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Open Access
Economic valuation of mangrove ecosystems in Kerala
(Department of Agricultural Economics, College of Horticulture, Vellanikkara, 2013) Hema, M; KAU; Indira Devi, P.
Mangroves are invaluable treasure o f our biodiversity with immense ecological and economic significance. But mangroves wealth of the world is depleting at an annual rate of -0. 34 per cent. Mangroves in Kerala, constitute 0.3 per cent o f that in India, is reported to be high in species diversity. The available reports indicate the depleting status o f the ecosystem in Kerala too. The socio-economic and ecological significance o f this ecosystem is to be studied in detail for assisting policy decisions when confronted with the conservation-development debate. This study was undertaken in this background. The study identified the stakeholders o f mangrove ecosystems o f Kerala and quantified the level o f dependence o f local communities for their livelihood and estimated the aggregate demand for products and services. Further, it identified and quantified the relative influence o f socioeconomic, institutional, climatic and anthropogenic forces on the destruction of mangroves and finally assessed the Total Economic Value (TEV) o f mangrove system and suggested policy prescriptions for the conservation and management of mangroves in Kerala. The study was conducted in the mangrove areas o f Emakulam and Kannur districts of Kerala. These two districts accounted for nearly 65 per cent o f the mangroves o f the state. The study was based on primary and secondary data. The primary data was gathered from 480 respondents belonging to four identified stakeholder groups (residents, fishermen, paddy farmers and general public), selected through simple random sampling method. Data was collected through personal interview using structured pretested interview schedule along with direct observation. The major tools of data analysis were Contingent Valuation Method (CVM) and Choice experiment. The data collection was conducted during June 2012 to January 2013. I Four stakeholder groups o f the mangrove ecosystem in the study area were residents living close to mangroves (<1 km from mangroves), fishermen (inland fishermen and women, engaged in shell mining and clam collection, shrimp farmers), paddy farmers (Pokkali and Kaippad) and general public (resides away from the mangroves). The residents were depending on the mangroves for extraction o f fuel wood, fodder and poles. On an average the level o f extraction was 307 kg o f fuel wood, 1024 kg of fodder and 14(no.) o f poles per year valued at X 4628/household. This amounted to 3 per cent o f their annual household income. The major species o f fish catch by the fishermen were Etroplus, shrimp, crab and Tilapia which was quantified at 1553 kg/ year valued at X 1,41,045. Shell mining which was found to be a major economic activity in Kannur region could generate an income of X 30,000/annum through the extraction and sale o f 7500 kg o f shells. Clam collected was quantified at 225 kg/year valued at X 5625. Thus, the average gross income from these activities was estimated at X 1,77,164 per year which was the main source o f income for the household. About 8 per cent of the fishermen were involved in shrimp farming and were mainly from Kannur district. The size o f the farm varied from 0.4 to 2 ha. The input cost/ha was X 2.8 lakhs which includes cost o f seed, feed, lime and water management. Labour cost was estimated at X 77,000. Hence total cost and returns o f shrimp farming/ha was X 3.27 and 4.75 lakhs respectively with net income o f ? 1.48 lakhs. Pokkali and Kaippad agricultural systems are proved to be closely interconnected with the:.mangrove ecosystem and the per hectare gross returns was X 60,007 and X 40,935 respectively. This amounted to average 30 per cent o f their household income. The respondents’ perception on the pattern of change and the major factors that effected the change in mangrove ecosystem was studied based on their responses. 46 per cent o f the respondents were o f the opinion that the mangrove ecosystem has declined over years and facing threat. The major factors responsible for the same were reported as anthropogenic, climatic forces and status o f property rights. The 11 developmental interventions like LNG Petronet Terminal, Puthuvypeen and ICTT Vallarpadam has resulted in large scale conversion o f mangrove areas. The contradictory forces o f development and conservation led to destruction of mangrove ecosystem. One fifth respondents opined that climatic factors were responsible for the decline. Nearly 85 per cent of the mangroves in the state were reported to be under private ownership and rest under public. The property right status along with economic status influences the rate o f depletion. The legal interventions and community and institutional efforts also influence the status of mangroves, most often positively. The economic valuation of ecological benefits o f mangroves was attempted employing the Contingent Valuation Method. The respondents expressed their willingness to contribute towards conservation both in cash and kind (cash payment and manual participation as labour and as volunteer in awareness programmes) and in combination. The average WTP expressed by the respondents was f 2308/annum the range being ? 50-28,870. The TEV of the mangrove ecosystem of the state was thus ? 1,17,947 million, which was 0.14 per cent ofthe GSDP (2011-12). A socially preferred management plan was identified among a set of alternatives, employing the choice experiment method. Among the management options given, the stakeholders preferred community management (41.6%) followed by public management (29.2%) and status quo (21.4%). The community management of the mangrove ecosystem provides opportunity for the local community to participate in management decision process. At the same time, the importance o f public funding for such activities is revealed in the analysis. The study suggests initiating scientific attempts on realistic area estimation and mapping o f the mangrove resources in the state. There should be attempts to identify and classify the species and document the traditional wisdom associated with them. Region specific studies are needed to establish and quantify the extent of association between mangrove ecosystem and the livelihood activities of local communities. The TEV justifies the increased resources allocation for the conservation efforts. Further, the implementation of community management system as institutional form for mangrove management in the state is suggested.
Open Access
Price behaviour of natural rubber in India.
(Department of Agricultural Economics, College of Horticulture, Vellanikkara, 2011) Reeja, Varghese; KAU; Satheesh Babu, K
Natural rubber, a product of vital commercial importance is recovered from the latex of the rubber tree, Hevea braziliensis. The present study entitled “Price behaviour of natural rubber in India” was conducted during 2010-11 based on the secondary data. The changes in area, production and productivity status of natural rubber in the world, India and Kerala were studied using the index numbers and compound growth rates. The compound growth rates in area, production and productivity of natural rubber in India were below the global growth rates, while that of Kerala was above the national level. India is emerging as the second largest consumer of natural rubber in the world. Consumption status of natural rubber in India showed that there is a growing deficit between domestic production and consumption of natural rubber in India. India was not a regular exporter of natural rubber, and therefore considerable fluctuations were observed in the export status depending on the domestic production level. The deficit in demand was met by imports. The import of natural rubber by Indian automobile industries grew annually by 12.37 per cent during the study period. The secular, seasonal, cyclical and irregular variations in rubber prices were studied using the techniques of classical decomposition of time series analysis. The trend in rubber prices in the domestic market at Kottayam and international market at Bangkok were captured by the single exponential smoothing model satisfactorily. The analysis showed that the RSS-4 prices in the Bangkok as well as the Kottayam markets were stagnant from January 1995 to April 2001, after which the prices showed an upward trend. The rubber prices were subjected to considerable seasonal variations due to the seasonality in production. In the international market, the peak price was observed in June and the trough price during the month of July, whereas in Kottayam market, the peak price was observed during May and the lowest price in the month of February. The rubber prices in the international as well as domestic markets were not subjected to pronounced price cycles. There were considerable irregular variations in rubber prices in both the markets. The rubber prices exhibited considerable instability in both the markets. Out of the different price forecasting models used to develop a reliable price forecasting model, the artificial neural network (ANN) model was found to be more reliable for predicting the price of RSS-4 in Kottayam market. However, no model could capture the underlying dynamics of rubber prices in the international market at Bangkok satisfactorily. The export competitiveness of Indian natural rubber was measured using nominal protection coefficient (NPC) under exportable hypothesis. It was found that Indian natural rubber was not export competitive during the study period. The market integration studies showed that Kottayam and Bangkok markets were integrated and there was a unidirectional influence of Bangkok market on the prices of natural rubber in Kottayam market, while the influence of Kottayam market on Bangkok market could not be established. The policy interventions suggested based on the study include efforts to increase the area under natural rubber in the non traditional rubber growing areas like North Eastern states, evolving technologies for enhancing the productivity of natural rubber in India to increase the income of farmers per unit cultivated area, improved tapping techniques to extend the tapping days, and to develop a multivariate price forecasting model. A reliable, regional market intelligence system for the natural rubber growers in the country to provide timely and reliable market information and intelligence is also suggested.
Open Access
Socio-economic vulnerability and adaptive strategies to environmental risk: a case study of water scarcity in agriculture
(Department of agricultural economics, College of horticulture, Vellanikkara, 2012) Rinu T, Varghese; KAU; Indira Devi, P
Water stress is predicted as one of the most pronounced risk of climate change in countries like India. Kerala is reported as moving from wetness to dryness. Management of risks of climate change necessitates scientific estimates of the level of potential damage, accommodating for the vulnerability and adaptive mechanisms of the communities. The study entitled ‘Socio-Economic Vulnerability and Adaptive Strategies to Environmental Risk: A Case Study of Water Scarcity in Agriculture’ was undertaken with the objectives of measuring farmers’ vulnerability to water stress in agriculture and its impact on household welfare and to identify and assess the relative influence of various factors on the level of vulnerability. Further, short term and long term adaptive strategies to water stress among farmers of different socioeconomic conditions were also analysed. The most backward district of the state of Kerala, Wayanad was selected as the study area. Multistage random sampling method was adopted for sample selection. Nine panchayats from four Community Development Blocks were selected, from each of which, 15 farmers were selected. Thus the total sample size was 135. Primary data regarding the socio-economic status, land use pattern and production, sources of water for domestic use and irrigation, perceptions and adaptive strategies to water scarcity were gathered using pretested interview schedule. Indicator based approach was used for constructing the composite vulnerability index to assess the vulnerability level of the farmers. Logit model was employed to identify the factors influencing vulnerability. Apart from these, conventional tabular analysis was also used. The cropping pattern in Wayanad shows a clear shift in favour of commercial crops like arecanut, banana and rubber. The conversion of paddy lands for these crops was to the tune of 41 per cent during the last decade. The area under pepper shows a decline (54 %) and that of other commercial crops show an increase. Among other reasons, climate change is perceived as one of the major reasons for this decision by the farmers. The analysis of weather parameters and climate predictions for Wayanad also supports the farmer level observation. The rainfall and temperature pattern of the district during past years indicate an increasing level of water stress. Climate change models project very high variation in the rainfall pattern of the district in future years. An increase in the average annual rainfall coupled with lower levels of summer showers are predicted. By 2020, summer showers may decline to 43.6 mm as against the present, 70 mm. High intensity rains with low duration will be the major characteristic. A gradual increase in annual temperature by about 1.5ºC is also predicted. In this background, a composite vulnerability index considering social, economical and agronomic factors of the farmers was constructed to measure the vulnerability. More than 50 per cent of farmers were highly vulnerable and the proportion of the farmers in that group was found to be increasing during the past five years. An inverse relationship was observed between the land holding size and vulnerability level, three- fourth of the marginal farmers were vulnerable while most of the small and large farmers (41.27 % and 34.78 % respectively) belonged to the other group. Thavinjal panchayat of Manathavady block was found to be the most vulnerable and Muppainad and Vythiri panchayats of Kalpetta block were found to be the least vulnerable. The results of the logit model shows that five out of eight factors viz. diversity index, cropping intensity, percentage of irrigated area to total cropped area, net cropped area and education as having significant influence on the probability of an agricultural household being vulnerable, of which the diversity index and cropping diversity are the most influential factors. Farmers often have their own adaptive mechanism to cope with the water stress condition within the constraints. In general, adaptation strategies followed in domestic and agricultural sector can be classified into supply management strategies and demand regulating strategies or long term and short term strategies. The supply management programme includes those activities which ensure the steady supply of water and the demand side management mainly focus on more efficient use of available water resources and improving water resources. Among the respondents, a gradual shift from the dependence on external sources of water to owned sources has occurred. The dependence on external sources increases the time spent and drudgery of women folk in such households. Common adaptation strategies followed by the farmers include irrigation, varietal selection, mixed cropping, crop diversification, organic farming, soil and water conservation measures (mulching, earthen bunds and rain pits) and migration (geographical and sectoral). About 39 percent of the sample respondents were adopting irrigated farming and the average expenditure was found to be Rs 18187 per household which is nearly nine percent of the total household income. Only a few farmers were adopting micro-irrigation methods because of its high investment. This cost of adaptation, further reduces their consumption expenditure leading to household welfare loss. The study suggests research interventions in developing a sustainable cropping pattern and scientific validation with location specific studies on the impact of climate change on major crops. The need for empowering the farmers through technology, infrastructure, financial and extension support to adapt to water stress is also underlined. It highlights the importance of water resource development and the need for identifying the constraints in the adoption and develop/modify the technologies to suit local conditions. Further the implementation of weather based crop insurance programmes with localised meteorological stations as reference points is also stressed.
Open Access
Price behaviour of turmeric in India
(Department of Agricultural Economics, College of Horticulture, Vellanikkara, 2011) Jyothi, T; KAU; Jesy Thomas, K
The present study on the "Price behaviour of turmeric in India" was undertaken with the specific objective of investigating the secular trend, seasonality, cyclical and irregular movements in the price of turmeric in India and to evolve a reliable price forecasting model for turmeric.' The study was conducted during the year 2010-11 with reference to three major markets in the country viz., Kochi, Nizamabad and Erode markets employing secondary data. With reference to CGR of area, production and productivity of turmeric at All- India level, compared to pre- WTO regime, the rate of growth in area and productivity of turmeric showed declining trend during post- WTO regime and hence, growth rate in production also showed declining trend. Both in Kerala and Andhra Pradesh, the crop has not received due attention during post- WTO regime compared to pre- WTO regime, as indicated by the declining trends in terms of area, production and productivity. However, in Tamil Nadu, the crop witnessed insignificant growth rates in terms of area, production and productivity of turmeric during both pre- WTO and post- WTO regimes. Despite slow growth in production of turmeric in the era of liberalized regime, India enjoyed favourable net trade position, as indicated by the significant positive growth rates in the exports of turmeric in terms of quantity, value and unit price compared to import scenario. Further, the instability in exports of turmeric declined during post- WTO regime compared to pre- WTO regime, as indicated by the fall in CV. However, there is much scope to increase the export prospects ofturmeric, as even today, India's export basket comprises of fresh produce only rather than processed products. This favourable net trade position is further confirmed by the low NPCsindicating that, India enjoys more export competitiveness for turmeric in the international market. Regarding price behaviour, the analysis based on single exponential method revealed that, in Kochi and Erode markets, turmeric prices showed greater degree of fluctuations up to September 2007 and the period beyond October, 2007 represents growth phase in turmeric prices. For turmeric (bulb) and turmeric (finger) in Nizamabad market, prices have not shown a specific trend, implying a greater degree of price volatality for these commodities. Market integration study was conducted considering the spot prices of turmeric at the selected markets by employing the Johansen multiple eo integration analysis. The two eo-integration equations were found to be significant at five per cent level, indicating that, the selected markets are having long run equilibrium relationship. Seasonal indices of turmeric prices computed through employing ratio to moving average method revealed that, the domestic prices of turmeric exhibited considerable seasonality in all the selected markets. The seasonal price behaviour further inferred that, it was almost similar among Kochi and Erode markets because of their proximity, while it was totally different for the Nizarnabad market, as it is distantly separated compared to the earlier two markets. Cyclical variations in turmeric prices are more pronounced in all the selected markets. In Kochi market, the length of the cycle lasted for about six years, seven years for turmeric bulb and finger prices in Nizamabad market and six to seven years in Erode market. Turmeric prices were subjected to considerable irregular variations and these are due to supply shocks on account of climatic variations or market shocks on account of demand shocks or high speculative factors. Different pnce forecasting methods were employed VlZ., double exponential smoothing (Nizamabad and Erode markets) and Winters' multiplicative method and Winters' additive method (Ko chi market) for price forecasting of turmeric during the months of March, April and May, 2011 and the findings revealed that, the modal prices of three months fall in the range of forecasted prices across all the markets indicating that, the price forecasts were reliable. The accuracy percentage of turmeric price forecast ranges from 90 to 99 per cent. The prices so forecasted across the markets are validated for the same period and the findings revealed that, the monthly modal prices of selected commodity fall within the range of predicted prices. The accuracy percentage of price forecast is above 90 for the reference commodity and this implies that the forecast is reliable in all the selected markets. Considering the above findings with reference to production and trading scenarios of turmeric, it is essential to formulate multi-pronged strategy such as strengthening R&D to develop and release HYV of turmeric and fine tune the crop production strategies with reference to different agro-ecological situations, strengthening processing, storage and market information network, effective implementation of Market Intervention Scheme, improving the acces:; of farmers towards futures markets to overcome price risk, quality enhancement of turmeric on the lines of SPS standards fixed by the importing countries, price forecasting to regulate area and production of turmeric in tune of its export prospects etc., so as to enhance both domestic and export competitiveness and to gain due share in the international market.
Open Access
Changing scenario of the cut flower industry in central Kerala - an economic analysis
(Department of Agricultural Economics, College of Horticulture, Vellanikkara, 2011) Lisma, Steephan; KAU; Prema, A
Floriculture is fast emerging as a lucrative profession in the world scenario and is a potential money spinner for many countries. In terms of production, floriculture in the world is growing at an average rate of 10 per cent per year. Floriculture is a multi-crore industry in India which contributes 0.6 per cent to global floriculture trade. In 2009-10 the total area under floriculture was estimated to be 1,83,000 hectare with an estimated production of 1021 metric tonnes of loose flowers and about 6667 million numbers of cut flowers. Cut flowers like orchid and anthurium are identified as the most important flowers with commercial potential suitable for Kerala. The present study was done to investigate the economics of cut flower enterprises, marketing channel and marketing efficiency of cut flower trade and to identify the constraints of cut flower industry in Central Kerala. Orchid and anthurium were the major cut flowers included in the study. The study was conducted with a sample of 120 cut flower growers. Percentage analysis, ABC cost concept, Capital productivity analysis and Shepherd’s formula were used to analyze the data. Orchid and anthurium growing units have been studied across three scales of operation, viz., small (less than 500 plants: C-I), medium (500 to 1000 plants: C-II) and large (above 1000 plants: C-III) for a standard of 100 plants in each categories. Anthurium Per unit cost of cultivation of anthurium showed increasing pattern towards smaller groups. According to ABC cost concept cost of cultivation for five years for C-1, C-11 and C-111was estimated to be Rs. 15,164, Rs.11,486 and Rs.9,963 respectively. The establishment cost was found out to be Rs.13,116 (C-1), Rs.12,008 (C-11) and Rs.11,330 (C-111). Recurring cost ranged from Rs.2,500 in C-111 to Rs.6,315 in C-111. The total return realized over crop life varied from Rs.32,790 to Rs.41,152 in different scales of operation. The estimated project worth parameters were well above acceptance level in C-11 and C-111. Orchid According to ABC cost concept cost of cultivation for five years for C-1, C- 11 and C-111 was estimated to be Rs. 15,932, Rs.13,017 and Rs.11,199 respectively. The establishment cost was found out to be Rs.13,397 (C-1), Rs.12,607 (C-11) and Rs.13,092 (C-111). Recurring cost was Rs.2,450 in C-111, Rs.3,835 in C-11 and Rs.6,025 in C-1. Per unit cost of cultivation was found to be decreasing as the scale of operation increases. The total return realized over the economic life of the crop was found to Rs.27,640 in C-1, Rs.30,461 in C-11 and Rs.35,474 in C-111.Higher returns were realized from larger units. The estimated project worth parameters were well above acceptance level in all the categories. Capital productivity analysis of orchid and anthurium showed that larger units were seen comparatively more efficient and profitable than smaller ones. In anthurium cultivation only family labour was utilized for all operations in three scales of operation. But in case of orchid, hired labour was employed for potting and planting in C-111. Marketing channels and efficiency Six marketing channels were identified for anthurium. The direct channel i.e. Producer Consumer was found to be more efficient. Out of the three marketing channels identified for orchid, Producer Local florists’ Consumer was identified as the most efficient channel. Constraints in cut flower trade The most serious problem faced by orchid and anthurium growers, especially smaller sized units, was low market price for their products. Irregular markets followed by delay in getting sale proceeds were identified as the other major constraints faced by the growers. Short supply of flowers, lack of government support, lack of storage facilities etc. were the major problems faced by cut flower traders. Effective production planning and marketing management were identified as the key factors for the development of the sector.
Open Access
Export and price behaviour of cashewnut in India
(Department of Agricultural Economics, College of Horticulture, Vellanikkara, 2012) Jeethu M, Gopalan; KAU; Jesy Thomas, K
India among the 28 other cashew growing countries is the largest area holder (9.53 lakh ha), processor and importer of cashewnuts. India holds a major share of around 54 percent in the global trade from 21 percent of its cashew area. The Indian cashew industry, apart from being a prominent national exchequer, provides sustainable employment opportunities to 5.5 lakh workers annually, mostly women. As any violent price fluctuations can have adverse effects on the industry, reliable price information is an urgent need for all stakeholders. Hence, the present study “Export and price behaviour of cashewnut in India” was taken up with the objective of analyzing the export and price behaviour of cashew in India and evolving a reliable price forecasting model for cashew kernel prices in the domestic (Kollam) and international (London) markets. The study was conducted based on the secondary data published by various institutions. The Compound Growth Rate (CGR) and the trend indices for the post liberalization period (1993-2011) indicated that area under cashew has been steadily increasing but production and productivity showed wide fluctuations in certain years. During the study period, Kerala registered negative growth rates in area, production and productivity because farmers have shifted to more remunerative crops like rubber. The CGR analysis of cashew trade in the pre and post-liberalisation periods revealed that exports of cashew kernels and import of raw nuts fell in the post-liberalization periods. But export of CNSL rapidly grew in the post-liberalisation period indicating its versatile need as raw-material in many industries. An analysis of the net export earnings revealed that earnings have been falling since 2000 stressing the need to boost Indian cashew production to meet the export requirement. The price behaviour of cashew kernels was studied using the techniques of classical decomposition of time series analysis. The monthly average price data on cashew kernels in domestic (Kollam) and international (London) markets were decomposed in to its four components viz., secular trend, seasonal, cyclical and irregular variations. The analysis showed that the cashew kernel prices in both domestic and international markets widely fluctuated during the period 1999 to 2009 February after which an increasing trend in prices was noticed. The prices of cashew kernels in both markets generally increased from 2009 onwards due to global supply constraints but the prices in the domestic market abruptly fell in 2011 July. Seasonal indices revealed that the buoyant phase was observed during June to July with the highest price index in July and the trough period was observed during March to April with the lowest index in the month of April. In the international market, the buoyant phase was observed during June to August with the peak price in August and the trough period was observed from February to May. The cyclical indices for the international and domestic markets showed that no price cycles could be identified in prices for both markets. The irregular indices revealed that there were considerable irregular variations in cashew prices in both the markets. The instability in cashew prices was studied using the coefficient of variation (CV) which was 23.87 per cent for domestic market and 26.46 per cent for international market. The export competitiveness of Indian cashew kernels was measured using NPC under exportable hypothesis. The mean NPC value for the period was 1.02, which is slightly more than unity indicating that the commodity was not export competitive as a whole but a trend towards gain in export competitiveness from 2008 was noticed. Various price forecasting models viz., moving average, single exponential smoothing, double exponential smoothing, ANN and ARIMA models were tried to develop a reliable price forecasting model for cashew kernel prices in both domestic (Kollam) and international (London) markets. While ARIMA model proved to be the best in predicting international kernel prices, no model could suitably forecast the prices in the domestic market. The market integration studies using the co integration technique showed that both domestic and international markets were integrated. The pair wise Granger Causality test indicated that there was influence of domestic kernel prices on international kernel prices and not vice versa. This result is of utmost importance as cashew kernels from Kerala sets the benchmark quality in the world market. Even though India is the largest area-holder under cashew, it lags behind in productivity. Development of new technology and their efficient transfer holds the key to increase productivity and become self-sufficient in raw nut production. More efforts need to be taken to improve cashew plantations in non-traditional areas like West Bengal and other north-eastern states which has contributed to 3 lakh MT of the total cashew production in 2010-11. By maintaining quality standards, India can remain a major player in the export scenario.
Open Access
Access to institutional credit-an economic analysis of tenant farming in east Godavari district of Andhra Pradesh
(Department of Agricultural Economics, College of Horticulture, Vellanikkara, 2012) Haritha, Chitturi; KAU; Satheesh Babu, K
The formal financial system plays an important role in financing the needs of the agricultural sector in India. In order to facilitate timely and adequate credit flow to agriculture, the sector has been targeted as a part of the priority sector for the lending programmes in 1969 with an emphasis on ‘social banking’. Domestic commercial banks have been directed to allocate 18 per cent of net bank credit to agriculture and allied activities. The directed credit programme has clearly resulted in a significant increase in the amount of credit allocated to agriculture over the years. According to the Reserve Bank of India, an amount of Rs.4,76,550 crores was pumped into the agricultural sector as institutional credit as on 31-03-2012 against a target of Rs.4,75,550. However, the increased amount of agricultural credit and its outreach over the years are accompanied by several qualitative issues like timeliness, adequacy, cost and access. Inclusive financing, ie., the delivery of financial services at affordable costs to sections of disadvantaged and low income segments of the society on par with access to any public good needs more scrutiny as banks look into the total quantity of credit disbursed in a financial year only. The growing spectra of financial exclusion in agriculture, providing livelihood to more than two third of our population, particularly of small and marginal holders, and tenant farmers merit more attention in this context. The inability to offer collaterals stands between them and the institutions despite many state initiatives. The present study entitled “Access to institutional credit: An economic analysis of tenant farming in East Godavari District of Andhra Pradesh” was carried against this background with the specific objective of investigating the operational problems faced by both the tenants and bankers in credit delivery, and to suggest policy fine tuning to overcome the bottlenecks. According to the Andhra Pradesh (Andhra area) tenancy act, 1956, tenancy is permitted in the state, but it is regulated. Informal tenancy system was very prevalent in the district of East Godavari and it covered nearly 50 to 60 per cent of the cultivated area. The total operating expenses on rabi paddy was found to be higher (Rs.49510/ha) on leased land as compared to the owned land (Rs. 40926/ha). This difference was accounted due to higher level of input use on leased land, besides the cost incurred towards paying rent (Rs. 7776/ha) to the land owner. Also, the scale of finance (Rs. 41990/ha) was found to be inadequate in meeting the working expenses of a tenant farmer, while it was sufficient in case of owner cultivated lands. Even though the gross income realized from the leased land was higher than that of owned land, the gross margin of the tenant cultivator was found to be relatively low. This was due to the additional costs incurred by the tenant farmer towards the land rent. The subsidies provided by the Government could not be availed in full by the tenant cultivators. Hence, the tenant farmers usually borrowed farm inputs from the input dealers and village traders who exploited them by charging high prices for the inputs advanced. Due to their indebtedness towards the moneylenders and village traders, the farmers resorted to distress sales at low prices at the village market itself. The Government interventions in marketing of the produce were found to be inefficient. Non availability of institutional credit and the high interest rate charged by the money lenders were the two major constraints experienced by the tenant farmers. The moneylenders exploited the tenant farmers by charging usurious rates of interest which varied from 24 per cent to 32 per cent. The scheme of financing tenant farmers through Joint Liability Groups (JLGs), introduced by National Bank for Agriculture and Rural Development (NABARD) was not successfully implemented in the study area. The logit regression analysis illustrated that the scheme of LEC introduced by the Andhra Pradesh Loan and Allied Benefits Eligibility Card (for permissive cultivation) Act was successful in providing formal credit to the tenant farmers. The possession of Loan Eligibility Card by the tenant farmers was found to be the most significant determinant in accessing credit from institutional sources. These cards enabled the tenant cultivators to access credit from public financial institutions and to claim input subsidy, crop insurance and compensation for damages to crop. Co-operatives were the agencies to implement the LEC scheme in a better way and advanced credit to the tenant farmers without any demand of collateral security due to more government support and political will. The other formal institutions like commercial banks and Regional Rural Banks (RRBs) were reluctant to implement the scheme due to the complicated documentation procedures involved in credit delivery to tenant farmers. Based on the findings of the study, policy measures like government intervention to strengthen the marketing system, credit linked marketing facilities, fixing realistic scale of finance with due considerations for the fair rent component, group initiatives in production and marketing, the universalisation of loan eligibility card, and simplification of bank procedures are being suggested.
Open Access
Economics of organic and conventional pepper production in Idukki district
(Department of Agricultural Economics, College of Agriculture, Vellayani, 2012) Sneha Elizabeth, Varghese; KAU; Elsamma, Job
The research entitled “economics of organic and conventional pepper production in Idukki district” was done in Azutha and Kattapana blocks of Idukki district. The study was undertaken with the objective to study the economics of organic and conventional pepper production, resource use efficiency, adoption of practices, marketing system and constraints in production and marketing of pepper. In this study the cost of cultivation was worked out using the A B C cost concepts. Since pepper is perennial crop, cost of production was studied by considering establishment cost (cost during pre bearing period). The establishment cost was amortized by multiplying it with annuity and an annualized establishment cost was obtained. This cost was added to the maintenance cost to obtain the total cost. Cost of production was worked out considering both rental value of owned land and market rent for leased in land. Allocative efficiency of the resource was estimated using Cobb – Douglas production function. Extent of adoption of recommended practices by organic and conventional pepper growers were analysed. Marketing channel of both organic and conventional pepper was identified and price spread was calculated for organic and conventional marketing channel. For organic pepper cost A was worked out to Rs 82,192 of which hired labour accounted to about 54 per cent, followed by cost of manures (28 per cent). Cost B1, B2, C1, C2 and C3were respectively Rs 83,062, Rs 4,84,420, Rs 1,29,879, Rs 5,31,237 and Rs 5,84,361. For conventional pepper out of Rs 77,230 estimated as cost A, hired labour was again the highest contributor accounting to 62 per cent and cost of manure and fertilizers occupied the second position accounting to 19 per cent of cost A. Cost B1, B2, C1, C2 and C3 were respectively Rs 77,900, Rs 4,70,091, Rs 1,18,910, Rs 5,11,102 and Rs 5,62,212. The gross returns obtained by organic farmers was Rs 3, 41,576 per ha which was 5.26 per cent lower than the conventional system (Rs 3,59,544 per ha). B – C ratio with respect to cost A was as high as 4.16 and 4.66 for organic and conventional farmer. The cost of production worked out to Rs 649 and Rs 572 per kg for organic and conventional pepper respectively when rental value of land was considered. The cost of production was analyzed considering the market rent for leased in land was found to be Rs 238 and Rs 205 respectively for organic and conventional pepper production. Cobb – Douglas production function was used to study the resource use efficiency of both production systems. From the allocative efficiency analysis it is understood that the inputs used in both organic and conventional pepper production is not optimal and could be increased further. Ten per cent and 22 per cent of the recommended practices were only adopted respectively by conventional and organic pepper growers. Climate, disease and pest attack, labour were identified as the major constraints by both organic and conventional farmers. High variability in price was identified as the major marketing constraint. Single export oriented marketing channel was observed for organic pepper and price spread worked to Rs 232 per kg. Various marketing channels of conventional pepper were observed, but the price spread of the local channel alone was calculated due to the complexity of other channels. The local channel observed for conventional pepper was producer – village trader – local retailer – consumer (tourist) and the price spread estimated was Rs 208 per kg with producer’s share of 64.70 per cent
Open Access
Climate change impacts and adaptation strategies in paddy production
(College of Horticulture, Vellanikkara, 2011) Susha, P S; KAU; Indira Devi, P
The impact of climate change is predicted to be more pronounced in developing countries like India as these economies mainly rely on climate sensitive sectors and the resources to manage are scarce. There exists wide variability in the socio economic conditions and geography across India and hence the impact of changes in climate varies across regions and locations. The study entitled “Climate change impacts and adaptation strategies in paddy production” in Kerala was undertaken with the objective of valuing the impact of climate change on paddy production and assessing the public cost of weather extremes .The study also explored farmer’s level of understanding on the concept of climate change and farm level adaptive mechanisms. The study was based on both primary and secondary data. The two major rice growing tracts of Kerala, viz. Alappuzha (Kuttanad) and Thrissur (Kole) districts were selected as the study area. Multistage random sampling method was adopted for sample selection. A random sample of 35 each farmers were identified and time series data (1980-81 to 2007-08) on the cost of cultivation and returns from paddy cultivation was collected from the records maintained by them. Further, the primary data on adaptation strategies and awareness level were gathered through personal interview method using pretested interview schedule. Ricardian approach using the panel data was employed to analyse the impact of change in climate on the paddy production. Apart from this, averages, percentages, growth rates and coefficient of variation were also used in the analysis. The area under paddy farming in Kerala has been exhibiting a declining trend for the past few years. During 1980-81 to 2007-08 the decline was to the tune of 3.06 per cent. The domestic production of paddy has never been able to meet the requirement and the gap is widening due to further falling trends ( -2.16 per cent per annum). Though the area and production trends were negative, the productivity trends showed a slightly positive sign with 0.94 per cent. There is wide variability in the performance of these indicators across the regions. The poor performance of paddy cultivation in the state has, largely been attributed to social (labour shortage, scarcity) and economic (relative profitability) reasons. The Gross returns from paddy farming amounted to an average of Rs 35,462 for the state, with a BC ratio of 1.69. Farm business Income in Kuttand was only Rs.16,235 and that in Kole lands (average holding size 1.84 ha) was Rs.29,725. At state level, this amounted to Rs.14,482. This income was enough to meet the household consumption requirement for only 1.5 months in Kuttanad and 2.8 months in Kole areas. Further, the time series data on Gross Returns reflected an increasing trend in current prices, but a stagnant or decreasing trend at constant prices. Thus it could be seen that the economic indicators do not very much favour paddy farming. The weather variables in Kerala has been changing in such a way that it caused the state to shift from wetness to dryness. Minimum temperature and rainfall recorded a negative growth rate over the years, with a compound annual growth rate of -0.03per cent and -0.09 per cent respectively and maximum temperature shows a positive growth rate of 0.02 per cent. There was very high variability in minimum temperature and rainfall in Kerala compared to maximum temperature. The pattern of changes shows distinct differences in magnitude and direction in each location. The Ricardian Method of analysis have shown that maximum temperature and rainfall during the initial growth phase(first two months) of the crop in Kuttanad region as exerting significant positive impact on farm income while these variables during second phase cause a decline in income. In Kole lands, however, it was the reverse and temperature during the second phase of crop growth was found to have positive and significant impact, though not direct The extreme events associated with climate change cause damage to property and life. The direct damage costs associated with the summer rain in 2008 amounted to Rs 4309.06 lakhs, of which 79.62 per cent was private and the rest i.e.20.38 per cent was the public cost. The total area equivalent affected was 32 per cent of total cropped area under paddy in Kuttanad during the season, amounting to 72 per cent of total paddy production in Alappuzha. Farmers in these regions were following several alternate management options like, planting time adjustments, varietal selection, crop rotation, System of Rice intensification (SRI), integrated farming systems and protecting against potential risk through subscribing to crop insurance. The farmers in general are aware of the climate change phenomenon, and majority state rising temperature as the most significant symptom of climate change. Increased outbreak of pests and diseases, changes in rainfall patterns, floods and sea level rise are also considered as symptoms of climate change by these farmers. The study highlights the need for detailed research on the topic covering different ecosystems and suggests location specific weather based agroadvisory services. The study justifies the public sector investment towards mitigating and adaptation programmes. The need for educating and empowering the stakeholders and developing a disaster management system to manage climate extremes is also underlined. The weather based crop insurance scheme, presently not very popular may be further promoted. The study also highlights the need for income support programmes for paddy farmers, as an incentive to continue in farming ,in the context of rising food security concerns.

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