An economic analysis of production and marketing of turmeric in Kerala and Andhra Pradesh

Abstract

The present study entitled “An economic analysis of production and marketing of turmeric in Kerala and Andhra Pradesh” was carried out in Palakkad district of Kerala and Visakhapatnam district of Andhra Pradesh. The specific objectives of the study were to study economics, input use pattern and resource use efficiency of turmeric cultivation in Kerala and Andhra Pradesh, to estimate the marketing efficiency and to analyse the constraints in production and marketing of turmeric. Both primary and secondary data were used to examine the specific objectives of the study. Palakkad district and Visakhapatnam district were purposively selected as these districts were the major producer of turmeric in Kerala and Andhra Pradesh, respectively.Alathur and Kuzhalmannam blocks of Palakkad district and Chinthapalli and G Madugula blocks of Visakhapatnam districts were purposively selected based on high acreage and production of turmeric. From the selected block panchayath, one grama panchayath was selected based on high acreage and production of turmeric. Finally, 35 farmers were randomly selected from the selected panchayats in the Visakhapatnam district, and 15 farmers were randomly selected from the selected panchayats in the Palakkad district. Apart from these, 10 market intermediaries from Palakkad district and 20 from Visakhapatnam district were selected to elicit market-related information. The total operational cost of turmeric was Rs. 1,74,430 in Palakkad district and Rs. 1,14,022 in Visakhapatnam district. In total operational cost, 71.63 per cent was attributed to the labour cost in Palakkad district, whereas it was 42.19 per cent in Visakhapatnam district. The low share of labour cost was mainly due to the low wage rate prevailing in the Visakhapatnam region. The total fixed cost for the cultivation of turmeric was Rs. 26,794 in Palakkad and Rs. 10,480 in Visakhapatnam. The gross income from turmeric was Rs. 2,70,000 in Palakkad district, whereas it was Rs. 1,68,000 in Visakhapatnam district. The total cost of cultivation (cost C) of turmeric incurred by the farmers in Palakkad and Visakhapatnam districts was observed to be Rs. 2,01,224ha-1 and Rs. 1,24,410ha-1 respectively. The net return at cost C for Palakkad and Visakhapatnam farmers was Rs. 68,775 ha1 and Rs. 43,589 ha1 , respectively. The estimated Benefit- Cost (BC) ratio was almost equal in both districts i.e., 1.34 in Palakkad and 1.35 in Visakhapatnam district. Analysis of input use patterns in turmeric cultivation revealed that the total labour required to perform various operations in turmeric cultivation was 241 man-days and 160 man-days, respectively, for Palakkad and Visakhapatnam districts. In Palakkad district, the major labour absorbing operation was harvesting and it accounted for about 34.69 per cent of total labour requirement, followed by land preparation, curing, and intercultural operations. Similarly, in the Visakhapatnam district, harvesting operation also required more number labours and it accounted for 27.72 per cent of the total workforce, followed by planting, weeding, and irrigation. Resource use efficiency in turmeric cultivation was estimated using the Cobb-Douglas production function, and it was fitted separately for Palakkad and Visakhapatnam districts. In Palakkad district, the independent variables like area, number of labourers, farmyard manure and muriate of potash were significantly and positively affected the yield of turmeric. While in Visakhapatnam district, area, seed and machine service were significantly and positively influenced the yield of turmeric. Allocative efficiency was examined to know whether the resources in the farm were efficiently utilized or not. Marginal productivity analysis showed that resources like farmyard manure, labour and muriate of potash were underutilized, whereas the resources like factomphos and lime were over-utilized in Palakkad district. Similarly, in the Visakhapatnam district, seed and machine services were having greater potentiality for further use as these resources were underutilized in the study area. Among the two identified channels in Palakkad district, channel-II (Producers - Trader cum semi processors - Processor cum primary wholesaler- Retailers) was the most preferred channel among producers due to its relatively low marketing cost, marketing margin and high marketing efficiency. Three marketing channels were identified in the Visakhapatnam district. Among three, Channel I (Producer- village merchant- trader cum semi processor- processor cum semi wholesaler- retailer- consumer) was the predominant marketing channel in the study area. Although Channel I was the dominant marketing channel, Channel III (Producer- trader cum semi processor- processor cum semi wholesaler- retailer- consumer) was the most efficient channel due to its low marketing cost and marketing margin. High wage rates and shortage of labour were considered as the major production constraints faced by the turmeric farmers in the Palakkad district. While in Visakhapatnam district, lack of remunerative price and lack of suitable machinery services for different operations were the major production constraints faced by the farmers. In the case of marketing, price fluctuations and inadequate storage and marketing facilities were the important constraints faced by the farmers and traders. Turmeric cultivation is found to be profitable in both districts, hence government may take suitable measures to bring more land under turmeric cultivation through area expansion programmes and such other programmes. To address the problem of labour shortage, incorporate agricultural operations in the ‘MGNREGA’ programme and may also be addressed with the use of low-cost machinery hence policies may be formulated to provide suitable machinery for the farmers through respective Krishi Bhavans. Strengthen the infrastructure facilities near the production sites and facilitate the farmers to perform on-farm post-harvest handling operations through the formation of several Farmer Producer Organisations (FPOs). The establishment of a regulated market in the Visakhapatnam district may help the farmers to realize a better price for the produce by eliminating the involvement of market mediators.