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ThesisItem Open Access Dynamics in prices and trade of Indian small cardmom and its implications on producers(Department of Agriculture Economics, College of Horticulture, Vellanikkara, 2019) Indhushree, A; KAU; Anil, KuruvilaIndian small cardamom is known worldwide for its quality and is exported to many countries around the world. Formerly, India enjoyed a monopoly in the production and export of small cardamom in the world. Since 1980s, the country lost its share in the international market to Guatemala due to comparatively higher price and increasing domestic demand for the commodity. The present study on “Dynamics in prices and trade of Indian small cardamom and its implications on producers” was undertaken with the objectives, to study the economics of small cardamom cultivation and marketing, analyse the price formation and transmission between Indian and international markets, study the supply response of cardamom, analyse India’s export performance and competitiveness and assess the implications of changes in price and trade at the farm level. The study was based on both primary and secondary data. In order to estimate the economics of cultivation and marketing of small cardamom, primary data were collected from 160 selected farm households in Idukki district of Kerala and from 52 market intermediaries in Kerala and Tamil Nadu. The secondary data on area, production, prices and exports of small cardamom published by various institutions for the period from 1970-71 to 2017-18 were collected in order to study the price formation and transmission between the international and domestic markets, to find out the export performance and competitiveness of Indian small cardamom and supply response of cardamom to prices. The economics of small cardamom cultivation in Idukki district of Kerala was estimated using the concepts of establishment cost and maintenance cost. The total cost of cultivation and production of small cardamom in Idukki district were estimated as ₹4,79,040 per hectare and ₹375 per kg respectively, while the net returns earned by the farmers was ₹9,18,366 per hectare. The major marketing channels identified for small cardamom were, Channel I: Producer-Village trader-Auctioneer-Wholesaler-Retailer-Consumer; Channel II: Producer-Auctioneer-Wholesaler-Retailer-Consumer; Channel III: Producer-Village trader-Auctioneer-Exporter-Consumer and Channel IV: Producer-Auctioneer-Wholesaler-Upcountry wholesaler-Retailer-Consumer. Majority of the farmers (49 per cent) were selling their produce to the village traders, while 32 per ii cent of the farmers were selling to auctioneers. The marketing efficiency was found to be highest in channel II because of the low marketing cost and margin, and high producer’s share in consumer’s rupee. The marketing efficiency was found to be lowest in channel III. The co-movement between the cardamom prices in the Indian and international markets was confirmed in the post-WTO period, while there was no integration in the pre-WTO period. The transmission of price signals between Indian and international markets was also established for period I, period III and period IV. The price series of different grades of cardamom in the domestic market were found to be moving together in almost all the periods considered. Thus, the price of cardamom in one market was found to be having considerable influence on the price prevailing in the other market after the liberalisation of trade. The Error Correction Model (ECM) indicated the presence of short-run disequilibrium between the Indian and international prices, and between the prices of different grades of cardamom, which got corrected with varying speed of adjustment. Granger causality test confirmed that the price transmission was from the international market to the Indian market in the long-run. The elasticity of supply of small cardamom with respect to its own price lagged by two years was positive and significant in both the short-run (0.39) and long-run (0.96). The rate of growth in the export of small cardamom from India increased, while the instability in export declined in the post-WTO period as compared to the pre-WTO period. The export quantity contributed to about 80 per cent growth in the export value of small cardamom in the post-WTO period. Nearly 85 per cent of change in the variance of export value in the post-WTO period was due to the change in the variability of export unit value of small cardamom. Among the different periods considered for the study, period I recorded a higher growth rate of export and lower instability in terms of value and unit value, while period II witnessed the lowest and negative growth rate with high instability in the export of small cardamom. Geographic concentration of small cardamom export from India always remained high and it further increased in the post-WTO period. Over the years from period I to period V, there was a steady and gradual increase in the geographic concentration of export. There was a changing pattern in the stability of export markets for Indian small cardamom, and the probability of retention of major countries was iii declining over the years with the exception of Saudi Arabia. It was found that Saudi Arabia, Malaysia, Japan and UAE were the stable markets in both pre-WTO and post-WTO periods. Even though India gained considerable market share of new markets viz., UK, Iran and Bangladesh, it lost some of the traditional export markets viz., Kuwait, UAE and Qatar. The export demand for Indian small cardamom was determined by the GDP per capita in the importing countries in both pre-WTO and post-WTO periods, while the export supply was influenced by the ratio of export price to domestic price and the domestic production. The indices of export competitiveness viz., the Nominal Protection Coefficient (NPC) and Effective Protection Coefficient (EPC) values were greater than one (1.33) indicating lower export competitiveness of Indian small cardamom. Domestic Resource Cost Ratio (DRCR) was less than one (0.22) which indicated India’s comparative advantage in the production of small cardamom. Variance in producer prices influences the welfare of the farmers by affecting their income. The variance in exchange rate was found to be the major source of variation in producer prices in the pre-WTO period and period II, while the variance in export unit value was the major determinant in the post-WTO period, period I and period III. The challenges in small cardamom cultivation need to be addressed by introducing varieties that are both pest resistant and high yielding, formulating effective organic inputs and providing replanting subsidy at a reasonable rate to the farmers. Regarding the price and trade of cardamom, crop specific price stabilization mechanism is needed to tackle the excessive volatility in cardamom prices. More transparency is required in the e-auction system to reduce re-pooling by traders and ensure faster payment to the farmers. In order to promote export and improve India’s competitiveness, farmers should be encouraged to follow Good Agricultural Practises (GAP) that will help to reduce the input usage, which will in turn improve the quality of the commodity and reduce the cost of production. Effective ban on toxic chemicals at the national level is necessary to keep the residual toxic content in small cardamom within the permissible limits. Branding of Indian small cardamom which is of superior quality could also help in promotion of the commodity in the international market.ThesisItem Open Access Dynamics and competitiveness of agricultural trade polices on coconut economy of Kerala(Department of Agricultural Economics, College of Horticulture, Vellanikkara, 2019) Thasnimol, F; KAU; Prema, ACoconut is a crop of economic importance in many Asian and Pacific countries. India is the largest producer of coconut in the world contributing 23798.23 million nuts from an area of 2.09 million ha (CDB, 2018). The economic reforms of the 1990s and the subsequent trade liberalization policies have brought challenges and prospects to Indian agriculture including the coconut industry. In this context, the present study was undertaken with the objectives to trace and assess the impact of trade policies in edible oil on coconut economy of Kerala, to analyse the price transmission in the markets, to estimate the efficiency of selected coconut markets and finally to suggest appropriate policy measures for improving the performance of coconut trade. Both primary and secondary data were used for examining the specific objectives of the study. The primary data were collected using well-structured and pretested schedules through a survey of 90 farmers, 45 market intermediaries and 15 exporters in the selected districts of Kerala. Secondary data was mainly collected from authentic sources like CDB, EXIM data bank, DGCI&S, DGFT and FAO statistics. Though trade liberalization adversely affected the coconut farmers during the initial phase of liberalization, it subsequently increased the opportunities of the Indian coconut sector to compete in the world market. The export growth rate of coconut products has increased during the study period (1980-81 to 2016-17) while instability index, a measure of export stability was found to have decreased. The high growth rates of coconut products together with low instability indices in the export revealed the prospects for Indian coconut sector in the global market. Hence stream lining the production through Good Agricultural Practices to fulfill the export market requirements with regard to quality and safety would boost the trade. The comparative advantage in coconut trade analysed using the Revealed Symmetric Comparative Advantage (RSCA) indicated that coconut oil and desiccated coconut did not possess any comparative advantage in global trade, while coconut (fresh and dried) and copra have comparative advantage. It was obvious from the result that rather than focusing on the export of coconut oil and desiccated coconut, India must give much effort to increase our export share of coconut, copra and other value-added coconut products to augment the foreign earnings. The trade policies concerning edible oils at the national level were found to have an impact on the coconut oil prices in Kerala too. Exponential growth rates were computed to compare the growth of edible oil imports and coconut oil prices in Kerala. The significant improvement in the growth rates of edible oil import and decline in the growth rates of coconut oil price confirmed that trade liberalisation and further Free Trade Agreements (FTAs) facilitated the huge import of edible oil from other countries which unfavorably affected the domestic coconut economy. The result of the Policy Analysis Matrix (PAM) unveiled that coconut oil production in Kerala was competitive at the given level of technologies, prices of inputs and outputs and current policy stipulations. However, social profitability, a measure of efficiency or comparative advantage was observed to be negative. The result depicted that coconut oil production in Kerala lacks comparative advantage in production and the state was not able to use the available resources efficiently. The efficiency of selected coconut markets studied using Shepherd’s index indicated that the presence of more number of marketing intermediaries and high marketing cost and margin have reduced the producer’s share in consumer’s rupee. Besides, high wage rates, shortage of skilled labour, lack of processing technologies, adverse climatic conditions, etc., obstruct the farmers in performing even the primary level processing and thereby it reduces the producer’s share in consumer’s rupee. The cointegration analysis using Johansen Cointegration method revealed that the liberalisation policies and further free trade agreements have resulted in the transmission of price signals between domestic and international edible oil markets and it led to the integration of these markets during the post-liberalisation period. The result of Vector Error Correction Model (VECM) also depicted that changes in the international prices of edible oils would cause changes in price in the domestic coconut oil market in the long-run. High wage rate, labour shortage and incidence of pest and diseases were the major production constraints faced by the farmers. Inclusion of agricultural operations also under MGNREGA has been suggested by farmers as an option for bringing down the cost of cultivation. Shortage of skilled labours can be lessened through the adoption of programmes like Friends of Coconut Tree (FoCT). The problems related to pest and disease attacks can be addressed by developing resistant and hybrid varieties and better plant protection measures. Price fluctuation, high transportation cost, inadequate storage and processing facilities were the major marketing constraints faced by the farmers. Long-term policies for the price stabilization of coconut and other coconut products are inevitable to reduce the price fluctuation. The government should continue the procurement operation through Krishi Bhavans as it is found to be beneficial for the farmers. Shortage of raw nuts, lack of exclusive market for coconut and high domestic price were the major constraints reported by the domestic traders and upcountry traders. The recent surge in the domestic price could be attributed mainly to the short supply coupled with high domestic and industrial demand. Shortage of raw nut due to lower production, productivity and pests and diseases needs to be addressed seriously. In the era of trade liberalisation and FTAs, the interests of farmers also need to be safeguarded while concentrating on trade opportunities. Given the present trade scenario, the coconut sector in Kerala needs strong support from the government to revive and retrieve its premier role performed in the past.ThesisItem Open Access Implications of geographical indications for rice in Kerala(Department of Agricultural Economics, College of Horticulture, Vellanikkara, 2019) Radhika, A M; KAU; Jesy Thomas, SThe present study entitled “Implications of Geographical Indications for rice in Kerala” was conducted with the objectives of assessing the impact of GI rice on income and welfare of the producer households, identifying the major supply chains, evaluating the institutional innovations in the supply chains, proposing viable supply chain options and examining the export prospects and market access of the registered GI rice. The rice GIs of Kerala viz., Navara, Pokkali, Jeerakasala, Gandhakasala, Palakkadan Matta and Kaipad were selected for the study. From each of the six categories, fifty farmers each were randomly selected making a total sample of 300 farmers. Data was also collected from market intermediaries and producer societies in each GI tract. Cost-return structure was worked out for the selected GI rice using percentage analysis and cost concepts. The highest cost of cultivation (Cost C2) was found in the case of Jeerakasala (`.131082/ha) followed by Gandhakasala (`.127308/ha). The highest average yield was realised for Palakkadan Matta (4498 kg/ha) and lowest yield was realised for Pokkali (1835 kg/ha). Accordingly, the cost of production was highest for Pokkali and lowest for Palakkadan Matta. The highest average gross income of `.155568/ha was obtained for Navara while it was lowest for Pokkali (`.75036/ha). The net income and BC ratio indicated that farming was a loss making business for farmers growing Pokkali, Jeerakasala and Gandhakasala, especially when the value of the family labour, land value and managerial cost were imputed and accounted in the cost. The BC ratio worked out to be more than one in the case of Navara (1.31), Palakkadan Matta (1.05) and Kaipad (1.02). The producer’s performance was assessed using one output and four inputs using DEA model. All the GIs showed low technical efficiency (<40 per cent). The estimated mean technical efficiency for producers of Gandhakasala was highest (90.5 per cent) and the least efficient producers were seen in Pokkali. The scale efficiency results showed that all the GIs were scale inefficient which could be attributed to low operational scale of units. The impact of GI on income and welfare of producer households was measured using the method of treatment effect analysis. The average treatment effects were worked out for the outcome variables; yield per hectare, net income, marketed surplus, and value of marketed surplus. Even though the yield of Navara was comparatively lower than that of Palakkadan Matta, Jeerakasala and Gandhakasala, the net income, marketed surplus and value of marketed surplus were higher for Navara. The yield per hectare was higher for Jeerakasala when compared to Gandhakasala while the net income, marketed surplus and value of marketed surplus were higher for Gandhakasala. Palakkadan Matta recorded the highest yield among these categories, but net income, marketed surplus and value of marketed surplus were comparatively low. The marketed surplus of Pokkali was comparatively higher than Kaipad even though yield, net income and value of marketed surplus were comparatively very less. Three marketing systems were prevalent in the study area. Some farmers market paddy through market intermediaries, some resource rich farmers cultivate and process their produce to meet the requirements of high end consumers and other resource poor farmers sell off their produce to local consumers after processing in nearby mills. The Palakkadan Matta farmers were marketing their produce through Supplyco at the rate of `.22.50/kg. Institutional Analysis and Development Framework (IAD) was used to explore the performance of GIs. Efforts were made for studying the institutional innovations strategies for enhancing profitability and effectiveness of the GI mechanism, to propose viable supply chain options and to examine the export prospects and market access of the registered GI rice. Producer societies play a lead role in the registration process of a GI. The other actors include GI registry, IPR cell, KAU and Producers of the respective GIs. The average prices of all these speciality rice have increased after GI registration. Group-farming can be adopted as an option to bring more area under production. Despite having ample scope for enhancing the income of farmers through diversification, lack of facilities for value addition is a major hurdle. Processing units and storage facilities should be established near major producing areas to overcome this problem. Taking advantage of the GI status, efforts are to be made for marketing GI products as a premium priced branded organic produce. An effective institutional arrangement should be constituted to ensure quality production and efficient marketing of GI rice.
