Economic analysis of production, marketing and price bahaviour of nutmeg in Kerala
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Date
2019
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Department of Agricultural Economics, College of Horticulture, Vellanikkara
Abstract
Nutmeg is an importaEit spice crop cultivated for its two distinct products,
nutmeg and mace. India is one of the largest producers of nutmeg in the world, with an
area of 21,456 ha and production of 14,280 tonnes in Triennium Ending (TE) 2016-17.
Kerala accounts for 97.2 per cent of the area and 98.2 per cent of the total production of
nutmeg in India. During the period from 2000-01 to 2016-17, the area and production
of nutmeg in Kerala increased by 217.5 per cent and 619.4 per cent respectively.
The objectives of the present study were to analyse the trend in area,
production, productivity and price behaviour of nutmeg; estimate the economics and
resource use efficiency of nutmeg production; study the marketing practices and
economics of marketing, and determine the major constraints in production and
marketing of nutmeg in Kerala.
The study was based on both primary and secondary data. The time series data
on area, production and productivity of nutmeg in Kerala for the period from 2006-07
to 2017-18 were collected to study the trend and growth rates. Monthly average prices
of nutmeg in Kochi market of Kerala for the period from 1993 to 2018 were collected
to analyse the price behaviour of nutmeg. Primary data was collected from 120 selected
fanners of Thrissur and Emakulam districts using a pretested interview schedule by
personal interview method.
It was evident from the trend analysis that the area and production of nutmeg in
Kerala has shown an increasing trend, while the productivity exhibited a varying
pattern. The price of nutmeg with shell, without shell and mace were analyzed by
decomposing the monthly prices into four components viz., trend, seasonal, cyclical and
irregular variations, assuming a multiplicative model of the time series. The prices of
all the three products of nutmeg showed an increasing trend and considerable
seasonality. The declining phase of nutmeg prices was observed from March to July,
coinciding with the pre-harvest and peak harvesting months. The prices of nutmeg with
shell and without shell showed considerable similarity in cyclical variations. One large
cycle was observed in the prices from July 1994 to July 2001 and was followed by a
short cycle upto May 2007. The next large price cycle which commenced from May
2007 reached the trough in November 2017 and thereafter started increasing.
Since nutmeg is a perennial crop, its yielding phase was assumed to be 60 years,
with a non-bearing period of three years. The cost and returns were estimated for both
the districts and also for the overall sample by separately working out the establishment
and maintenance costs. The cost of establishment and maintenance were found to be
higher in Emakulam district. The aggregate establishment cost was estimated as
? 1,74,425 and the aggregate annual maintenance cost were ?65,299, ^83,112 and
^48,268 per hectare in the yield increasing, yield stabilizing and yield declining phases,
respectively. Human labour contributed about 50 per cent of total maintenance cost and
was followed by manures accounting for about 38 per cent. The cost of cultivation per
hectare of the crop was estimated as ^1,00,196 and the net return was ^44,447. The
average cost of production in the yielding phase was estimated as ?225 per kg. To
estimate the resource use efficiency in nutmeg cultivation, Cobb-Douglas production
function was fitted. Human labour and manures were found to be significantly
contributing towards the returns. Moreover, a decreasing returns to scale in nutmeg
production was observed in the study area.
The most common marketing channel identified in the study area was
Channel II, comprising of the producer, wholesaler, retailer and consumer, with the
highest marketing efftciency of five for nutmeg and 14.88 for mace. The major
constraints faced by the farmers in nutmeg cultivation were low price of the produce,
occurrence of diseases, high wage rate, non-availability of drying and storage facilities,
climate change and difficulty in harvesting.
In order to overcome these constraints, strengthening the market intelligence,
fonnation of Farmer Producer Companies, provision of assistance for mechanical
dryers, training the farmers on improving the quality of produce, product diversification
and value addition, promotion of warehousing and use of warehouse receipts as
negotiable instrument for availing credit were recommended.
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