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Open Access
Determinants and dynamics of lease land farming in pineapple
(Department of Agricultural Economics, College of Horticulture, Vellanikkara, 2015) Judy, Thomas; KAU; Indira, Devi P
Land is considered as the most valuable and dependable fixed asset in all economies particularly in developing economies like India. In such economies, due to mismatch in ownership and farming interests, the agricultural production was done under lease arrangements .At the same time the system of lease land farming is prohibited in many states of India including Kerala. But concealed tenancy is widely prevalent in all these states. Under this background, an in-depth study primarily focusing on lease land farming in pineapple was undertaken. The study identified the details on structure and dynamics of lease land farming market and determined the important factors that influence the decision to lease out. It also assessed the management differences between owner operated farms and leased-in farms. The problems faced by the lessors and lessees were identified as well. The study was conducted in the Muvattupuzha Block Panchayath of Ernakulam district, which is the major centre for pineapple farming. The samples were selected following a Multi stage Random Sampling method and data was collected from 120 respondents of three identified groups viz., own farm cultivators, lessors and lessees, with 40 members in each group. A pretested, structured interview schedule prepared separately for each group was used for data collection. The major tools for data analysis were Garrett Ranking Technique, Logit model and Discriminant Analysis. In the study area, pineapple was mainly being taken as an intercrop in rubber plantations. As such, there are two situations of lease land pineapple farming. Situation I- pineapple is grown in land where rubber is proposed to grow for the first time. Situation II- pineapple cultivated in slaughter tapped rubber plantations. Under situation II, three rent payment systems were noticed viz., cash alone, planting and management of rubber and management of rubber along with a cash payment. Half of the lessees were paying the rent as cash alone. The average rent for different situations ranged from Rs.67,031 to 88,888 per hectare. The average leasing period was 3.5 years, which included the time for clearing the field. Mostly, the payment was effected in advance, in the beginning of each year. The lessors (90 per cent) insist on signing a written agreement following the pattern of civil contracts, though it is not formally registered. In 10 per cent cases there was only verbal agreements. The decision of lessor to lease out was influenced by several factors, of which the size of holding was identified as the most important one, as revealed by the statistical analysis employing the logistic regression model. As the size of holding increases, the land owners tend to lease out their land. There was considerable difference in the management practices followed in the owner operated and leased-in farms. In the owner operated farms, more of organic inputs were used and as such they were more inclined towards sustainable line of farming whereas chemical fertilisers were intensively used in leased-in farms. By employing the Discriminant Analysis, out of the seven significant factors, total operational holdings, fertiliser cost and organic input cost were identified as the important factors that differentiate the owner operated and leased-in farms. The cost of cultivation (Cost C2) in leased-in farms was estimated at Rs.4,22,114 as compared to the owned farms (Rs.3,86,139). Similarly, the yield obtained from leased-in farms was 20 per cent higher than the owner operated farms and the net income realised was nearly 12 per cent higher. Though lease land farming is extensively being practiced in the area, both the land owners and the lessees face several problems. In case of the lessors, the anxiety on probable land degradation due to soil erosion, intensive chemical usage causing environmental hazards and abandoning the crop at low price situations were found to be the major ones. On the other hand, difficulty in availing quality land, social resistance on application of poultry waste, exorbitant rent rates and difficulty in availing agricultural credit and subsidies were the serious problems faced by the lessees. The social situation in the area demands promotion of lease land farming by providing legal support. At the same time, stringent conditions should be specified on the lease agreement to ensure sustainable management. To facilitate compliance of the same, a monitoring and supervisory mechanism also needs to be formulated. The need for a dispute resolution mechanism is also underlined. Thus, it can be summarised that, the lease land farming system can facilitate to bridge the gap between the demand and supply of land and supplement the agricultural production in the state.
Open Access
Ecosystem valuation of wetlands: a case study of Vellayani lake
(Department of Agricultural Economics, College of Agriculture, Vellayani, 2015) Aswathy, Vijayan; KAU; Elsamma, Job
The study entitled “Ecosystem Valuation of Wetlands: A Case Study of Vellayani Lake” was conducted during the year 2013- 2014 at College of Agriculture, Vellayani. The major objective of the study was to assess the Total Economic Value (TEV) of the Vellayani lake. The main ecosystem services provided by the lake system were provisioning services such as drinking water, fishing, duck rearing, lotus collection, irrigation, bathing and washing; regulatory services such as ground water recharge, stabilising microclimate; cultural services such as bird watching, photography, boat race, religious rituals and training centres in water sports and finally supporting function such as biodiversity conservation. Based on the ecosystem services, relevant stakeholders were identified and valuated using suitable techniques. The income generation activities of the lake such as fishing, lotus collection and duck rearing were valuated using the market price method and it accounted to Rs.1.83 crores year-1. The drinking water supply schemes installed by Kerala Water Authority, Central Public Works Department and College of Agriculture, Vellayani draws nearly 98,677 lakh litres of water from the lake per year, the value of which is Rs. 370.05 crores year-1. Provision of irrigation water by the lake valuated using opportunity cost method accounted to Rs. 20.69 crores year-1. The economic value of bathing and washing in the lake estimated using opportunity cost method was Rs. 0.009 crore year-1. The lake is also a part of religious activities, cultural activities, and recreational activities. The ecosystem service use by Centralized Sports Hostel for Canoeing, Kayaking and Rowing and Ayyankali Boat Race, valuated using public pricing method accounted to Rs.0.24 crore year-1 and Rs.0.07 crore year-1 respectively. People visit the lake for bird watching, photography, enjoying the scenic beauty, enjoy annual boat race and to attend religious ritual, Karkidaka vavubali. The value of recreational and spiritual services valuated using Travel Cost Method was Rs.0.56 crore year-1. The estimation of aesthetic value of the lake employing Hedonic Pricing Method revealed that, the marginal implicit price of getting one cent of land with lake view evaluated at mean property price of Rs. 2,44250/- was Rs. 79171/- and the aesthetic value of the lake was Rs.275.92 crores year-1. This illustrates the preference given by individuals for land with lake view. The monetary valuation of supporting and regulating functions of the lake was done using a double bounded dichotomous choice contingent valuation method. The mean stated Willingness to Pay (WTP) was Rs.225.22 year-1 for local residents. The economic value of the lake estimated using Contingent Valuation Method was Rs.2.91 crores year-1. Thus the Total Economic Value, which is the total value of ecosystem service use of the Vellayani lake estimated by summating the value of goods and services provided by the lake was Rs. 672.28 crore year-1. Analysis of temporal variation in area of the water body indicated a drastic reduction in area from 558.73 ha in 1973 to 243.39 ha in 2011. The reduction in area was not the result of natural geological process alone, but the major reason is irrational human activities due to demographic pressures. Based on the study it was concluded that the major reason for degradation and loss of wetland services provided by Vellayani lake is the lack of awareness on the value of its ecosystem services, non enforcement of property rights and lack of lake management policies. The major anthropogenic stressors on lake are unsustainable agricultural and fishing activities, watershed impact due degradation and destruction of canals carrying water to the lake and habitat modification. Vellayani lake management policy was formulated based on the study suggests the proper enforcement of property rights by bringing the lake under single management authority with statutory powers including members from line department and stakeholders. The authority may address the present threats on the sustainability of the lake and also chalk out action plan for prevention of further degradation. The low WTP by people indicated that conserving the lake with contribution of stakeholders alone is not practical and so at least one rupee per 70 litres may be fixed as cess to realize a minimum of 13.97 crores per year for the lake conservation. This amount is meager when compared to the TEV of the lake per year. Today’s critical need is to recognize the benefits that could be obtained if the lake is managed in an integrated manner. If not properly managed and degradation and loss continue in the same manner, we are going to lose the invaluable services provided by the lake which cannot be replaced by any other means. Management of lake is a very challenging task and requires actions at many levels and involvement of many stakeholders. The recommendations of the study, along with the values of the ecosystem services of the lake, if properly taken care of, may help in developing sustainable strategies for conservation of this unique freshwater source.
Open Access
Pepper economy of Kerala in the pre and post WTO regimes
(College of Agriculture, Vellayani, 2015) Anju, Jacob; KAU; Elsamma, Job
The study entitled "Pepper economy of Kerala in the pre and post WTO regimes" was conducted to examine the structural instability, trade competitiveness, forecasting of pepper exports and changes in economics of pepper cultivation in the light of liberalized WTO regime and to suggest policy measures to improve pepper trade based on the results of the study. The study was based on both secondary and primary data. Secondary data were collected from various published sources and primary data were collected from 30 farmers and 10 traders from Idukki and Wayanad districts. The study covered a period of 34 years from 1980-81 to 2013-14. The analysis was done for two sub periods -pre WTO (1980-81 to 1994-95) and post WTO (1995-96 to 2013-14) period so as to ascertain the changes in pepper economy. The results of the instability index revealed that the instability in area, production and productivity of pepper in Kerala was more pronounced during the post WTO period with 9.27 per cent, 17.41 per cent and 16.36 per cent respectively. The instability in export quantity (29.35%), export value (41.64%) and export unit value (18.87%) in the post WTO period were high when compared to instability in pre WTO period. Instability index for international price during post WTO period was more than that of pre WTO period. In the case of domestic price the instability during the pre as well as post WTO periods were almost the same, which were 21.38 and 21.14 respectively. The forecast for quantity of pepper export from India for the years from 2014-15 to 2017-18 showed an increasing trend. The analysis of trade competitiveness using Nominal Protection Coefficient (NPC) revealed that pepper had competitive advantage in all lustrums except during 1995-96 to 1999-00. The cost of cultivation of pepper increased in the post WTO period when compared to pre WTO period which could be attributed to increase in input costs. The regression of export value with area, production and productivity showed that production had a positive and significant influence on export value of pepper. The major problems faced by pepper farmers were incidence of pest and diseases, unavailability of labour and changes in climate. The problems faced by pepper traders were fluctuating prices and import of pepper from other pepper producing countries like Vietnam and Srilanka. The study also revealed that 63.4 per cent of the farmers and 30 per cent of the traders were not aware about WTO. Majority of farmers opined that even though pepper is profitable (83.3%) in the current scenario, productivity of pepper is decreasing (90%) and according to the opinion of 76.6 per cent of the farmers pepper cultivation is affected by the fluctuations in price. The instability in area, production, productivity and export of pepper, in terms of quantity and value, showed an increasing trend during post WTO period. Forecasted value of pepper exports showed a positive trend and pepper exports were found to be competitive during post WTO period implying that export competitiveness of black pepper was not negatively affected by WTO agreements. The results of the study also revealed that the area, production, productivity, export quantity and domestic price of pepper had significant influence in the value of pepper export from India. Hence, urgent action is needed for enhancing the area, production and productivity of pepper in Kerala to reap more benefits from the WTO agreements.
Open Access
Price volatility of black pepper and its implications in Kerala
(College of Horticulture, Vellanikkara, 2015) Sachu, Sara Sabu; KAU; Anil, Kuruvila
Black pepper, the "King of spices", is one of the oldest and best known spices in the world. India, with an area of 1.23 lakh ha and a production of 65,000 tonnes in 2012-13, is one among the leading producers of pepper. The area under pepper in Kerala has declined from 1.08 lakh ha in 1980-81 to 0.85 lakh ha in 2013-14, while the corresponding decline in production was from 36,670 tonnes to 28,519 tonnes. As an internationally traded commodity, black pepper is highly prone to price fluctuations. The study entitled “Price volatility of black pepper and its implications in Kerala” aimed at assessing the magnitude and determinants of volatility in prices of black pepper in the pre-WTO and post-WTO periods. The transmission of volatility between Indian and international markets as well as spot and future markets of black pepper were studied. The implications of price volatility on input use, production, employment and income of farmers, who were members of Peermedu Development Society (PDS), an NGO organising organic pepper farmers, with a contractual agreement for purchase and non-PDS farmers, were also studied on a comparative framework. The study was based on both secondary and primary data. The main observations were annual, monthly, weekly and daily prices in domestic and international markets of black pepper from 1980 to 2014. The micro-level study was undertaken in Idukki district. 40 farmers each were randomly selected from the PDS and non-PDS categories, making the total sample size to 80. For the assessment of implications of price volatility, data was collected from the same 80 farm households at two points of time at an interval of ten months, using a pretested interview schedule. The intra-annual volatility of monthly nominal prices in rupee as well as dollar declined marginally in the post-WTO period. In the case of international prices, the decline in intra-annual volatility was comparatively more when compared to the Indian prices. The magnitudes of the estimated intra-annual ii volatility indices for weekly black pepper prices were larger in comparison with those computed for the monthly prices indicating that the weekly prices were more volatile. The intra-annual volatility for weekly international nominal prices was comparatively lower than that for the domestic prices in pre-WTO and post-WTO periods. While the inter-annual volatility for monthly prices increased for Malabar Garbled Cochin prices that of Cochin Ungarbled decreased for both nominal and real monthly prices in the post-WTO period. In the international markets, the year to year variability in real and nominal rupee and dollar prices decreased in the post-WTO period. The results of the analysis of instability in annual prices showed that the magnitude of the volatility indices of nominal as well as real prices in both rupee and dollar increased in the post-WTO period. The determinants of price volatility identified were, (i) variations in US dollar-rupee exchange rate (ii) behaviour of black pepper prices including the seasonal and cyclical components (iii) changes in international trade (iv) futures trading, and (v) variations in domestic and world production as well as consumption. The nature and extent of price transmission between the domestic and international markets of black pepper for the pre-WTO and post-WTO periods were analysed using both pair-wise and multiple cointegration analyses. The markets were found to be cointegrated and hence, it could be established that the Indian prices moved in unison with the international prices even before liberalization and liberalization per se has not much improved or affected the co-movement of prices between the domestic and international markets. The Granger causality tests carried out on monthly prices proved that there was unidirectional causality from domestic to international market in pre-WTO period and it developed into bidirectional causality in the post-WTO period. In the case of weekly prices, the existence of bidirectional causality between domestic and international markets was found in both the periods. The spot and future markets prices were also found to be cointegrated and bidirectional causality could be established between them in the long-run. The implications of price volatility of black pepper on producer households was studied by comparing the price, production, employment, income and number of plants replanted in two years (2014 and 2015) for PDS and non- PDS farmers. The results showed that there was slight reduction in price in 2015 when compared to 2014 for both PDS and non-PDS farmers. Even though the average production of black pepper has increased in PDS as well as non-PDS farms, the growth in production was slightly high in the case of PDS farms. Hence, the non-PDS farms experienced a higher decline in income between 2014 and 2015 when compared to the PDS farmers. Consequent to the reduction in price, when the replanting of black pepper per hectare was considered, it was found that the number of plants replanted increased in the case of PDS members, whereas it decreased in non-PDS farms. The cost incurred on labour and inputs also showed a similar nature of increasing pattern in PDS farms and a decreasing pattern in non-PDS farms. The vulnerability of farmers to price volatility was studied and it was found that age, education and experience in farming reduced the vulnerability, while the family size and share of income from pepper were found to increase the effect of price volatility. It was found that a contractual agreement alone could not protect the farmers from price variations. The policy recommendations include proper implementation of warehouse receipt system so as to enable the farmers to borrow from banks to meet their immediate needs and prevent distress sales, dissemination of timely market intelligence and training the farmers on suitable selling decisions based on price movements, an implementable black pepper price stabilization mechanism which could adjust for changes in the cost of cultivation as well as ensure a stable income for the farmers and ensuring participation of small and marginal farmers in futures markets.
Open Access
Impact of green army labour bank on the welfare of agricultural labourers
(College of Horticulture, Vellanikkara, 2015) Sachu, Zachariah John; KAU; Prema, A
Green Army Labour Bank (GALB) is an organization formed as a self-sustaining group of skilled labour force fostered by the local body of Wadakkanchery block panchayat in Thrissur district of Kerala. A systematic study has been taken up with the objectives of studying the institutional structure and capital investment of GALB, to assess the impact of GALB on the welfare of Green Army members (GAM) and farmers who avail the services of GALB. Data were collected from 40 GAM, 40 user farmers, 40 agricultural labourers who are not the members of GALB and 20 officials through personal interviews. The membership of GALB is open to marginal farmers and agricultural labourers aged above 18 years residing in the jurisdiction of Wadakkanchery block. GALB functions on a six level hierarchy system in the order of High power committee, Executive Committee, Chief coordinator, Green Army Group, Green Army Team and Green Army Members. Average number of working days of members of GALB showed a significant increase from 203 days per year to 225 days after joining GALB. The average annual family income of GA members showed 40.51 per cent increase at current price. The monthly consumption expenditure of GA member was increased by 54.81 per cent after joining GALB. Savings of GA members after joining GALB has also increased by 137.5 per cent. The results of regression analysis to study the household welfare taking family consumption as the dependent variable showed significant relationship with economic category, education, age, family size, wages per month received by the members, per month contribution to outstanding loan, empowerment and number of employment days per month. Analysis of the constraints faced by GA members showed that rigidity with time norms was the greatest constraint, followed by drudgery in using machineries and their maintenance. A significant reduction in the number of employment days of ordinary agricultural labourers (OAL) from 221 days per year before GALB formation to 166 days per year was observed consequent to the intervention of GALB. This may be due to consequent reduction in the employment opportunities due to the substitution of manual labour with mechanization by GALB. The mean annual family income of agricultural labourers who were not members of GA significantly increased from Rs.92,826 per year to Rs.1,20,263 after GA. The mean monthly expenditure of the family of agricultural labourer before GA formation has significantly increased to Rs.4686, from Rs.3,314. Nearly 43 per cent of the agricultural labourers have opined that they are not in a position to work away from their village and hence they have not joined the GALB. Many of them (35%) admitted that they were not aware of the establishment of GALB. Due to the intervention of GALB, the area under rice cultivation in Wadakkanchery block has increased to 4559 ha in 2010-11, compared to 3161 ha in 2009-10. The mechanization intervention has resulted in increasing the cost of cultivation from Rs.33,440 per ha to Rs.50,736 per ha. At the same time, an increase of grain yield by 2432 kg/ha was reported by the farmers, contributing to an increase in gross income to the tune of Rs.83,896. The BC ratio at cost A1 improved from 1.6 to 2.59 as a result of GALB intervention. The labour utilization pattern indicated a savings of 108 days per ha due to GALB in rice cultivation to the farmers. GALB over the period has proved itself as a replicable model for supplying labour to the farming community and also for safe guarding the welfare of labourers. Through more diversified activities, undertaking lease land farming and through skill upgradation, the GALB can sustain in the future.
Open Access
Economic analysis of orchid flower trade in Kerala
(College of Agriculture, Vellayani, 2015) Aiswarya, Mohanan; KAU; Santha, A M
The research entitled “Economic analysis of orchid flower trade in Kerala” was conducted in Thiruvananthapuram (TVM) and Ernakulam (EKM) districts during the period from October, 2014 to March 2015. A sample of 10 elite growers having 5 years of experience, actively involved in commercial orchid production and 5 florists were selected randomly from each district. The study was carried out with the objective to understand the opportunities and challenges in orchid flower trade in Kerala and to assess the economic viability of orchid cultivation as an agri-business enterprise. In this study, the socio-economic characteristics of the orchid growers were ascertained. Aranthera was observed as the most popular orchid among the growers in TVM district whereas Dendrobium was mostly cultivated in EKM district. Even though growers had developed their own practices for cultivation of orchids, innovations could not be observed. The costs and returns were analysed for a unit of 1000 orchid plants. Cost of cultivation using A B C cost concepts showed that cost A1 (paid out costs) was Rs. 1,25,585 of which planting material accounted for 80.44 per cent, followed by hired labour (7.15 per cent). Considering all variable and fixed costs, cost C3 came to Rs. 1,53,868. The total cost of establishment was worked out to Rs. 1,49,504. Cost of planting material alone contributed 67.57 per cent of the total cost of establishment followed by shade structure or artificial support (18.67 per cent). The average annual returns obtained from a unit of 1000 orchid plants was Rs. 1,06,789. Even though the cost of cultivation and establishment costs were higher, the returns was lower in Ernakulam district. Capital productivity analysis revealed that orchid cultivation is a viable enterprise with B – C ratio of 1.64 and Net Present Worth of Rs. 1,37,898. Pay Back Period and Internal Rate of Return was obtained as 3.03 years and 55 per cent respectively. Orchid cultivation was found more remunerative in TVM compared to EKM. The resource use efficiency estimated using Cobb-Douglas production function revealed that the input planting material was underutilized and could be increased further to reach the optimum level. Four marketing channels were identified, of which Producer (exporter) – Distant Wholesaler – Consumer channel was observed as the most prominent channel contributing to 51.13 per cent. Price spread was Rs. 6.3 per flower and producer‟s share was 74.8 per cent in this channel. Most efficient channel was Producer – Consumer with lowest price spread (Rs. 0.09), highest Shepherd‟s index (155.76) and highest producer‟s share (99.36 per cent). But only 5.44 per cent of total flowers produced were marketed through this channel. Ninety two per cent of total quantity of flowers produced were sold in domestic markets of Chennai, Bangalore, Mumbai, Delhi etc and the remaining were sold in local market. Flowers were sold by florists after value addition. Value added products like flower arrangements, bouquets and wreaths helped them in realizing highest net margin among intermediaries. However value addition was not observed among growers. Orchid cultivation in Kerala can be a highly profitable agribusiness enterprise, if proper marketing strategies are followed. Opportunities are optimal for new entrepreneurs to start orchid cultivation since there is high demand for orchid flowers in the domestic market and high demand for potted flowering plants in the local market. Marketing is the major challenge faced by growers in cut flower orchid production, because of the small unit size and unorganized marketing. Therefore it is suggested that orchid flower marketing system should be under the ambit of regulation and control. This requires establishment of primary market producing area, wholesale market in the cities, terminal markets for export and revitalization of nonfunctional producers association in the state which must be financially supported by the government
Open Access
Adequacy of procurement price for paddy farmers in Kerala
(College of Agriculture, Vellayani, 2015) Sukanya, S Dharan; KAU; Santha, A M
The study entitled “Adequacy of procurement price for paddy farmers in Kerala” was conducted at Alappuzha and Palakkad districts. The objectives of the study were to analyze the adequacy of procurement price of paddy in relation to its cost of production, to compare the procurement price of paddy with its farm harvest price and to study the scale of procurement of paddy in Kerala and constraints experienced by the stakeholders in the procurement. The study was based on both secondary and primary data. Secondary data on cost of production, farm harvest price, procurement price and quantity of paddy procured for the period of ten years from 2003-04 to 2013-14 were collected from Department of Economics and Statistics and Food and Civil Supplies Department, Kerala. Primary data on cost of production of paddy was collected from 30 farmers selected from both the districts using a structured interview schedule. Trend analysis on area, production and productivity was done to have an understanding of rice scenario of Kerala. Even though area and production showed a significant negative growth rate of 4.27 and 1.88 per cent per annum respectively, the productivity showed a positive significant growth rate of 2.38 per cent per annum. Comparing the trend analysis of farm harvest and procurement price of paddy, there was more significant growth rate for procurement price (10.94 per cent) than farm harvest price at the rate of 7.25 per cent per annum. The study also revealed that there was a sharp increase in the growth rate of scale of procurement of paddy at the rate of 20.03 per cent annum with increase in its procurement price. Season wise analysis was done to find the adequacy of procurement price in relation to its cost of production. Analysis on adequacy of procurement price in relation to cost of production for the period of 2004-05 to 2013-14 in autumn season revealed that at cost A procurement price of paddy was adequate in all the years except 2007-08. At cost B inadequacy was seen in all the years except 2006-07. The procurement price was also inadequate in all the years at cost C. The analysis on adequacy in winter season and summer season revealed that at cost A, procurement price was found adequate in all the years in the study period. At cost B and cost C the ratio was inadequate in all the years. Similarly the measurement of adequacy using primary data revealed that the procurement price of paddy was inadequate at cost B2, cost C2 and Cost C3 on estimating the cost of production of paddy. Cost of cultivation and cost of production were found higher in Palakkad district with B-C ratio of 1.47 than Alappuzha district with a B-C ratio of 1.60. Hired labour contributed more to cost A followed by machine labour in both the districts. Cobb- Douglas production function was used to study resource use efficiency. By calculating resource use efficiency, machine labour cost, seed cost and plant protection chemicals cost are found under utilized in Alappuzha and only fertilizer was found under utilized in Palakkad. The major constraints faced by the paddy farmers selling paddy to procurement agency was the amount for procurement available only in installments and difficulty as amount is not available in time. Rice being the staple food of Kerala, the decreasing trend in area and production is a matter of concern. It is appreciable that the cost of production is atleast at cost A is covered by procurement price. The state is having high competitiveness of crops and for people who depend on farming, the present procurement price is not adequate to sustain them. Moreover the receipts due to farmers on account of procurement should be made available without any delay. Assurance of a remunerative price regime is essential for sustained rice production for meeting the food security of the state.

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