Dynamics of Coffee ( Cofffeaarabica spp.) production and marketing in Kodagu district of Karnataka
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Date
2020
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DRPCAU, Pusa
Abstract
The present study aims at studying the dynamics of Coffee (Coffeaarabica spp.) production and marketing in Kodagu district of Karnataka.The total sample size for the current study was 120 constituting 40 planters each from three taluks of Kodagu district. Multistage type of sampling was used to select the ultimate sample and the data required were collected based on the records and recalls of the sampled respondents. Karnataka state was selected purposively at first level as it is the leading producing state of coffee in India accounting for 68 per cent of total production. In Karnataka, Kodagu district is selected purposively which alone holds half of the production in the state.Coffeaarabica is grown in all the three taluks namely Madikeri, Somwarpet and Virajpet in the selected district. Therefore, all these three taluks were selected purposively. A list of all the coffee growing villages was prepared in the selected taluks, one village or two from each taluk was selected randomly keeping in view the availability of adequate number of respondents. A list of planters according to the estate size was prepared and there after categorized into two broad categories i.e., small (below 10 ha) and large (above 10.01 ha) following Coffee Board’s standard categorization. From each taluk, a sample of 40 planters (small and large) was selected randomly.
The compound annual growth rate for area in Karnataka as well as India has encountered a positive rate of growth which is 0.0004 and 0.0172 respectively. The growth rate was statistically significant in Karnataka at 5% level of significance whereas in India it was statistically insignificant. The compound growth rate of production was observed to be -0.0092 and -0.0117 in Karnataka and India in the same order and was statistically significant in both the cases at 5% level of significance. The compound annual growth rate of productivity (kgs/ha) registered a declining and negative growth rate with -0.0097 and was
statistically significant at 5% level of significance in Karnataka and -0.0285 in India which was statistically insignificant at 5% level.
The Compound Annual Growth Rate of export of coffee from India also has encountered a positive growth of 0.04 (4.15%) which was insignificant statistically at 5 % level of significance. India’s share in total export has also encountered a positive growth of 0.02(2.12%) which was statistically significant at 5 % level of significance. Compound growth rate of quantity and value encountered a negative growth with compound growth rate of -0.79 and -0.45 respectively during the time period 2010-2019 which were insignificant statistically at 5 % level of significance. The Cuddy Della Valle’s instability Index (CDVI) worked out for the quantity, value and unit value. The results showed an instability of 8.29, 6.16 and 6.40 per cent respectively in export of coffee from India.
The cost of establishment consists of initial investment in the first year andvarious fixed costs and variable costs involved during the gestation period (upto forth year from planting). The total cost of establishment borne by smalland large plantations were Rs.5,41,232.47/- per ha and Rs.5,26,693.46/- per ha in the same order.The investment was somewhat higher in small plantation (Rs.5,41,232.47/- per hectare) than large plantation (Rs.5,26,693.46/- per hectare). The total annual cost of maintenanceof coffee plantation was Rs.1,44,792.8/- per hectare and Rs.1,41,786.8/- per hectare in the same order for small plantations and large coffee plantations.
The per hectare discounted Net Present Value (NPV) of cash inflow was higher (Rs1,32,064/- per ha) on small plantation compared with that of large plantation (Rs.1,75,247/- per ha) for the whole 30 years of life span, signifying the economically viable proportion of the coffee plantations. Further, the NPV on large plantation was more than the small plantation. It might be because of the higherrealization of returns in case of large plantations. The IRR on small plantation recorded (11.76 %) was lesser than large plantation(12.35%). The lending rate in banks are usually 10 per cent (commercial banks) for the long term loans and the IRR was found to be greater than the lending rate in both the small estates as well as large estates which depicted that coffee enterprise had a good repayment capacity in the long run. The Benefit-cost ratio was worked out and seen to be 1.10 and 1.13 in case of small estates and large estates in the same order in the study area. The figures were found to be higher in case of large planters which indicated that large estate owners gained more from the investment on the coffee plantations than that of small planters. The PBP was found to be 7.9 years in case of large plantation and 8.4 years in small farms. Hence, the time required to cover the initial investment was found to be around 8 years in context of a longer life span of coffee estates which would be sufficient to yield good income and improve the economy of the investor.
There are various constraints which all the stakeholders in the coffee chain face. Out of which the major constraint that was reported to be problematic to the coffee growers was the infestation of Coffee stem borer with a Garrett mean score of 78.34.The coffee growers reported that a huge loss in yield has occurred every year, due to the infestation of coffee stem borers. Once the stem borer infests a coffee plant, the whole plant has to be uprooted or else it destroys the whole estate as per the views of respondents. Inappropriate price realized for the produce is the major constraint faced by the planters during marketing of produce with Garrett Mean Score of 55.3. Lack of proper transportation facilities comes next with the Garrett mean score of 54.85. The major problem faced by the middlemen while undertaking marketing operations was the lack of transportation facilities in the research area with Garrett
Mean Score of 52.2. Increase in transportation cost on the other hand increases the cost of marketing and ultimately price spread in marketing chain. Higher moisture content in the procured coffee is the major constraint faced by the coffee curers with Garrett Mean Score of 75. The ideal moisture content for dried coffee is 12 per cent. Anything greater than this, would damage the quality of coffee. Unavailability of transportation facilities is also a prime problem with Garrett Mean Score of 45. The prime constraint hindering the export of coffee from India was higher expenses incurred during coffee production in India with Garrett Mean Score of 78.34. Cut throat competition faced by the exporters from other coffee producing nations on two criteria i.e.,quantity and price is the other main constraint faced by coffee curers with Garrett Mean Score of 60.72.
The analysis, in nutshell, concludes that disease attack and adverse climatic conditions are the major constraints which has more impact during production and responsible for low remunerative price realized by planters. The analysis also observed that marketing of produce through proper marketing channel at right time and place plays a crucial role as large no of planters felt that middle men caused adversely leading to the uneconomic prices.Based on the research findings, the following suggestions have been made for improvisation. The scientific practises coupled with low cost techniques is necessary to enhance the productivity of soil in the study area as well as in the coffee growing areas. As coffee is an export oriented crop, easing the regulations on movement of the commodity between the borders may help reducing the price spread. Coffee Board need to, intervene in the marketing of coffee,in order to check the malpractices followed by the middlemen. Special loans can be provided by the public sector banks to the planters for a simplified disbursement of loans to the planters which could help planters during the peak operations period. The extension work has to be strengthened which exposes growers to the innovations which is utmost necessary for improving the industry. The gravity of pest and diseases attack has drastically increased in the recent past. Hence, measures have to be taken like development of integrated disease and pest management in order to eradicate these pests and diseases before they take over the entire coffee estates.