An-Economic Analysis of Gherkins Contract Farming in Dindigul district of Tamil Nadu

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dc.contributor.advisorSHAREEF, S.M
dc.contributor.authorVEMBU, M
dc.date.accessioned2016-08-04T15:06:38Z
dc.date.available2016-08-04T15:06:38Z
dc.date.issued2008
dc.description.abstractContract farming is a system where a central processing or exporting unit purchases the harvests of independent farmers and the terms of the purchase are arranged in advance through contracts. India is the largest producer of vegetables but is only the 19th largest exporter in the world. Gherkin is one of the potential items of export. In Tamil Nadu, gherkins are cultivated only under contract farming. In this context the present study is taken up with the following objectives: (1) To compute the cost and returns of cultivation of gherkins under contract farming (2)To estimate the resource use efficiency and input demand in gherkin cultivation (3)To assess the environmental impact and environmental awareness (4)To study the constraints at various stages of this contract farming. Dindigul district was purposively selected because it has the largest area under gherkin cultivation among various districts in the state of Tamil Nadu. Among the taluks in Dindigul district, palani taluk was purposively selected in order to comparatively study the contract cultivation of gherkin by farmers supplying to four major units namely ITAP, IAP, Bnazram and Ravibala. The data were collected from the sample farmers through personal interview method using a structured pre-tested questionnaire. The one way Analysis of Variance test showed no significant difference between the sample farms supplying gherkins to the four firms in terms of gross income per hectare. Therefore, the functional analyses were done for the pooled sample though the descriptive analyses were done individually for farmers supplying to the four firms for better comparison. The cost and returns of cultivating gherkins was estimated and compared between companies. Cobb- Douglas form of production function was fitted, to analyze the contribution of different inputs to gherkin production and the efficiency of inputs used in cultivating gherkins. The "Environmental Impact Quotients" (EIQ) (Kovach et al., 1992) was computed to study the levels of environmental impacts of plant protection chemicals used. The Multivariate Tobit Model was used to determine the factors which influenced the level of environmental awareness among the gherkin farmers. A Cobb-Douglas form of profit function was modeled incorporating the level of environmental awareness and its impacts on profit and to derive the input demands. The average size of the sample farms supplying gherkins to ITAP, IAP, Bnazram and Ravibala was 2.05 hectares. The average area irrigated was 0.99 hectares accounting to 48.29 per cent of the net area of the farm. The average area under gherkins for the pooled sample was only 0.26 hectares. The Paddy – Gherkin-Paddy crop rotation seemed to be popular (23.33 per cent) and paddy was grown as the successive crop to gherkin in 56.67 per cent of the farms. The average variable cost worked out to little over Rs.125000 per hectares in the case of sample farmers supplying gherkin to all the four firms operating in Dindigul district. The human labour accounted for the lion’s share of over 47 per cent, out of which the family labour constituted close to 18 per cent. The next major expenditure was on plant protection which stood at closer to 22 per cent. This was followed by expenditure on fertilizers which constituted close to 18 per cent. Expenditure on seeds constituted little over two per cent. The net income over Cost A for the pooled sample was Rs. 94519 per hectares and the net income over Cost C3 was Rs. 69815 per hectares. The average cost of production (A) was Rs. 4.06 per kg for the pooled sample. The net returns worked out to Rs. 3.06 per kg over Cost A. The average cost of production (C3) was Rs. 4.86 per kg for the pooled sample. The net returns worked out to Rs. 2.26 per kg over Cost C3. The production function analysis revealed that one percent increase in the expenditure on labour would increase the gross returns by 0.62 per cent; one per cent increase in the expenditure on seeds would increase the gross return by 0.03 per cent, the coefficients for seeds, fertilizers and plant protection chemicals stood at 0.03, 0.48 and – 0.379 respectively. The MVP/MFC ratio for labour (1.73) and fertilizers (2.51) were greater than unity indicating the scope to increase the use of these inputs. However, in case of the expenditure on seeds, the ratio of 0.82 (less than unity), indicated that every additional rupee spent on seeds would add only Rs.0.82 to gross returns and for plant protection chemicals at -0.02 happened to be negative indicating that every rupee increase on plant protection expenditures would reduce the gross returns by Rs.0.02, hence there is a need to reduce the use of plant protection chemicals. The average yield of gherkins (of all grades) was 30.87 tonnes for the pooled sample and it ranged between 30.81 and 31.90 tonnes per hectare. The average gross income for the pooled sample was Rs. 219751 per hectare and it ranged between Rs. 219454 and Rs. 220023 per hectares for farmers supplying to various firms. The average number of payments made by Ravibala (2.68) was the highest, followed by ITAP (2.37), Bnazram (2.06) and the IAP (1.98) in that order. The EIQ field scores indicated high levels of EIQ values ranging between 80.475 and 149.446, the average being 113.308. The analysis would only show the need to reduce the use of chemicals by using these on need basis. The environmental awareness increased with the level of education, extension contact and the increase in the off farm income. The elasticities of demand for inputs showed that the input prices had negative elasticity of demand for all inputs. The price elasticity for fertilizer was -0.56, for pesticides was -0.79, for labour was -1.125. For every one per cent increase in area, fertilizer demand increased by 0.11 per cent and pesticide demand increased by 0.33 per cent. If the index of infrastructure increased by one per cent, fertilizer demand increased by 0.006 percent and labour demand decreased by 0.31 per cent. For every one per cent increase in environmental awareness, fertilizer demand decreased by 0.45 per cent and pesticide demand decreased by 0.68 per cent. Invariably, the contract farmers of all the companies in the study area revealed that the type of agreement between them and the company had been oral and informal in nature as it happened to be more convenient. All the sample farmers expressed satisfaction about companies and were ready to cultivate gherkins once again. In the system of contract farming, the major problem encountered by the farmers was higher price of the inputs when compared with the market price. The problems in cultivating gherkin were labour scarcity and severe yield loss due to pests and diseases. The major expectations in the order of Garrett ranks were higher price for the produce, supply of inputs at subsidized prices and identification of specific seasons for gherkin cultivation.en_US
dc.identifier.urihttp://krishikosh.egranth.ac.in/handle/1/70905
dc.language.isoenen_US
dc.publisherACHARYA N.G. RANGA AGRICULTURAL UNIVERSITY, RAJENDRANAGAR, HYDERABADen_US
dc.relation.ispartofseriesD8249;
dc.subAgricultural Economics
dc.subjectEconomic, Analysis, Gherkins, Contract, Farming, Dindigul district, Tamil Naduen_US
dc.these.typeM.Sc
dc.titleAn-Economic Analysis of Gherkins Contract Farming in Dindigul district of Tamil Naduen_US
dc.typeThesisen_US
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