MSc

Agriculture and allied sectors provide livelihood to nearly 40 per cent of the rural population in the state. But, the household income from agriculture is very low and is reported to be fluctuating.
The study entitled “Assessment and management of risk at farmer’s level in rice and banana cultivation” was conducted with the objectives of analyzing the spatial and temporal dimensions of risk in agricultural income realization in Kerala and studying the economic cost of risk management strategies adopted by the farmers and the factors influencing it.
The study was conducted based on primary and secondary data. Primary data was collected from rice and banana farmers in Thrissur district following Multistage Random Sampling method. Puzhakkal and Anthikkad were the two selected BPs under paddy and Kodakara and Chalakudy were the two selected BPs under banana. Ten farmers each were randomly selected from two GPs of each BP making a total sample size of 80 (40 each rice and banana farmers).The secondary data on agricultural income in Kerala was gathered for a period of 15 years (1999-00 to 2015-16) and was analyzed to assess the instability.
Agricultural income was 9.94 per cent of the GDP of the state (2015-16) and it showed an increasing trend at current prices recording a growth rate of 10.6 per cent (1999-00 to 2015-16). However the real income showed declining trend recording a negative growth rate of 0.82 reflecting the welfare loss to farm households. The agricultural income being a function of prices and output, an attempt to analyse the price trend of agricultural commodities was made by looking at the index of prices received and price paid by the farmers. The prices paid by them were at a higher level than price received and the gap was observed to be getting widened though they were both showing an increasing trend.

The index of agricultural production of prominent crops of Kerala including food crops and non-food crops (1999-00 to 2015-16) halved from 107.85 (1999-00) to 49.30 over these years, highlighting the severe set-back in agricultural production.
To quantify the changes in agricultural income during the period, and to understand the performance of districts, the Compound Annual Growth Rate (CAGR) was estimated at the state level and district level. The growth rate of the state income was estimated as 10.6 per cent at current prices and -0.8 per cent at constant prices during the year 1999-00 to 2015-16. The growth rate in current prices was obviously high due to the price factors and its inflationary trends. All the districts in Kerala showed positive growth in agricultural income at current prices but it recorded a negative growth at constant prices except in the case of a few districts. Highest positive growth rate was observed in Palakkad (12.6 per cent) followed by Idukki (11.7 per cent) and Kasargod (11.6 per cent). At constant prices, majority of the districts showed negative growth rate except Palakkad, Kasargod and Kottayam, in that order.
The level of agricultural risk was measured through the estimation of instability index which was found to be 0.086 at current prices and 0.067 at constant prices. Alappuzha (0.225), Wayanad (0.210) and Kasargod (0.288) were the high risk districts and Thiruvanathapuram (0.068) and Ernakulam (0.082) were in the low risk ones.
Palakkad, Idukki and Kottayam are the agriculturally most important districts in terms of contribution to state agricultural income (2015-16) while Idukki, Kottayam and Malappuram in that order were the ones that showed consistent high share over a span of 15 years.
Sample based field studies showed that rice farmers are facing a number of constraints, viz., production, finance, marketing and institutional factors. The production ranged from 5719kg/ha to 4181kg/ha and price Rs.22.50 to Rs.7/kg. Most of them depended on institutional sources of credit. Institutional risk on account of delayed procurement/payment of produce and the problems associated with DBT system were also highlighted. Statistical analysis identified expenditure

on machines and fertilizers and age of the farmer as favouring the production while higher expenditure on fertilizers and plant protection chemicals increased the risk. Higher levels of labour involvement and larger holdings are found to be less risky. Generally, aged and experienced farmers were found to be opting for crop insurance protection. More cultivated area also influenced rice farmer’s decision to subscribe to crop insurance
On analyzing the risk in banana cultivation, the production ranged between 22330kg/ha to 14342kg/ha and price Rs.50/kg to Rs.15/kg. Majority of the respondents depended on borrowed capital source from institutional agencies. Statistical analysis identified size of land holding, human labour involvement and expenditure on manures as the factors that favoured banana production while higher human labour involvement and better education of the farmer reduced the risk. Education, years of experience and land holding size are the factors that influenced the banana farmers decision to adopt crop insurance as a risk management tool.
The findings highlight the need for a microlevel analytical study to identify the reasons for unstable income in the agriculturally important regions of the state. There should be special risk management tools designed for the risky regions. The constraints with respect to payment for the procured produce and the subsidy delivery needs to focused and efforts to address the same needs to be initiated. The study underlines the need for regulating the use of chemical inputs as it increases the risk, though adds to the rice output. The production and price risk factors in banana cultivation are to be properly addressed through the activities of institutions like VFPCK. There is a need for sensitizing the young farmers on crop insurance.