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ThesisItem 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.ThesisItem Open Access Market access for smallholder tomato farmers in Mashonaland East Province of Zimbabwe: an economic analysis(Department of Agricultural Economics, College of Horticulture, Vellanikkara, 2014) Emmanuel Zivenge; KAU; Jesy Thomas, KLinking small primary producers with markets has been identified as one of the major issues in policy and practice in improving livelihoods for millions of poor in Zimbabwe. Hence this study assessed the current market situation as a way of tracking and tracing efficacy and efficiency failures leading to more informed decision making with regard to redesigning of the matching market for smallholder farmers. The objectives of the study were to identify the tomato supply chains, analyse the price behaviour of tomato, assess the economic performance of the major supply chains, evaluate the institutional innovations in the supply chains and suggest viable supply chain options for smallholder tomato farmers in Zimbabwe. Tomato crop was chosen for the study as it is among the most important vegetables grown by smallholder. The study was based on both primary and secondary data. The study was conducted in Mashonaland East Province. Primary data were collected by means of formal interviews and structured questionnaire from farmers, market-intermediaries and government officials. Multi-stage random sampling technique was used for sample selection. Descriptive analysis was employed to provide a snap shot of the situation under study, which consisted of household level information. The Random Utility Model was employed to determine the factors which significantly influence the market accessibility. The price behaviour was studied using the techniques of classical time series. The Supply chain mapping was done to identify the actors. The study employed Data envelopment analysis to assess economic performance of supply chains and allocation of resources. Volume mapping results indicated that the supply chain, which involved hawkers, was handling the largest volume of tomatoes approximately 409.4 tonnes in one production cycle in 2013 season. The chain that included wholesalers/processors was the least in terms of quantity handled (39.4 tons) showing that it was not accessible. Data envelopment analysis results indicated that the chain that included wholesalers and processors was the only efficient chain when constant return to scale was assumed. Supermarket chain was efficient when variable returns to scale was assumed. The chains that included passers-by and hawkers were inefficient under both constant returns to scale and variable returns to scale technologies. The seasonal index results showed that the tomato prices were highest and lowest in July and November respectively when prices were 31 percent higher than the annual average price and 43 percent below the annual average' price. Spatial markets were not efficient in the short run although showing stable equilibrium in the long run. The price changes were transmitted from one market to another at a rate between 22 percent and 24 percent in the short run which proved to be low. There was no centre market among six municipal markets since price changes were to be set around more than one market. Random Utility model results showed that credit, greenhouse and cooperative membership were significantly influencing participation of smallholder farmers in formal markets. Data envelopment analysis results showed that farmer, on average could reduce input consumption by 12 percent and 27 percent at production and marketing stages respectively. The study concluded that the opportunities to improve profits lie in the marketing perspectives rather than production for tomato producers under study. Farmers can gain better income by reducing consumption of inputs without necessarily asking for high prices. The higher market price cannot compensate the value loss incurred by the high level of transaction costs. Tomato producers should pursue the low transaction costs marketing chains rather than ask for a higher market price. The chain that included hawkers should be given due attention and modem matket infrastructures should be established in rural areas in order to relay reliable, relevant and correct information to the farmers.ThesisItem Open Access Institutional credit supply and repayment behaviour of farmers in Kerala: a policy persepective(Division of Agricultural Economics, I A R I, New Delhi, 1998) Sathees Babu, K; KAU; Singh, R PCapital has been one of the most limiting factors in crop production in India. Hence, institutional credit was evolved in India from the angle of liberating farmers from the clutches of private moneylenders by providing cheap, adequate and timely source of credit. With the advent of the high- yielding varieties programme, credit was expected to play the role Of production enhancement through the adoption of the modern technology. The credit policy in India had given special emphasis in giving preference to the small and marginal farmers and agricultural labourers in providing institutional credit. Kerala ranked first among the Indian states with regards to the growth in the flow of production credit. However, the increased flow of institutional credit at concessional rates was accompanied by many related issues such as inadequacy, misutilization and diversion of loan, lack of timeliness in credit delivery and high credit transaction costs. The mounting overdues level of the credit institutions has been a matter of growing concern, which has directly or indirectly influenced the repayment behaviour of the borrowers. It is in this context that the present study attempted to examine the institutional credit supply and repayment behaviour of farmers in Kerala. The specific objectives of the study were : 1. to examine the growth in credit institutions, their disbursement and recovery performance in Kerala 2. to study the economic characteristics of the borrowers and the extent of their credit need in crop production 3. to examine the pattern of credit supply, timeliness. repayment behaviour and overdues of the borrowers. and 4. to identify the factors influencing the overdues in order to screen the potential defaulters and suggest suitable policy prescription. Kottayam district in Kerala was purposively selected for the study because he district topped in the institutional credit disbursal to agriculture. Among the eleven blocks in the district, Madappally block was chosen for detailed investigation because of the higher target, achievement and credit absorption capacity with regards to crop loans. Finally, a cluster of four villages, viz., Changanasserry. Madappally, Trikkodithanurn and Vazhappally were selected based on concentration of lending, and a total of 160 crop loan borrowers were selected by stratified random sampling. Primary as well as secondary data were used for examining the objectives of the study. The time series data on agency-wise disbursal of credit to agriculture was collected from the State Level Bankers' Committee, Trivandrum to study the growth in the functioning of the credit institutions in the state. Primary data on the various aspects of credit at the household level were collected through personal interview of the sample respondents with the help of a pre-tested, structured survey schedule. The secondary data pertained to the period from 1985-86 to 1996-97. The primary data pertained to the agricultural year 1996-97. The economic characteristics of the borrowers like farm size and family composition, educational status. size group status, farming status, investment pattern on capital assets, cropping pattern, working capital requirements, gross income, gross margin and overdues level were examined by tabular analysis. Compound growth rates were worked out in nominal as well as real terms to study the growth in the functioning of the credit institutions in terms of number, deposits, advances and recovery levels. Production function analysis was carried out, using the Cobb-Douglas production function, to analyse the resources productivity among the various borrower groups and their allocative efficiencies were compared. Frequency distribution analysis was carried out to quantify the farmers' perception to different dimensions of credit. The factors influencing the repayment behaviour of crop loan borrowers were examined using a logit model based on logistic cumulative distribution function. Growth in Credit Institutions, Disbursement and Recovery Performance in Kerala The commercial banks were the major purveyors of agricultural credit in Kerala, accounting for more than half of the total credit disbursed to the farm sector. They could achieve a high growth rate in deposit mobilisation and credit delivery through the proliferation of their branches in the state during the eighties and the early nineties. On the other hand, the growth in lending by the cooperatives appeared to be less attractive than that of other financial institutions. The relative share of the cooperatives in agricultural lending has been declining over the years. This amounted to a role reversal considering the major role visualised for the cooperatives in the multi-agency credit prpgramme in rural lending. The inter-regional and inter-temporal variations in the flow of all forms of institutional• credit, resulted in regional imbalances in credit delivery. Inter-regional differences existed in credit deepening also. Eventhough the state received a high credit receipt of Rs. 2027 per hectare of cropped area, only the districts of Kottayam, Alappuzha, Idukki, Ernakulam, Palakkad, Kozhikkode, Wayanad and Kollam experienced credit deepening in real terms. The recovery of overdues to demand has been fluctuating from year to year. On an average, the financial institutions in the state had an overdues of 23 per cent to demand, with a loan recovery rate of 77 per cent. The recovery performance of the PACSs were better (79 per cent) than that of the commercial banks and regional rural banks (68 per cent) on account of the peer group pressure exerted by their democratic mode of management. Economic Characteristics of the Borrowers and the Extent of Their Credit Need in Crop Production There was not much pronounced variation in the size of family, gender composition, experience in farming, educational status, size group composition and cropping intensity among the defaulter and non-defaulter group of farmers. However, the average size of operational holdings, share of irrigated area, share of cash crops in the cropping pattern, investment on fixed assets, and intensity of modern input use of the non-defaulter borrowers were higher than that of the defaulter borrowers. The resource productivity varied widely among the borrower groups. Production of major crops like paddy, coconut, banana and rubber were labour intensive, and they utilised the labour resource more productively. The better managerial skills of the non-defaulter borrowers helped them in harnessing higher yield and thereby higher gross profit. They depended more on agriculture for the gross income (69 and 51 percentage of shares respectively), and hence placed more importance on maintaining better customer relationship with the credit institutions. On an average, 88 per cent of the non-defaulter borrowers were the small and marginal farmers while 94 per cent of the defaulter borrowers formed small and marginal farmers. It amply illustrated the free access of small and marginal farmers to institutional form of credit, thereby indicating the effectiveness of the agricultural credit policy that placed greater thrust on progressive improvement in accessibility of credit and inputs to the small and marginal farmers. However, the estimation of the working capital requirement and comparison with the scale of finance showed that it fell short of the credit needs of the farmers, particularly that of the small and marginal farmers. It underlined the need for working out the scale of finance in a more realistic and scientific manner, keeping the production requirements of the farmers in the area. Pattern of Credit Supply, Timeliness, Repayment Behaviour and Overdues of the Borrowers The analysis of the pattern of credit supply showed that not only the scale of finance was inadequate with respect to the credit needs of the borrowers, there was widespread credit rationing practised by both commercial banks and PACSs from the level of approved scale of finance as well. This led to acute shortage in working funds among all the categories of borrowers who were driven to the private moneylenders to meet the shortfalls. Thus, the basic objective of providing institutional credit to wean away the cultivators from the clutches of village moneylenders was defeated. While 10 per cent of the non-defaulters depended on non-institutional sources of fund to meet the short fall caused by credit rationing, it was as high as 35 per cent in the case of defaulters. Another interesting finding that emerged out of the analysis was the disbursal of kind components in proportions lower than the norm prescribed by the scale of finance. There was considerable delay in the disbursal of credit to the farmers by all sources of institutional credit to the farmers. However, the delay was more pronounced in the case of cooperative lending. It resulted in agricultural illusion among the borrowers, who indulged in the diversion of loan availed for agricultural production at concessional rate of interest for other non-productive purposes. The extent of diversion was more in the case of defaulters than the non- defaulters. The credit acquisition cost of the defaulters were also higher than that of the non-defaulters. The defaulters had to spend nearly Rs. 15/- for transacting Rs. 100/- as loan while the non-defaulters could transact a loan amount of Rs. 100 for Rs. 13/-. The commercial banks could ensure credit to its borrowers at a lower credit transaction cost than the cooperatives. The cooperatives could not dispense cheaper loans to its member borrowers in spite of their interest subsidy facility. The repayment obligation of the non-defaulter borrowers were higher than that of the defaulters, indicating the higher volume of credit made available to them. They could generate higher repayment capacity also, thereby having a higher financial surplus after debt servicing. The analysis also revealed that more than half of credit delinquency was due to wilful default. Among the factors perceived by the borrower farmers that influenced their non-repayment decision, crop failure and diversion of loan for non- productive purposes were the most important one. The agricultural debt relief scheme, 1989 had given an impression of similar loan write-offs in future also, thereby vitiating the recovery climate. Factors Influencing the Overdues and Screening the Potential Defaulters The analysis of the factors influencing the repayment behaviour of crop loan borrowers using logistic regression showed that the repayment behaviour of the borrowers were conditioned by a host of factors like operational expenses, per capita consumption expenditure, loan amount, amount diverted to non-productive uses and credit acquisition cost. There were differences in the economic characteristics and their relative importance in influencing the repayment behaviour among the borrowers of commercial banks and cooperatives. Higher share of cash crops in the cropping pattern resulted in better recovery of commercial bank loans whereas the experience in institutional credit, loan amount diverted for other purposes resulted in lower recovery. On the other hand, the per capita consumption expenditure resulted in better recovery of cooperative credit. Higher credit acquisition cost, more delay in credit delivery, more advanced age and more educational status contributed to lower repayment of cooperative loans. The farmers perception of improving the recovery performance of credit institutions also showed that there were differences in the factors influencing the repayment behaviour of borrowers of commercial bank and PACSs. The borrowers of PACSs viewed that timeliness in credit disbursal, l.V":' followed by the adequacy of loan amount and lower interest rates were the more important factors influencing their repayment decision. The borrowers of commercial banks, on the other hand perceived that the adequacy of loan amount, followed by the timeliness in credit supply and proper supervision of loans improved the recovery performance. Rigid formalities in credit transaction was the most important limiting factor faced by borrowers while dealing with the financial institutions. Cumbersome procedures and pre-occupation with paper works were other factors that made the agricultural banking less customer-friendly to the borrower farmers. Policy Implications Based on the insights provided by the study, the following policy measures are being suggested that could make the crop loan scheme more efficient and meaningful. Firstly, in view of the regional imbalances in credit delivery, concerted efforts are required to reduce the regional imbalances in credit delivery in the different districts of the state. Secondly, the cooperatives played only a supplementary role to the commercial banks in credit dispensation to the agricultural sector. Keeping in view of the democratic nature of cooperative credit, they are to be revitalised and geared to play the major role in the multi-agency approach in agricultural finance. Thirdly, the small and marginal farmers were receiving inadequate credit matching to their credit requirement. Policy interventions are needed to correct credit gaps so created. Scale of finance shall also be evolved in a more realistic and scientific manner to meet the credit needs of the farmers, particularly that of the small and marginal size groups adequately. Fourthly, credit rationing practiced by the financial institution defeated the very purpose of weaning the farmers away from the clutches of village moneylenders. Hence, policy perspectives need to be farmed to overcome this pitfall. Fifthly, considering the higher incidence of diversion of production credit to non-productive purposes, effective supervision and followup of loans are needed to keep agricultural illusion at minimal levels. Lastly, the practices and procedures followed by the financial institutions were cumbersome and rigid. It needs simplification to offer more customer –friendly banking facilities to the farmer borrowers.