Economic analysis of rice group farming in Palakkad District of Kerala

Abstract

The study entitled “Economic analysis of rice group farming in Palakkad district of Kerala" was conducted during 2024-25 at the Department of Agricultural Economics. The research aimed to evaluate the functioning and performance of Padasekhara Samithis, identify and quantify the transaction costs incurred at Padasekhara Samithi and at farmer level and identify the key challenges faced by the members of the Samithi. Padasekhara Samithis are collectives of paddy farmers established as a part of the group farming initiative of the Government of Kerala during the 1980s. These collectives, registered under the Charitable Society Act, operated based on bye-laws. The study was carried out in four grama panchayats of Palakkad district- Erimayur, Kizhakkanchery, Kuzhalmannam and Mathur covering 36 Padasekhara Samithis and 180 farmers. Primary data was collected through a well-structured, pretested interview schedule from the secretaries, farmer members and the Agricultural Officers (AOs). Secondary data was obtained from various offices of Department of Agriculture Development and Farmers’ Welfare in Palakkad district. The study analysed data pertaining to agricultural year 2022–23. The selected sample of Padasekhara Samithis had an average age of 30 years, with a mean group size of 69 members, covering approximately 32.79 hectares. Most secretaries and farmers were male, aged 60 or older and had at least 10 years of formal education. The average years of experience as a secretary was 18 with half of them serving for more than 15 years. The average size of landholding size of secretaries was 1.46 hectares compared to 0.96 hectares for farmers. The majority of both secretaries and farmers belonged to the marginal farmer category and relied primarily on agriculture for their livelihood. The study examined various aspects of Padasekhara Samithis including organisational structure, the roles and responsibilities of committee members, meetings conducted by them, election procedure, renewal processes and the financial assistance provided to these collectives. The access to information for Samithi members was analysed to determine the sources relied upon by the secretaries and farmer members for different types of information such as subsidies and government programs, Plant Protection Chemicals (PPCs) and price of paddy. The former two types of information were studied using a Social Network Analysis (SNA). The results indicated a low network density across the grama panchayats. Krishibhavans were identified as the primary source of information on subsidies and government programmes, while pesticide and herbicide dealers were the main sources for PPCs. Secretaries primarily served as intermediaries in the subsidies and government programs information network facilitating the flow of information between Krishibhavan and farmer members. Regarding the information on price of paddy, most of the respondents relied on newspapers. The performance of Padasekhara Samithis was assessed using a performance index which revealed that the Samithis were performing moderately. The identification of transaction cost incurred at Padasekhara Samithi and at farmer level revealed different components of information and decision making costs, contractual costs and monitoring and enforcement costs at the Padasekhara Samithi level and information and decision-making costs at farmer level. The transaction cost at Padasekhara Samithi level amounted to ₹552.29 per year per hectare with monitoring and enforcement costs accounting for 62.78 per cent of the total. Information and decision-making costs made up to 34.56 per cent, while contractual costs contributed 2.66 per cent. The high proportion of monitoring and enforcement costs was attributed to poor coordination among members. At the farmer level, transaction costs amounted to ₹481.68 per hectare per year. Further analysis revealed that transaction cost at the Padasekhara Samithi level was positively influenced by age of the Padasekhara Samithis, while the area of the Padasekharam and the number of years of education completed by the secretary had a negative influence on transaction cost. At the farmer level, transaction costs increased with the number of general body meetings attended by the farmer but decreased with the size of the farm. The challenges faced by the members of Padasekhara Samithi were ranked using Garrett’s ranking technique. The major constraints included shortage of labour followed by the lack of coordination among the members and absence of uniform cultivation and farming practices within the group. The study concluded that while Padasekhara Samithis were established to promote group farming, the complete adoption of group farming practices was not fully realised in the study area. The envisioned cooperation and coordination among members were poor. To address this, the study recommended training and capacity-building programmes to improve teamwork and make the members aware of the benefits of group farming. Moderate performance of the Samithis and low participation of executive members apart from the secretary highlighted the need for performance-based incentives and the equitable distribution of roles and responsibilities among committee members. Additionally, reliance on dealers for PPC related information and a shortage of labour were identified as significant challenges. To mitigate these issues, the study suggested encouraging members to utilise additional information sources such as Krishibhavans and Kerala Agricultural University (KAU) and establishing custom hiring centres for machinery and labour support