Organic farm produce in Kerala - an economic analysis

Abstract

The present study on the “Organic farm produce in Kerala – An economic analysis" was conducted to analyse supply pattern, marketing practices, constraints in production and marketing and to study the consumer awareness regarding organic produce. The study was based on the data collected from Poothadi and Panamaram panchayaths in Wayanad districts, where organic farming is taken up on a commercial scale.

The general cultivation practices followed in organic was examined and the input wise expenses for selected crops were worked out. Among the inputs organic manure contributed the largest share in most of the crops followed by labour. The yield and return were worked out and the per hectare expenses estimated based on cost component analysis by employing ABC cost concepts. Total cost at C3 level in organic farms was found to be Rs.49116 per hectare and it ranged from Rs. 72374 in Class I farms to Rs 53584 and Rs. 43599 per hectare in Class II and Class III farms respectively. The returns from the organic farms at the aggregate level were worked out to Rs 126706 per farm and it was Rs 50539, Rs. 101742 and Rs 207862 for Class I, Class II and Class III farms respectively.

The farm efficiency measures for organic farms were worked out and the benefit cost ratio was found to be 1.58. At the aggregate level, the gross income was found to be Rs. 77496 per hectare and net farm income was Rs. 28379 per hectare.

Resource productivity analysis revealed that, bio pesticides, labour and cropping intensity was significantly influenced the gross income. Optimum returns for selected variables were worked out based on the above analysis . The important marketing channels for organic produce were, Producer - Indian organic producer’s company – exporter; Producer – private company – organic market and Producer – local market and the first channel was found to be widely adopted by the farmers. It was found that no marketing cost was involved in the marketing of organic produce in the study area. The major constraints faced by the farmers were lack of fixed price premium, lack of assured markets, scarcity of quality organic manures, lack of financial support during transitional period, competition from fake products, pest and disease control and lack of consumer awareness.

The study revealed that 53 per cent of consumers were aware of the market availability of organic produce and the Willingness To Pay Premium (WTPP) was found to be Rs. 4.6 per kilogram of organic vegetables, Rs 7.4 per kilogram of fruits, Rs. 11.9 per kilogram of spices and Rs. 2.5 per kg as price for milk. Logistic regression analysis revealed that awareness with respect to organic produce and income were highly significant and it indicated that the willingness to pay premium was directly related to these variables