develop new models of cooperation among growers, processors and exporters. Suitable contract farming models and farmer groups should be promoted to ensure cost-effective and adequate supply of raw material by strengthening direct linkages .

3. Government should encouraging formation of small industries consortia or associations to formulate collective marketing and sales promotion strategies for small units.

4. The existing processing units should be strengthened by providing access to information on modern technology, packaging, markets, food laws and hygiene requirements of different markets.

5. Small firms are poor in adopting the adequate quality standards .This calls for the support and nurturing by government to help technology upgradation and to adopt HACCP and get other quality certifications.

CONCLUSION The production and marketing of mango pulp has great potential and

presents a good scope and opportunity in domestic as well as international market at all the scales of production in the region of south Gujarat. The demand can be tapped on sustainable basis by setting up proper marketing network, maintaining taste and quality, using improved packaging and hygiene standards , understanding requirements of different markets and ensuring regular and cost effective supply of raw materials for processing.

ACKNOWLEDGEMENT The authors are thankful to the Dean ,ASPEE Agribusiness Management Institute and Director of Research and Dean PG Studies, Navsari Agricultural University for providing necessary facilities during the period of study.

REFERENCESAnonymous, (2005), ‘A Pre-Feasibility Study

on Mango Pulp’, Punjab Agricultural Marketing Company, Govt. of Punjab, Pakistan

Anonymous, (2009), ‘Chittoor Fruit Processing Cluster. A Holistic Perspective’, A report of MFRC project.

Anonymous, (2009), ‘Mango Pulp and Nectar Processing in Mali: A Technical and Financial Analysis for the Malian Investor’, A report by United States Agency for International Development and Abt Associates Inc.

APEDA, (2008), http://www.apeda.com/apedawebsite/six_head_product/PFV_OPF.htm

Babitha M. (2009), ‘Export of Fresh Mangoes and Mango Products’,http://icaap.org.in/node/59


Hanemann L.P., (2006), ‘An Assessment of the Export Competitiveness of the Banana,Mango and Mango Pulp Sectors in the State of Tamil Nadu’, Paper for the World Bank, Abt Associates, Inc.

MFPI, Indian Ministry of Food Processing Industries http://mofpi.nic.in/mango.pdf

Jha V., (2002), ‘Strengthening developing countries’ capacities to respond to health, sanitary and environmental requirements’, A scoping paper for South Asia,UNCTAD

Reddy K.V and Kumar P.,(2010), ‘An Economic Appraisal of Mango processing

Plants of Chittoor District in Andhra Pradesh’,Indian Journal of Agricultural Economics,Vol.65,No.2,April-June

Sharma K.D. ,Pathania M.S. and Lal Harbans,(2010), ‘Value Chain Analysis and Financial Viability of Agro-Processing Industries in Himachal Pradesh’, Agricultural Economics Research Review ,Vol. 23, pp- 515-522

Xavier A S. R,(2008), ‘An Economic Analysis of Mango Pulp Agro based Industry in Krishnagiri District, Tamil Nadu’, Political Economy Journal of India, Jan-June.


INTRODUCTION Agricultural Marketing is an area for the “second generation” of green revolution problems. Indian Marketing is undergoing a significant metamorphosis because of economic liberalization and globalization. The successes of marketing strategies and macro-economic policies in developing countries are influenced by the availability of infrastructure development, which plays a significant factor in present era of marketing. Today, we are experiencing a significant transformation of agricultural sector. In past, agriculture was driven by bid, at present it is driven by command using technological interventions in

the marketing process. However, we can articulate that agriculture will be driven by technology in the future in order to provide potential technological opportunities and realize benefits. The monetary potential of technology use in agriculture is not recognized (Kaaya, 1999; Phougat, 2006). Though modern Information Technology (IT) revolution, has helped in not only market information system but also has changed the nature of market functioning altogether by making several intermediaries redundant, reducing the cost of information, lowering the transaction cost and increasing the competition.

A COMPARATIVE STUDY ON USE OF ELECTRONIC DEVICES IN AGRICULTURAL MARKETING IN NEK REGION

T.J.AMRUTHA, SIDDAYYA AND S. VIJAYACHANDRA REDDY*NIRD, Rajendra and NAARM*,Rajendra Nagar, Hyderabad-500030

Agricultural marketing plays an important role in Indian agriculture in general and farmer’s economy in particular. The use of modern technologies provides transparency in agri-business and in making appropriate decisions in marketing of agricultural produce. The study was conducted in important regulated markets of north eastern Karnataka region that adopted the use of electronic technologies in agricultural marketing. The findings of the study reveal that the use of modern technology did not benefit the farmers or traders or other market functionaries. The illiteracy of farmers and limited access or no access makes the web portals redundant for them. The tangible, electronic devices used in the markets would ease the marketing process and help the farmers in realizing a remunerative price for their produce. These electronic equipments had no direct impact on the price mechanism but alleviated the buying and selling processes. The study suggests that planned workshops or programmes could be organized at mandi level for farmers to cope up with the changing modern technologies.

Key words: Electronic devices, Agricultural Marketing, Produces, Prices and Decision Making.


Farmers perceive that marketing as the major constraint rather than production to enhancing farm incomes. Markets are the means of either prosperity or distress for the farmers. These are the places where the farmers’ fate for the crops they have grown is decided. Hence, the government does everything possible to ensure that the farmers realise a better return for their produce. In addition, enactment of Model APMC Act, linking of all APMCs with National Information Network (NIC-NET) to provide the speedy and timely dissemination of market information to the growers, separate web portals for dissemination of market information, etc., are some of the efforts of the government In order to render the marketing systems more efficient, government has introduced electronics devices into market mechanism in some markets for bringing more transparency in the markets. Electronic medium has been used for transmission of information in various industries. However, their uses in agricultural markets are relatively low (Murthy and Abhinov, 2012).

Hence, this study was undertaken to throw light on the various electronic devices being introduced in the regulated market viz., the electronic weighing machines, weigh bridges, electronic display boards, e-tendering mechanism, etc. and their utility to different stakeholders. Thus the study was undertaken with the following objectives

OBJECTIVES(i) To identify and assess the extent of

use of electronics and communication technologies (ECTs) in marketing of agricultural commodities

(ii) To investigate the nature and extent of economic benefits by use of ECTs to farmers and other stake holders in marketing of agricultural commodities

METHODOLOGY The study was carried out in two Agriculture Produce Market Committees (APMCs) in North Eastern Karnataka where the use of electronics devices was introduced. To compare these two more markets were included in which electronics devices were used and two rarely used markets were selected as control. Hence, the study was carried out in the APMCs of Raichur and Gulbarga, where electronics were extensively used and Gangavati and Sindhanur markets where the use of electronics was less which were used as control. The markets were classified into ‘reformed’ and ‘traditional markets’ for convenience of representation. The study was carried out from the year 2011 to 2014. Random sampling procedure was followed in selecting the farmer-respondents. A total of 120 farmers were selected from 4 markets consisting of 30 farmers from each market. The farmers were selected randomly for the study. Both primary and secondary data were used in the study. The primary data were collected from the farmers with respect to the electronic facilities available in the market for the sale of their produce and the utilization


of the same. Conversely, the secondary data were collected from the market committee pertaining to the arrangements made by the market committee in the form of weigh bridge, electronic balance, electronic display boards, etc., and extent of use and the effect of the same on the smooth conduct of trade in the market. For evaluating the awareness, degree of utility of electronic facilities and impact of the use of electronics, tabular analysis with percentages were used.

RESULTS AND DISCUSSIONThe results and discussion of the study are presented under three broad headsi. Profile of the study markets and

sample farmersii. Awareness and the extent of use of

electronics by farmers

iii. Effect of the use of electronics on farmers and market

Profile of the Sample Markets and Sample Farmers The profile of the study markets are presented in Table 1. The finding reveals that, Raichur market was the oldest, being established during 1934 and Sindhanur market was the newest being established 44 years back. In all the reformed and traditional markets, 92 to 113 commodities are notified. Raichur and Gulbarga markets have wide area coverage in terms of villages (348 and 502) under their jurisdiction. All the markets had a number of intermediaries operating in the market viz., commission agents (CA), traders, weighmen, graders, processors, stockists, exporters and

Tables.1 Profile of the Selected Markets (n=120)

ParticularsReformed markets Traditional markets

Raichur Gulbarga Sindhanur GangavathiYear of establishment 1934 1940 1970 1953No. of notified commodities 113 92 113 112Market Area (villages covered) 348 502 174 157

Method of sale Tender, openauction (onion)

Tender,open auction

Mutualagreement

openagreement

Annual Profits 6.8 crores 41 lakhs 2.4 crores 5.2 crores

No. of market functionariesCommission agents 376 570 423 228Traders 629 1140 544 531Weigh men 84 3 12 120

Source: krishimaratavahini.kar.nic.in


brokers. But CAs and traders were in very large number. The method of sale was open auction in all markets, except in the case of Sindhanur where it was based on mutual agreement. As agricultural outputs are perishable in nature, market prices do response to the change in the method of sale and also the demand (Acharya and Agarwal, (1994), Manouselis et al., 2009). In the study area, all market functionaries were to operate in the market by paying a prescribed license fee which ranged from Rs. 2000 (CAs and traders) to Rs. 10 for hamals. The reforms initiated by the government have been implemented in large markets like Raichur and Gulbarga especially in terms of introduction of e-tendering method of sale. Conversely, the traditional markets where reforms are partially introduced still follow open agreement/mutual agreement method for sale of notified commodities.

Table 2 indicates the profile of the selected farmers. Most of the farmers

visiting the market belong to age group of 35 years to 50 years irrespective of the market being reformed or otherwise. It was interesting to note that, about half the farmers (49% to 59.25%) visiting the market were literate, indicating that more and more literate farmers were involved in the sale of the produce.

Awareness and the Extent of use of Electronics by Farmers Awareness of the farmers on the use of electronic devices are presented in Table 3. The analysis of data revealed that electronic gadgets available in the markets are electronic balance, electronic display board, use of computers for e-tendering, electronic weigh bridge and use of public address system for announcements. The findings show that, the use of electronic balance/ scale has been made compulsory and hence all the farmers were aware of the system of weighment through the e-balance. Similarly, the use of

Table. 2 Profile of the Sample Farmers (n=120)


Raichur Gulbarga Sindhanur GangavathiAge (Yrs) 48.61 50.10 35.40 43.20Education (%)Literate 49.00 54.55 58.42 59.25Illiterate 51.00 45.45 41.58 40.75Land holding (acres)Dry 11.00 19.50 3.00 3.50Irrigated 4.72 - 5.44 7.00


e-tendering was followed in the reformed markets and hence the farmers in those markets were fully aware of the system. Further, though some electronics were also used in the traditional markets, very few farmers (around 15%) were aware of the electronic display boards and none of the farmers were aware of e-payment facility which did not exist in traditional markets of Sindhanur and Gangavathi.

The results related to the utilization of electronics devices are presented in Table 4. Despite the fact that many electronics were available in the markets; the utilization of these was restricted

for weighment only. Thus electronic weighing balance/scale/weigh bridge was the only gadget which was extensively used in the market (Table 4). Even though, computers were involved in the process of e-tendering, farmers did not have any role to play in their use, hence it was not considered. Hardly any farmers were utilizing the facility of electronic display to make marketing decisions in Raichur market (23.33 %) when compared to Gulbarga market (76.67 %) as these electronic display boards were placed in the APMC office premises (Cecchini, Scott, 2003; Courtright, 2004). Hence the

Table. 3 Awareness on Electronics used in Markets (%) (n=120)


Raichur Gulbarga Sindhanur GangavatiElectronic balance 100.00 100.00 100.00 100.00E tender 100.00 100.00 80.00 73.33Electronic display 20.00 26.67 13.33 16.67T V Display 100.00 100.00 100.00 100.00Public address system 100.00 100.00 100.00 100.00E-payment 6.67 16.67 - -

Table. 4

Extent of use of Electronics by Farmers in the Market (n=120)


Raichur Gulbarga Sindhanur GangavatiBalance/ weighing scale/ weigh bridge 100.00 100.00 100.00 100.00T V Display - - - -Electronic display 23.33 76.67 - -Public address system 76.67 93.33 20.00 23.33


study suggests that, there is need to put up the display boards at strategic locations in the markets so that the benefit would flow to all the stakeholders in the market. The findings of the study are closely related with study made by De Silva and Ratnadiwakara (2008) which recognized that the farmers in Sri Lanka spend 11 per cent of farmers’ total costs for seeking information. Since the cost of information does not vary with the size of a farmer’s crop marginal and small farmers are particularly loaded by high information costs.

Effect of the use of Electronics on Farmers and Market The use of electronic devices in the marketing of agricultural produce had a significant impact on the farmers (Table 5) especially with the use of electronic balance as it led to 100 per cent reduction in the unauthorized deductions that was made in the process of weighment.

According to the opinion of the farmers the findings revealed that, electronics devices did not have any impact on the expenditure that was made by the farmers in terms of marketing cost. It also exposed that, there was no effect on the price mechanism or realization of better price by the farmers. Because of the use of electronic balance/ scale, weighment in the markets had been standardized with one kg deduction per quintal of the produce towards the weight of the container. Thus, the use of electronic gadget had no direct financial benefit to the farmers but there was reduction in the time that the farmers spent in the market to the extent of one to two hours. Correspondingly, the effect of the use of electronics on the market was restricted to the reduction in the business hours which was diverted towards other procedures to be followed in the market (Table 6). However, many studies revealed the use

Table. 5

Effect of use of Electronics on Farmers (n=120)


Raichur Gulbarga Sindhanur GangavatiReduction in unauthorized Deductions (%) 100.00 100.00 100.00 100.00

Saving in market time (hrs) 1.00 1.00 2.00 2.00

Disputes Nil Nil Nil Nil

Price mechanism No effect No effect No effect No effect

Marketing cost No effect No effect No effect No effect

Weighment standardized standardized standardized standardized


Table. 6Effect of use of Electronics on the Market


Raichur Gulbarga Sindhanur Gangavati

Use of manpower No effect No effect No effect No effect

Turnover/ receipts No effect No effect No effect No effect

Settlement of disputes - - - -

Market operation time Reduced Reduced Reduced Reduced

of advanced technology in agriculture and allied sectors, very few studies focus on limitations and problems in technology implementation and its use. (Slavoljub, 2014). Hence the study suggests that, the use of electronics devices were not having any direct impact on economic benefit either to the stakeholders or to farmers in the market.

CONCLUSIONS This paper makes an attempt to study the use of electronics and communication technologies (ECTs) in marketing of agricultural commodities in selected districts of North Eastern Karnataka. The study shows that no direct benefit was observed by means of use of electronics and communication technologies in markets, either to the traders or other market functionaries in the study area. In addition study indicated that the illiteracy levels of farmers coupled with limited access or no access to electronic devices, leads to unawareness of modern electronic devices which are more accurate and with in less time helps in marketing process

than traditional means of methods/measurements. The use of electronics devices in the markets could only reduce the marketing. The electronic balance/scale, electronic display and use of computers for tendering were the only few electronics devices used in the regulated markets. Further, selling operation time had reduced considerably in these markets due to the use of e-balance and the e-tendering process. The study also points that, the payments to the farmers were made between one and 15 days in all the markets. Thus these electronic equipments had no direct impact on the price mechanism but alleviated the buying and selling processes. Hence, the study suggest that, there is an immediate need to introduce/put to use the electronic display boards, TV display in these markets for the benefit of farmers.

REFERENCESAcharya, S.S. and Agarwal, N. L,

(1999) “Agricultural Marketing in India,”Oxford & IBH Publishing, New Delhi.pp.2-36.


Acharya, S.S. and Agarwal, N. L, (1994) “Agricultural Prices-Analysis and Policy, Oxford & IBH Publishing, New Delhi.pp.84-90.

Cecchini, S. Scott, C. (2003): Can Information and Communications Technology Applications Contribute to Poverty Reduction? Lessons from Rural India, Information Technology for Development, 10 (2):73-84.

Courtright, C. (2004): Which Lessons Are Learned? Best Practices and World Bank Rural Telecommunications Policy, Information Society, 20 (5): 345-356.

De Silva, H. and Ratnadiwakara, D. (2008). Using ICT to reduce transaction costs in agriculture through better communication: A case-study from Sri Lanka, LIRNEasia, http://w w w. l i r n e a s i a . n e t / w p - c o n t e n t /uploads/2008/11/transactioncosts.pdf, web. 15 January 2015.

Murthy T. N. and T. Abhinov Electronic Media In Rural Agricultural Business

- A Promotional Injection www.abhinavjournal.com, Web. 25 January, 2015.

Kaaya, J. (1999): Role of Information Technology in Agriculture, Proceedings of FoA Conference, 4: 315-328.

Manouselis, N., Konstantas, A., Palavitsinis, N., Costopoulou, C., Sideridis, A.B. (2009): A Survey of Greek Agricultural E-Markets, Agricultural Economics Review, 10 (1): 97- 112.

Phougat, S. (2006): Role of Information Technology in Agriculture, Science Tech Entrepreneur, August, pp. 1-7.

Rajagopal (1998), “Rural Marketing Development, Policy, Planning and Practice”, Rawat Publications, Raipur, pp.251

Slavoljub Milovanovic, (2014), The Role and Potential of Information Technology In Agricultural Improvement, Economics of Agriculture, Year 61, No. 2 (269-552) 2014, Belgrade.


INTRODUCTION Animal husbandry and dairy sector contribute over one-fourth of agricultural GDP of India and is a source of income and employment to 22.45 million people creating self sufficiency in milk production with current output of 127.9 million tons (NDDB, 2013). Among the milk producing animals, buffaloes alone contribute about 56 percent of the total milk production in the country. Buffalo’s milk productivity is significantly higher as compared to indigenous cows. Buffalo is preferred as a milk producer over indigenous cows by the dairy farmers on

account of its higher milk productivity and fat content. Among different breeds of buffalo the attraction of the farmers is graded Murrah buffalo, which is mostly found in Haryana and western Uttar Pradesh, mainly because of its higher milk productivity. A large number of graded Murrah buffaloes are regularly sold out from its home tract in Haryana through different channels to southern and western destinations like Hyderabad and other places in Andhra Pradesh, Maharashtra, Gujarat and Madhya Pradesh mostly to urban dairy farms. Consequently the milk productivity of dairy farms rearing

SUPPLY CHAIN AND SUSTAINABILITY ISSUES OF GRADED MURRAH BUFFALOES: A CASE STUDY OF URBAN DAIRY FARMS IN

HYDERABAD, INDIA

SHALANDER KUMAR, T. RAMILAN, AND DVB RAMANA*International Crop research Institute for Semiarid Tropics, Patancheru, INDIA 502 324

* Central Research Institute for Dryland Agriculture, Hyderabad - 500 059

The paper analyses interstate movement of graded Murrah buffaloes and sustainability issues in their rearing on urban dairy farms. The data related to buffalo rearing, channels of their supply and disposals were collected from randomly selected 48 dairy farms in Hyderabad, Telangana in the year 2009-10. The other data points were traders from Haryana stationed in Hyderabad, interstate traders from Hyderabad, local buffalo traders, butchers and trader-farmers. The sample consisted 19 small (with average of 6.15 buffaloes), 16 medium (14.5 buffaloes)and 13 large dairy farms (85.7 buffaloes). The majority of graded Murrah buffaloes were supplied from Haryana (Rohtak, Jind, and Hisar districts). The paper analysed the market channels, price spread, marketing efficiency and constraints at farm level. The study clearly deciphers the supply chain and brings out the factors that threaten the sustainability of such system of production and trade in the long term and proposes options for enhancing the sustainability of such production system. Large number of graded dry buffaloes which are culled every year for slaughter by the urban dairy units, if transferred to neighbouring rural areas, would help conserve the superior germ plasm and will have implications for enhancing milk production significantly.


graded Murrah buffalo has significantly increased. These dairy farms have not only contributed to higher national milk production but also cater to the huge local demand of the large urban centers. But there is no appropriate market channel available that could provide access to good quality graded Murrah buffaloes to urban dairy farmers on long term basis. The absence of proper supply chain appears to be resulting in unduly high market margins for middlemen traders and un-sustainability of the production system. A large number of such superior quality dry animals are being sent for slaughter every year (Khurana, 1997). However there is hardly any information available on such supply chains and their appropriateness. Therefore the present paper attempts to analyze the segments of supply chain and sustainability issues in Graded Murrah buffalo rearing on urban dairy farms.

METHODOLOGY This study covers Hyderabad as a centre of milk production and destination of graded Murrah buffaloes. Further, it traces the supply of buffaloes to Hyderabad from their home tract. Like many other urban centers in Maharashtra, Madhya Pradesh, Andhra Pradesh, Gujrat, Karnataka and Delhi, Hyderabad also has a large number of commercial buffalo dairy farms (more than 700). The herd size on these farms varies from 5 to more than 500 buffaloes. Majority of these dairy farms source breeding buffaloes

(Graded Murrah) from Haryana, Uttar Pradesh and also some of them through Maharashtra, Gujarat and Punjab. To track the whole chain of supply, the present study uses primary data collected from urban dairy farmers in Hyderabad, agents of buffalo suppliers, trader farmers and buffalo traders working in Hyderabad as well as in Haryana and butchers working in the local animal markets. In order to have a representative sample, a complete enumeration of commercial dairy herds in Hyderabad city and outskirts was undertaken. The dairy herds were categorized into small, medium and large based on cumulative square root frequency method of stratification. Finally, 48 dairy herds were selected on the basis of probability proportionate to the number of dairy herds in each category (Table 1). The data related to buffalo rearing, channels of their supply and disposals of calves, dry and milking buffaloes were collected on the well-structured and pre-tested interview schedules for the year 2009-10 from selected dairy herds.

The other data points included the supplier traders/agent supplying Graded Murrah buffaloes, trader farmers and butchers. Five randomly selected suppliers/ their representatives/ market functionaries were interviewed from each of the five such groups, operating in the supply chain, viz. traders from Haryana stationed in Hyderabad, interstate traders from Hyderabad, local buffalo traders,


butchers and trader-farmers. Visits were also made to local animal markets viz. Narsingi and Yerragadda in Hyderabad to collect information on trading of buffalo and their calves from traders, butchers and farmers. The study has made a diagnostic analysis of the supply chain and examined issues related to sustainability of urban buffalo dairy production system. To analyze the constraints faced by the dairy herds, opinion of dairy herd owners was recorded on different aspects and Garrett’s Ranking Technique as mentioned below was used for ranking the constraints in order of their importance.

100 (Rij - 0.50)Percent position = –––––––––––––––– Nij

Where, Rij is the rank given by ith item by jth individual

Nj is the number of items ranked by the jth individual

The percent position of each rank is converted into scores by referring

tables given by Garrett and Woodworth (1969). Then for each factor, the scores of individual respondents are added together and divided by the number of respondents for whom scores are added. The mean scores for all the factors are ranked by arranging in descending order.

RESULTS AND DISCUSSIONChannels for interstate movement of breeding graded Murrah buffaloes The majority of graded Murrah buffaloes being reared on urban dairy farms in Hyderabad were sourced from Haryana (Rohtak, Jind, and Hisar districts) with 69 per cent of the total purchases of these animals. However dairy farmers in Hyderabad also accessed graded Murrah buffaloes from Punjab, Gujarat and Maharashtra (Table 2). Some of the farmers of Maharashtra and Gujrat, who have been sourcing graded Murrah buffaloes from Haryana and Uttar Pradesh regularly, prepare breeding graded Murrah animals for supplying them to further destinations like Hyderabad.

Table - 1Distribution of selected dairy farms and value of animals

Category Samplesize

Total milch

buffalo(Nos)

Milking buffalo (Nos)

Dry buffalo

(Nos)

Value per

buffalo(Rs)

Breeding male

(Nos)

Value per breedingmale (Rs)

Small 19 6.15 4.25 1.90 35250 0.2 20000

Medium 16 14.50 11.10 3.40 39333 0.7 24000

Large 13 85.70 63.20 22.5 44462 1.3 30455

Overall 48 35.50 26.20 9.30 43234 0.7 24818


Table 2Sources of graded Murrah/ graded

Murrah type buffaloes

Source State % Dairy farmsHaryana 69Punjab 8Gujarat 8Maharashtra 8 Local animals(Hyderabad) 7

There were three following major source of supply of graded Murrah buffaloes to urban dairy farms in Hyderabad.

i. Haryana trader’s representative stationed in Hyderabad: This representative remains in Hyderabad for months together and contacts the prospective buyers/ dairy farmers. As per the demand he would arrange supplies of graded Murrah buffaloes of different milk productivity. In some cases they were also using services of local petty traders/ brokers by paying them commission which ranged from Rs. 1500 to Rs. 2800 per buffalo. Out of the total Graded Murrah buffaloes sourced, they supplied more than half of the buffaloes.

ii. Hyderabad trader’s representative stationed in Haryana: They are other major players in the interstate trade of graded Murrah buffaloes. Majority of these traders also own buffalo dairy farms in Hyderabad. They have established direct contact

with number of buffalo rearing farmers in Haryana as well as in Maharashtra and Gujarat. The trader or his representative collects animals from the villages and transport them to Hyderabad. They accounted for 40 per cent of the total supply of Graded Murrah buffaloes to Hyderabad’s dairy farms.

iii. Direct purchase by dairy farmers: The large dairy farmers who have established contact with Graded Murrah breeders in Haryana, Maharashtra and Gujarat directly purchase animals from them. As per their demand they contact individual large dairy farmers in the state of source and accordingly plan the transport of animals to Hyderabad. Such direct purchase by the farmers accounted only for 9 percent of the total buffalo sourcing.

The interstate movement of breeding graded Murrah buffaloes from Haryana to southern destinations in other states were in operation mainly through following seven channels:

In the case of movement of buffaloes from Maharashtra and Gujarat, hardly any trader was available in Hyderabad from these states. The animals from Maharashtra and Gujarat were sourced either directly by dairy farmers who have established contact with dairy farmers there or traders from Hyderabad would go to these states and collect animals from farmers and or middlemen. In all there were seven major channels of


interstate movement of breeding Graded Murrah buffaloes from Haryana to Hyderabad. Channels I and II, wherein animal moves from buffalo breeder to a trader in Haryana than to Haryana’s trader’s representative in Hyderabad and then to dairy farmer directly or through local petty traders / brokers accounted for major share (51%) in the total buffaloes supplied to Hyderabad. Channel III contributed for about 18 percent of the total supply, wherein traders from Hyderabad collect animals through local commission agents/ brokers in Haryana. The amount of commission per buffalo

charged by these brokers/ commission agents ranged from 5 to 7 percent of value of the animal. Even some veterinarians working in Haryana provide paid services for arranging Graded Murrah buffaloes for these traders. Channels IV and V together accounted for 22 percent of total supply of Graded Murrah. In the channels VI and VII, the dairy farmers from Hyderabad directly sourced Graded Murrah buffaloes from Haryana, Maharashtra and Gujarat, which accounted for 9 percent of the total supply. These dairy farmers (mostly from large category) either have established direct


contact with farmers in Haryana villages or collect animals through local petty traders/commission agents in Haryana. These informal channels for interstate movement of graded Murrah buffaloes have emerged only due to market forces, but there has been no effort to organize this trade which could enable active participation of buffalo breeders in the home tract.

Though the purchase and transport of animals is done throughout the year, however the major purchases were made during the months of November to February mainly because of larger availability of high yielding milking buffaloes at competitive price during this period. All the buffaloes purchased were in early stage of their lactation mostly they were transported just 15 days after calving that resulted into very high mortality in young calves up to 25-40 percent during

transit. Overall the mortality of adult buffaloes during transit was very low at less than 1 percent however number of animals suffers with injury losses. None of the traders and farmers interviewed insured the buffaloes during their long transit, but most of the dairy farmers get insurance for their buffaloes at the rate of Rs. 900 per animal under the government scheme in Hyderabd.

Price fixation and spread The price of buffalo was decided on the basis of its milk yield. The traders charged Rs.4300 to Rs.5200 for each liter of milk yield of the buffalo. The cost of one milking buffalo for the dairy farmers in Hyderabad ranged from Rs. 32000 to Rs. 61000. Average cost of a buffalo was estimated at Rs. 43234. The traders’ margin ranged from Rs.6500 to 11100 per buffalo. On the one hand huge margins were charged by the middleman

Table 3: Price spread under major marketing channel (I and II) (Per animal)

Sl. No. Particulars Amount. Rs. Percent share1. Price received by farmers at Haryana 35100 70.52. Transportation cost 4050 8.13. Fodder, labour and other charges during transit 1160 2.34. Mortality loss during transit 310 0.65. Marketing cost (2+3+4) 5520 11.16. Haryana trader’s margin 7200 14.57. Hyderabad trader’s margin 1960 3.98. Marketing margin (6+7) 9160 18.49. Price paid by dairy herd owner at Hyderabad 49780 100.010. Marketing efficiency [1/ (5+8)] 2.39


and on the other middleman (in case of channel I and II) also faced risk of less or non-payment by the dairy farm owners and illegal payments to officials during transit.

The analysis of price spread indicates that the marketing cost together with trader’s margin was as high as 14680 per buffalo in channel I & II constituting 29.5 percent share in the consumer’s price. Further the trader’s margin was also very high and constituted more than 18.4 percent of the final price, which was equivalent to 26 percent of the amount received by the producer farmer for each buffalo. The measure of marketing efficiency also indicates inefficiency. In the absence of any formal marketing system for these graded Murrah buffaloes the herd owners are forced to pay unduly higher price for purchase of the animal and the middlemen get very high market margin. The Graded Murrah breeders in Haryana may be encouraged to form Graded Murrah buffalo breeder groups or associations. They may also be encouraged to use websites for providing information about the type of animals and prices. These groups or associations would be better placed to organize the production and trade of this very important animal in a sustainable manner. The dairy farmers or traders from different urban centers of the country may directly source animals from these groups or associations.

Production, disposal and some sustain-ability issues These dairy farmers were rearing

milking buffaloes under intensive feed management system for milk production. The green fodder cultivated on the bed of Musi River in which sewage water is drained was the major source of supply of fodder to these farms. The farmers take a piece of land in the bed of Musi River on lease and produce green fodder. The dry fodder (chopped sorghum stovers) was sourced from the market. The milk yield of dairy buffaloes ranged between 7 to 15 liters per day. Whenever the milk yield of a buffalo goes down to 5-6 liters per day it was disposed off. Moreover any buffalo would be culled if its dry period is likely to be extended for more than two months. On an average 27 to 33 percent of the breeding graded Murrah buffaloes in different categories of dairy farms in Hyderabad were culled every year at a very low price which was about one-third of the initial price of a buffalo (Table 4). Hence the dairy farmers were replacing the whole herd in a span of three years through purchases from Haryana and other states. Longer dry period, infertility and low productivity of buffaloes and frequent abortions were the main causes of culling of the superior germ plasm (Table 5). Among these culled breeding buffaloes, more than 85 percent were sold to the butchers and rest went to the traders and farmers mainly for rearing. In this way not only the superior germ plasm was lost but the farmers also had to sell the costly animals at low price.

About 90 percent of the dairy farmers did not rear the calves of buffaloes and sold them at a very early age of 15 days


to 1 month at a price of Rs. 910 to 1750 per calf. More than 90 percent of these young calves of graded Murrah buffalo were sold to butchers who slaughtered them to produce veal. In the process the graded Murrah superior germplam was lost without being used for production or multiplication. The calves were not even reared up to the economic age for meat production. The removal of herd of breeding buffaloes in three years and their calves in the very first year is a big loss in terms of loss of superior germ plasm and that threatens the sustainability of the graded Murrah buffalo production system which is one of the most important milk producing animals in the country.

The continuous movement of good quality graded Murrah buffaloes from its home tract with no organized efforts for their sustainable production; the availability of such superior animals has become difficult. This phenomenon of slaughter of highly productive buffaloes is not only specific to Hyderabad but is being practiced in most of the urban and peri-urban milk production systems in the country. It has been observed by the animal husbandry department of Uttar Pradesh that on peri-urban dairy farms in Uttar Pradesh graded Murrah buffaloes are milked for only one lactation without mating and then sold for slaughter (UPAHD, 2010).

Table 4:Disposal of breeding buffaloes

Category Total buffaloes (Nos)

Dry buffalosold ( Nos)

Dry buffalo soldas % of total

Average sale price ofDry buffalo (Rs.)

Small 123 41 33.33 9912 Medium 218 53 24.31 10536 Large 1114 301 27.02 12769Overall 485 132 28.22 11072

Source: Primary survey.

Table 5:Reasons for sale of breeding buffaloes to butcher

Reasons of sale No. of farmers PercentLonger dry period 32 66.67

Infertility 16 33.33low productivity 5 10.42

Abortion 7 14.58Source: Primary survey.


Constraints faced by commercial buf-falo herds All the constraints perceived by the farmers were analyzed and ranked following Garret ranking technique and shown in Table 6. The most important constraint was the infertility problem in milch buffaloes. However it was found in the study that rearing buffalo calves and maintaining dry buffaloes was not economically viable for these urban dairy farmers on account of very high feeding cost and lack of space. These urban dairy farms also face a number of other constraints resulting in low productivity and profitability from the enterprise.

Implications and Suggestions• The urban dairy farms in Hyderabad

contribute significantly in catering the huge local demand for milk. The Graded Murrah buffaloes, which were mainly sourced from Haryana, moves through different informal

channels, wherein the middlemen make huge margins. Unorganized extraction of best quality Graded Murrah buffaloes from its home tracts has been resulting not only in lower price realization by the breeders, but also in dilution of the breed and making availability of such superior animals difficult. Hence, there is need to organize this interstate trade of Graded Murrah buffaloes. The Graded Murrah breeders in Haryana may be encouraged to form Graded Murrah buffalo breeder groups or associations. These groups or associations would be better placed to organize the production and trade of this very important animal in a sustainable manner. The dairy farmers or traders from different urban centers of the country may directly source animals from these groups or associations.

Table 6:Constraints as perceived by urban dairy farmers

Constraints Score % dairy farmersInfertility problem 94.07 INon-availability of fodder & High feeding cost 90.33 IIMastitis in milking buffaloes 87.43 IIILabour problem (high cost and non-availability) 85.50 IV lack of knowledge about dairy farming 84.31 V Poor access to bank loan 80.17 VILack of space 78.54 VIIDisease 75.67 VIII

Source: Primary survey


• Further, a large number of superior buffaloes as well as their calves were slaughtered in the urban dairy farms as rearing of the dry animals and calves does not fit into economics of these farms. Such system of marketing and production is resulting in a loss of precious germ plasm and threatening the sustainability of the buffalo milk production system. A sincere effort is required to facilitate transfer of these superior graded dry buffaloes and their calves to the rural areas where some feeding resources are available with arrangement for treatment of infertility problems.

• The state animal husbandry departments (AHD) and non-government organization (NGOs) may play an important role in transferring these dry buffaloes and young calves to the rural areas in neighbouring districts or even to other states. The AHD may develop a programme to collect superior quality culled buffaloes and their calves from urban dairy farms and transfer them to the active women self help groups (SHGs) in the rural areas by partly subsidizing the cost of animals (25 to 40 %). The animal husbandry department may also make arrangement for treating the dry animals to bring them in estrus. Different SHGs may be identified to take up calf rearing or buffalo rearing as a livelihood earning activity.

The funding for such a programme may be sourced from the centrally sponsored scheme in operation for conservation of important animal breeds. Similarly the non-governmental organizations (NGOs) working for livestock development may also be encouraged to take such projects. This will go a long way for breed conservation, sustainable buffalo dairy farming and increasing the income of rural dairy farmers.

P.S.: The views expressed are of the authors.

ACKNOWLEDGEMENT T he authors thankfully acknowledge the assistance of VL Savitri, B Kishore and A Vijaya Kumar in data collection and digitization.

REFERENCESGarett, E. Henry and R.S. Woodworth

(1969) “Statistics in Psychology and Education”, Vakils, Feffer and Simons Pvt. Ltd., Bombay, pp. 329.

NDDB (2013) National statistics, http://www.nddb.org/statistics.html

UPAHD (2010) Present Status of bovine production systems in Uttar Pradesh, http://www.animalhus.up.nic.in/fpr.doc

Khurana, I. (1997) “Vanishing breeds”, Down To Earth, 15 September, Viewed on 15 september 2013, http://www.downtoearth.org.in/content/vanishing-breeds


INTRODUCTION Depleting water table, escalating soil degradation, ecological problems and stagnation in crop yield are the results of intensive use of inputs and monoculture in cropping system of Punjab. The crop diversification is one option for obtaining more stable farm incomes while improving natural resource use and environmental sustainability. (Singh,K 2009; Arora et.al.2008; Singh K 2011;

Sekhon & Kaur 2004) Although the agro climatic conditions in the country allow growing a wide variety of crops but few crops (Wheat, Rice etc.) dominate the crop portfolio. Gradually the awareness about the importance of other crops is pertaining among the farmers and they are willing to diversify the present cropping rotation. But the market uncertainty haunts in the minds of farmers. The stagnation in the state agriculture requires

COST- RETURNS ANALYSIS AND MARKETING PATTERN OF SUMMER MAIZE IN PUNJAB

M.K. SEKHON, M.S. SIDHU, MANJEET KAUR AND PRABHJEET KAUR Dept. of Economics and Sociology, P.A.U., Ludhiana,141004

The study analyses the growth pattern, economics, marketable surplus, marketing pattern and price spread of summer maize in Punjab. Both primary and secondary data were used, collected from 120 farmers of different categories, from Hoshiarpur, Nawanshehar and Ropar districts of Punjab. Area under maize showed negative growth rate during all the decades but productivity depicts positive growth rate in all the decades except 1980’s. The highest return over variable cost of maize was calculated as Rs. 7272 per acre harvested by large farmer during 2010-11. Among different cost items, higher cost was occurred on seed, FYM, fertilizer and machinery. The yield of maize crop varied among different categories of farmers and coefficient of variation worked out 41.45 percent. However the large gap in yield level on different categories of farms needs to reduce using appropriate measures. The price response however, is important aspect of the impact (input and output) on the cropping pattern. The different categories of farmers (small, medium and large) contributed 14.72 percent, 31.90 percent and 53.37 percent respectively in the total marketable surplus. The findings of study revealed that marketing of maize was also not as assured as rice and wheat. MSP is announced every year but not implemented effectively. By analysing the marketing of maize it was found that as number of intermediaries increased, the cost and margin increased and the inverse has been the marketing efficiency. The efficiency can be improved by proper handling of crop after harvest through better storage and performing the functions suitably.


corrective policy measures to increase the productivity on farms (Singh et al. 2000). The situation demands some concrete solutions which augment the income of the farmer and save them from further erosion. For this purpose, institutions of input delivery and output market need to be strengthened. Among the various factors price is one of the important aspect of the marketing which significantly shapes the cropping pattern. Equally important are the market infrastructure and institutional arrangements. If the former is weak because of the inadequate transport or communication facilities or due to the absence of proper information, the producers do not receive correct signals. The delivery systems for inputs and credit along with irrigation facilities are important factors in determining cropping decision of the farmers (Vyas, 1996). Maize crop can be promoted as a step taken towards the crop diversification in Punjab because it has less water consumption and good returns. The demand of maize for producing cattle and poultry feed and other valuable products for human consumption has been increasing through its raw consumption among the elite population is declining (Badal and Singh, 2000; and Chauhan and Chabra, 2005). In the light of these concerns, present study was planned to estimate the scope of maize crop in the present crop rotation of Punjab farmers.

Though the maize crop is grown in all the districts of Punjab but it is mainly grown in Hoshiarpur, Nawashehar, Rupnagar, SAS Nagar, Jalandhar and

Gurdaspur districts. Viewing the vast scope of the maize cultivation in Punjab the present study was undertaken with the following objectives

i) To analyse the trends in area, production and productivity of maize in Punjab during different decades :

ii) To work out economics of summer maize and the cost and returns structure on different categories of farms and

iii) To estimate the marketable surplus, marketing pattern, price spread and marketing efficiency through different channels.

METHODOLOGY The study is based on the primary as well as the secondary data. Major source of secondary data were Statistical Abstract of Punjab. The multistage random sampling technique was employed to draw a representative sample of maize growers. Three districts with the highest area under maize were selected namely Hoshiarpur, Nawashehar and Ropar. Two blocks from each district and twenty farmers from each block were selected randomly for the purpose of study. These farmers were categorized into different farm size categories on the basis of operational holding using criteria followed by Government of Punjab. Thus, the total sample of 120 farmers was selected. A survey was conducted to gather information from producer farmers related to input and output matrix.


Selection of markets and intermediaries: In order to study the marketing channels, price spread, marketing costs and marketing margins retained by different intermediaries, the markets of Hoshiarpur, Nawashehar and Ropar districts were selected purposively. In order to gauge the marketing efficiency of maize in Punjab the list of all the intermediaries involved in marketing of maize was prepared. A representative sample from each category of marketing functionaries operating in the selected maize markets was drawn.

Analytical tools Budgeting method was applied to calculate cost and return structure of summer maize in the selected area. The Compound growth rates of area, production and yield of maize were estimated for different decades viz. sixties, seventies, eighties, nineties and overall

To workout the marketing costs, margins, price spread and efficiency of markets of maize through various channels, tabular analysis was carried out using the following formulae.-

TCmm = C mg + Mci

where, TCmm = Total cost

C mg = Cost born by producer

Mci = marketing cost incurred by ith middleman

Ami = SPmi – (PPmi + Mci)

where, Ami = Absolute margin of the ith

middlemen

Spi = Selling price of the ith middleman

PPmi = Purchase price of ith middleman

Producer’s share in consumer’s rupee was worked out as under

PS = PP/ CP

Where, PS = Producer’s share in consumer rupee

PP and CP are the producer’s price and consumer’s price respectively.

Marketing efficiency was worked out by employing the Acharya’s formula as under

ME= (V/I – 1)100,

where, ME= Marketing Efficiency

V= Consumer’s price , I= Total marketing cost plus margins

RESULT AND DISCUSSION The cropping pattern in the state has witnessed significant change since 1960’s. The state has experienced substantial diversification in its agriculture towards different cash crops such as oil seeds, pulses, maize, cotton and sugarcane. Maize was an important summer crop in the Punjab state during early 1960’s. The continuously availability of new high yielding varieties of rice and wheat compelled the farmers to shift to these new varieties of crops. Maize crop has exhibited deceleration in production in


last fifty years or so in Punjab state. Except for the decade 1960’s (1960-61 to 1969-70) when it registered positive growth rate i.e. 5.98, 9.76 and 3.78 respectively for area, production and yield. The area under maize crop was replaced by paddy as the returns from this crop were assured and higher. Maize is a risky crop as its yield was found unstable (Kumar et.al. 2005). Area under maize showed negative growth rate during all the decades and the long term growth rate of area under maize was calculated as -2.76 per cent per annum which is significant at one per cent level in Punjab (Table 1). Production and yield of maize depicts positive growth during all the decades except for 1980-81 to 1990-91.

Production of maize witnessed negative growth rate during 1980’s

contributed more by area than yield. The yield of maize start improving during 1990s and CGR reached at 3.75 per cent per annum during 2000-01 to 2009-10.The long term growth rate of maize yield was worked out as 2.59 per cent per annum during 1980-81 to 2009-2010 in the Punjab state. The overall growth rate of maize yield was 2.59 per cent per annum during the study period.

Socio Economic Profile of the Maize Growers Regarding the education level, the study revealed that more than 30 percent of farmers were illiterate, whereas graduate and post-graduate farmer accounts small in number. The majority of the farmers were in the category of senior secondary level among different categories of farmers. Agriculture is the

Table 1:CGR of Area, Production and Yield of Maize in Punjab

Year Area Production Yield

1960-61 to 1969-70 5.98(1.83)

9.76(5.44)

3.78(2.05)

1970-71 to1979-80 -3.66(-4.07)

-3.47(-3.43)

0.18(0.13)

1980-81 to 1989-90 -5.59(-10.32)

-6.78(-4.52)

-1.25Ns

(-0.71)

1990-91 to 1999-2000 -2.04(-4.36)

0.65Ns

(0.50)2.75

(2.35)

2000-01 to 2009-10 -1.30(-3.97)

2.40Ns

(1.55)3.75

(2.81)

1980-81 to 2009-10 -2.76(-11.48)

-1.22Ns

(-0.50)2.59

(8.35)Note: Ns- non significant, and others are significant at 1 per cent level. Figures in parentheses are’t’ value.


main occupation and source of livelihood for majority of the sample farmers. Only nine percent, eight percent and twenty percent farmers are having supporting business among small, medium and large farm size categories respectively. The sample maize growers has their own and hired arrangements for the land irrigation. The whole areas of sample farmers were irrigated. As in the Punjab state, about 98 percent area is irrigated and out of which, 73 percent area is irrigated by tube wells. The medium and large farmers have their own arrangements for irrigation whereas 84 percent and 44 percent of small and medium farmers had hired arrangements. It was observed during the survey that majority of the maize growers in the sample use tractor as the source of draught power. Tractor was used for different operations for maize crop. The small and semi-medium farmers who did not have their own tractor got the operation performed by custom hiring (Annexure I).

Economics of Maize Production The cost of cultivation of crop is a key factor in allocation of area under particular crop along with the resource endowment. Maize crop basically requires less number of irrigation than its competing crop paddy. Consequently, farmers having the limited irrigation facility allocated higher area to this crop. The economics of summer maize was calculated for the purpose of the study and is shown in Table 2. It was observed from the table that major items of cost include fertilizer, seed, field preparation,

harvesting and threshing. The cost of cultivation of summer maize was worked out to Rs. 6237 per acre during 2011-2012. The highest cost was observed in case of large farms Rs. 10378 per acre followed by medium Rs. 7237 per acre and Rs. 5729 per acre by small farms category respectively. The cost of fertilizer was observed higher in small farms as compared to medium and large size category whereas harvesting become costly on large farms followed by medium and small Rs. 2100, Rs. 1460 and Rs. 648 per acre respectively. Major item of cost on large farms were seed, fertilizer, irrigation, harvesting and threshing to the tune of Rs. 1320, Rs. 1327, Rs. 1460, Rs. 2100 and Rs. 1560 per acre for maize in Punjab. On small farms, the highest cost was worked out on fertilizers ( 23.44 percent) followed by seed (14.10 percent) and field preparation (13.14 percent). Further, the medium farms spend Rs. 1281 on fertilizer, Rs. 1460 on harvesting and Rs. 1020 on seed and seed treatment. Overall it can be concluded that large farms bear the higher cost of major items like fertilizer, seed and mechanical operations where as medium and small farms spends less on these items for cultivation of maize in Punjab.

There is direct relationship of variable cost and farm size in maize during 2011-2012. The yield of maize was higher on large farms i.e 20 qtl/acre, on medium farms 17 qtl/acre and 12 qtl/acre on small farm category (Table 3). The large variation was observed in the yield of this crop among different categories


of farms. Price and yield of maize and farm size bear the positive relationship, as farm size increases yield and price of maize increases. Average gross returns were worked out as Rs. 11274 per acre, Rs. 17650 on large farms Rs. 14393 on medium farms and Rs. 10053 on small farm situations respectively during 2011-2012. Returns over variable cost were Rs. 7272, Rs. 7056 and Rs. 4324

per acre on large, medium and small farms respectively. These figures clearly reveal as to why farmers not in favour of this crop. The average gross margins for paddy in the Punjab state were worked out to Rs. 19065 per acre during 2010-11(Singh, 2013). No doubt the returns from competing crop (paddy) were higher but in the long run if sustainability issues were considered it (maize) will

Table 2: Cost of Cultivation of Summer Maize, Punjab 2011-12 (Rs. /acre)

Particulars Small Medium Large Overall

Field preparations 753(13.14)

663(9.16)

647(6.23)

730(11.70)

Seed and seed treatment 812(14.16)

1020(14.09)

1336(12.86)

877(14.06)

Sowing 537(9.37)

603(8.33)

540(5.20)

551(8.83)

Insecticides/Pesticides and Herbicides

191(3.33)

404(5.17)

880(8.47)

264(4.23)

Farm yard manure 200(3.49)

184(2.54)

123(1.18)

216(3.46)

Fertilizers and zinc 1362(23.77)

1417(19.57)

1579(15.20)

1383(22.16)

Irrigation cost 551(9.61)

514(7.10)

1460(14.06)

581(9.31)

Harvesting 648(11.31)

1460(20.17)

2100(20.23)

878(14.07)

Threshing 560(9.77)

864(11.93)

1560(15.03)

665(10.66)

Interest on variable cost 85(1.48)

107(1.47)

153(1.47)

92(1.47)

Total variable cost 5729 7237 10378 6237

Note: Figures in parenthesis are percentage to total variable cost


pay some dividends. Rice in kharif and wheat in rabi are not only the most dominant crops but these have been the most profitable with electricity subsidy (Singh, 2012). Now a day’s agriculture without subsidy is not profitable, thus some further incentives are also needed for maize to compete with paddy for effective substitution, especially in marketing mechanism. There are several ways to accelerate agriculture growth and important one is diversification of crops. For this purpose institution providing input and output market needs to strengthen. Marketing of crops plays significant role in reshaping the cropping pattern of the farmers. The adoption of new crops/ enterprises not only depends on socio economic characters of the farmer but also on orderly and efficient market conduct. Present study also deals with the structure, pattern and conduct of market for maize crop in Punjab state.

Marketable Surplus, Input and Output Pattern The marketable surplus is the

quantity of the produce which is available for non producing population of the country. Overall the production of maize for different categories was worked out as 29.83 qtl, 58.84 qtl and 92.00 qtl per farm respectively (Table 4) out of which more than 80 percent was sold in the markets by the producer. It was the major portion of marketable surplus contributed by large farmers (54.05%) followed by medium (32.76%) and only small portion (13.18%) by small farmers respectively. This surplus quantity was sold either directly to the consumers or through commission agents in the regulated markets. Private traders were important part of the sale purchase of maize. However, cost has not contributing significantly to the purchase of summer maize. The public procurement agencies do not procure maize on the pattern of wheat and paddy. Input and output market structure provide crucial link between farm and non farm sector which were important for the smooth conduct of marketing operation to improve the livelihood security of the large number of farmers. Marketing is an

Table 3:Returns over Variable Cost of Summer Maize for Sample Farmers, Punjab 2011-12

(Rs. /acre)

Particulars Small Medium Large OverallYield (qtl/acre) 12 17 20 14Coefficient of variation 36.36 34.71 39.82 41.45Price (Rs./qtl) 719 764 800 732Value of by product 1146 1260 1330 1177 Gross return 10053 14393 17650 11274Returns over variable cost 4324 7056 7272 5037


activity which starts with the decision to produce a saleable farm commodity. Input availability is an important determinant in molding the decision of the farmer in particular direction in choice of production of crops.

Farmers require input at particular time so the availability should be insured before sowing the crop. Seed, fertilizers and pesticides are the major inputs required by the farmers. As the bargaining power of the small and marginal farmers

has been low as compared to their counter parts, they are attached with the ‘arthia’ or company dealers for these inputs. Quality of inputs affects the crop yield and so on; small farmers seldom purchase inputs by bargaining with other stakeholders (Sekhon et.al 2008). Table 5 reveals that major source of input supply with the selected maize grower was private agents. In case of fertilizers private sources were more powerful than primary agricultural co-operative societies (PACS). Large farmers purchase fertilizers more from

Table 4: Marketable Surplus of Maize for Different Categories of Farms in Punjab (qtls)

ParticularsFarm size categories

Small Medium Large AverageProduction 29.83 58.84 92.00 38.47Family consumption 4.52 3.42 1.20 4.16Payment in kind 0.05 - 0.09 0.04Seed 2.27 - - 2.44Cattle feed 1.99 3.20 4.00 2.33Total consumption 8.83 6.62 5.29 8.96Marketable surplus (MS) 21.01 52.22 86.71 29.50MS per cent to production 70.43 87.26 94.25 76.68MS per cent to total marketable surplus 13.18 32.76 54.05 100.00

Table 5: Input Purchase Pattern of Selected Farmers in Punjab, 2011-12 (% age)

Input Source Small Medium Large

SeedOwn 27 12 -Government 3 - 40Private 70 88 60

FertilizersPrivate 92 80 80PACS societies 22 48 60Private & PACS 16 30 6


PACS whereas some of small and medium farmers depend more on the private source.

Price Spread of Summer Maize Marketing channels are the routs through which the crop moves from the production point to ultimate consumer. The length of the channel varies from commodity to commodity, depending on quantity to be moved, the form of consumer demand and degree of regional specialization in production. Number of intermediaries was involved in the marketing of maize were wholesalers, retailers, processors and consumers. Based on the information major channels in marketing of maize were identified as follows.-

Channel I: Producer-Wholesa ler-Miller-Retailer-Consumer

Channel II: Producer-Wholesa ler-Miller- Consumer

Channel III: Producer-Consumer

The price spread for maize was calculated for channel I, II and III. Channel III (Producer to Consumer) said to be an efficient channel as share of producer in consumer rupee is higher but the limitation of this channel was that only very small portion of the total produce (2.63%) was sold through this channel. Hence channel I and II were considered as important channels. The higher share of producer in consumer rupee was worked out for channel II (Producer-Wholesaler-Miller- Consumer) i.e. 32 percent. Producer incurred cost of

transportation, unloading and sieving as Rs. 25 per quintal (Table 6). The buyer in the market has to pay market fee and RDF @ 3 percent. Channel I (Producer-Wholesaler-Miller-Retailer-Consumer) was very important market channel of maize because significant quantity of produce flows through this channel. Farmer sold 86.35 percent of their produce through the wholesaler/ commission agents, who in turn sold to the processor (flour mills). Channel II (Producer-Wholesaler/CA-Miller- Consumer) under this channel two intermediaries were involved, Wholesaler/ CA and miller. Produce sold through wholesaler/CA to the miller who in turn sells it to the consumer. Of the total sale 11.02 percent of crop flows through this channel. The share of producer in consumer rupee was 32.29 percent.

Marketing Efficiency: Marketing efficiency moves around the fact that what extent of market agencies has been able to move the goods at minimum cost extending the maximum service from the producer to final consumer. Table 7 revealed that, the marketing efficiency has been highest in channel II i.e.1.47 than channel I at 1.34. It could be observed that the marketing efficiency has inverse relationship with the total cost and margins. As number of intermediaries increased, the cost and margin increased and the inverse has been the marketing efficiency (Chauhan, 2013; Balappa and Hugas, 2003; Wani et.al.1995, Patel et.al.2013). Efficiency can be improved by proper handling of crop after harvest


Table 6: Price Spread of Maize in Punjab, 2011-12 Channel I, II and III (Rs. /qtl)

Details Channel-I Channel-II Channel-IIINet price received by producer 775(25.83) 775 (32.29) 1975 (99.75)Marketing costs incurred by producer:Transportation charges 17.75 17.75 -Unloading charges 6.15 6.15 - Sieving charges (Rs. 0.55/unit) 1.10 1.10 -Total 25 25 75Producer’s sale price/wholesaler’s purchase price 800 800 -Expenses born by wholesaler:Market charges 24 24 -Packing material 25 25 -Labour charges 30 30 -Total 79 79 -Margins of wholesaler 571(19.03) 571 -Wholesaler sale price/ miller’s purchase price 1450 1450 -Marketing costs incurred by miller:Transportation cost 18 18 - Packing material 110 110 - Milling charges of maize 65 65 -Labour charges 32 32 -Miscellaneous charges( maintenance cost) 10 10 -Total 235 235 -Miller’s net margin 715(23.83) 715 -Miller’s sale price/retailer’s purchase price 2400 2400 -Marketing costs incurred by retailerRetailer’s net margin 480 - -Packing material 120 - -Retailers sale price/consumer’s purchase price 3000 2400 2050

Table7:Marketing Efficiency of Maize in Different Marketing Channels

Channel Value of goods sold (consumer price Rs/qtl)

Total marketing cost and margins (Rs/qtl)

Marketing efficiency

I 3000 2225 1.34II 2400 1625 1.47


through better storage and performing different functions efficiently.

CONCLUSION It may be concluded from the study that summer maize is risky crop in the Punjab state as the yield of maize found unstable. This might be the reason that area under summer maize showed continuously decline during different decades. The finding of the study depicts that summer maize had not succeeded at the net margin front. Returns over variable cost were worked out which are very meager, maximum Rs. 7272 per acre on large farms during 2011-12. Marketing of summer maize were in the

hands of private traders. Farmer sold the crop immediately after harvest otherwise it became difficult to store in unscientific store, because it catches moisture again.

REFERENCES Arora, V.K, S.K Jalota and K.B Singh

(2008) Managing Water Crisis for sustainable crop Productivity in Punjab: An overview, Punjab Agricultural University Journal of Research, 45(1-2): 17-21.

Badal P.S and Singh R.P (2000) Production, Marketing and Utilization of maize in Bihar: Some Micro level evidences, The Bihar Journal of Agricultural Marketing, 8(1): 15-20.

ANNEXURE I:Literacy Level and other Features of Sample Farmers in Punjab

(% age)

Sl.No. Particulars

Farm size categoriesSmall Medium Large Overall

1 Education of head of the familya. Illiterate 34 32 - 32.50b. Primary 16 32 40 20.00c. Secondary 46 32 20 41.67d. Senior secondary and graduate 4 4 40 5.83

2 Occupationa. Agriculture 100 100 100 100.00b. Agriculture and other (any job or business) 9 8 20 9.17

3 Draft Power (tractor)a. Own 9 52 100 21.67b. Hired 91 48 - 78.33

4 Source of irrigationa. Own 11 56 100 24.17b. Hired 84 44 - 72.50

5 Size of operational holding 2.59 7.5 49.4 5.57


Balappa S.R and Hugus L.B (2003) An Economic Evaluation of Onion production and its Marketing Systems in Karnataka, Indian Journal of Agricultural Marketing, 46 (2): 22-24.

Chuhan S.K and Chhabra Amit (2005) Marketable Surplus and Price spread for maize in Hamirpur District of M.P, Agricultural Economic Research Review, 18 (1): 39-49.

Chauhan,S.K (2013) Maize marketing in Himachal Pradesh, Indian Journal of Agricultural Marketing, 27 (1): 41-58.

Patel R.R, Patel AJ and Patel RM (2013) Marketing of lemon in Mehsana district of north Gujrat, Indian Journal of Agricultural Marketing 27(1): 190-198.

Sekhon, M.K and Kaur, Manjeet (2004) Role of small farmers in diversification of Punjab Agriculture with vegetables, Indian Journal of Agricultural Marketing 18 (1): 80-88.

Sekhon MK, Sidhu MS, Kaur Manjeet and Mahal AK (2008) Production, Marketing and institutional constraints: Strategies

for small and marginal farmers, UGC project Report, Dept of Economics & Sciology, PAU, Ludhiana, pp: 189.

Singh Karam (2009) Act to save groundwater in Punjab: Its impact on water table, electricity subsidy and environment, Agricultural Economics Research Review, 22 (Conf. no): 365-386.

Singh Karam (2011) Groundwater depletion in Punjab: Measurement and countering strategies, Indian Journal of Agricultural Economics, 66(4): 573-589.

Singh, J.P. and V.P. Sharma.2000. Productivity land diversification in Haryana agriculture. Productivity. 40 (4): 644-652.

Vyas, V.S. 1996. Diversification in agriculture: Concept, rationale and approaches. Indian Journal of Agricultural Economics, 51 (4): 636-643.

Wani, M.H.; Mattoo, M.S. and Sofi, A.A. (1995); Resource use and Economic Efficiency of various marketing cost components in apple; Agricultural Marketing; 37(4):38-40.


INTRODUCTION India has a tremendous potential for the growth of agro-based industries and presently one of the focus-segment is mushroom production. At present, India is producing about 41000 metric tonnes of button mushroom valued over Rs 328 crores. The demand for mushroom is increasing, because the nutritive value of mushroom has been rediscovered and recognized as a richer source of protein. Himachal Pradesh is a state of

valleys and hills where under controlled conditions of temperature and moisture, mushroom could be grown anywhere and throughout the year (Chauhan and Sood, 1992). This industry is fastly developed as a subsidiary occupation for income as well as for creation of additional employment to the growers and their families, the retired persons and women both in rural and urban area of the state. During 2013-14, the production in the state was 6313 metric tonnes valued at

PRODUCTION AND MARKETING OF BUTTON MUSHROOM IN KANGRA DISTRICT OF HIMACHAL PRADESH

ARTI KANGOTRA AND S.K. CHAUHANDirectorate of Agriculture, Nagrota Bagwan, Himachal Pradesh and

Department of Agricultural Economics, Extension Education and Rural SociologyCSK Himachal Pradesh Krishi Vishvavidyalaya, Palampur - 176 062

Mushroom production in Himachal Pradesh is mainly confined to private sector entrepreneurs through supply of quality spawned compost from the public sector compost cum mushroom production units. The state has witnessed an increase in its production from 2945 tonnes in 2000-01 to 7377 tonnes in 2009-10 and 7262 tonnes in 2012-13 with a larger share of private sector which increased from 96.38 per cent in 2000-01 to more than 99 per cent in 2012-13. The mushroom production in Himachal Pradesh recorded a spectacular annual growth rate of 3.64 per cent over this period with highest of 3.74 per cent per annum in case of private sector units. A study carried out with 70 button mushroom growing units grouped as small and large based on spawned compost bags in Kangra district of Himachal Pradesh revealed that out of three identified button mushroom marketing channels; channel II (producerà retaileràconsumer) was the most important channel as more than 63 per cent of total mushroom produce was marketed by almost one-half growers through this channel in which producer’s share in consumer’s rupee was as high as 68.57 per cent and quite reasonable for a highly perishable commodity and might be due to shorter marketing channel. Nearly two-third of growers reported that the quality of the spawned compost bags supplied to them by public sector production units was below satisfactory level while comparing with private suppliers. Nearly one-tenth of mushroom units were noticed to be infested with the incidence of disease and insect pests. Over one-third (42.85 per cent) of growers reported that they did not fetch remunerative price for their crop.


Rs 72 crores. Kangra district of Himachal Pradesh has achieved reasonable progress in the horizontal expansion of mushroom farming due to conducive climate at one hand and the concerted efforts of Indo-Dutch Mushroom Project, Palampur and the State Agricultural University, Palampur on the other. Keeping this in view, a study was undertaken with the following objectives:

OBJECTIVES 1. To examine the share and growth

of public and private units in the mushroom production of Himachal Pradesh.

2. To study the marketing system along with marketing costs, margins and marketing efficiencies, and

3. To identify problems and constraints faced by the mushroom growers and to suggest ways and means to overcome them for the promotion of mushroom cultivation in the study area.

METHODOLOGY The study was restricted to Kangra district of Himachal Pradesh because Indo-Dutch Mushroom Project, Palampur functioning under the state Directorate of Horticulture is located within the State Agricultural University, Palampur which is supplying spawned compost to mushroom growers in five districts namely Chamba, Mandi, Kangra, Hamirpur and Una. Secondly, the Centre for Mushroom Research and Training (CMRT) of State Agricultural University, Palampur

produce spawn and has close linkage with Indo-Dutch Mushroom Project in terms of supplying quality spawn as one of the essential components. Besides, Directorate of Extension Education, HP Agricultural University, Palampur provides training on various aspects of mushroom cultivation from time to time. A complete list of private growers who were actually engaged in the mushroom cultivation at the time of selection was obtained from Indo-Dutch mushroom Project, Palampur and HP Agricultural University, Palampur. From this list, a random sample of 70 button mushroom growers was chosen for the study. The public sector mushroom production units were quite less thus not included for detailed analysis as their main objectives is to supply compost and simply demonstrate mushroom production. With the help of cube-root cumulative frequency (3√f) method these growers were stratified into two categories viz; small (upto 150 spawned compost bags) and large (> 150 spawned compost bags) on the basis of number of bags placed by them. To find out the marketing costs and margins, primary data on various aspects such as prices paid for various inputs and received for the mushroom produce, the different costs incurred while packing, assembling, handling and transporting the producer were collected. Besides data from retailers and wholesalers of Palampur, Baijnath, Kangra and Thural markets were collected through personal interview method. The costs, margins and price-spread involved in mushroom marketing were analysed.


RESULTS AND DISCUSSION

Status of mushroom production in Himachal Pradesh Himachal Pradesh has varied agro-climatic conditions and has enormous potentialities for profitable mushroom enterprise. For the development of mushroom production, the state Department of Horticulture has divided Himachal Pradesh in three zones – with headquarters at Solan, Palampur and Bajaura. The Solan zone includes Solan, Shimla, Sirmaur and Bilaspur districts whereas Palampur some comprises of five districts namely Kangra, Hamirpur, Una, Mandi and Chamba. The Bajaura zone covers Kullu and Mandi. The major role of public sector zonal units established at Solan, Palampur and Bajaura is to manufacture quality spawn compost for distribution among private growers; however, mushroom production on these project units was also realized to impart demonstration to the growers. Due to enhanced number of private mushroom growers on account of increasing demand over the last five years, the public sector units concentrated their activities in meeting out the requirement for spawned compost instead of increasing the scale of mushroom production. Besides, these compost manufacturing units were few and thus not included in the sample for detailed study. Therefore, mushroom production in Himachal Pradesh is the main activity of private units and the state has witnessed an increase in its production from 2945 metric tonnes in 2000-01 to 7262 metric tonnes in 2012-13

(Table 1 and 2). Over the last decade the contribution of private units has increased from 96.38 per cent in 2000-01 to more than 99 per cent in 2012-13; the spurt in private share was more conspicuous since 2007 when public sector project unit at Solan also stopped mushroom production and concentrated in just maintaining the supply of spawned compost to growers. The mushroom production in Himachal Pradesh recorded a compound growth rate of 3.64 per cent per annum over this period with the highest of 3.74 per cent per annum on private farms.

Distribution of Mushroom Growers The distribution of mushroom growers under different category based on number of mushroom crops raised including Dhingri ( a summer crop) in a year is presented in Table 3. The table shows that at the overall level, majority (81.43 per cent) of growers raised one crop of button mushroom in a year while 12.86 per cent could grow two crops and 4.28 per cent resorted to one crop of Dhingri with one crop of button mushroom. As much as 97.44 per cent of small growers raised one crop of button mushroom and 2.56 per cent raised two crops whereas none could raise Dhingri crop. In large category, 61.29 per cent of growers raised one crop of button mushroom followed by 25.81 per cent raising 2 crops of button mushroom and 10 per cent raising Dhingri crop along with button mushroom. The analysis clearly reveals that majority (81.43 per cent) of growers raised one crop of mushroom in a year mostly during winter (September/October to January/


February) as subsidiary enterprise as they could maintain the essential requirements like temperature, humidity and control of insect pest for its production in their non hi-tech units easily and economically. More than one-fifth of growers who had hi-tech units could take two crops in a year and hardly 1 per cent raised Dhingri along with two crops of button mushroom. Since the second crop of button mushroom in the study area was taken during January/February to March/April when low humidity and rising natural temperature invites managerial issues in protecting the crop from the attack of insects & diseases and getting uniform size of buttons. Due to these reasons majority of growers who had simple mushroom houses did prefer to take only one crop of button mushroom.

The oyster mushroom commonly referred as Dhingri in India, is a basidiomycetes and belongs to the genus

Pleurotus that grows naturally in the temperate and tropical forests on dead, decaying wood logs, sometimes on drying trunks of deciduous or coniferous trees. It can also grow on decaying organic matter like agro-wastes without composting. This mushroom is cultivated in about 25 countries of far-east Asia, Europe and America. It is the 3rd largest cultivated mushroom in the world. China alone contributes 88% of the total world production. The other major oyster producing countries are South Korea, Japan, Italy, Taiwan, Thailand and Philippines. At present India produces annually 10,000 metric tonnes of this mushroom. It is popularly grown in the states of Orissa, Karnataka, Maharashtra, Andhra Pradesh, Madhya Pradesh, West Bengal Meghalaya, Tripura, Manipur, Mizoram and Assam. Like button mushroom, Dhingri is becoming popular among commercial growers in Himachal Pradesh being grown during summer.

Table 1Zone wise Mushroom Production Under Projects in Himachal Pradesh (Metric tonnes)

Sr.No. Year Particulars

ZoneTotalSolan Palampur Bajaura

1. 2000-01Under the project * 65.00 41.60 0.00 106.60Private units 2835.00 3.75 0.00 2838.75Total 2900.00 45.35 0.00 2945.35

2 2001-02Under the project 51.00 102.00 0.00 153.00Private units 3000.00 74.00 0.00 3074.00Total 3051.00 176.00 0.00 3227.00










11. 2010-11Under the project 0 232.66 0 232.66Private units 6580.1 904.81 73.20 7558.11Total 6580.1 1137.47 73.20 7790.77

12 2011-12Under the project 0 44.20 0 44.20Private units 5636.33 1106.10 415.00 7157.43Total 5636.33 1150.30 415.00 7201.63

13 2012-13Under the project 0 50.37 0 50.37Private units 5815.38 1027.25 368.50 7211.13Total 5815.38 1077.62 368.50 7261.50

Note: * stands for Indo- Dutch Mushroom Project, Palampur & National Research Center for Mushroom (NRCM) Project, Solan

Source: Directorate of Horticulture, Shimla


Table 2 Trend and Growth of Mushroom Production in Himachal Pradesh

Sr.No. Year

Production (Metric tonnes)

Public sectorproject units Private units Total

1 2000-01 106.60(3.62)

2838.75(96.38)

2945.35(100)

2 2001-02 153.00(4.74)

3074.00(95.26)

3227.00(100)

3 2002-03 90.70(2.80)

3145.70(97.20)

3236.40(100)

4 2003-04 100.95(2.25)

4383.75(97.75)

4484.70(100)

5 2004-05 96.48(2.05)

4604.00(97.95)

4700.48(100)

6 2005-06 57.38(1.15)

4928.50(98.85)

4985.88(100)

7 2006-07 200.35(3.76)

5122.55(96.24)

5322.90(100)

8 2007-08 97.92(1.79)

5377.60(98.21)

5475.52(100)

9 2008-09 89.49(1.52)

5805.87(98.48)

5895.36(100)

10 2009-10 102.50(1.39)

7274.60(98.61)

7377.10(100)

11 2010-11 232.66(2.99)

7558.11(97.01)

7790.77(100)

12 2011-12 44.2(0.61)

7157.43(99.39)

7201.63(100)

13 2012-13 50.37(0.69)

7211.13(99.31)

7261.50(100)

Compound growth rate (% p.a.) -1.54 3.74 3.64

Source of data: Directorate of Horticulture, Shimla and authors’ calculations


Socio Personal Characteristics of Mushroom Growers Knowledge regarding the personal characteristics of the respondents is very important as this influences the decision-making process in running the farm business to a great extent. It is in this context that Table 4 presents some salient features about the distribution of the heads of the sample mushroom growing units according to their age, education and farming experiences. It can be visualized from the table that about 49 per cent of the growers were in the age group of 41-60 years where as 37 per cent of them were in the age group of 26-40 years. As far as their education status was concerned, 100 per cent of the growers were literate, while 41.13 per cent were at least matriculate. As regards the experience in mushroom growing, 25.81

per cent of the growers in large and 25.71 per cent in overall category had more than 7 years experience. Thus, most of the mushroom growers had experience in this field of more than 7 years which could help them take sound farm management decision in their units.

Production and Disposal of Button Mushroom Table 5 details out the production and disposal of button mushroom. The table shows that at the overall level, total production of button mushrooms was 8.38 qt out of which 1.91 per cent was utilized at home and 0.24 per cent was offered as gift. The respective figures of home consumption for small and large growers were 4.42 per cent and 1.29 per cent, respectively. The button mushroom production after harvest found unfit for

Table 3Mushroom Growers based on Raising Mushroom Crops per Annum (No.)

Sr. No. Particulars

Unit sizeSmall Large All units

1. Sample mushroom growers (No.) 39(100)

31(100)

70(100)

2. Raising only one crop of button mushroom 38(97.44)

19(61.29)

57(81.43)

3. Raising two crops of button mushroom in a year 1(2.56)

8(25.81)

9(12.86)

4. Raising one crop of button mushroom and one crop of Dhingri

0(0.00)

3(9.67)

3(4.28)

5. Raising two crops of button mushroom and onecrop of Dhingri

0(0.00)

1(3.23)

1(1.43)

Note: Figures in parentheses are percentages of total


human consumption due to one reason or the other, called post harvest losses during harvesting was 1.55 per cent of total production, the proportion of which was much higher (5.18%) on small units than just below 1 per cent on large units. The higher percentage of spoilage on small units was mainly due to use of poor casing material and lack of awareness regarding

maintaining required temperature and relative humidity which clearly shows that small units need to be educated properly about the required essential infrastructure and cultivation & handling techniques of mushroom output to avoid spoilage and thus directly affecting their revenue generation.

Table 4Socio- Personal Characteristics of Sample Mushroom Growers (No.)

Sr. No. Socio personal


1. Age (Years) 39 (100)

31 (100)

70(100)

Up to 25 1 (2.56)

0 (0.00)

1(1.43)

26-40 14 (35.90)

12 (38.71)

26(37.14)

41-60 20 (51.28)

14 (45.16)

34(48.57)

61-80 4 (10.26)

5 (16.13)

9(12.86)

2. Education 39 (100)

31 (100)

70(100)

Illiterate 0 (0.00)

0 (0.00)

0(0.00)

Primary level 9 (23.08)

6 (19.35)

15 (21.43)

Middle standard 2 (5.13)

4 (12.90)

6(8.57)

Matriculation 18 (46.15)

11 (35.48)

29(41.43)

Senior secondary 4 (10.26)

4 (12.90)

8(11.43)


Graduation 5 (12.82)

6 (19.35)

11(15.71)

Post graduation and above 1 (2.56)

0 (0.00)

1(1.43)

3. Experience in mushroom growing 39 (100)

31 (100)

70(100)

Up to 1 year 6 (15.38)

2 (6.45)

8(11.43)

1-2 year 6 (15.38)

5 (16.13)

11(15.71)

3-5 year 7 (17.95)

10 (32.26)

17(24.29)

5-7 year 10 (25.64)

6 (19.35)

16 (22.86)

Above 7 years 10 (25.64)

8 (25.81)

18(25.71)

Note: Figures in parentheses are percentages of total.

Table 5Production and Disposal of Button Mushroom on Sample Units (q/unit)

Sr. No. ParticularsUnit Size

Small Large Overall

1. Production 2.71 (100)

15.50 (100)

8.38 (100)

2. Home consumption

0.12(4.42)

0.20(1.29)

0.16(1.91)

3. Gift - 0.04(0.25)

0.02(0.24)

4. Spoilage 0.14(5.18)

0.13(0.84)

0.13(1.55)

5. Marketed surplus 2.45(90.40)

15.13(97.62)

8.07(96.30)



Harvesting and Packing of Button Mushrooms Mushrooms are picked up just before their caps expand and the gills are exposed. When the caps develop around 3 to 3.5 cm in diameter and attain button stage, individual mushroom were picked by holding it between forefingers and thumb and gently removing them from the casing bed. The dirt was removed by cutting off the soiled stem portion with knife and cleaned mushrooms were put in small handy baskets. The yield was highly variable and depended upon the quality of the compost, the strain of spawn used and proper management of the crop. The harvested mushrooms have very short life. At the temperature of 20 C0, the mushroom deteriorates in 1-2 days. After harvesting, deterioration includes browning and discoloration of buttons. Therefore, the picked up mushrooms were dipped and washed in a solution of potassium metabisulphate (KMS) to prevent browning and discoloration of buttons. The washed mushrooms were weighed on electronic balance while putting in 200 g polythene bags. The polythene bags were sealed using candles and pricked with small needle to allow aeration. The whole lot was put in large hand bags for easy carrying during transportation.

Sale Procedure and Mode of Payments Fresh mushroom have very short shelf life. They cannot be transported to long distance without refrigerated transport facility. Therefore, they were sold in highly localized markets in

the surrounding areas. Because of the limited duration and limited marketing area, some growers faced the problems of over- saturated market. Thus few of them were forced to sell their produce at below the prevailing market price. As far as sale is concerned, few customers very well known to growers approached them at their door steps for purchase and could get fresh material at reasonable price. Majority of growers had made their links in the markets and at their own level supplied to retailers and wholesalers. The produce at individual level varied from 3 to 4 kg per day easily carried out in hand bags and transported through public vehicles. The mushroom growers received their payments on the same day and cases of deferred payments were negligible.

Channels of Mushroom Marketing The marketing channels of mushroom were identified on the basis of mushroom sold by the growers in various markets. Most of the mushroom growers sold their produce through retailers on individual basis. The prevailing channels along with percentage of the mushroom growers and sale of mushroom identified in each channel are shown in Table 6. It can be seen from the table that Channel - I (Produceràconsumer) was availed of by 40.35 per cent small and 44.44 per cent large units growing button mushroom and the proportion of produce sold through this channel was found to be 11.83 per cent on small and 12.79 per cent on large units with overall share of 12.63 per cent. Channel II (Producerà retailerà


consumer) was the most important and followed by 47.83 per cent of growers through which 63.83 per cent of button mushroom produce was marketed. Similarly, Channel III (Producerà wholesalerà retailerà consumer) was followed by only large units through which 28.30 per cent of mushroom production was disposed of by 16.05 per cent growers. On the whole, 23.55 per cent of button mushroom production was disposed of by 9.42 per cent of the

mushroom growers through this channel. Thus it can be concluded that Channel II was the most important channel of mushroom marketing through which larger quantity of mushroom reached in the hands of consumers. The public sector compost manufacturing cum mushroom production units (though not many and thus excluded in the sample) could sell their mushroom produce through channel- III. The wholesalers existed in the regulated markets.

Table 6Pattern and Disposal of Button Mushroom on Sample Units

Sr. No. Channels


No. Qty (q) No. Qty (q) No. Qty (q)

1. Channel - I(Producer àconsumer)

23.00(40.35)

11.20(11.83)

36.00(44.44)

60.00(12.79)

59.00(42.75)

71.20(12.63)

2.Channel -II(Produceràretailerà consumer)

34.00(59.65)

83.49(88.17)

32.00(39.51)

276.45(58.91)

66.00(47.83)

359.94(63.83)

3.Channel -III (Producerà wholesaleràretaileràconsumer)

0.00(0.00)

0.00(0.00)

13.00(16.05)

132.79(28.30)

13.00(9.42)

132.79(23.55)

4. Total 57.00(100)

94.69(100)

81.00(100)

469.24(100)

138.00(100)

563.93(100)

Note: Figures in parentheses are percentages of total

Marketing Costs, Margins and Price-spread Marketing costs refer to the actual expenses incurred by the growers and other intermediaries while handling mushroom. Marketing margins refer to the difference between the price paid

and received by a specific agency during movement of the mushroom from the growers to consumers. Price-spread refers to the difference between the price paid by the consumer and the price received by the growers. This spread consisted of marketing costs and margins of the intermediaries, which ultimately


were estimated separately for different channels and the results, are shown in Table 7. It can be observed from the table that net margin earned by the retailer came to be Rs 20.80 and Rs 12 in channel

II and channel III, respectively. For the wholesaler it was Rs 3 per kg of the mushroom. The price-spread worked out for channel I and channel II was Rs 55 and Rs 75 per kg, respectively.

Table 7Marketing Cost and Price-Spread for Button Mushroom (Rs/kg)

Sr. No Particulars Channel

I

% of consumer

price

Channel II

% of consumer

price

Channel III

% of consumer

price

1. Price received by grower 100.00 100.00 120.00 68.57 100.00 57.14

i Cost incurred by growers 1.18 1.18 1.73 0.99 1.73 0.99

ii Packing charges 0.60 0.60 0.60 0.34 0.60 0.34

iii Transportation charges 0.00 0.00 0.55 0.31 0.55 0.31

iv

Others charges (included match box, stapler, stapler pins, etc.)

0.58 0.58 0.58 0.33 0.58 0.33

vNet price received by grower

98.27 98.27 118.27 67.58 98.27 56.15

2. Cost incurred by wholesaler - - - - 27.00 15.43

i Wastage / spoilage - - - - 20.00 11.43

ii Commission - - - - 5.00 2.86

iii Handling and packing - - - - 1.00 0.57

iv Others /market fees - - - - 1.00 0.57

3. Sale price of wholesaler - - - - 130.00 74.29

4. Gross margin of wholesaler - - - - 30.00 17.14


5. Net margin of wholesaler - - - - 3.00 1.71

6. Cost incurred by retailer - - 34.20 19.54 33.00 18.86

i Wastage / spoilage - - 20.00 11.43 20.00 11.43

ii Commission - - 7.20 4.11 6.00 3.43

iii

Loading and unloading charges &packing charges

- - 5.00 2.86 5.00 2.86

ivTransportation & distribution charges

- - - - 2.00 1.14

7. Net margin of retailer 20.80 11.89 12.00 6.86

8.

Sale price of retailer / consumer purchase price

100.00 100.00 175.00 100.00 175.00 100.00

9. Price spread 0.00 55.00 75.00

share in consumers’ rupee was 68.57 per cent which seems to be reasonable as far as the perishable commodity is concerned. In channel III producer’s share in consumer’s rupee was 57.14 per cent. It is also evident from the tables that button mushrooms were sold at the rate of Rs 100 per kg in the study markets of Palampur, Baijnath, Kangra; etc. A close examination of Table 8 shows that channel I was the most efficient channel based on Shepherd’s efficiency index which was 4.55 followed by channel II (4.15). Similar findings were reported by Meena et al. (2009).

Producer’s Share in Consumer’s Rupee in Mushroom Marketing A comparative view of producer’s share and marketing efficiency involved in the various different marketing channels is presented in Table 8. It is evident from the table that the producer’s share in consumer’s rupee was the highest of 100 per cent in Channel I though not important channel from mushroom sale point of view. This channel no doubt was followed by as much as 42 per cent growers but it could absorb just 12.60 per cent of the produce. Since channel II was the most important in which producer’s


Problems Faced by Mushroom Growers Mushroom growers in general faced problems in the field of production as well as marketing which are presented in Table 9. The results reveal that non availability of compost bags as per requirement was perceived by the growers as the major constraint (78.57 per cent on over all units). Similar findings were reported by Paul et al; 2001. The nearby public units preparing spawn compost could not meet the demand of growers. As much as 60 per cent of the growers reported that the quality of the spawned compost for mushroom production provided by public units was below satisfactory level. Nearly 13 per cent of growers reported the incidence of disease and attack of insect pests. Similarly, 42.85 per cent growers complained that they did not receive remunerative price for the mushroom crop.

CONCLUSION According to findings the growers could harvest 8.38 q mushrooms produce on an average unit, of which 96.30 per cent was meant for sale. Producer à retailerà consumer (Channel II) was the

most important channel of mushroom marketing followed by different category of units. At the overall level nearly one-half of the growers disposed of approximately 64 per cent of mushroom produce through this channel, followed by Producerà wholesalerà retailerà consumer (channel III). The producer’s share in consumer’s rupee was as high as 68.57 per cent in Channel II which seems to be reasonable as far as perishable commodities are concerned. Non availability of required number of spawned compost bags was one of the major constraint (78.57 per cent) faced by mushroom growing units. The nearby public units producing spawned compost could not meet the demand of growers. As much as 60 per cent of the growers reported that the quality of the spawned compost bags supplied by public units could not meet their satisfaction level. Nearly 13 per cent of growers reported the incidence of disease and attack of insect pests on their units and 42.85 per cent of the growers did not receive remunerative price for the mushroom crop.

The findings of study suggest that mushroom growers’ co-operative

Table 8Channel wise Marketing Efficiency in Mushroom Production

Sr. No. Particulars Channel I Channel II Channel III

1 Producer’s share in consumer’s rupee (%) 100 68.57 57.14

2 Marketing efficiency index 4.55 4.15 1.19

3 Rank I II III


marketing society needs to be promoted for looking after their interests. The government must encourage the mushroom cultivation through timely distribution of quality spawned compost at the doorsteps of growers on subsidized rates. Regular field visits of mushroom experts cum subject matter specialist

Table 9Problems Faced by Mushroom Growers (Multiple response)

Sr. No. Particulars


1 Non availability of compost bags of desired quantity when needed

31 (79.48)

24 (77.42)

55 (78.57)

2 Non availability of quality raw material 20 (51.28)

22 (70.96)

42 (60.00)

3 Higher incidence of insect pest 0 (0.00)

4 (12.90)

4 (12.90)

4 Higher incidence of disease 21 (53.85)

16 (51.61)

37 (52.85)

5 Non remunerative price 18 (46.15)

12 (38.70)

30 (42.85)


be ensured to check the prevalence of disease and attack of insect pests and educating the small growers in particular, about package of mushroom practices. The mushroom growers taking one crop should be encouraged and guided to raise at least two crops per year by ensuring regular and adequate supply of spawned compost.

REFERENCESChauhan S. K and R.P Sood (1992). Economics

of production and marketing of mushroom in Kangra district, H.P. Ind. Jour. Agril. Mktg; 6(1): 44-49.

Meena K. N; D. C Pant and B. Upadhyay (2009).

Production and marketing of mushroom in Udaipur district of Rajasthan. Ind. Jour. Agril. Mktg; 23(2): 75-84.

Paul N; N. K Punjabi and S. Paul (2001). Constraints of mushroom cultivation. Agril. Extn. Rev.; 13(2): 26-31.


INTRODUCTION Cotton (Gossypium Sp) is an impor-tant fibre crop in the world. Being a prime supplier of raw material for the textile industry, it plays a vital role in the Indian economy. Besides sustaining the country’s textile industry, it also earns precious foreign exchange for the country from the export of raw cotton and finished goods. Although cotton is primarily fibre crop, it is also used as a food and feed crop. Cotton seed, being the world’s second most oilseeds is used for culinary purposes and the oil cake residue is a protein rich feed for ruminate livestock.

Cotton production in India engages more than 6 million farmers. Besides, indirectly it employs an additional 40 to 50 million people in activities related to its cultivation, processing and trade.

The area under cotton in India is around 115.53 lakh hectares, with the production and productivity of 375 lakh bales and 552 kg/ha respectively in 2013-14. After Maharashtra and Gujarat, Andhra Pradesh ranks at third position in the country in cotton cultivation with an area of around 21.42 lakh hectares, and production and productivity of 72 lakh bales and 571 kg/ha respectively in 2013-14. The

ECONOMIC ANALYSIS OF COTTON MARKETING CHAIN IN ANDHRA PRADESH

E. RADHIKA AND R. VIJAYA KUMARIDepartment of Agricultural Economics, College of Agriculture,Acharya N.G. Ranga Agricultural

University (ANGRAU),Rajendranagar,Hyderabad – 500 030

The study was conducted covering 30 cotton growers, 15 each commission agents, 15 Cotton Corporation of India agents, 20 ginners and 5 spinners in six mandals of Adilabad and four mandals of Guntur district. Findings of the study revealed that, the average total cost of cultivation and net returns of Bt cotton were higher in Adilabad district (Rs.69607 and Rs. 36781 per ha respectively) as compared to Guntur district (Rs.63793 and Rs. 21901 per ha respectively). The average total cost incurred in the processing of kapas to lint and lint to yarn worked out to be Rs.4631 and Rs. 17202 per quintal of kapas. The gross returns obtained from ginning one quintal of kapas were Rs.4970, of which the returns from main product (lint) were Rs.3979 and that from by product (seed) were Rs.992. The value addition to the product in the process was Rs.732. The net value added as a result of processing of kapas to lint was Rs.340 per quintal of kapas processed. The gross returns obtained from processing (spinning) of one quintal of lint were Rs.20435, which comprised of mainly returns from yarn (Rs.18250) and wastage (Rs.2185). The value addition in the process was Rs.8435. The net value added as a result of processing of lint to yarn was Rs.5933 per quintal of lint processed. The ginners have maximum financial profitability (1.86) followed by spinners (1.62) and farmers (1.39).


main cotton growing districts in Andhra Pradesh are Adilabad, Guntur, Warangal, Karimnagar, Khammam and Nalgonda. Adilabad is one of the leading districts in Andhra Pradesh with 7.23 lakh bales of cotton production under 3.7 lakh hectares during 2012-13.

The processing of cotton is a business which is undertaken for the purpose of value addition to the product. The value addition to cotton takes place at three main stages of processing viz., ginning, spinning and weaving. The end product in cotton processing is the cloth which will result at the weaving stage of cotton processing.

The cotton processing industry, in fact, is the largest labour intensive economic activity next to agriculture and provides employment to Indian population either directly or indirectly. It is the largest organised and unorganised sector and constitutes an integral part of the urban and rural life of the country. India like other countries in the world, preserves its ancient and time honoured traditions of ginning, spinning, weaving, dyeing and printing crafts.

Knowing the commercial importance of cotton at the country and state levels, it is felt that there is need to map the cotton marketing chain and study the same through functional and financial analysis. Hence, the present study was undertaken with the following specific objectives.

1. To identify and outline the cotton marketing chain using functional analysis .

2. To determine the value added, production-trading accounts and the consolidated account of the chain and

3. To workout the financial profitability of the various agents in the cotton marketing chain.

METHODOLOGY Multistage purposive sampling technique was adopted in the selection of the districts, mandals, villages, and cultivators for the present study. The study was conducted in Adilabad and Guntur districts of Andhra Pradesh covering six and four major cotton growing mandals respectively. From each selected mandal one village was selected and three farmers were selected randomly from each village for collection of data. Thus a total of 30 cotton farmers formed the sample size for the study. Besides, a sample of fifteen commission agents, fifteen CCI agents, twenty ginners and five spinners were selected as sample market intermediaries for the present study.

The data were collected through personal interview of selected cotton growers and marketing intermediaries like traders and processors with the help of pre-tested schedules designed for the purpose. The data regarding cropping pattern, cost of cultivation, net returns, gross returns, input costs, buying price, selling price etc were collected from farmers. Traders or the commission agents are the middle men between farmers and processors. Marketing


costs, selling and buying price, fixed and variable costs were calculated. Related information was taken from processors also. The data collected were subjected to various analytical tools apart from simple averages.

The value addition on cotton occurs at three stages of processing viz., ginning, spinning and weaving. Out of these three stages of processing, two stages viz., ginning and spinning stages were considered for the present study. Conventional, functional and financial analytical tools were employed for estimating the costs and returns in cotton production, cost of processing, returns and value addition to cotton in each stage of processing.

RESULTS AND DISCUSSIONIdentification of the cotton marketing chain The various agents involved in the cotton marketing chain of the study area are identified as farmers, commission agents, CCI agents, ginning mills, oil mills and spinning mills.

Farmer Seed cotton producers (Farmers) are the starting point in the chain. Production of cotton was the first stage in cotton marketing chain. Farmer undertake activities like production and marketing of cotton. They sell output (kapas) to commission agents or Cotton Corporation of India (CCI) agents.

Commission Agent Commission agents act as a direct link between the farmers and the ginning mills. The commission agents mostly work for the ginneries on commission of Rs. 500 to Rs. 1000 per tonne of seed cotton (kapas) purchased. It has been identified that the activities of the agents do not directly affect the existing price but indirectly affect the income of the farmers and that of the traders. These activities of the agents’ were noticed to be as a result of re-adjustment of weighing scale, and adulteration of seed cotton with impurities. The effect of adulteration is contributing to the low ginning capacity of the ginneries, thereby reducing output as well as income of the farmers, traders and the ginning companies since market price is affected in the process.

CCI Agent Cotton Corporation of India as a Nodal Agency of Government of India undertakes price support operations and keeps itself in preparedness to meet the eventualities of price support operations. As and when kapas prices touch the level of Minimum Support Price (MSP), kapas purchases are made under MSP operations without any quantitative limits. Under these MSP operations, cotton farmers are free to offer their kapas produce to CCI and Corporation continues purchases of such kapas till the prices rule at MSP level. In the event of kapas prices ruling above MSP level, Corporation undertakes commercial operations at its own cost for supply of cotton to mills in the State sector as well as private sector.


Ginning Mill Ginning means separation of cotton seed from raw cotton. Ginning mills are of two types i.e., private and co-operative ginning mills. The processing of seed cotton into lint and seed is done at the ginneries which are located at the cotton growing areas of the country. At the ginneries, after extracting the seed from the seed cotton, the lint is graded, made into bales and then sent to the textile mills where it is spun into yarn before being woven into assorted fabric.

Processing refers to value addition for the commodity in the process. Ginning is considered as primary processing. It makes possible to recover valuable byproducts. Processed products provide better returns to processor. The main output of ginning (lint) is sent to spinning mills and the by product (seed) to oil mills. Some part of main product (lint) is exported to other states like Maharashtra, Gujarat and Tamilnadu.

The raw cotton harvested by various farmers makes its way to various ginneries either directly by the cotton farmers or through local collectors. Ginners are pivotal in the cotton marketing chain as the lint output from them links the cotton sector with the textile and garment factories both in the domestic and international markets, while the cottonseeds go to edible oil mills and oil cake residues as animal feed.

Oil Mill The factory utilizes cottonseed as raw material in addition to other oil crops like sesame, groundnut and niger seed (Nug). The oil mill produces oil and seed cake from cottonseed. The main function of oil mills is the separation of oil from cotton seed. During this processing the byproduct is seed cake. Cotton seed is composed of 10 per cent of oil, 64 per cent of seed cake and remaining 26 per cent is the wastage. The main product oil is sold to local oil consumers and the byproduct seed cake is used as feed for livestock. The oil produced from cottonseed is then used for human consumption, while the oilseed cake is used for dairy and fattening animals as feed. The oil produced from cottonseed by the oil mill is consumed by a number of consumers from different parts of the country in addition to the local consumers. However, shortage in supply of cottonseed is reported as a serious problem.

Spinning Mill Spinning is the next stage of ginning in the processing. Spinning means making yarn or thread from fibrous material (cotton lint).The act of fishing with a light rod and a reel having a bail or similar device that guides the line around a stationary spool and that can be disengaged to let the line run freely, as when casting, also called spin casting or spin fishing. After processing, the yarn is sent to textile mills and some part is exported to other countries like Pakistan and Bangladesh.


Farmer

Commission agent CCI agent

Ginning Mill

Oil Mill Commission agent Export

Dairy farm Local oil traders Spinning mill

Textile mill Export

Fig.1 Flow diagram of cotton marketing chain

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Table 1 indicates different stages of the cotton marketing chain, agents involved in the chain, the functions of each agent and the output of each stage.

Value Added, Production-Trading and Consolidated Accounts of cotton marketing chain

Cotton Producer

Cost and returns of cotton cultivation:The cost of cultivation of cotton computed from the data collected from the sample

farmers (Table 2) reveals that the cost of cultivation is higher (by Rs. 5814) in Adilabad as compared to Guntur district. This is because of higher expenditure on labour component and also increased fixed costs by the sample respondents in Adilabad district.

The average total cost per hectare of cotton was Rs.69607 in Adilabad of which 79.24 per cent was towards variable expenditure and 20.76 per cent was the fixed cost. The total cost of cultivation


incurred to produce one quintal of cotton was Rs.2578, which comprised of variable cost (Rs.2043) and fixed cost (Rs.535). Similarly, the average total cost per hectare of cotton in Guntur district was Rs.63793 of which 75.63 per cent was variable cost and 24.37 per cent was fixed cost. The total cost of cultivation incurred to produce one quintal of cotton was Rs.2542, which comprised of variable cost (Rs.1922.4) and fixed cost (Rs.619.7).

Per hectare cost of marketing and per quintal cost of marketing of cotton in Adilabad and Guntur districts are presented in Table 3. The sample farmers in Adilabad district have incurred Rs. 7012 as the marketing cost of cotton, of which packing material and packing charges (Rs.2710.8) was the major component accounting for 38.66 per cent followed by commission charges (Rs.2149.2),

transportation cost (Rs.1404), loading and unloading charges (Rs.558.9) and weighing charges (Rs.189) accounting for 38.66 per cent, 30.65 per cent, 20.02 per cent, 7.97 per cent and 2.7 per cent of the total cost of marketing respectively. The marketing cost per quintal of cotton was Rs.259.7.

Similarly, the marketing cost of cotton in Guntur district was Rs.6805, in which packing material and packing charges (Rs.2897.5), commission charges (Rs.1636.25), transportation cost (Rs.1630), loading and unloading charges (Rs.466.25) and weighing charges (Rs.175) accounted for 42.59 per cent, 24.04 per cent, 23.95 per cent, 6.85 per cent and 2.57 per cent respectively. The marketing cost per quintal of cotton was Rs.272.2. These results are in conformity with the results of Mundinamani (2000).

Table 1Functional Analysis of Cotton Marketing Chain

Stage of the chain Function Agent Output Production Cultivation Small and Large farmers Cotton seed

Primary marketing Marketing Transport to mill

Commission agent CCI agent Cotton seed

Millers Ginning mill Milling Private and Co-operative

millers Lint and Seed

Spinning mill Milling Private and Co-operative millers Yarn

Oil mill Processing Private and co-operativemillers Oil Seed cake

Textile industry Weaving Private and co-operativeweavers Cloth

Exports Marketing Exporters Lint ,Yarn, cloth


The gross returns per hectare of cotton cultivation were Rs.113400 and Rs.92500 with gross returns per quintal of cotton being Rs.4200 and Rs. 3700 in Adilabad and Guntur respectively (Table 4). The net returns obtained per hectare and per quintal of cotton over cost was found more in Adilabad (Rs.36781.15/ha, Rs.1362.32/qtl) when compared to

Table 2Cost of Cultivation of Cotton

S.No ParticularsAdilabad Guntur

Rs/ha Rs/qtl % Rs/ha Rs/qtl %I Variable cost 1 Human labour 17152.8 635.28 24.64 15542.5 621.7 24.452 Bullock labour 2500 92.59 3.59 2125 85 3.343 Tractor power 5250 194.44 7.54 4575 183 7.194 Seeds 3697.9 136.95 5.31 3750 150 5.95 Farm yard manure 16515 611.66 23.72 13312.5 532.5 20.946 Fertilizers 3135.95 116.14 4.5 3831.65 153.26 6.027 Plant protection

chemicals2583.32 95.67 3.71 1927.07 77.08 3.03

8 Irrigation charges 927 34.33 1.33 0 0 09 Interest on working

capital3395 125.74 4.87 3237 119.9 4.72

Sub total (I) 55157 2042.8 79.24 48300.7 1922.44 75.63

II Fixed cost1 Rental value of own

land11500 425.92 16.52 12800 512 20.14

2 Depreciation 1500 55.55 2.15 1350 54 2.123 Interest on fixed

capital1450 53.7 2.09 1342.5 53.7 2.11

Sub total (II) 14450 535.18 20.76 15492.5 619.7 24.37

III Total cost ofcultivation (I+II) 69607 2577.98 100 63793.2 2542.1 100

Guntur (Rs.21901.78/ha, Rs.885.66/qtl). The benefit cost ratio obtained was 1.48 and 1.31 in Adilabad and Guntur respectively. This is also on par with the results of Mundinamani (2000).

Ginning Units On an average, the total cost incurred in the processing of kapas to lint worked


out to Rs.4630.87 per quintal of kapas (Table 5). It is worth noting that the total variable cost (Rs.4545.75 per quintal) formed a substantial component (98.2 %) of the total cost of processing of kapas to lint. The total fixed cost being Rs.85.12 per quintal, accounted for only 1.8 per cent of the total cost of processing. Considering variable cost, cost of raw material comprises about 91.51 per cent of total cost of processing. In the total fixed cost, salaries to permanent staff (Rs.33.56) were found to be the major component (0.72%). Similar results are

Table 3Cost of Marketing of Cotton

Sl.No Particulars

Adilabad Guntur

Rs/ha Rs/qtl % Rs/ha Rs/qtl %

1 Packing material and packingcharges 2711 100.4 38.66 2897.5 115.9 42.59

2 Loading and unloading charges 558.9 20.7 7.97 466.25 18.65 6.85

3 Transportation cost 1404 52 20.02 1630 65.2 23.95

4 Weighing charges 189 7 2.7 175 7 2.57

5 Commission charges 2149 79.6 30.65 1636.3 65.45 24.04

Total 7012 259.7 100 6805 272.2 100

Table 4Returns from Cotton Production

S.No ParticularsAdilabad Guntur

Rs/ha Rs/qtl Rs/ha Rs/qtl1 Gross return 113400 4200 92500 37002 Total cost 76618.85 2837.68 70598.22 2814.343 Net return 36781.15 1362.32 21901.78 885.664 B-C Ratio 1.48 1.48 1.31 1.31

observed by Mundinamani (2000) and Shivakumar et al. (2001). The gross returns obtained from ginning one quintal of kapas were Rs.4970.41, of which the returns from main product (lint) were Rs.3978.81 and that from byproduct (seed) were Rs.991.6 (Table 6). The value addition to the product in the process was Rs.732.41. The net value added as a result of processing of kapas to lint was Rs.339.54 per quintal of kapas processed. The benefit cost ratio worked out to be 1.86 in kapas processing. Among all the marketing costs of ginned


cotton, the maximum cost was incurred on packing material Rs.30.36 per quintal (37.47%). As the packing material was very important in case of lint marketing, it constituted the maximum percent followed by sales tax, miscellaneous costs and selling expenditure (Table 7).

Spinning unit The average total cost incurred in the processing of lint to yarn was Rs.17201.64 per quintal, of which the total variable cost was Rs.15497.16 (90.09%) and total fixed cost being Rs.1704.48 per quintal (9.91%). Of the variable cost the major component

Table 5Cost of Processing of Kapas to Lint (ginning process)

S.No Particulars Rs/Qtl PercentageA Fixed Cost 1 Depreciation (a) Building @ (5%) 2.16 0.04 (b) Machinery @ (15%) 7.81 0.162 Salary to permanent staff 33.56 0.723 License fee 1.15 0.034 Insurance 15.85 0.345 Taxes 4.33 0.096 Interest on fixed capital 20.26 0.43 Total Fixed Cost 85.12 1.8

B Variable Cost 1 Cost of raw material 4238 91.512 Electricity charges 49.97 1.083 Repair and maintenance 15.91 0.364 Wages to casual labour 22.3 0.485 Telephone charges 2.82 0.096 Interest on working capital 216.75 4.68 Total Variable Cost 4545.75 98.2 Total Processing Cost (A+B) 4630.87 100

is cost of raw material (Rs.12000/qtl) accounting for 69.76 per cent (Tale 8). In total fixed cost, depreciation was found to be major component (8.27% of total cost of processing). These results are in line with the results of Mundinamani (2000) and Shivakumar et al. (2001).

The gross returns obtained from processing (spinning) of one quintal of lint were Rs.20435, which comprised of mainly returns from yarn (Rs.18250) and wastage (Rs.2185). The value addition in the process was Rs.8435. The net value added as a result of processing of lint to yarn was Rs.3233.36 per quintal of lint


Table 6Returns from Processing of Kapas to Lint (for one quintal of kapas ginned)

S.No Particulars Amount (Rs)1 Returns from main product(lint) 3978.812 Returns from by-product (seed ) 991.63 Gross returns 4970.414 Raw material cost (kapas) 42385 Value addition 732.416 Processing cost 392.877 Net value addition 339.548 Benefit-cost ratio 1.86

Table 7Cost of Marketing of Lint

S.No Particulars Rs/Qtl Percentage1 Packing material 30.36 37.472 Selling expenditure 13.92 17.183 Sales tax 20.26 25.024 Miscellaneous cost 16.46 20.33 Total 81.01 100

processed. The resultant benefit-cost ratio was 1.62 (Table 9).

Among all the costs incurred in marketing of spinned cotton, the maximum cost was incurred on packing material Rs.275.48 per quintal (47.9%). This was followed by commission charges Rs.246.45 (42.85%) and export expenses and yarn sale expenses, yarn freight, together accounting for 9.22 per cent of the total cost of marketing of one quintal yarn (Table 10).

The results indicated that an additional value to the extent of Rs.1406.66 was

created in the course of processing of one quintal of kapas in to yarn. The breakup of the same at different levels of processing was Rs.339.54 (24.14%) at ginning and Rs.1067.12 (75.86%) at spinning.

Financial Profitability of Agents Of all the members in the chain, ginner has benefit-cost ratio of 1.86 with first profitability rank followed by spinner with 1.62 benefit-cost ratio and farmer with 1.39 benefit-cost ratio, possessing 2nd and 3rd profitability ranks among themselves (Table 11).


Table 8Cost of Processing of Lint to Yarn

(spinning process)

S.No Particulars Rs/qtl Percentage

A Fixed Cost

1 Depreciation

(a) Building @5% 123.14 0.71

(b) Plant and Machinery @ 15% 1292.81 7.51

(c) Computers and software @60% 4.45 0.02

(d) Furniture @10% 2.51 0.01

(e) Vehicles @ 15% 4.15 0.02

2 Salary to permanent staff 176.9 1.02

3 License fee 3 0.01

4 Insurance 19.43 0.11

5 Taxes 9 0.06

6 Interest on fixed capital 69.09 0.4

Total Fixed Cost 1704.48 9.91

B Variable Cost

1 Cost of raw material 12000 69.76

2 Electricity charges 1690 9.82

3 Repair and maintenance 21.08 0.12

4 Office maintenance 220.54 1.28

5 Wages to casual labour 560 3.25

6 Telephone charges 20.54 0.11

7 Interest on working capital 985 5.72

Total Variable Cost 15497.16 90.09

Total Processing Cost (A+B) 17201.64 100


Table 9Returns in Processing of Lint to Yarn (For one quintal of lint spinned)

S.No Particulars Amount (Rs)

1 Returns from main product(yarn) 18250

2 Returns from wastage 2185

3 Gross returns 20435

4 Raw material cost (kapas) 12000

5 Value addition 8435

6 Processing cost 5201.64

7 Net value addition 3233.36

8 Benefit-cost ratio 1.62

Table 10Cost of Marketing of Yarn

S.No Particulars Rs/Qtl Percentage

1 Packing material 275.48 47.9

2 Commission 246.45 42.85

3 Export expenses 30.64 5.32

4 Yarn sale expenses 12.06 2.09

5 Yarn freight 10.46 1.81

Total 575.09 100

Table 11Profitability of the agents

S.No. Members in cottonmarketing chain

B-Cratio

Profitabilityrank

1 Farmer 1.39 32 Ginner 1.86 13 Spinner 1.62 2


CONCLUSION The findings of the study revealed that, the average total cost of cultivation and net returns of cotton were higher in Adilabad district (Rs.69607 and Rs. 36781 per hectare respectively) than that of Guntur district (Rs.63793.2 and Rs.21901.78 per hectare respectively). In view of use of inputs (fertilizers) higher than the recommended level, there is need to educate the farmers on recommended doses of inputs and adopt the same for enhancing the productivity.

The average total cost incurred in the processing of kapas to lint and lint to yarn worked out to be Rs.4630.87 and Rs. 17201.64 per quintal of kapas. The gross returns obtained from ginning one quintal of kapas were Rs.4970.41, of which the returns from main product (lint) were Rs.3978.81 and that from byproduct (seed) were Rs.991.6. The value addition to the product in the process was Rs.732.41. The net value added as a result of processing of kapas to lint was Rs.339.54 per quintal of kapas processed. The gross returns obtained from processing (spinning) of one quintal of lint were Rs.20435, which comprised of mainly returns from yarn (Rs.18250) and wastage (Rs.2185). The value addition in the process was Rs.8435. The net value added as a result of processing of lint to yarn was Rs.3233.36 per quintal of lint processed. It was observed that the ginners have maximum financial profitability (1.86) followed by spinners (1.62) and farmers (1.39) in this cotton marketing chain.

Since the value addition to cotton is found profitable over marketing the raw cotton, farmers may be motivated to take up value addition at their level for increased farm returns. It is wiser for the farmer to get the cotton ginned and sell the lint instead of selling kapas. The ginning can be done even on custom hire basis from the ginning units. The spinning could add substantial amount of value to the cotton. Hence, the cotton growers can take advantage of this by establishing spinning units of their own on co-operative basis, as the existing co-operative units in the region have proved their worth. Usually the ginning and spinning are taken at different places. In order to reduce the transportation cost and increase the value addition to the commodity, it is better to establish these three types of processing units at same location. As cotton is generally grown in only one season, the processing units face shortage of raw material during other seasons. Hence, it is necessary to establish storage facilities for storage of cotton. These units can be established by the government sector as well as co-operative and private sectors.

REFERENCESMundinamani, R.M. (2000). An economic

analysis of value addition to Cotton in Gadag district. Unpublished M.Sc. (Ag) Thesis. University of Agricultural Sciences, Dharwad.

Shivakumar, S., Sonnad, J.S., Basavaraj, H. (2001). Economics of cotton ginning and pressing in Bellary District. Agricultural marketing. 43(4): 9-12.


INTRODUCTION The cultivation of vegetables is most suitable in Punjab due to varied climatic conditions, surplus family labour and small land holdings. This enterprise provides higher return per unit area in less time than cereals besides providing nutritive food. Being labour intensive vegetable production also offers more employment opportunities not only to the family labour but also to the hired labour especially around the periphery of cities of the state. So the vegetable farming is more beneficial for the marginal and small farmers

whose family labour availability per unit of land is high. However, the level of profitability of the vegetable crops depends upon how marketing of vegetables is undertaken by the farmers in addition to the technology used. Time of sale, price of produce and agency through which these are sold are some of the farm decisions which influence the net prices received by the farmers for their produce. High transport and packing costs and existence of a large number of intermediates reduce the producer’s share in the consumer’s rupee.

PRODUCTION AND MARKETING OF GREEN PEAS IN PUNJAB

GURBIR SINGH, V.K. SHARMA AND SUKHPAL SINGH Department of Economics & Sociology,

Punjab Agricultural University, Ludhiana.

Green peas occupied 19.70 thousand hectare area with a production of 202.94 thousand tons in Punjab during 2012-13.The total variable cost incurred in growing green peas was Rs. 51761 and the minimum variable cost was on small farms. The maximum expenses incurred were Rs. 256970 on hired labour. The hired labour put 1104 hrs. per hectare and family labour put 169 hrs. per hectare in growing green peas. The return over variable cost was Rs. 68725 per hectare and was maximum on large farm due to prevailing of economies of scale on large farms. The marketing of green peas has been studied by four supply chains viz; I: Producer-Wholesaler-retailer-Consumer, II: Producer-Wholesaler-Consumer, III: Producer-Retailer-Consumer, IV: Producer-Consumer. The net price received by the producer was 70.57 per cent, 81.91 per cent, 75.68 per cent and 96.25 per cent in supply chain I, II, III and IV respectively in Ludhiana market during January, 2012. The producer’s share in supply chain IV was maximum because of direct sale to consumer. Hence supply chain IV has been found most efficient because the farmer ‘s were avoiding the marketing expenses for green peas.

Key words: Production, Labour, Returns, Price spread, Punjab.


Despite being an important enterprise the area under vegetable crops during 1981-82 in the state was only 63.83 thousand hectares whereas it has almost remained stagnant till 1994-95 with 62.99 and further thousand hectares. But it increased to 117.1 thousand hectares in 1998-99 to 181.7 thousand hectares during 2012-13 with total production of 1.90 and 3.74 million tons respectively (GOI,2013). It is being realized that enhancing vegetable production would ensure the fulfillment of the objectives of household food, nutritional and economic security of the farmers in a single go. The issue of economic security is of utmost importance for India’s farming community in general and small and marginal farmers in particular.

Hence , there is a need to change the farming system favouring adoption of vegetable farming which can help in generating additional income and employment for the farmer. At the same time the marketing operations due to seasonality of produce have crucial role in deciding the profit of the farmer on one hand and level of availability to consumers on other hand. Among vegetables, green peas is one of the important crop in the state. Therefore it is essential to make an in-depth economic analysis of the green peas in the sub-urban area of Punjab.The present study was planned with the following objectives:

i) To estimate the costs and returns from green peas;

ii) To study the pattern and magnitude of employment provided by green peas, and

iii) To analyse the price spread in different marketing channels.

METHODOLOGY Vegetables grown on a area of 9.08 million hectare with a production of 160.2 million tones whereas, green peas, one of the important vegetables occupied an area of 391.33 thousand hectare with a production of 3913.31 thousand ton during 2012-13 in India. In Punjab, green peas, grown in 13.10 thousand hectare (15.50 percent of the total vegetable area) with a production of 54.55 thousand tons in 1991-92,r increased to 20.22 thousand hectare (10.84 percent of the total vegetable area) with a production of 202.24 thousand tons during 2012-13 (GOP, 2014). Ludhiana district was selected because it has the highest potential from demand side which may be conducive to the growth of this enterprise. The ready market for disposal of vegetable produce on the one hand and the population pressure on Ludhiana district are the other factors leading to select this area for the purpose of this study. The sample consisted of 100 farmers of three different sized groups viz; Small: upto 1.5 hectares, Medium farms: >1.5 to £ 3.75 hectares and large farms: above


3.75 hectares from the five villages during 2011-12 for detailed analysis.

In order to study the supply chain of vegetables, 10 wholesalers and 15 retailers were selected randomly from Ludhiana markets to estimate the costs incurred and margin retained in various marketing channels.

RESULTS AND DISCUSSIONEconomics of Production of Green Peas The information pertaining to the expenses incurred on production as well as marketing component for peas crop have been worked out and given in Table 1. The perusal of the table revealed that an average farm family incurred Rs. 51761.35 per hectare on peas crop during the study period. Of this total amount, 89.11 per cent was incurred on production variables. Whereas 10.89 per cent on marketing cost comprising packing, transportation and other marketing expenses. The analysis of components of cost indicated that the highest amount of 49.65 per cent was spent on hired labour, followed by seed cost with 14.54 per cent respectively. Amongst the marketing cost, the highest proportion of expenditure was 8.11 per cent which was spent on transportation and marketing expenses etc.

So far as the size wise analysis is concerned, the results indicated that the highest expenses on per hectare basis were incurred by medium farms

with Rs. 52248.25 followed by large and small farms with Rs. 51848.66 and Rs. 51367.13 respectively. With respect to the composition of total variable cost, the highest amount on production variables was incurred by small farms ( 89.35 per cent) followed by medium and large farms (89.04 and 88.57 respectively). Corresponding to this, the expenses incurred on marketing items indicated that large farms incurred the highest amount with 11.43 per cent on these times followed by medium and small farms with 10.96 and 10.65 respectively. The medium farms spent the highest amount of 49.96 per cent on hired labour in comparison to other size categories . The analysis showed that though the hired labour is the most important variable sharing about one-half of the total expenses over all the size categories yet each of the size category differed in preference relating to the use of other items of expenditure in the study area.

Pattern And Magnitude of Employment In order to study the pattern and extent of total human labour employed in the production of peas, the analysis of family as well as hired in labour have been carried out and given in Table 2.

The perusal of the table revealed that an average farm family in the study area employed total human labour (both family as well as hired in) to the extent of 1104 hours on


Table 1Cost of cultivation of peas on different farm size categories

(Rs/ha)

Cost Items Small Medium Large OverallProduction Cost

Seed7492

(14.59)7533

(14.42)7595

(14.65)7523

(14.54)

Hired labour 25408(49.46)

26102(49.96)

25655(49.48)

25697(49.65)

Farm yard manure and fertilizers

5520(10.75)

5522(10.57)

5561(10.73)

5527(10.68)

Plant protectionMeasures

1452(2.83)

1456(2.79)

1485(2.86)

1458(2.82)

Irrigation964

(1.88)842

(1.61)528

(1.02)850

(1.64)

Machinery3222(6.27)

3202(6.13)

3259(6.29)

3220(6.22)

Interest @10% pa1835(3.57)

1860(3.56)

1836(3.54)

1844(3.56)

Sub-Total: A45893(89.35)

46519(89.04)

45921(88.57)

46124(89.11)

Marketing Cost

Packing1333(2.60)

1501(2.87)

1630(3.14)

1441(2.79)

Transportation and marketing expenses

4137(8.16)

4227(8.09)

4297(8.29)

4195(8.11)

Sub-Total: B5470

(10.65)5728

(10.96)5927

(11.43)5637

(10.89)

Total Variable Cost51363

(100.00)52247

(100.00)51848

(100.00)51761

(100.00)

Note :- Figures in parentheses are the percentage of their respective total cost.


per hectare basis during the study period. Of this total employed human labour, 15.33 per cent has shared by family workers while the remaining 84.67 per cent by hired in labour. Out of hired labour, 44.60 per cent were shared by males and the remaining 40.07 percentage points by female workers, respectively

The size-wise analysis highlighted that all the size categories mainly depend upon hired labour which used more

Table 2

Pattern and magnitude of human labour employment in production of green peas

(Hrs/ha)

Type of Labour Small Medium Large Overall

Family Labour Employment

Male 157(14.52)

111(9.89)

98(8.91)

131(11.91)

Female 40(3.76)

19(1.75)

44(4.01)

33(3.06)

Children 8(0.76) 0.00 0.00 3

(0.36)

Total: A 206(19.04)

131(11.63)

143(15.33)

169(15.33)

Hired Labour Employment

Male 461(42.65)

518(45.76)

528(44.60)

492(44.60)

Female 414(38.31)

482(42.61)

437(40.08)

442(40.07)

Total: B 876(80.96)

1000(88.37)

965(84.67)

935(84.67)

Total Human Labour : A+B 1082 1131 1108 1104

Note : Figures in parentheses indicate percentage in relation to labour hours used.

than 80 per cent of the total labour. However, some differentials in terms of magnitude indicated the highest use of hired labour by medium farms with 88.37 per cent of the total human labour employed in the production of peas. Corresponding to this, the lowest use recorded was 80.96 per cent on small farms during the same period. The obvious reason for lowest use of hired labour was that the families of small farmers (19.04 %t) were participating more in production


activities than the other categories (11.63 and 15.33 % on medium and large farms). Thus on the whole, the hired labour use on the one hand, and female labour participation almost of the equal magnitude turned out to be the most important factors in the production of peas crop in the study area.

Pattern and Magnitude of Returns The major objective of the producer is to get the maximum net returns which in turn depend upon yield level, price of the product and the expenditure incurred. While producer have little control over prices, they may certainly increase production and cut-down costs through proper planning. Since the efficiency of production differ from farm to farm, hence an independent analysis pertaining to return over production variable costs and return over total variable costs after deducting the marketing costs have been carried for

Table 3Returns structure from production of peas on different farm size categories (Rs/ha)

Returns Small Medium Large Overall

Production Variable Costs 45893 46519 45921 46124

Marketing Costs 5470 5728 5927 5637

Gross Returns 117674 121126 127482 120486

Returns over Production Costs 71779 74606 81561 74362

Returns over Total Variable Costs 66307 68877 75634 68725

peas over different size categories of farms.

The information pertaining to the magnitude of returns recorded from the production of peas crop on per hectare basis have been given in table 3. The perusal of the table indicated that an average family recorded Rs. 120486 as gross returns from green peas. The returns over production variable cost turned out to be Rs. 74362 per hectare while the returns over total variable cost recorded were to the tune of Rs. 68725 respectively.

With respect to size-wise analysis, the results indicated that the highest magnitude of gross returns observed was Rs. 127482 over large size category of farms in the study area. This was followed by medium and small farms with Rs. 121126 and Rs. 117674 respectively. In the case of returns over production variable cost as well as return over total variable cost, the magnitude was the


highest over large size category with Rs. 81561 and Rs. 75634 per hectare respectively.

Price Spread of Green Peas The price spread was worked out through four supply chains of green peas, viz. the supply chain-I (Producerà WholesaleràRetaileràConsumer), supply chain-II (Producer-àWholesaler à Consumer), supply chain III (Producer-à Retailerà Consumer) and supply chain IV (Producer-consumer – Apni Mandi). The results are shown in Table 4.

A perusal of Table 4 revealed that producer’s sale price of peas was Rs. 1450/q in Ludhiana market, which was 74.32 per cent of the consumer’s purchase price. The sale price of peas was Rs. 900/qt in Hoshiarpur market which was 72 percent of the consumer purchase price (Sidhu et al, 2011).

The expenses incurred by the producer was Rs. 73/q which was 3.74 per cent of the consumer purchase price. The net price received by the producer was Rs. 1377/q which was about 70.57 per cent of the consumer’s price. The expenses incurred by the wholesaler were about Rs. 130/q and the expenses incurred by the retailer were Rs. 85/q, which was 4.35 per cent of the consumer’s price. The margin of the wholesaler was lower (5.17%) than of retailer (9.48%). The wholesaler’s margin was low due to large volume of business in comparison to the retailer.

The price spread of green peas in supply chain II (Producer-àWholesaleràConsumer) showed that the producer’s sale price of peas was Rs. 1450/q and expenses incurred by the producer were Rs.73/q. The net price received by the producer was Rs.1377/q. It was 81.91 per cent of the consumer’s purchase price and expenses incurred by the wholesaler were Rs. 130/q. The wholesaler’s margin was Rs. 101/q. It was 6 per cent of the consumer’s purchase price.

Table 4 also showed that in supply chain III (Producer-à RetaileràConsumer) the producer’s sale price of peas was Rs. 1480/q and expenses incurred by the producer were Rs. 73/q. These were 79.61 per cent and 3.92 per cent respectively of the consumer’s purchase price. The net price received by the producer was Rs. 1407/q. It was 75.68 per cent of the consumer’s purchase price. The expenses incurred by retailer were Rs. 216/q which was 11.61 per cent of the consumer’s purchase price. The retailer’s margin was Rs. 163/q. It was 8.76 per cent of the consumer’s purchase price.

The price spread of peas in supply chain IV (Producer-consumer) depicted that no middleman was involved in the sale of farm produce in this channel. It was evident from Table 4 that the peas grower received the highest i.e. 96.25 per cent of the consumer’s rupee by direct sale to


Table 4Price spread of green peas in different supply chains, Ludhiana market,

January, 2012

Sl.No.

ParticularsCost (Rs/q)

Chain-I Chain-II Chain-III Chain-IV

1. Net price received by theproducer

1377(70.57)

1377(81.91)

1407(75.68)

1492(96.25)

2. Cost incurred by the producer

(i) Grading, filling, stitching etc. 6(0.30)

6(0.35)

6(0.32)

6(0.38)

(ii) Packing 19(0.97)

19(1.13)

19(1.02)

21(1.35)

(iii) Transportation 28(1.43)

28(1.66)

28(1.50)

20(1.29)

(iv) Loading, unloading andwastage

20(1.02)

20(1.18)

20 (1.07)

11(0.70)

(v) Total cost incurred by theproducer

73(3.74)

73 (4.34)

73 (3.92)

58(3.74)

3. Producer’s sale price/Wholesalers purchase price

1450(74.32)

1450(86.25)

1480(79.61) NA

4. Cost incurred by wholesaler

(i) Market fee @2% 29 (1.48)

29(1.72)

29 (1.61) NA

(ii) Rural development fund @ 2% 29(1.48)

29 (1.72)

30(1.61) NA

(iii) Commission @5% 72(3.69)

72(4.28)

74(3.98) NA

5. Wholesaler’s margin 101(5.17)

101(6.00) NA NA

6. Wholesaler’s sale price/retailer’s purchase price

1681(86.16)

1681(100.00) NA NA


consumer. The total cost incurred by producer is Rs. 58 which was 3.74 per cent of the consumer’s purchase price.

Summary and Conclusions

It was observed that the area under green peas was 19.70 thousand hectare with a production of 202.94 thousand tons in Punjab during 2012-13. The analysis pertaining to cost incurred indicated that an average farm family spent Rs. 51761 per hectare as total variable cost in the study area. About 89 per cent of

7. Costs incurred by retailer

(i) Transportation 18(0.92) NA 18

(0.96) NA

(ii) Labor charges 4(0.20) NA 8

(0.43) NA

(iii) Rent of shop/rehri 1(0.05) NA 1

(0.05) NA

(iv) Loss, wastage and spoilage@3%

50 (2.56) NA 44

(2.36) NA

(v) Misc. 12(0.61) NA 11

(0.59) NA

(vi) Total cost incurred by retailer 85(4.35) NA 216

(11.61) NA

8. Retailer’s margin 185(9.48) NA 163

(8.76) NA

9. Retailer’s sale price/consumer’s purchase price

1951(100.00) NA 1859

(100.00) 1550

(100.00)

Price spread 574(29.42)

304(18.08)

452(24.31)

58 (3.74)

the total variable cost was spent on variable inputs whereas 11 per cent on marketing items. Labour seems to be most important variable which shared about 50 percent of the total variable cost incurred on this crop. With respect to the analysis carried out to examine the pattern and magnitude of employment for different winter vegetables, the results highlighted that one hectare of land put under peas crop provided 1104 hours of employmenrt. Hired labour was the main input for this crop which provided as high as 85 per cent of the total labour


employed for this crop. Further, the share of hired female labour was as high as 40 per cent. The family labour use recorded in case of pea crop was about 15 per cent of the total labour used. Medium farms spent the highest amount on per hectare basis for this crop with Rs. 52248 whereas small farms incurred Rs. 51363 respectively. The study revealed that the large farms received Rs. 75634 per hectare from the production of green peas. Corresponding to this, the returns over total variable cost for the small categories were minimum with Rs. 6630. The returns over variable cost were the highest for large farms followed by medium and small farms respectively. The average farm received Rs. 68725 as a net return from the production of this crop on per hectare basis. Thus, large farms seem to be more efficient in comparison to small farms with respect to production of peas crop.

With respect to the analysis carried out to examine the market margin and price spread in different marketing channel for different winter

vegetables, the results highlighted that in pea crop, the consumer paid Rs. 2109, Rs. 1754, Rs.2147 and Rs. 1608 per quintal in channel I, II, III, and IV respectively. The producer share in the consumer’s rupee was higher in channel IV (96.29%) as compared to channel I (65.29%), channel II (78.51%), and channel III (65.53%) because in channel IV the producer sold the produce (peas) directly to consumer in apni mandi. The price spread was the higher in channel I (34.23%) and lowest in channel IV (3.61%) because the number of intermediaries involved in channel I were more as compared to channel IV.

REFERENCESGOI (Government of India) (2013). National

Horticulture Board, Ministry of Agriculture, New Delhi.

GOP (Government of Punjab) (2013). Department of Horticulture, Chandigarh.

Sidhu, R.S., M .Sidhu and J. M. Singh J M (2011). Marketing efficiency of green peas under different supply channels in Punjab. Agril. Econ. Res. Review 24 : 267-273.


INTRODUCTION Maize is the most important and widely distributed cereal after wheat and rice. In India it is mainly used for three purposes as a staple food in various regions of India, feed for live stock and as a raw material for industry including biofuel production. Leaves, stalks and tassels are used as feeds for livestock either as greens or as silage. The roots can be used for mulching to improve physical structure of soil. Most of maize in India is used as poultry feeds. The demand of maize for producing cattle and poultry

feed and other valuable production for human consumption are increasing though its raw consumption among the elite population is declining (Badal and Singh, 2000 and Chauhan and Chhabra, 2005). Globally, maize is known as queen of cereals because it has the highest genetic yield potential among cereals. Maize ranks first followed by wheat and rice in world production (GOI, 2013). Worldwide maize production was more than 967 MT and global maize production has grown at CAGR of 3.4 percent over last ten years from 716 MT in 2004-05 to

PRODUCTION AND MARKETING OF HYBRID MAIZE IN SARGUJA DISTRICT OF CHHATTISGARH

ANKEETA MUKHERJEE, SUVASHREE R.PRUSTY ANDSUDHAKAR TRIPATHY

Dept. of Agril.Economics, OUAT., Bhubaneswar-751003

A study was conducted to estimate cost and return, price spread, marketing efficiency, constraints in production and marketing of hybrid maize in Sarguja district of Chhattisgarh. A sample of eighty farmers was surveyed (fourty five marginal, twenty five small and ten large) by three stage stratified random sampling method. Three predominant marketing channels were producer →consumer,producer→villagetrader→consumer,producer→villagetrader→wholesaler→retailer→consumer. Regression analysis for different categories of farm holdings was carried out by using Cobb-Douglas type of production function considering variables like labour, seed, manure and fertilizer cost. The study revealed that large farmers received highest net income of Rs. 354.9/q followed by marginal farmers (Rs. 342.80/q) followed by small farmers (Rs. 315.73/q). Producer’s share in consumer’s rupees was highest in channel-I (96%) as compared to (83.7%) in channel –III. As number of intermediaries increased, marketing cost and margin increased and producer’ share in consumer’s rupees decreased. Improvement of farm level efficiency relies on technical knowledge of crop as well as income diversification, institutional capacity building that can enhance assets ownership, extension and credit facility. Producer should sell their produce in wholesale market where competition among traders was keen in order to get highest price.


967 MT in 2013-14 (FICCI, 2014). The cropping systems that include new maize technology is reportedly risk efficient to local maize varieties (Ames et al, 1993). High degree of hybrid maize adoption have better dietary intake in household use (Kumar, 1994).

Major maize growing states in India are Andhra Pradesh, Karnataka, Rajasthan, Maharashtra, Bihar, Uttar Pradesh, Madhya Pradesh, and Himachal Pradesh contributing more than 80 percent of total maize production (ICAR, 2014). India ranks 6th position in maize production and at 82th position in its productivity in the world. India’s yield at 2.5 MT/hectare is less than half the global average of 5.5 MT/hectare (FICCI, 2014).

In Chhattisgarh, maize is replacing uneconomic and non marketable crops in the upland. Maize is grown in an area of 116 thousand hectare and has a productivity of 1939 kg/ha. The total maize production in the state is 225 thousand metric tons. It is being treated in the range of Rs. 1500-1600/q across major spot markets, much above minimum support price fixed by government. (GOC, 2012-13). Though Chhattisgarh is favorable in its climatic condition for maize production, better input delivery system, price stabilization, market condition, institutional support, use of hybrid seeds, composite seeds lead to bumper harvest, but a huge amount of maize production goes in losses during various stages of marketing especially in retailing. Thus, the present study has been made with the special objectives,

a) To estimate cost and return of hybrid maize on different farm size groups,.

b ) To calculate price spread and marketing efficiency in different marketing channels and

c) To find out constraints in production and marketing of hybrid maize in the study area.

METHODOLOGY Chhattisgarh state consists of three zones i.e. Chhattisgarh plains, Northern Hills and Bastar plateau. Out of these three zones, Northern hills was taken into consideration for the present study because of maximum of its area is used for maize production and Sarguja district comes under that zone with higher area contributed for maize production. Primary data had been used for the study. A three stage stratified random sampling procedure has been followed to select a sample of eighty farmers out of the total sample forty five are marginal, twenty five are small and ten are large farmers. At the first stage Ambikapur block was randomly selected. Three villages namely Sakalo-sargawa, Digma and Nehru Nagar were selected randomly. At the third stage farmers were selected randomly by their farm size proportionally. The information about sample villages and respondents were obtained through a pre tested schedules.

Prevailing Marketing Channels identi-fied in the std are : Channel I: (Producer→Consumer)


Channel II: (Producer→Village trader → Consumer)

Channel III: (Producer→Villagetrader →Wholesaler→Retailer →Consumer)Analytical tools This includes analysis of costs and returns of individual crop enterprises as well as the farm as a whole. The Cost concept used in the study area was as followsCost concepts used Cost A1 includes: Wage of hired human labour, Wage of bullock labour, Charges of machinery, Value of fertilizer, Value of manure, Value of seeds, Value of insecticide and pesticide, Land revenue and other taxes, Depreciation on the farm machinery, implements, equipments, farm building and irrigation structure and Interest on working capital.

Cost A2 is Cost A1 + Rent paid for leased land.

Cost B1 is Cost A1+ Rental value of owned land+ interest on fixed capital (excluding land).

Cost B2 is Cost B1+Rental value of owned land less land revenue+ rent paid leased in land.

Cost C1 is Cost B1+ imputed value of family labour.

Cost C2 is Cost B2+ imputed value of family labour.

Cost C3 is Cost C2+ 10% of cost of C2

Cobb-Douglas production function (algebraic form) of the following form was used:

Y=a X1b1X2

b2X3b3U

Where,

Y=Gross return Rs/ha

a= Efficiency parameter (intercept term)

X1=Per Hectare expenditure in human labor

X2= Per Hectare expenditure in seeds.

X3= Per hectare expenditure in manure and fertilizer

U= Error term

b1, b2, b3 are regression co-efficient.

Statistical Tools For testing statistical significance of regression coefficient of (production elasticity) t statistics was applied.

Return to scale In Cobb-Douglas production function return to scale is obtained by the summation of elasticity of coefficients of independent variable i.e. (∑in=1bi)

If ∑bi=1, implies constant return to scale.

If ∑bi>1, implies increasing return to scale.

If ∑bi<1, implies decreasing return to scale.

Marketing costs It is he total cost incurred on marketing either in cash or kind by the producer seller and by various intermediaries involved in


the sale and purchase of the commodity till the commodity reaches the ultimate consumer. It can be computed as follows

C =CF+Cm1+Cm2+Cm3+………+Cmn

Where

C = Total cost of marketing of the commodity,

CF = Cost paid by the producer from the time the produce leaves the farm till he sells it, and

Cmi = Cost incurred by the ith middleman in the process of buying and selling the product

Marketing margin It is the difference between the price paid by consumer and the price received by the producer for an equivalent quantity of farm produce. It can be worked out by the formula

MT = (Si-Pi) /Qi

Where MT = Total marketing margin

Si= Sale value of a product for ith firm

Pi =Purchase value of a product paid by the ith firm

Qi =Quantity of the product handled by ith firm

I = 1, 2, 3………..n (number of firms involved in marketing channel)

Producer’s share in the consumer’s rupee It is price received by farmer, to the retail price, expressed as percentage. If Pr is the retail price, Pf is the price received

by the farmer, then Producer’s share in the consumer’s rupee Ps is expressed as follows

Ps= (Pf/Pr) ×100

Marketing Efficiency It is the ratio of the market output to market input. An increase of this ratio represents improved efficiency and decrease denotes reduced efficiency. It is effectiveness or competence with which a market structure performs its designated function.

ME= {(V/I) -1} (Shephered formula)

ME= Marketing Efficiency

V=Value of Goods Sold

I=Total Marketing Cost

Constraint Analysis Constraint perceived by the farmers were analyzed using Garrett ranking technique 100 (Rij – 0.50)Per cent position = –––––––––––––––– Nj

Where, Rij is the rank given for ith items by jth individual, Nj is the number of items ranked by the jth individual. The per cent position of each rank is converted into scores by referring the table given by Garrett and Woodworth (1969) which was cited by (Rao, 2010). Then for each factor, the scores of individual respondents are added together and divided by the number of respondent for whom scores are added. The mean scores for all the factors are ranked by arranging in descending order.


RESULTS AND DISSUSSIONCost Structure and Return on Maize Production in Sample Farmer Production cost plays an important role in the process of decision making by the farmers. The analysis of cost and return indicates profitability of farm business. Table 1 illustrates the composition of variable cost and fixed cost per quintal production of maize. Variable cost is such cost of inputs which varies with level of production rather than fixed costs which do not vary . It was observed that average total cost per quintal was Rs.572.85, which was the highest for large farms followed by small

(Rs 514.19) and marginal farms (Rs 487.93). Total variable cost constituted nearly around 90 percent of total cost while fixed cost constituted only about 9-10 percent for all the farm types. Cost of production increased with increase in farm size. It was also evident that all the costs i.e. Cost A1, Cost A2, Cost B1, Cost B2, Cost C1, Cost C2, Cost C3 were the highest for large farms followed by small and marginal farms. It was necessary to study gross income as there was a variation in cost and productivity on different farm sizes. It was found that gross income increased with increase in farm size, it was the highest for

Table-1Cost and return of hybrid maize in different farm size (Rupees per quintal)

Particulars Marginalfarmers

Smallfarmers

Largefarmers All farms

Average variable cost 443.61(90.92)

460.00(89.46)

514.31(89.78)

472.64(90.02)

Average fixed cost 44.32(9.07)

54.19(10.46)

58.54(10.21)

52.35(9.07)

Average total cost 487.93(100.00)

514.19(100.00)

572.85(100.00)

524.99(100.00)

Cost of production 487.93 514.19 572.85 524.99Cost A1 420.17 440.15 494.26 451.53Cost A2 425.07 442.36 517.84 461.76Cost B1 458.63 482.69 538.92 493.41Cost B2 501.36 527.01 606.12 544.83Cost C1 488.10 514.19 572.85 525.05Cost C2 530.82 557.99 640.05 576.29Cost C3 583.91 613.79 704.06 633.92Gross income 926.73 929.52 1059.03 971.76Net income 342.80 315.73 354.97 337.83


large farms i.e. Rs.1059.03 followed by marginal farms (Rs.929.52) ,small farms (Rs.926.73). Net income was highest for large farms (Rs. 354.97) followed by marginal farms (Rs. 342.80), small farms (Rs. 315.73) respectively and it was Rs. 337.83 per quintal for overall farms. The net income of marginal farmer was higher than small farmer due to higher variable and fixed cost of small farmers than marginal farmers because small farmer used mainly farm machinery for which depreciation, interest was higher with higher use of fertilizer and labour. Wani et al, 2013 reported that average net return from local maize was Rs.80.79/q in Kashmir valley and from composite maize was Rs.469.51/q. The variation among two studies was due to present study was done for hybrid maize which showed good yield in comparison to local maize.

Production Function Analysis The summary of the values of the related statistics of the Cobb-Douglas production function model are given in Table-2. The regression coefficient (bi), standard error (SE), ‘t’ value, F statistics, return to scale (bi) and coefficient of multiple determination (R2) were worked out for different farm sizes. A multiple log linear analysis was conducted in which per hectare gross income was regressed with per hectare expenditure on inputs. It was observed that three independent variables like labour, seed and manure-fertilizer explained 62-79% of variation of gross income in sample farms. In marginal farms, labour, manure and fertilizer

were found to be positive and significant impact on maize production whereas seed was found to be non significant variable. In small and large farms per hectare expenditure on labour was found to be non significant, whereas seed, manure, fertilizer had positive and significant impact on maize production. As regard to return to scale, marginal and large farm experienced increasing return to scale of 1.15 and 1.09 respectively whereas small farm experienced a decreasing return to scale of 0.91.

Price Spread and Marketing Efficiency: The difference between the price paid by the consumer and price received by the producer for an equivalent product constituted the marketing cost and margin. Producer’s share in the consumer’s rupee in channel I was 96% as compared to 83.7% in channel III asown in Table 3. Chauhan (013)reported that producer farmer in different channels accounted about 73 to 81 percent of consumer’s price. It was observed that as number of market intermediaries increased in marketing channel, marketing margin and cost increased and producer’s share in the consumer’s rupees decreased. In channel I producer sold their produce at an average price of Rs. 1152/q to the consumer and in channel II producer sale their producer to village trader at an average rupees of Rs. 1100/q. Marketing efficiency was 23 for Channel I where as 5.16 for channel II which indicated that with increase in number of intermediaries, marketing efficiency decreased.


Constraints in Production and Marketing of Maize: The measure constraints reported were lack of transit facilities (38%) followed by lack of storage facility (20%) as shown in Table 4. But lack of regulated market was the least responded constraint (10%) where as lack of market information was reported by 17% and

lack of whole sale market by 14% of the farmers. It was reported in Cuttack district of Odisha that lack of transportation, lack of market information and wholesale market was the major problems in case of cauliflower marketing (Tripathy et al, 2014).In many instance, the farmers reported that non remunerative price and unfair practices were the major problems

Table 2Estimated value of the coefficient and the associated statistics of the Cobb-Douglas

production functional model

Categories of farmers Variables Coefficient Standard

error ‘t’ statistics Return to scale R2

Marginal farmers

Intercept 3.39 0.133 25.44

1.15 0.79Labour 0.495 0.128 3.853*

Seeds 0.352 0.010 0.141

Manure & Fertilizer 0.307 0.120 2.544**

Small farmers

Intercept 9.5 0.202 47.14

0.91 0.64

Labour 0.195 0.0445 0.439

Seeds 0.672 0.0249 3.49*

Manure & Fertilizer 0.0460 0.0141 3.261*

Large farmers

Intercept 8.480 0.388 21.83

1.09 0.62

Labour 0.132 0.047 1.357

Seeds 0.678 0.0506 2.768***

Manure & Fertilizer 0.2751 0.0312 2.403**

*Significant at 10 percent level of significance, **Significant at 5 percent level of significance, ***Significant at 1 percent level of significance.


Table 3 Price spread in different marketing channels (per quintal)

Sl. No. Particulars (Cost in rupees) Channel I Channel II Channel III

1 Expenses incurred by the farmer

Packing, loading, unloading 23 - -

Transportation 10 - -

Personal expenses 15 - -

Subtotal 48 - -

2 Producers selling price 1200 1170 1100

Net price received by the farmer 1152 1170 1100

Expense incurred by village trader -

Packing, loading, unloading - 24 23

Transportation - 22 25

Personal expenses - 11 15

Subtotal - 57 63

Village traders margin - 33 15

Village traders selling price - 1260 1178

Expenses incurred by the whole seller - -

Packing, loading, unloading - - 20

Transportation - - 15

Personal expenses - - 20

Subtotal - - 55

Wholesalers margin - - 20

Wholesalers selling price - - 1253

Expenses incurred by the retailer - -

Packing, loading, unloading - - 20

Transportation - -

Personal expenses - - 20

Subtotal - - 40

Retailers margin - - 20Retailers selling price/Consumers purchase price 1152 1260 1313

Marketing efficiency 23 13 5.16

Producer’s share in consumers rupees 96% 92.8% 83.7%


in the marketing system (Chauhan and Chhabra, 2005).

CONCLUSION Irrespective of farm size, the cost of seed, labour, manure, fertilizer and pesticides were the important components of operational cost. Similarly rental value of owned land, interest on fixed capital and depreciation charges were the major component of fixed cost. The result indicated that the cost of labour constituted the largest amount to the total variable cost. The total cost increased with the increase in size of holding. All costs Cost A1, Cost A2, Cost B1, Cost B2, Cost C1, Cost C2, and Cost C3 increased with the increase in the size of holding. Marginal and small farms were experiencing increasing return to scale, so there was a scope of elevating maize production by applying more inputs like manure and fertilizer. The gross income was the highest for large farms (Rs. 1059.03) followed by small farms (Rs. 929.52) and marginal farms (Rs. 926.73). Elasticity

of coefficient of labour and manure- fertilizer were found to be significant for marginal farms whereas of coefficient of seed and manure, fertilizer found to be significant for small and marginal farms. The regression coefficient of labour was observed positive but had non-significant effect on maize production which showed a disguised employment situation. Producer’s share in the consumer’s rupees in channel I was 96% whereas in channel II it was 83.7%. Marketing efficiency indicated that with increase in number of intermediaries efficiency decreased (that was 23% for Channel I and 5.16% for channel III). Improvement of farm level efficiency relied on institutional capacity building like asset ownership, extension, credit facility and crop as well as income diversification. Producer’s share in consumer rupees and marketing efficiency can be improved by direct selling to consumer by establishing Krushak Bazaar, market intervention programme and regulated markets.

Table 4Marketing problem of farmers in th`e study area in percentage.

Sl.No. Particulars Response in Percentage Response rank

1 Lack of transportation 38 I

2 Lack of storage facilities 20 II

3 Lack of whole sale market 14 IV

4 Lack of market information 18 III

5 Lack of regulated market 10 V


REFERENCES

Ames, G.C. W.; Reid, D.W. and Hsiou, L.F. (1993). Risk analysis of new Maize technology in Zaire; a portfolio approach. Agrl. Econ.,9(3): 203-214.

Badal, P.S. and Singh, R.P. (2000). Production, marketing and utilization of maize in Bihar: Some Micro level evidences. Bihar J. Agrl. Mktg., 8(1):15-20.

Chauhan S.K. and Chhabra, A. (2005). Marketable surplus and price spread for maize in Hamirpur district of H.P. Agrl. Econ. Res.Rev., 18(1):39-49.

Chauhan, S.K. (2013). Maize marketing in Himachal Pradesh. Ind. J. Agrl. Mktg., 27(1):41-58.

FICCI, 2014. Federation of Indian chambers of commerce and industry, India Maize Summit.

GOC, 2014. Statistical Survey Database.

GOI, 2013. Indian Statistical Survey Database. Online, http://goidirectory.nic.in.

ICAR, 2014. Indian Council of Agricultural Research Database, Ministry of Agriculture, Government of India.

Kumar, S.K. (1994). Adoption of hybrid maize in Zambia, effects on gender role, food consumption and nutrition, research report no.100, international food policy research institute,Washington.D.C.,U.S.,:11.

Rao, I.V.Y.R. (2010). Economic analysis of value addition in sugarcane in North Costal zone of Andhra Pradesh. Indian Journal of Agricultural Marketing, 24(2): 41-49.

Tripathy, S.K.; Prusty, S.R. and Mishra, S. (2014). Marketing and post harvest losses of cauliflower in cuttack district of Odisha. Ind. J. Agrl. Mktg., 28(2): 15-25.

Wani, M.H.; Baba, S.H.; Ramasundaram, P.; Shoaib, Y. and Yousuf, S. (2013). Maize composites enhance economic returns from dry land farming: evidences from uplands of Kashmir valley., Ind. J. of Agrl. Econ. 68(3):339-353.


INTRODUCTION The total production of agricultural commodities on a farm is composed of the output of milk, field crops and vegetables. Further, more agricultural production does not necessarily mean higher marketed surplus of it. The increase in agricultural production would be more beneficial from the consumer

only, if it is followed by proportionate increase in the marketed surplus. Many of the farm products are perishable and semi-perishable in nature which require quick disposal or conversion into other products. The problem of marketed surplus and marketable surplus of farm products has received considerable attention of researchers because of its

IMPACT OF HORTICULTURE AND LIVESTOCK BASED TECHNOLOGIES ON PRODUCTION AND MARKETING OF

AGRICULTURAL PRODUCE IN UDAIPUR DISTRICT OF RAJASTHAN

SAPURTI, G. L. MEENA AND S. S. BURARK Department of Agricultural Economics & Management,

MPUAT, Udaipur, 313001, Rajasthan

The present investigation pertaining to impact of horticulture and livestock based technologies on productivity, production and marketed surplus of agricultural produce was conducted in Udaipur District of Rajasthan during the year 2013-14. The study covered 45 beneficiaries and 45 non-beneficiaries from six selected villages. The results of the study revealed that the overall average productivity of all major field crops was significantly higher on the beneficiary households as compared to non-beneficiary households. The average production of field crops and milk per household/annum was 49.46 quintals and 868.23 litres, respectively, on beneficiary households while corresponding figures for non-beneficiary households were 29.03 quintals and 734.10 litres. The average quantity of field crops and milk retained for home consumption per household/annum was 18.76 quintals and 388.67 litres, respectively, on beneficiary households while corresponding figures for non-beneficiary households were 10.30 quintals and 327.20 litres per household/annum. The per cent marketed surplus of field crops to total production was slightly lower in the beneficiary households (62.07 per cent) than non-beneficiary households (64.52 per cent). The per cent marketed surplus of milk to total production was almost the same (55 per cent) in both the beneficiary and non-beneficiary households. A larger proportion of 53.14 per cent and 62.63 per cent of total marketed surplus of food grains crop was disposed through village traders by beneficiary and non-beneficiary households, respectively. A maximum percentage of 61.62 and 52.89 of total marketed surplus of milk were disposed through milk vendors by beneficiary and non-beneficiary households, respectively.

Key words: - Productivity, production, consumption, marketed surplus, horticulture and livestock based technologies.


inherent importance. The development efforts are aimed at increasing the production at farmer-producers level so as to meet the demand for agricultural produce at urban centres. It can be achieve through promoting the use of quality inputs, adoption of modern technologies and management practices at the farm level. In order to provide technologies and inputs, project entitled “Livelihood and Nutritional Security of Tribal Dominated Areas through Integrated Farming System and Technology Models” was implemented by ICAR-NAIP under the aegis of Maharana Pratap University of Agriculture & Technology (MPUAT), Udaipur in tribal belt of southern Rajasthan. A large number of horticultural and livestock based technologies were made available to the farmers through this project. The modules of Integrated Farming System with judicious mix of proven technologies have been recognized as a vital tool for increasing the agricultural production and consumption level of farmers. The beneficiaries got various facilities, which are expected to have a positive impact on production, consumption and disposal pattern. A precise idea about the production, consumption, marketed surplus and disposal pattern of agricultural produce is not only important for researchers but also for planning and policy purposes with a view to generating economic information useful for projecting development activities in this sector. Therefore, an attempt was made to ascertain the impact

of this project production, consumption, marketed surplus and disposal pattern of agricultural produce on selected households in Udaipur district of Rajasthan.

METHODOLOGY The consortia project was implemented in Udaipur, Durgapur, Banswara and Sirohi districts of Rajasthan. Out of these, Udaipur district was purposively selected for the present study. Out of the four clusters in Udaipur district, one cluster i.e. Mavli-I was selected on the basis of maximum number of villages covered under the project. Within selected cluster, the villages were stratified into two strata, namely villages covered under the project (beneficiary villages) and villages not covered under the project (non-beneficiary villages). Rathana, Bansliya and Rediya khedi were randomly selected as beneficiary villages while other three villages namely Khimakheda, Ganvda and Varni were considered as non-beneficiary villages. Thus, keeping in view the available resources and time factor, with the researcher, the study was confined to only six villages. A complete enumeration of all the households in the selected villages with respect to technologies adopted, family size and land holdings was made. From six selected villages, 45 beneficiary households and an equal number of non-beneficiary households (45) of almost similar resource situations were selected from the nearby villages to serve as valid basis of comparison. Thus, a total of 90 households (45 beneficiaries and


45 non-beneficiaries) were randomly selected from selected villages in order to compare and study the impact of livestock and horticulture based technologies on the households for the present study. The study was based on a sample survey conducted for the year 2013-14. The primary data on production and consumption of field crops, vegetables and milk and disposal of the surplus production to different agencies were collected from selected households with the help of well structured schedules by personal interview method.

The productivity, production, consumption and marketed surplus were studied with the help of tabular analysis. The significance of difference between the mean value of different economic parameters of beneficiary and non-beneficiary households was tested by using Z-test.

Where,

= Mean of beneficiary households

= Mean of non-beneficiary households

S1 = Standard deviation of beneficiary households

S2 = Standard deviation of non-beneficiary households

n1 = Total number of beneficiary households

n2 = Total number of non-beneficiary households

RESULTS AND DISCUSSION The impact of livestock and horticulture based technologies of ICAR-NAIP project was studied on various economic aspects such as productivity, production, consumption and marketed surplus of field crops, vegetables and milk.

Productivity of major field crops The average productivity of principal field crops was measured in terms of kilograms ha-1 and presented in Table 1. In the study area, the average productivity of wheat, black gram, green gram, gram, mustard and maize crops, on beneficiary and non-beneficiary households, was observed as 2938 and 2625, 410 and 322, 320 and 227, 1289 and 1012, 1113 and 1002, 1820 and 1820 kilograms ha-1, respectively.

The gain in productivity through replacement of varieties revealed that among the field crops, productivity gain was the highest in green gram (40.97%) followed by maize (28.26%), gram (27.37%), black gram (27.33%), wheat (11.92%) and mustard (11.08%) on beneficiary households compared to non-beneficiary households. It was due to the introduction of short-duration high- yielding varieties, namely Raj-3765, 4037, 3077 of Wheat; MRM-3838/MRM-3765, Prabal, Allrounder, Bio-9687, Boom of Maize; Bio-902, Pusa, Tarak, Mahak, Panch, Vasundhara of


Mustard; RBU-38, PU-31 of Blackgram; Pratap Chana-1, Smarat, Vardan of Gram; K-851, SML-668, Pusa Vishal of Green gram and adoption of improved production techniques. Consequently, an impressive increase in productivity could be achieved for major cereals, oilseeds and pulses crops. The overall average productivity of all major field crops was significantly (1% level of significance) higher on the beneficiary households as compared to non-beneficiary households. The findings are in line with the findings of Bhange et al. (2005), Meena et al. (2012) and Mula and Sarkar (2013). Thus, it can be concluded that this project had a positive impact on the productivity of field crops.

Production of agricultural Commodities: It may be observed from the Table 2 that average production of field crops, vegetables and milk per household/annum

was 49.46 quintals, 7.49 quintals and 868.23 litres, respectively, on beneficiary households while average production of field crops and milk per household/annum was 29.03 quintals and 734.10 litres, respectively, on non-beneficiary households.

A perusal of Table 2 revealed that increase in production was observed highest in field crops (68.41%) followed by milk (18.27%) on beneficiary households compared to non-beneficiary households. The cultivation of vegetables could be achieved only on beneficiary households due to the intervention of NAIP project. Further, average production of field crops and milk produced was significantly higher on beneficiary households as compared to non-beneficiary households. This could be attributed towards use of superior quality of inputs and adoption of better management practices. The similar observations in milk production were also

Table 1Productivity of major field crops on beneficiary and non- beneficiary households

(Kg ha-1)

Crops Beneficiary Non-beneficiary Productivity gain

Wheat 2938 2625 313 (11.92)Black gram 410 322 88 (27.33)Green gram 320 227 93 (40.97)Gram 1289 1012 277 (27.37)Mustard 1113 1002 111 (11.08)Maize 1820 1419 401 (28.26)

Figures in parentheses indicate percentage increase in productivity of crops on beneficiary over non-beneficiary households.


The quantity of produce consumed at each individual household was worked out by subtracting the quantity of produce sold from the total quantity produced. The average quantity of field crops, vegetables and milk retained for home consumption per household/annum was 18.76 quintals, 2.56 quintals and 388.67 litres, respectively, on beneficiary households while quantity of field crops and milk retained was 10.30 quintals and 327.20 litres per household/annum, respectively, on non- beneficiary households. It was observed that increase in quantity of consumption was the highest in field crops (76.50%) followed by milk (18.79%) on beneficiary households compared to non-beneficiary households. The similar observations were also reported by Sharma and Singh (1989) and Rao

Table 2Average production of agricultural produce on beneficiary and non- beneficiary households

(Per household/annum)

Particulars

Mean

Change

Standard Deviation

“Z”ValueBeneficiary

( 1)

Non-beneficiary

( 2)

Beneficiary(S1)

Non-beneficiary

(S2)

Field crops(Quintal) 49.46 29.03 19.86

(68.41) 23.38 9.22 5.45**

Vegetables(Quintal) 7.49 - 7.49 (+) 10.01 - -

Milk (liter) 868.23 734.1 134.13(18.27) 291.89 265.62 2.27*

Figures in parentheses indicate percentage increase in production on beneficiary over non-beneficiary households.* Significant (P<0.05); ** Significant (P<0.01). + Mathematically infinity implying a very large increase.

reported by Sharma and Singh (1998), Rao (1991), Sangu (1995) and Kumar & Dhaka (1999). Thus, it can be concluded that the project had a positive impact on the production of field crops and milk on the beneficiary households. This could be attributed to various facilities provide through project which favourably affected the production in beneficiary households.

Consumption of agricultural produce With a view to examine the impact of project on consumption pattern of agricultural produce on the beneficiary households, data were analyzed to work out average consumption for both the beneficiary and non-beneficiary households. The same are presented in Table 3.


(1991). Further, average quantity of field crops and milk retained for household’s consumption was significantly higher on beneficiary household as compared to non-beneficiary households.

Marketed surplus of agricultural produce In order to assess the impact of project on marketed surplus, data for the same were analyzed for both the beneficiary and non-beneficiary households and are presented in Table 4.

The average quantity of produce sold in case of field crops, vegetables and milk per household/annum was 30.71 quintals, 4.93 quintals and 479.56 litres,

Table 3Average consumption of agricultural produce on beneficiary and non- beneficiary households (Per household/annum)

Particulars

Mean

Change

Standard Deviation


( 1)

Non-beneficiary

( 2)

Beneficiary(S1)

Non-beneficiary

(S2)

Field crops (Quintal) 18.76 10.3 7.88

(76.50) 6.09 4.62 7.42**

Vegetables (Quintal) 2.56 @ 1.06 (+) 3.6 - -

Milk (liter) 388.67 327.2 61.47 (18.79) 153.99 181.8 1.73*

Figures in parentheses indicate percentage increase in consumption on beneficiary over non-beneficiary households.* Significant (P<0.05); ** Significant (P<0.01). + Mathematically infinity implying a very large increase.@ It was zero out of own production actually things were buying from outside.

respectively, on beneficiary households while average quantity of production sold in case of field crops and milk per household/annum was 18.73 quintals and 406.90 litres, respectively, on non- beneficiary households.

A perusal of Table 4 revealed that increase in quantity of production sold was observed highest in field crops (63.96%) followed by milk (17.86%) on beneficiary households compared to non-beneficiary households. The similar observations in marketed surplus of milk were also reported by Sharma and Singh (1989), Rao (1991), Shah (1996), Kumar & Dhaka (1999). Further, it may be observed from the table that average


quantity of marketed surplus of field crops and milk per household per annum was significantly higher in the beneficiary households as compared to the non-beneficiary households.

The consumption and marketed surplus in relation to total production has been presented in Table 5. The per cent consumption of field crops to total production was slightly higher on the beneficiary households (37.93 per cent) compared to non-beneficiary households (35.48 per cent). The per cent consumption of milk to total production was almost the same (45 per cent) in both the beneficiary and non-beneficiary households. The per cent marketed surplus of field crops to total production

Table 4Average marketed surplus of agricultural produce on beneficiary and

non- beneficiary households(Per household/annum)

Particulars

Mean

Change

Standard Deviation


( 1)

Non-beneficiary

( 2)

Beneficiary(S1)

Non-beneficiary

(S2)

Field crops(Quintal) 30.71 18.73 11.98

(63.96) 18.63 5.84 4.12**

Vegetables(Quintal) 4.93 # 4.93 (+) 6.84 - -

Milk (liter) 479.56 406.9 72.66(17.86) 240.62 145.7 1.73*

Figures in parentheses indicate percentage increase in marketed surplus on beneficiary over non-beneficiary.· Significant (P<0.05); ** Significant (P<0.01). + Mathematically infinity implying a very large increase.# it was negative as they were buying from the market

was slightly lower in the beneficiary households (62.07 per cent) as compared to non-beneficiary households (64.52 per cent). The per cent marketed surplus of milk to total production was almost same (55 per cent) in both the beneficiary and non-beneficiary households. The per cent consumption and marketed surplus of vegetables to total production was observed 34.18 per cent and 65.82 per cent, respectively only on the beneficiary households.

Further, though the marketed surplus of field crops as percentage of the total production on beneficiary compared to non-beneficiary households was lower, but in absolute terms, it was consider-ably higher, despite higher consump-


tion.Household consumption The average food intake in terms of per capita per day by beneficiary households compared with non-beneficiary households is depicted in Table 6. Data revealed that the daily cereals intake for beneficiary household was 300 grams not much different from 280 grams per capita, for the non-beneficiary households. But per capita daily vegetable consumption was 83.04 grams, high for the beneficiary household compared to 47.76 grams per day per capita for the non-beneficiary households. The per capita per day consumption of pulses in beneficiary household was also higher (6.69 grams) than non-beneficiary households (4.34 grams). This trend was also observed for fruits and milk consumption. However, per capita per day milk consumption was almost the same for beneficiary households (0.31 litre) and non-beneficiary households (0.30 litre). Among the different food items, increase in consumption of food items by beneficiary households over non-beneficiary households was observed the highest in vegetables

(73.90%) followed by pulses (54.25%), fruits (32.24%), cereals (6.00%) and milk (2.19%) on beneficiary households compared to non-beneficiary households. Thus, the beneficiary households were consuming more foodstuffs (cereals, pulses, vegetables, fruits and milk) than non-beneficiary households. The findings made in this study are in conformity with that of Meena et al. (2012). Further, the consumption of vegetables was significantly higher on beneficiary households than non-beneficiary households, because beneficiary households were producing their own vegetables, while non-beneficiary house holds were buying from the market.

Disposal pattern of agricultural produce

Availability of efficient marketing facilities ensure the progress of enterprises. Specially, in the case of highly perishable commodities like milk, vegetables and other agricultural commodities, since these requires quick disposal or conversion into other forms of products. In the study area, both organised

Table 5Share of consumption and marketed surplus to total production

(Per cent)

ParticularsConsumption Marketed surplus

Beneficiary Non-beneficiary Beneficiary Non-beneficiary

Field crops 37.93 35.48 62.07 64.52 Vegetables 34.18 -- 65.82 -- Milk 44.77 44.57 55.23 55.43


Table 6 Average daily food intake among beneficiary and non-beneficiary households

Food

item

s

Uni

ts o

f con

sum

ptio

n

Mea

n of

Ben

efici

ary

(1)

Mea

n of

Non

-ben

efici

ary

(2)

Cha

nge

S.D

. of

Ben

efici

ary

(S1)

S.D

. of N

on-b

enefi

ciar

y (S

2)

“Z”

valu

es

Cereals Grams/day/capita 300 280 20(6.00) 0.08 0.06 0.91

Pulses (daal) Grams/ day/ capita 6.69 4.34 2.35 (54.25) 0.01 0.01 1.78

Vegetables Grams/ day/ capita 83.04 47.76 35.29 (73.90) 0.04 0.03 4.51**

Fruits Grams/ day/ capita 10.26 7.76 2.50 (32.24) 0.07 0.06 1.71

Milk Litre/day/ capita 0.31 0.30 0.01(2.19) 0.15 0.20 0.10

Figures in parentheses indicate percentage increase in food intake on beneficiary over non-beneficiary households.

** Significant at 1% level of significance.

and unorganised marketing agencies were operating. Government purchasing centers at MSP and mandi were in the organised sector while village traders, vendors and tea maker’s shop were operating in unorganised sector. Further, dairy cooperative societies are also one of the important organised sectors in milk procurement. But this was not found in selected villages.

It may be observed from the Table 7 that out of 30.71 quintal marketed surplus

of food grains crop, a larger proportion of 53.14 per cent was disposed through village traders, 35.82 per cent was disposed through mandi by beneficiary households. Only 6.84 per cent of total marketed surplus of food grains was sold by them directly to the consumers or consumers collected from the producer’s place. The sale of food grains through Government purchasing centers was the lowest (4.20%). About 62.63 per cent, 24.56 per cent 9.34 per cent and 3.47 per cent of total marketed surplus of food


grains was disposed by non-beneficiary households through village traders, mandi, direct to consumers and Government purchasing centres, respectively. Almost a similar disposal pattern of food grains was observed on both beneficiary and non-beneficiary households.

As regards the vegetable marketing, out of 4.93 quintal marketed surplus of vegetable crop, a proportion of 60.04 and 27.59 per cent were disposed through

vendors and directly to rural consumers by beneficiary households. Only 12.37 per cent surplus of vegetable crop was sold in the mandi.

As regards the milk marketing, about 61.62 per cent, 25.23 per cent and 13.15 per cent of total marketed surplus of milk was disposed by beneficiary households through milk vendors, tea maker’s shop and directly to consumers, respectively while non-beneficiary households sold

Table 7 Disposal of agricultural produce through various agencies on beneficiary and

non- beneficiary households(Per household/annum)

Agencies

Beneficiary Non-beneficiary

Food grains

(quintals)

Vegetable (quintals)

Milk(litres)

Food grains

(quintals)

Vegetable quintals)

Milk(litres)

Village traders 16.32 (53.14) - - 11.73

(62.63) - -

Government purchasing centers

1.29(4.20) - - 0.65

(3.47) - -

Mandi 11.00(35.82)

0.61(12.37) - 4.60

(24.56) - -

Direct sale to consumers

2.10(6.84)

1.36(27.59)

63.06(13.15)

1.75(9.34) - 63.40

(15.58)

Tea maker’s shop - - 121.00

(25.23) - - 128.30(31.53)

Milk/vegetable vendors - 2.96

(60.04)295.50(61.62) - - 215.20

(52.89)

Total 30.71(100.00)

4.93(100.00)

479.56(100.00)

18.73(100.00) - 406.90

(100.00)

Figures in parentheses indicate percentage.


about 52.89 per cent, 31.53 per cent and 15.58 per cent of total surplus of milk through milk vendors, tea maker’s shop and directly to consumers, respectively. It was revealed from the results of study that there was dominance of unorganized agency in the study area in the marketing of agricultural produce.

Family Size and Composition Family size and its composition is an important contributory factor in the different activities of agriculture, since agriculture is basically a labour intensive activity, and much of the labour requirements are met from the family itself. The particulars relating to this factor are presented in Table 8. The overall average family size in beneficiary household was slightly lower (5.78) as compared to non-beneficiary household (5.84). Further, the number of adults was higher than those of children in both the groups implying relatively more availability of work force for agriculture in the study area.

Extent of Income The results of income estimates are presented in the Table 9. A close examination of Table 9 revealed that the overall income per household per annum was to the tune of Rs. 37844 for

the beneficiary household which was relatively more than Rs. 21696 for the non-beneficiary households. Present findings are in conformity with the findings of Kumar and Sharma (1999), Kumar and Singh (2001), Singh and Sharma (2006) and Meena et al. (2009). Overall income per household per annum was increased by 74.43 per cent on beneficiary households. Further, per cent share in total income was the highest from field crops (75.28%) followed by vegetables (15.74%) and livestock (8.98%) on beneficiary households. It was also the highest from field crops (85.53%) followed by livestock (14.47%) on non-beneficiary households.

It may be observed from the table that overall income was significantly higher on the beneficiary households as compared to non-beneficiary ones. This may be mainly attributed to higher production as a result of adoption of improved technology by the member group. A considerable increase in the income and employment of beneficiary household’s vis-à-vis non-beneficiary households was observed in the present study which leads one to conclude that there has been a positive impact of livelihood project on overall income of beneficiary households.

Table 8Average family size and composition of beneficiary and non- beneficiary

Category Adult male Adult female Children TotalBeneficiary 1.80 1.74 2.24 5.78Non-beneficiary 1.82 1.77 2.25 5.84


CONCLUSIONS AND POLICY IMPLICATIONS Horticulture and livestock based technologies formed an important source of livelihood through increased production and consumption and it can go a long way in boosting up more income. It is evident from the results of the study that beneficiary households were better off as compared to non-beneficiary households. All the parameters viz., average productivity, production, consumption and marketed surplus of agricultural produce were relatively higher in beneficiary households. The beneficiary households were consuming more foodstuffs (cereals, pulses, vegetables, fruits and milk) than non-beneficiary households. Maximum surplus food

Table 9Income from different sources of agriculture across beneficiary and non- beneficiary

households

Part

icul

ars

Mea

n of

Ben

efici

ary

(1)

Mea

n of

Non

-be

nefic

iary

(2)

Cha

nge

S.D

. of

Ben

efici

ary

(S1)

S.D

. of N

on-

Ben

efici

ary

(S2)

“Z”

valu

es

Income (Rs./Household/Annum)

Field crops 28488.89(75.28)

18555.56(85.53)

9933.33(53.53) 13615.87 11961.22 3.67**

Vegetables 5955.56(15.74) - 5955.56

(+) 10916.95 - - Livestock & livestockproducts

3400.00(8.98)

3140.00(14.47)

260.00(8.28) 2157.44 1749.73 0.63

Total 37844.45(100.00)

21695.56(100.00)

16148.89(74.43) 20146.01 12154.33 4.60**

grain was sold through village traders by beneficiary and non-beneficiary households while lowest surplus food grain was sold through Government purchasing centres. The maximum milk was handled through vendors by beneficiary and non-beneficiary households in the study area. The surplus milk production of beneficiary as well as non-beneficiary households was totally handled by unorganized sector. The study clearly indicated a positive impact of horticulture and livestock based technologies on productivity, production, consumption, marketed surplus of agricultural produce. Study suggests the need for extending the network of such projects in Udaipur district of Rajasthan


REFERENCESBhange, S. B., Lande, S. B. and

Sadaphal, S. S. 2005. Impact of National Watershed Development Programme. Asian Journal of Extension Education, 24: 62-64.

Ghosh, A. K. and Maharjan, K. L. 2001. Impacts of Dairy Cooperative on Rural Income Generation in Bangladesh, Journal of International Development and Cooperation, 8(1): 91-105.

Kumar, N.R and Dhaka, J.P. 1999. An Economic Analysis of Milk Production on Tribal Areas of Bihar. Journal Dairying, Foods & Home Science, 18 (3&4): 199-204.

Kumar, R. and Sharma, A. K. (1999) Impact of dairy cooperatives on rural economy in Nalanda district. Journal of Dairying Foods and Home Science, 18 (2): 92-97.

Meena, G. L., Jain, D. K and Dhaka, J. P. (2009) Impact of dairy cooperatives on income and employment generation of milk producers in Alwar District (Rajasthan). Journal of Dairying Foods and Home Science, 28 (1): 39-42.

Meena, G.L., Jain, D.K. and Burark, S.S. 2010. Impact of dairy cooperatives on the rural households economy in Alwar district of Rajasthan. Indian Journal of Agricultural Marketing, 24: 92-103.

Meena, G.L., Pant, D.C. and Burark, S.S. 2012. Impact Assessment of NAIP Project on Livelihood and Nutritional

Security of Tribal Dominated Areas through Integrated Farming System and Technology Modules, Project Report, ATIC, MPUAT, Udaipur.

Mula, G. and Sarker, S.C. 2013. Impact of Improved Agro-techniques on Sustainable Livelihood Empowerment: An Economic Study from West Bengal, Agricultural Economics Research Review, 26: 129-137.

Rao, B.D.1991. Impact of Operation Flood Programme on the Rural Households of Guntur District in Andhra Pradesh. Ph.D. Thesis submitted to National Dairy Research Institute (Deemed University), Karnal, India.

Sangu, K.P.S. 1995. Impact of Dairy Cooperative Societies on Production, Consumption and Marketed Surplus of Milk. Indian Dairyman, 17 (4): 43-46.

Shah, D., Jain, D.K. and Sharma, K.N.S. 1996. Impact of Dairy Cooperatives on Marketing Pattern of Milk in Bullandsahar District. Indian Dairyman, 48 (6): 37-41.

Singh, L. and Chattaraj, J. 1989. Impact of Dairy Cooperatives on Production, Consumption and Marketed Surplus of Milk. Indian Dairyman, 41 (2): 57-63.

Singh, N. and Sharma, F. L. (2006) Extent of income generated through dairy enterprise among members and non-members of dairy cooperative societies in southern Rajasthan. Indian Dairyman, 58 (7): 49-54.


Agribusiness looks beyond the production and productivity in agriculture sector, and also refers to trade of the produce. India’s presence in international trade of agricultural produce is negligible, though it has vast potential due to varied agro-climatic conditions and its suitability for production of variety of crops. Recently, Gujarat has registered a very high agricultural growth and due to well-developed infrastructure and supportive policy environment it has better potential for growth in agri-business sub-sector.

The book under review contains compilation of papers presented in the seminar on “Agri-business Potential of Gujarat” held at Anand Agricultural University, Anand, Gujarat on 17th and 18th March 2011. Total thirty two papers were presented under the themes related to agribusiness viz., a) production potential and trade values of important commercial crops b) infrastructure support for agribusiness c) export potential of agricultural commodities and d) policy support for domestic and overseas agribusiness of important crops of Gujarat State. In the final compilation of the book twenty six papers were selected.

The key note address delivered by Dr. Katar Singh gave a holistic picture of strategies for promoting the growth and

development of agri-business in Gujarat. This paper sets the platform appropriately for understanding the current scenario and future prospects of agribusiness in the state. It is being proposed in his address that for realizing the potential of agribusiness in Gujarat there is need to have continuous flow of better eco-friendly technologies, availability of institutional finance for production and post-production operations, higher investment in basic infrastructure, cost effective provision of inputs and services, crop insurance, agricultural extension and training, favourable macro-economic policies, and professional management.

The first section of the book contains three papers dealing with policy support for domestic and overseas agribusiness of important crops of Gujarat state. The contract farming laws in Gujarat have been analysed by the N. T. Sudarshan Naidu and paper identifies the areas where additional efforts are required to protect the interest of all the stakeholders and create a conducive atmosphere for growth of contract farming in Gujarat. The author is of the view that though Gujarat State rules are more comprehensive in terms of registration of sponsor, agreement formation, registration with authorities and State government’s proactive role as facilitator, still most rules are tilted in

BOOK REVIEW

Agribusiness Potential of Gujarat State (Seminar Proceedings).Published by Indian Society of Agricultural Marketing,

Nagpur, 2011, Pp 293. Rs. 500.00.


favour of contracting agencies and rules do not have strong penalty clause to punish the defaulters. The needs for appropriate laws for effective functioning of marketing systems and for the sustainability of the contracts are highlighted. Second paper by A. Patel & J.B. Patel, deals with the challenges and opportunities that are linked to market led extension. The paper raises the concerns and caution against the series of crises that may arise in the existing extension system. The greater role played by the extension officers in agribusiness sub-sector is highlighted. Venture Capital Assistance (VCA) and Project Development Facility (PDF) under Small Farmers’ Agri-business Consortium Scheme are being discussed in the third paper. Though paper title says VCA and PDF by Gujarat government, but it elaborates about the features and functioning in general for all India.

The second section of the book has nine papers and they mainly focus on production potential and improving trade values of important commercial crops. The crops and commodities covered are banana, mango, sapota, date palm, guava, papaya, anola, onion, lime, potato, tomato, cabbage, cashew nut, livestock (dairy + meat), fishery and poultry. The session highlighted the benefits of mixed farming system and value addition. The papers show that poultry, dairy and most of the fruits and vegetables discussed have very high potential in Gujarat and there is opportunity for the farmers specially small and marginal farmers to reap benefits from growing these crops/commodities.

It is possible due to changing food habits, rising income, presence of private players and supportive policies of the State government. The suggestions made for improving productivity and profitability of the agricultural system pertains to improving quality of seeds; increasing awareness of the farmers about the existing facilities in the state by involving public, private, farmer partnership; and better extension services. However, for improving the trade values of the crops/commodities not much emphasis was given in the papers except in a paper by S.K. Ashokan and Anita Arya, where they have discussed a case study that stresses role of private firm in improving not only the quality and yield of the produce but also value addition through processing and marketing. Paper by S.K. Raval highlighted the need for controlling Fascioliasis disease in slaughter buffalo to increase the economic returns and export potential of the meat.

The issue of infrastructure support for agribusiness is covered in section three and contains six papers. The major growth drivers and important challenges faced by the food processing sectors are emphasized in this section. It was suggested that in order to increase farmers’ realization in the marketing channel a hybrid model need to be devised using positive aspects of Rythu Bazar of Hyderabad along with some others like Amul model. The constraints for growth and development of agribusiness include proper and improved supply chain management and favourable


infrastructure. Gujarat government initiatives for promotion of agribusiness such as, food parks, onion cold storage, fresh fruits pack house, vegetable pack house, mechanized grain handling & storage at port and terminal markets are emphasized.

The fourth section deals with export potential of agricultural commodities of Gujarat state and contains seven papers. The commodities analysed in detail covered onion, cumin, sesame, frozen fruits and vegetables, groundnut, tobacco, mango and banana. The paper by Priti Jangam and Y.C. Zala shows that India has comparative advantage in export of groundnut, spices and mango, whereas, in case of unmanufactured tobacco and banana it has comparative disadvantage. The paper by Sukhpal Singh and Tarunvir Singh, point out that there is not much scope of increasing quantity of fresh onion export, however, there is possibility of diversifying the fresh onion market to European countries and Japan. They also pointed out that onion dehydration units are not running to their installed capacity

mainly due to unavailability of suitable raw material in Gujarat. There is need for R&D to develop better quality seeds and variety. The paper by Soparkar Farhin N. highlights that though production of cumin is increasing but its export is less competitive due to constraints in production, processing and marketing. The export of sesame was found to be moderately competitive to Australia and USA and non-competitive to Malaysia, Taiwan and Vietnam by V. M. Thumar.

The book covers major issues for growth and development of agribusiness in Gujarat and gives an overall scenario. All the four themes are very well interconnected. Some of the papers highlight the rich and diverse range of crops and commodities that can be looked upon by the researchers and policy makers for the purpose of agribusiness. Nevertheless, the suggestions and recommendations made, in most of the papers, need to be more specific in the context of Gujarat. As such, book is well placed to achieve its aim of augmenting the agribusiness potential of Gujarat state.

- Vijay Laxmi PandeyIGIDR, Mumbai


REMEMBERING AN ACADEMIC RISHI: VM RAO In the journey of life we meet many exceptional personalities, a few of them carve

a niche of their own with elegant qualities while, others pause and leave. Persons with core unassuming nature, plain simplicity with gifted intellectual capabilities are amongst these rarest. We adore their aura and naturally bow with humility and respect without any command. Prof V M Rao (Vidyanand Mohan (Madiman) Rao) was one such unforgettable personality that shall remain engraved in our memory for decades to come. He left us like a Rishi (Saint) serenely at his residence in Bangalore on 1st May 2015. An hour before the end came he accepted a spoonful of water and tried hard to push opens his eyelids which he could not do. He was ailing for quite some time and almost predicted the destiny very confidentially, a few months before. Professor VM was a multifaceted pure academic with vast span of reading and information store. He could speak with ease in various fields that included: literature, spirituality, mathematics, astronomy, science, economics or econometrics. He traversed with an ease of a swan through these multifaceted fields of knowledge, but never allowed even a thin shade to assert depth of his knowledge. He was known to all his admirers and friends as an uncomplicated true intellectual and his works reflected every thread of his knowledge. He was an extraordinarily keen and unpretentious researcher with great human values. He had mastered the rare capabilities to pick the finer intricacies in any complex analytical field effortlessly. The extent of his academic reach stretched across agricultural economics, micro-economics, econometrics, labour issues, decentralisation, development interventions, and political economy including core complex mathematics. Not many knew his command on complex mathematical problems and commitment to socialistic principles almost with the same zeal. His passion for studies on poverty, rural development, market failures and labour issues was apparent through his writings. We lost him on the international Labour Day, a subject that was very close to his heart.

Professor Rao was born in Karnataka in 1931 and had his early education in South Canara (Udupi) and later shifted to Mumbai for higher education. His childhood memories were full of many issues a displaced child faces especially when one loses mother at an early age. His family had some financial difficulties and was full of praise for his father, step-mother and his sisters. He had to go for work after graduation and completed post-graduation in 1956. During the Annual conference of the Indian Society of Agricultural Marketing held at Pune, he fondly remembered the time spent at the Fergusson College & the Gokhale Institute of Politics and Economics, Pune during the last week of December 2012. We went to a one of his friend’s house on Bhandarkar Road and he shared some stories when he was a student among the early batches taught by Late Professor D R Gadgil. His acquaintance with erstwhile socialist friends as also his experiences at Pune gave us me a


glimpse of Pune during early fifties. The power of descriptions and storytelling skills were so unique and picturesque that I lived history of Pune of early fifties through his descriptive prowess.

Prof VM obtained PhD from the University of Mumbai in 1963, on “Changing Agrarian Patterns in the Deccan’, demonstrating unparallel acumen in utilising theoretical arguments using simple statistics to buttress his arguments. With the use of rank correlations, he reached the best results which even the present day econometricians cannot handle with all available sophistications. His mastery over econometrics and mathematics was demonstrated through his article published in the Journal of Royal Statistical Society (1969) http://www.jstor.org/stable/2344120 which has the highest citations (333) of his works till date. His brief note on ‘Derived demand curve’ a comment on Richard Lipsey’s treatment in micro-economics demonstrated his mastery on economic theory, published in the Economic Journal (1967) a testimony of his mathematical acumen. He brought out an alternative robust test for the estimation of returns to family labour on small farms in India using data from ‘Studies in Economics of Farm Management’. Thus, his authority on understanding the nuances of empirical research and its interpretation was absolutely unparallel, so also his capability of getting into the thin crevices of issues in question.

Professor V M Rao taught at the University of Mumbai in the Department of Economics. His monograph published by Allied publications on “Teaching of Economics: Methods and Techniques”. This contribution is not known to many but a few of us took that monograph further in our teaching. His students and colleagues at Mumbai making him their best teacher and an endearing friend. I had the opportunity as a parasite student sharing a dingy room and attending classes in the Department of economics, Mumbai University. It was a sheer pleasure to listen to him, SH Deshpande, R Bhardwaj and other giants. Later he joined Institute for Social and Economic Change in 1975, as Professor and Head of Rural Economics Unit, handpicked by Professor VKRV Rao considering his scholarship in the subject. He served ISEC throughout his life with full devotion keeping the institutional interests beyond his self. ISEC also achieved great laurels through his work along with many others.

All of us knew Prof VM was an accomplished and highly reputed agricultural economist but I take liberty I would categorise his passion as ‘Economics of by-passed’ and that was his forte. Studies on poverty as a ‘By-passed group’ in the process of development attracted his analytical mind. He wrote quite substantially and most innovatively (provocatively) on the issue of poverty in his book titled “The Poor in a Hostile Society: Glimpses of Changing Poverty Scenario in India” published by Vikas publications in 1998. His V B Singh lecture on ‘Policy making for Agricultural Development: Why it misses the poor, later published in the Indian Journal of Labour Economics, in 1999, drew picture of a policy failure that pushes


the poor further down. His analyses of poverty was typically unconventional, with almost a neglect of the mundane measurement acrobatics. His emphasis was more on reaching the poor with policy tools rather than merely counting them. The question that haunted him throughout his research pursuit was to “why and how they are by-passed by the policy and how to get them under the policy influence”.

Another candidate in his analysis of the ‘By-passed’ was rainfed agriculture. Right from the early years of his career he was continuously concerned about the rainfed agriculture and marginalisation process. He wrote a master piece on “Linking irrigation with development”, in EPW (1978) that demonstrate his analytical prowess. Even in the analyses of irrigated agriculture he underscored the importance of getting rainfed areas in the policy focus. His presidential address to the Indian society of Agricultural Economics in Hyderabad in 1991, had put forth a completely new paradigm of development for these regions. Rainfed agriculture he analysed as the ‘by-passed’ component of the agricultural sector. Almost in the same vein as the analyses of poverty he approached the ‘rainfed’ areas from an unusual angle. He pressed for policy towards rural industrialisation that will unshackle the labour power in rainfed areas towards a more productive and income generating source. That was first time we realised the scope and potential for the non-farm sector in bringing rainfed areas to the mainstream development. Later, he elaborated these ideas in a book under the series Farmer at the Millennium.

Right from the beginning of his career, his research focused on issues pertaining to agricultural labour and land. We must recall that the famous hypotheses on ‘reverse tenancy’ put forth initially by Professor Dantwala came out of his joint survey work. During mid sixties he wrote extensively on Farm Management, Family Labour, Small Farms & Technical Constraints, Land Lease Markets, Inequality in Land Ownership; Land Transfers and Redistribution of Land. His approach to land market was largely similar to that of Dandekar’s views. Every time he came out with pertinent unique idea. The Second India studies was his master-piece on “Food” that stands out as one of the best food projection exercises with an inherent ‘Ladder Hypothesis’. This book is still a milestone in Food Projections. During those hay days of farm management economics, his book on ‘Estimation of Production Function and Theory of Producer Behaviour’ contributed to the class-room teaching. As an office bearer of the Indian Society of Agricultural Economics (ISAE) his sincere work for the journal and the society helped to build the reputation of ISAE. Later on he expressed a strong anguish at the quality of the research carried out in the journal in many private conversations. His presidential address in the 1991, conference still holds a strong ground in agricultural economics research.

Prof VM wrote another master piece reviewing fifty years of agricultural economics research in India in EPW in 1989, which is a milestone for all of us. The idea of workshop


on “Rejected papers of IJAE” came from his paper analysing the papers rejected in IJAE. These workshops helped many struggling young scholars to write good research papers. In his joint paper with me on pace and pattern of growth in agricultural production in India, in the celebrated volume edited by Professor Dantwala, we presented a long term review of the growth of India’s agriculture and hinted at the most needed policy leads. This work stays as one of the essential readings for agricultural economists even today. We worked on the idea of understanding and getting an undisturbed growth measurement further. He continued writing on agriculture till almost the ending months of his life.

His interest in markets and market centric research was addressed through the analyses of cost of production. Some years before his retirement, Govt of India offered him the expert membership of the Commission on Costs and Prices, when late Professor Tyagi was the Chairperson. He wrote two excellent analytical pieces one in EPW and another in Journal of the Indian School of Political Economy to bring out subtly critical failures in agricultural price policy. In his inimitable style, he indicated the redundancy of CACP due to its ineffectiveness. The interaction between polity and the policy is indicated quite subtly showing the helplessness of CACP. At the 26th Annual Conference of the Indian Society of Agricultural Marketing held at Pune, he spoke on “Price Support for Farmers: A Perspective from Cross roads’ from the presidential podium. His idea was quite clear that the price support is not administratively effective as also universal. The welfare of the farmers is tied with many facets of the policy and its effectiveness. Furthering his interest on the ‘Economics of By-passed”, he wrote on small millets, PDS, Regional disparity, Farmers’ distress, Crop insurance, Village panchayats and many topical issues that had the by-passed nature at the core of the argument. Indeed he possessed that knack of understanding the nuances, undercurrents of development and present them in apt words, without any pomp about.

His work on poverty is certainly unique. During the famous Dandekar-Sukhatme debate on poverty that rocked through pages of EPW, he wrote on “Poor as Social Stratum” indicating a completely non-food measurement approach to poverty. Many years later the Planning Commission picked that central idea and tried to provide the criteria to identify poor. He viewed that the poverty alleviation efforts in India need to shift the worn-out focus from poverty line to a broader concept of capabilities and empowerment. The idea that was pursued decades later. Similar is the case of his excellent piece jointly with me on “Decentralised Public Distribution System” as also the SHG type of Crop Insurance Scheme. These ideas however were not taken in the policy circles.

After the first few firm steps of liberalisation in the country, he wrote a few important contributions warning the pitfall. He was not opposed to becoming market friendly but cautioned that many sectors and social groups will be left out and discriminated in the process of change. Human face, agricultural labour, prices and functioning of markets were


the themes. He recognised liberalization as a difficult challenge to the Indian economy and therefore, was not in favour of withdrawal of the State from critical spheres of the economy, but favoured shift in the focus of government’s policies from subsidizing the organized sector to unorganised rural sector that may remain largely unorganised and backward. Arguing that India has to go long way before its human development can match even those of the advanced Asian countries, India should build a strong complementary relationship between economic growth and human development.

Prof. Rao’s astounding academic contributions were laced with immaculately fresh ideas, out of box thinking, creative views, analytically challenging the intellect. He always posed his simplicity while explaining intricate economic issues. He always reserved a masterly stroke while analysing any intricate and complex issue. An artistic academic shot on a reverse spin of the issue was his master stroke and he scored every time he played that. The examples are plenty like the non-food measure of poverty (during early eighties), decomposition of Gini Ratio, robust test for returns to family labour, deriving the demand curve, SHG approach to Crop Insurance, Cluster approach to rural development, micro planning methods, agricultural price policy and many more. He was a simple and most adorable acharya to many and we will miss his intricate comments. His absence in the sharp discussions, his unique pieces with simplistic explications shall no more be available to us.

R.S. DeshpandeFormer Director-

Institute for Social and Economic ChangeICSSR National Fellow

#405, Mrunmayi, 5th Main 10th Cross, Teacher’s Colony

VKRV Rao Road, Nagarbhavi Bangalore-560072

[email protected]


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