AN ECONOMIC ANALYSIS OF VEGETABLE NURSERY BUSINESS: A STUDY IN CHICKBALLAPUR DISTRICT OF KARNATAKA
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Date
2018-07-01
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University of Agricultural Sciences, Bangalore
Abstract
The study makes an attempt to analyse the economics of investment and to assess
the marketing strategies adopted and to document the constraints faced by vegetable
nurseries. The required information was collected from 40 vegetable nurseries located in
Bagepalli and Chintamani taluks of Chickballapur district. The average area of vegetable
nursery units selected for study was about 930 m2 which was considered as the unit size for economic analysis. The initial establishment cost of vegetable nursery was Rs.
2,20,141.87, among which fixed costs formed the major share (60.73 %). The operating
costs of producing seedlings for one production cycle was found to be Rs. 56,616.84,
among which seeds cost has major share (31.38%). The average net returns per
production cycle was Rs. 33,533.16. Capital investment on vegetable nurseries was found to be financially viable in terms of positive NPV @12 % interest rate (Rs. 8291.12), Discounted B: C Ratio is more than unity (1.43) and Internal Rate of Return of 14.28 per cent. The payback period of investment on vegetable nurseries was 1.90 years. Breakeven production was 94,949.31 seedlings per production cycle. The method of sale followed by nurserymen was direct sale of seedlings to farmers, providing extra seedlings to buyers and placing banners in front of nursery was major marketing strategies followed. High cost of inputs, delayed payment by farmers, and non-availability of cash/credit were major constraints faced by nurseries.