MSc

The present study entitled “An economic analysis of production and marketing of tea in Wayanad district” was conducted during 2019-20. The specific objectives of the study was to know the input use pattern, analyze the costs and returns from tea cultivation, to examine resource use efficiency, to study marketing aspects and constraints in the production and marketing of tea.
The study was based on both primary and secondary data. The study was conducted in Muppainad village from Kalpetta block and Ambalavayal village from Sulthan Bathery block in Wayanad district. Primary data was collected from the farmers through formal interviews. The farmers in the study area were categorized into two groups on the basis of size of land holding small farmers (≤ 2 ha land) and large farmers (>2 ha of land). From each of the selected village panchayats, 12 farmers each of small and large size will be selected. The total sample size of study was thus 48. Secondary data pertaining to tea production and marketing and data regarding socio- economic status physiographic and demographic factors were collected from the official websites and government annual reports.
On average, the total amount of human labour utilized was 404.80, 324.64 and 382.50 mandays per hectare on large, small and pooled farms respectively, and thus indicated a direct relationship between human labour and the size of the farm. The major labour needed operations were harvesting (87.60%) followed by application of fertilizers and manures (3.97%), plant protection chemicals (3.52%), pruning (3.03%) and weeding (1.88%) on pooled farms. Among the owned and hired labour, owned labour occupied 7.83 per cent and hired labour occupied 92.16 per cent on pooled farms.
The annual maintenance Cost of cultivation of tea was carried out using cost concepts. The total cost of cultivation (cost C) of tea incurred by the small and large farmers was found to be ` 1,86,438.82 ha-1 and ` 2,45,143.60 ha-1 respectively. It was found that cost of cultivation was more for large farmers than small farmers. For both small and large farmers, per cent share of hired labour in cost A1 was the highest followed by manures and fertilizers. The net return at cost C for small and large farmers was ` 85,943.18 ha-1 and 1,54,156.40 ha-1 respectively. It was found that
profitability was more for large farmers with a B:C ratio of 1.46 while small farmers had a comparatively smaller B:C ratio of 1.62.
Resource use efficiency in tea cultivation was estimated using Cobb-Douglas production function and it was fitted separately for small and large farmers. The results showed that R2 value for small and large farms in tea cultivation was 0.71 and 0.90 respectively and it indicated good fit of both the regression models. Marginal productivity analysis showed that, all the independent variables were having a K value more than one, which indicated the suboptimal or underutilization of resources by both small and large farmers. Allocative efficiency of these inputs can be improved only by the enhanced utilization.
The study done on the respondent farmers revealed that there existed two marketing channels of tea:
Marketing channel- I
Producer Commission agent Processing unit Wholesaler
Retailer Consumer
Marketing channel-II
Producer Processing unit Wholesaler Retailer Consumer
In channel-1 The total marketing cost incurred was Rs 9.22/- and the total cost incurred in channel-II was Rs 8.12/- per one kg of green tea leaf, which shows that total marketing cost in channel-I is more as compared to channel-II, respectively. The total margin observed in channel-I was Rs 89.78/-, which was slightly higher than Rs 89.28/- per one kg of green tea leaf as obtained in channel-II, respectively. It can be concluded that channel-I is less efficient than channel-II. This shows that as intermediaries increases between producer and consumer, marketing efficiency decreases. In channel-I, producer‟s share in consumer price was Rs 10.00/-, which is less than Rs 11.81/- per kg of green tea leaf as obtained in channel-II, respectively.
Detailed assessment and interpretation of the constraints faced by tea farmers were required to improve the net return, socio-economic status and also to find policy implications. Garrett‟s ranking method was used for the constraint analysis. The major constraints faced by small and large were same, the ranking procedure was performed separately for both production and marketing. High labour cost was considered as the major production constraint faced by tea growers and high price fluctuation of green tea leaves was considered as the most important marketing constraint faced by the tea growers in Wayanad district.
Major portion of the cost of cultivation of tea was occupied by labour cost. So, farmers should get remunerative prices for their produce to compensate the labour cost. In the study area, usage of all of the inputs were under suboptimal levels, this should be further improved by educating or training the farmers with respect to the allocative efficiency of inputs. The role of commission agent can be minimized if direct purchasing by factories is practiced. Marketing of tea leaves and produce should be sold directly to processing units so that the farmers will get remunerative prices for tea leaves. To control high price fluctuation of green tea leaves, the fixation of suitable prices based on quality of green tea leaves will help the farmers. Thus the study can be a guide for planners and policy makers and reference for further studies.