ECONOMIC APPRAISAL OF DRIP IRRIGATION SYSTEM UNDER GRAPE CULTIVATION IN BIJAPUR DISTRICT

Transcription

1 ECONOMIC APPRAISAL OF DRIP IRRIGATION SYSTEM UNDER GRAPE CULTIVATION IN BIJAPUR DISTRICT Thesis submitted to the University of Agricultural Sciences, Dharwad in partial fulfillment of the requirements for the Degree of MASTER OF SCIENCE (AGRICULTURE) IN AGRICULTURAL ECONOMICS By BHEEMANAGOUDA O. PATIL DEPARTMENT OF AGRICULTURAL ECONOMICS COLLEGE OF AGRICULTURE, DHARWAD UNIVERSITY OF AGRICULTURAL SCIENCES, DHARWAD JULY, 2012

2 ADVISORY COMMITTEE DHARWAD JULY, 2012 (R. S. PODDAR) CHAIRMAN Approved by : Chairman : Members : (R. S. PODDAR) 1. (S. M. MUNDINAMANI) 2. (N. R. MAMALEDESAI) 3. (V. S. PATIL) 4. (S. Y. WALI)

3 CONTENTS Sl. No. CERTIFICATE ACKNOWLEDGEMENT LIST OF TABLES LIST OF FIGURES LIST OF APPENDIX 1. INTRODUCTION 2. REVIEW OF LITERATURE Chapter Particulars 2.1 Extent and pattern of spread of drip irrigation systems. 2.2 On-farm investment pattern of drip irrigation system for grapes. 2.3 Economic appraisal of irrigation investment. 2.4 Constraints in adoption of drip irrigation system. 3. METHODOLOGY 3.1 Description of the study area 3.2 Sampling procedure 3.3 Nature and sources of data 3.4 Analysis of data 3.5 Definitions of terms and concepts used 4. RESULTS 4.1 General characteristics of the sample farmers in Bijapur district 4.2 Extent and pattern of spread of drip irrigation system in grape 4.3 Investment on on-farm drip irrigation system in grape cultivation 4.4 Economics of grape cultivation under different methods of irrigation 4.5 Financial feasibility analysis of investment drip irrigation system for grape cultivation 4.6 Constraints in adoption of drip irrigation system in grape cultivation 5. DISCUSSION 5.1 General characteristics of sample farmers 5.2 Extent and pattern of spread of drip irrigation system in grape 5.3 Investment on on-farm drip irrigation system in grape cultivation 5.4 Economics of grape cultivation under different systems of irrigation 5.5 Financial feasibility analysis of investment drip irrigation system for grape cultivation 5.6 Constraints in adoption of drip irrigation system in grape cultivation 6. SUMMARY AND POLICY IMPLICATIONS REFERENCES APPENDIX

4 LIST OF TABLES Table No. Title 1.1 Major countries producing grapes in the world 1.2 State wise area, production and productivity of grapes in India 1.3 District wise area, productions and productivity of grapes in Karnataka 3.1 Taluk wise area, productions and productivity of grapes in Bijapur district 3.2 Disbursement of subsidy for drip irrigation under grape cultivation in Bijapur district 3.3 Selection of sample villages and sample orchards 4.1 General Characteristics of sample grape growers 4.2 Taluk wise progress in subsidy on drip irrigation for grapes under micro irrigation scheme in Bijapur district 4.3 Taluk wise area coverage under drip irrigation systems for grapes under micro irrigation scheme in Bijapur district 4.4 Taluk wise beneficiaries coverage under drip irrigation systems for grapes under micro irrigation scheme in Bijapur district 4.5 Share of drip irrigation system under grape to all crops under micro irrigation scheme in Bijapur district 4.6 Cost of Installation of drip irrigation system for grape orchard 4.7 Annual working cost of drip irrigation system for grape orchard 4.8 Investment on furrow* irrigation structure 4.9 Establishment cost of grape orchard under drip irrigation system 4.10 Establishment cost of grape orchard under furrow* irrigation system 4.11 Maintenance cost of grape orchard up to bearing period under drip irrigation 4.12 Maintenance cost of grape orchard up to bearing period under furrow* irrigation 4.13 Maintenance cost of grape orchard during bearing period under drip irrigation 4.14 Maintenance cost of grape orchard during bearing period under furrow* irrigation 4.15 Yield and returns structure in grape orchard 4.16 Economics of grape cultivation under drip and furrow irrigation methods 4.17 Cash flow analysis of grapes under drip irrigation method 4.18 Financial feasibility analysis of investment on drip system in grape cultivation 4.19 Constraints in adoption of drip system for grapes

5 LIST OF FIGURES Figure No. Title 3.1. Map of Bijapur district showing the study area 3.2 Schematic diagram showing the model of drip irrigation system 4.1 Share of drip irrigation system under grape to all crops 4.2 Cost of Installation of drip irrigation system for grape orchard 4.3 Investment on furrow irrigation structure 4.4 Establishment cost of grape orchard under drip irrigation system 4.5 Establishment cost of grape orchard under furrow irrigation system 4.6 Maintenance cost of grape orchard upto bearing period under drip irrigation 4.7 Maintenance cost of grape orchard upto bearing period under furrow irrigation 4.8 Share of labour, inputs and other fixed expenses in the total maintenance cost upto bearing period under drip and furrow irrigation systems 4.9 Maintenance cost of grape orchard during bearing period under drip irrigation 4.10 Maintenance cost of grape orchard during bearing period under furrow irrigation 4.11 Share of labour, inputs and other fixed expenses in the total maintenance cost during bearing period under drip and furrow irrigation systems 4.12 Yield and returns structure in grape orchard 4.13 Economics of grape cultivation under drip and furrow irrigation methods

6 1. INTRODUCTION India s irrigated agriculture sector has been fundamental to its development and poverty alleviation. Although plan expenditure on irrigation has increased from Rs crores in I five year Plan to Rs crores (outlay) in the X Plan, the share in total plan expenditure decreased from 23 per cent in the I Plan to 6.3 per cent in the X Plan (Anon., 2007). India has more than 17 per cent of the world s population, but has only four per cent of world s renewable water resources with 2.6 per cent of world s land area (Anon., 2012a). At present, India receives on an average annual precipitation of about 4000 Billion Cubic Meter (BCM), which is its basic water resource. Out of this, after considering the natural evaporation- transpiration, only about 1869 Billion Cubic Meter (BCM) is average annual natural flow through rivers and aquifers. Of this, only about 1123 BCM is utilizable through the present strategies, if large inter-basin transfers are not considered. Thus, the availability of water is limited but the demand for water is increasing rapidly due to growing population, rapid urbanization, rapid industrialization and economic development. (Anon., 2012a). According to the statistics available with the Central Water Commission (2012), of the total irrigation potential for the country, a total of million hectares cultivated land has been brought under irrigation from various sources. In this, share of wells, canals, tanks and other sources was 60.7 per cent, 26.5 per cent, 9.6 per cent and 3.2 per cent, respectively (Anon., 2010a). Of the total available fresh water in the country irrigation consumes the largest part (69%). Added to this the water use efficiency of different systems in the country is very low. The irrigation efficiency in India is of the order of only 25 per cent to 35 per cent in most irrigation system, with efficiency of 40 per cent to 45 per cent in a few exceptional cases. A basin wise study conducted by Dr. A. Vaidyanathan and K. Sivasubramaniam of the Madras Institute of Development Studies reports the overall efficiency of around 38 per cent in the country (Khanna, 2012). Therefore, there is an urgent need for ensuring efficient use of water for irrigation. Further, with growing multi sectoral demand for water and limited supply there are signs of scarcity in the country which may aggravate in future (Poddar et al, 2009). As India s National Water Policy 2012 observes, irrigation being the largest consumer of fresh water, the aim should be to get optimal productivity per unit of water. Scientific water management, farm practices and sprinkler and drip system of irrigation should be adopted wherever feasible (Srivastava, 2012). Water saving in irrigation use is of paramount importance. Technological innovations have found out many water saving techniques in the past few years. Drip and sprinkler are such techniques which serve the purpose better. Methods like micro irrigation (drip, sprinkler, etc.), automated irrigation operation, evapotranspiration reduction, etc., should be encouraged and incentivized (Anon., 2012a). Drip or trickle irrigation developed by Symcha Blass, an Israeli engineer during early 1940 s, is well established world over as the most efficient irrigation method, especially in water scarce areas for most of the field, plantation, vegetable, forest and green/ grass house crops. It has revolutionized the production of some high valued crops and other orchards in countries like Israel and elsewhere especially when water is saline. From a beginning outside Israel in 1969, micro irrigation in its current diverse form had been installed on some 11 mha throughout the world. Drip irrigation is best suited to the Indian sub-continent in view of its varied agro climatic conditions, shortage of irrigation water resources and increasing demand for food. The water table in many parts of the country is depleting due to excess withdrawal and increased agricultural activities. But, rainfall is limited and at the same time farmers are not even able to raise their seasonal crops. Hence, drip irrigation system is regarded as solution for solving many of the problems in dry land agriculture and improving the efficiency in irrigated agriculture. Micro irrigation system is now being adopted in a number of irrigation projects because of several advantages such as saving of water, increase in yield, lower input cost, etc (Srivastava, 2012). Drip irrigation involves a slow application of water to the soil in the vicinity of the plant when laid on the surface or to the plant root zone, when laid underground. The main benefit of drip irrigation system is that it helps in preventing wastage of water by seepage, infiltration and evaporation.

7 The other advantage of this system is that plant nutrients and other agrochemicals that are water soluble can be provided to the plants through irrigation water and directly supplied to the plant roots. This technique is called fertigation or chemigation. This would avoid losses through leaching, volatilization and prevent pollution and environmental degradation by excessive use of chemicals. However, this system suffers from drawbacks such as high initial cost, restricted plant growth, salinity hazards, persistence maintenance and care, sensitivity to clogging, skill requirement etc. Micro irrigation technology is gradually emerging as a demand driven technology in India. The coverage of micro irrigation is about 3.67 million hectare in India (Chakrawal, 2010). In India adoption of micro irrigation is growing with annual average growth rate of per cent (Chakrawal, 2010). The spread of technology is however being restricted to states like Maharashtra, Andhra Pradesh, Gujarat, Tamil Nadu, Karnataka, Madhya Pradesh and Rajasthan. The northern states of India still have not come into the main picture. States like Haryana and Uttar Pradesh are slowly getting into groove. Drip irrigation come as boon to horticultural crops where there is a need for continuous supply of water to the root zone. This system has been successful in almost all the wide spaced crops such as mango, coconut, grapes, banana, citrus, guava, and pomegranate and also in vegetables to some extent. The system is more popular in grape cultivation because of the row alignment of the root system. Drip irrigation was introduced in India during seventies. The growth of drip irrigation in terms of area coverage has really gained momentum in recent years from mere 1500 ha in 1985; the area has grown to 2,03,500 ha at present. Karnataka is the second largest state (16,767 ha) in the country next to Maharashtra (39,924 ha) in adoption of drip irrigation. To promote drip irrigation system various schemes under Department of Agriculture and co-operation, Government of India are being implemented in the country. Introduction of subsidy by central and state governments, improvements in the quality of raw materials used in drip irrigation systems, advancement in research technology and strengthened extension activities under taken by the state governments, National Committee on use of Plastic in Agriculture (NCPA), Plasticulture Development Committee (PDC) and manufacturing units have all contributed in to spread of area under drip irrigation. At present, around 3.5 1akh ha area is under drip irrigation with the efforts of the Government of India, while it was only 40 ha in Maharashtra (94,000 ha), Karnataka (66,000 ha) and Tamil Nadu (55,000 ha) are some of the states where large areas have been brought under drip irrigation (Anon., 2012b). India has enormous potential for drip irrigation. The National Committee on Plasticulture Applications in Horticulture (NCPAH), Ministry of Agriculture, Government of India (GOl) has estimated a total of 27 mha area in the country has the potential for adoption of drip irrigation application (Anon., 2012b). Potential area for drip irrigation is also expected to increase faster due to fast decline of irrigation potential in the country. Various crops that are highly suitable for drip irrigation are extensively cultivated in different parts of the country. As per available information, about 80 crops, both narrow and wide spaced crops, can be grown by applying drip irrigation. Due to various measures taken by the central and state governments along with the support of drip manufacturers, the area under drip irrigation has increased substantially in the recent years. However, the achievement seems to be less compared to its potential that exists in India (Srivastava, 2012). Many crops are irrigated by the drip method in India with the tree crops occupying the maximum percentage of the total area under drip irrigation, followed by vine crops, vegetables, field crops, flowers and other crops (Anon., 2012b). Grape is one such horticultural crop with tremendous potential for production and exports from India. Grape (vitis vinifera L.) belongs to the family vitacea and is native of America, a district near the Caspian Sea in Russia. Nutritionally, grape is one of the most delicious refreshing and nourishing fruit. It is universally praised as table fruit. About 80 per cent of grapes produced in the world are used in making wine. Of the remainder, about half is dried and marketed as raisins and rest eaten fresh. World production of grapes was lakh t from lakh ha in (Table 1.1). The major producers are china, Italy, USA, Spain, France, Turkey, Chile, Argentina, Iran and India. India produces lakh t of grapes from 1.11 lakh ha and accounts for 1.8 and 1.5 per cent of the World s production and area, respectively.

8 Table 1.1: Major countries producing grapes in the world Country Area (lakh ha) Production (lakh t) Productivity (t/ha) Spain (13.90) (9.10) 6.10 France 7.87 (10.90) (8.70) 7.40 Italy 7.77 (10.70) (11.60) China 6.43 (8.90) (12.90) Turkey 4.77 (6.60) (6.30) 8.30 USA 3.82 (5.20) (9.20) Argentina 2.23 (3.10) (3.90) Iran 2.20 (3.00) (3.30) Chile 1.88 (2.60) (4.10) India 1.11 (1.50) (1.80) Others (33.40) (29.10) 8.10 World Note: Figures in parentheses indicate percentages to total. Source: Anon. (2010)

9 In India it is mostly the table grapes which are cultivated. The area under grape in India accounts to 1.11 lakh ha with an annual production of lakh tonnes at productivity level of 11.1 t/ha. India ranks 10 th in area under grape production (Anon., 2010b). In India, area under grape is rapidly increasing as it is one of the most paying fruits. The main harvesting season for grape in India is from January to March, where as in the other grape growing countries harvesting is strictly confined to July-September. This provides the great potential for export of grapes from India. Karnataka ranks second in area under grapes with an area of 18, 100 ha producing 3,30,300 t with a productivity of 18.3 t/ha (Table 1.2). Grape is grown extensively in Bijapur, Belgaum, Bangalore (Rural), Bagalkot, Chikkaballapur and Bangalore (Urban) districts of Karnataka. Bijapur district ranks first in area under grapes with an area of 5,388 ha and an annual production of 1,85,267 t (Table 1.3). The productivity level in the district is 18.8 t /ha (Anon., 2009). Most of the varieties grown in Karnataka are mainly used for table purpose. Thomson seedless, a multipurpose variety is popular in the state. Apart from Thomson seedless other popular mutant varieties are Thas-e-Ganesh, Manic chaman and Sonaka. Bijapur district is one of the districts in Karnataka having typical dry land farming conditions, favourable for grape cultivation. As part of efforts to enhance productivity of horticultural crops, drip irrigation has been promoted by the government. Increasing adoption of drip system in the district has been noticed. There is tremendous potential for adoption of drip irrigation systemfor grape cultivation in the district. But, the general opinion of farming community in the district is that programme has not made much progress. This needs to be assessed to document constraints and to suggest modifications to existing policies to enhance productivity and economic conditions of the farmers. Hence, the study is carried out with the following objectives. 1.1 Objectives 1. To analyze extent and pattern of spread of drip irrigation system in grape in Bijapur district. 2. To assess investment pattern for on-farm drip irrigation system in grape cultivation. 3. To carry out financial feasibility and economic viability of drip irrigation system in grape cultivation. 4. To document constraints in adoption of drip irrigation system in grape cultivation in Bijapur district. The Hypotheses framed for the above-mentioned objectives are 1. The extent and pattern of spread of drip irrigation system in Bijapur is inadequate. 2. On-farm investment for irrigation development is not adequate in Bijapur district. 3. Investment for drip irrigation in grape in Bijapur district is not feasible. 4. There are constraints in adoption of drip irrigation system in grape cultivation in Bijapur district. 1.2 Presentation of the Study The study is presented in seven chapters. Chapter-I introduces the reader to the topic and presents the specific objectives of the study. Chapter II comprehensively presents a review of relevant research work done on the related topics. Chapter III outlines features of the study area, sampling design followed, collecting of relevant data and analytical tools used in the study. Chapter IV is devoted to main findings of the study trough tables, graphs etc. chapter V concentrates on discussion of results of the study. Chapter VI summarizes findings of the study and brings out policy implications that emerge from the findings of the study and references of the related studies are listed out. 1.3 Limitations of the Study 1. The interview method of data collection requires the respondents to recall from their memories the operations carried out. Hence, the findings are subjected to errors in memories of the respondents.

10 2. Though other varieties are also grown in the region, the study is restricted to Thomson seedless variety under 12 ft 6 ft spacing. 3. Comparative cost and benefits from drip irrigation were approximated based on the past studies due to paucity of current comparative studies on traditional (furrow) and drip methods of irrigation. \ Table 1.2: State wise area, production and productivity of grapes in India State Area (000 ha) Production (000 t) Productivity (t/ha) Maharashtra (77.2) (62.7) 9.0 Karnataka 18.1 (16.2) (26.7) 18.3 Tamil Nadu 2.7 (2.4) 53.0 (4.3) 19.3 Andhra Pradesh 1.3 (1.2) 27.6 (2.2) 21.0 Mizoram 1.6 (1.4) 20.4 (1.7) 12.9 Others 1.7 (1.6) 29.5 (2.4) 17.3 Total Note: Figures in parentheses indicate percentages to total. Source: Anon. (2011)

11 Table 1.3: District wise area, productions and productivity of grapes in Karnataka Districts Area (ha) Production (t) Productivity (t/ha) Bijapur 5388 (39.1) (43.2) Belgaum 2147 (15.5) (15.1) Bangalore(Rural) 1787 (12.9) (13.6) Bagalkot 1221 (8.9) (13.5) Chikkaballapur 1236 (9.0) (5.5) Bangalore (Urban) 849 (6.2) (4.2) Koppal 268 (1.9) 5581 (1.3) Others 881 (6.4) (3.5) State Note: Figures in parentheses indicate percentages to total. Source: Anon. (2009)

12 2. REVIEW OF LITERATURE The present chapter presents brief reviews of the previous work carried out relating to objectives stated in the previous chapter. For the sake of clarity, reviews are presented under the following heads 2.1 Extent and pattern of spread of drip irrigation systems. 2.2 On-farm investment pattern of drip irrigation system for grapes. 2.3 Economic appraisal of irrigation investment. 2.4 Constraints in adoption of drip irrigation system. 2.1 Extent and pattern of spread of drip irrigation systems Phuke and Borle (1989) reviewed the position of installation of drip sets in the Marathwada region of Maharashtra. They observed that Latur district ranked first in the amount of subsidy granted (42.4%) followed by Parabhani (23.07%), Aurangbad (22.43%), Nanded (7.65%) and Jalna (4.37%) districts. The total cost of drip unit in the region was about Rs. 47 lakhs of which amount of subsidy given was Rs. 17 lakhs. Sivanappan (1992) from his study in Jalgaon district of Maharashtra found that the cost of drip system for banana was Rs. 18,000 per acre. Subsidy given by the Maharashtra government was 50 per cent for 5 acres and maximum of Rs. 20,000. Where as central government has given 50 per cent for 10 acres and a maximum of Rs. 60,000 for drip irrigation. This indicated that farmers have to spend only Rs. 9,000 to Rs. 10,000 per acre for installing drip system. Mane (1993) from his study in Latur district of Maharashtra found that the total amount of subsidy disbursed for 60 ha was accounted for per cent (Rs. 3,15,820) of the actual amount required for purchase of drip irrigation system (Rs. 9,14,420). Narda and Lubana (1996) carried out a study on scope of drip irrigation in Khandi region of Punjab and reported that the government provided subsidy to farmers under centrally sponsored scheme Use of plastic in agriculture for installation of drip irrigation system. The subsidy sanctioned was to the extent of 50 per cent of the actual cost or Rs /ha whichever was less. This indicated that there was great scope for installing drip irrigation system for high value crops. Selvaraj et al. (1997) reported that the government of India through centrally sponsored scheme for Drip Demonstration Programme has made investment of Rs. 2,000 million as subsidy. Government of Tamil Nadu has extended a subsidy of Rs. 15,000 /ha for laying out drip irrigation system. In Coimbatore district about Rs. 15 million was give as subsidy for and it has covered 640 farmers in an area of 2,350 ha. Shiyani (1999) conducted a study on economic impact of drip irrigation technology on cotton growers of sourashtra region. Four districts of Sourashtra region namely Amreli, Bhavanagar, Junagadh and Rajkot were purposively selected. The results of the study showed that cost-a for drip farmers was Rs. 16,956 and per cent and in case of non drip farmers, it was Rs. 16,907 and it was per cent of the total cost. Despite innumerable advantages some constraints were faced by the farmers like higher initial investment, maintenance of proper pressure in the whole system of drip, lack of technical knowledge about chemical treatment, operation of drip etc. Anonymous (2000) conducted a study on the reform of subsidy regime in respect of all agricultural implements and machinery including drip and sprinkler irrigation. The main findings of the study revealed that subsidy was being provided for mechanisation of agricultural sector under 14 schemes in Karnataka for various components. Among them drip and sprinkler irrigation subsidy scheme was important one, which encouraged the poor farmers to invest on drip. Narayanamoorthy (2003) conducted a study on potential for drip and sprinkler irrigation in India. The study showed that the benefits of micro-irrigation in terms of water saving and productivity gains were substantial in comparison to the flood method of irrigation.

13 Micro-irrigation was also found to be reducing energy (electricity) requirement, weed problems, soil erosion and cost of cultivation. Investment in micro-irrigation also appeared to be economically viable, even without availing subsidy. Despite this, the coverage of drip (2.13%) and sprinkler (3.30%) method of irrigation was very meager to its total potential, which was estimated to be mha for drip and mha for sprinkler irrigation. It was identified that slow spread was not mainly due to economic reasons, but due to less awareness among the farmers about the real economic and revenue-related benefits. Therefore, apart from promotional schemes, the study suggested various technical and policy interventions for increasing the adoption of these two water saving technologies. Narayanamoorthy (2005) conducted a study on efficiency of drip irrigation. Study carried out using field level data from Maharashtra on three crops clearly showed that the investment on drip irrigation was economically viable even without government subsidy. The estimated benefit-cost (BC) ratio varied from 1.73 to 2.23 among the three crops under without subsidy condition. Even though subsidy was not needed to enhance the economic viability of the drip system, it was still needed to enhance the incentive for the widespread. Shashidhara et al. (2007) conducted a study on adoption of drip irrigation management practice by plantation crop growers in Shivmoga and Devanagari districts of Karnataka. The results of the study revealed that per cent of farmers belonged to medium adopters category, per cent to high adopter s category and per cent to low adopter s category. Out of ten independent variables age, education, land holding, area under drip irrigation, annual income and social participation did not have significance association with adoption at 5 per cent level of significant, while remaining independent variables exhibited positive association. Yogi (2008) conducted study on use of drip and sprinkler irrigation in India. The information collected in the last two minor irrigation (MI) census regarding trend in growth. It is found that the rate of growth in deep tube well scheme using micro irrigation devices was the highest (346%) followed by surface flow schemes (194%).In case of coverage of irrigation area, the prominent states were Rajasthan (9%), Madhya Pradesh (16%) Karnataka (16%). With respect to ownership of micro irrigation devices 81 per cent were owned by individual farmers, 12 per cent by group of farmers, 2 per cent by government and less than 1 per cent by panchayat. Jalajakshi and Jagadish (2009) conducted a study on economics of Krishi Bandu Drip irrigation scheme in Tamil Nadu. Results of the study revealed that, there was saving of Rs. 6,450, Rs. 6,313, in sugarcane and banana respectively in Krishi Bhandu drip irrigation. Benefit cost ratio in sugarcane was observed to be 1.55 in KB drip irrigation and 1.12 in conventional flood irrigation method. B: C ratio under KB drip irrigation and conventional flood irrigation was 4.58 and 1.85 in banana and 5.68 and 2.95 in chilli, respectively. Kumar and Palanisami (2010) conducted a study on impact of drip irrigation on farming system was an evidence from southern India. The study was conducted in the Coimbatore district of Tamil Nadu. The sample of 100 farmers was studied, 50 were drip adopters and 50 are control. Results of the study revealed that in the drip villages the net sown area increased from 4.51 ha to 5.31 ha. A significant shift toward crops such as coconut, grape was commonly observed in drip villages. Markov chain analysis results showed that, the probability of retaining banana and coconut was found to be 57 per cent and 75 per cent, respectively. Probability of shifting the area under maize to banana, maize to coconut and maize to grape was 18 per cent, 18 per cent and 13 per cent respectively. Water productivity was been worked out to be 7.4 kg/m 3 of water in drip farm and 4.9 kg/m 3 of water in control farms. Palanisami et al. (2011) conducted a study on spread and economics of micro irrigation in India: Eviedence from nine states with an objective to examine the actual area covered compared to the potential area and to understand the adoption level of micro irrigation. Results of the study analyzed percentage of actual area against the potential estimated under drip irrigation in different states. The area varied between nil in Nagaland to as much as per cent in Andra Pradesh followed by Maharashtra (43.23 per cent) and Tamil Nadu (24.1%). In a span of five years (April 2005 to December 2009) an area of around 3.87 million hectares was brought under micro irrigation (1.42 mha under drip).

14 The results also revealed that only about per cent of the micro irrigation potential area was covered in the country. 2.2 On-farm investment pattern of drip irrigation system for grapes Mahalle et al. (1989) made an attempt to worked out economics of drip irrigation system for orchards on farmers field. The study indicated that the drip irrigation requires 33 per cent higher cost of cultivation (Rs. 13,837 /ha) over the conventional system (Rs. 10,428 /ha). The cost of labour was reduced by about Rs. 500 /ha due to drip irrigation. The total returns realized from the orchard were higher Rs. 39,092 /ha under drip irrigation system compared to Rs. 37,628 /ha those under conventional irrigation system. He also found that the average quantity of water required per unit of orchard significantly reduced by 60 per cent due to drip irrigation. Hegde and Srinivas (1990) reported that cost of installation of drip irrigation system has been worked out as Rs. 18,500 /ha of banana crop. Net returns obtained under drip irrigation were Rs. 99,115 and Rs. 80,750 /ha for planted and ratoon crops, respectively. The net returns obtained from basine system of irrigation were Rs. 98,150 and Rs. 72,915 /ha for planted and ratoon crops. Neelakantiah (1991) conducted a study on investments in ground water and resource use efficiency in Doddaballapur taluk of Bangalore rural and estimated that the average investment made on the wells per farm was Rs. 46,953 in Doddaballapur taluk. The payback period was around three years, discounted benefit cost ratio was 1.22 and IRR was 31 per cent which indicated that investment on ground water irrigation was economically feasible. Sivanappan (1992) conducted a study on drip irrigation on banana crop in Maharashtra. He estimated the cost of the drip irrigation system to be Rs. 18,000 per acre for banana crop in Jalgaon district Maharashtra. Study reported savings in fertilizers cost by about 30 per cent and labour cost by about 35 per cent. Bhattacharya (1992) studied the impact of tube well irrigation on farmers income in region of Uttar Pradesh and showed that cash crops dominated under tube well and food crops dominated under dug well irrigation. The cropping intensity under tube wells and dug wells was estimated to be per cent and 117 per cent, respectively. Mane (1993) conducted a study on the economic analysis of different methods of irrigation in grapes in Marathwada region of Maharashtra. The study showed that the total investment on drip irrigation structure amounted to Rs. 38,387/ha. The net benefits obtained from vineyards under drip irrigation amounted to Rs. 1,18,503 /ha. Under traditional method the net benefits obtained amounted to Rs. 1,02,540 /ha. The study also indicated under drip irrigation method, there was labour saving of about 60 per cent in the cost incurred for weeding as compared to the traditional irrigation method. Kolavalli and Atheeq (1993) in their study on access to groundwater in the hard rock areas indicated that the historical average cost of bore well was Rs. 47,353 and the average cost of failed wells was about Rs. 10,000 per household. The annual operating expense which included electricity charges and lubricant and repairs were Rs The IRR computed varied a great deal across different size groups. For households with less than 2 ha, the IRR was 15 per cent which was slightly higher for households with 2 to 4 hectares. For households owning more than 4 ha, the IRR exceeds 50 per cent. The average cost of irrigation per gross ha, varied according to size of holdings. Those with large holdings and wells had lower cost. Those with three wells for instance, had an average cost of only Rs. 2,046 per gross ha compared to Rs. 3,089 and Rs. 3,729 for households owning one and two wells, respectively. The irrigation cost accounted for one third of the total production cost for small farmers. Anand (1994) conducted a study on performance of guava under drip irrigation system and estimated the cost of drip irrigation system to be Rs. 57,441/ha for guava in Kolar district of Karnataka. He also compared the cost of irrigating one hectare of guava under drip and flood irrigation methods, which worked out to be Rs. 800 and Rs. 1,298, respectively.

15 Shivanappan (1994) reported that the cost of installation of drip irrigation system may vary from Rs. 15,000 /ha for wider spaced crops (coconut and mango) to Rs. 45,000 /ha for close spaced crops (sugar cane, vegetables and cotton) and it mainly depended upon crops, spacing, water requirements and also location of water source. Lokesha (1995) conducted a study to analyze the impact of drip irrigation on coconut plantation in Bangalore district and indicated that the water use efficiency (in Rs/m 3 ) defined as the ratio of net income (in Rs/ha) to total water used (m 3 /ha) for drip irrigation was Rs. 30/m 3 under drip irrigation system compared to Rs. 13/m 3 under flood irrigation. The net returns under drip irrigation system were Rs. 49,461 /ha compare to Rs. 31,755 /ha under flood irrigation system. Mane and Vijayakumar (1996) conducted study in Marathwada region of Maharashtra and found that expenditure on installation of drip for grapes amounted to Rs. 38,387 /ha and total cost of irrigation in drip method was Rs /ha of which depreciation on drip irrigation system accounted for per cent of the total cost. In respect of traditional method of irrigation the total cost worked out was Rs /ha of which major item of cost was that of labour which accounted for per cent of the total cost of traditional irrigation system. Malik and Luhach (2002) in their study on economic dimensions of drip irrigation in Haryana showed that the annual cost of drip irrigation for grapes was Rs. 37,964/ha, out of which the variable cost accounted for per cent. Out of total annual working costs (Rs. 27,955), annual fixed costs accounted for major share (77.89%) followed by labour (14.01%) and operating and maintenance costs (8.03%). Narayanamoorthy (2003) conducted a study on drip method of irrigation (DMI) two water intensive crops in Maharashtra. Two districts Ahmedanagar for sugarcane and Jalgon for banana were selected. The sample farmers consisting of 50 drip and 50 non-drip adopters was selected for the study. Data was analysed using the discount cash flow technique, net present worth (NPW) and benefit cost ratio to judge whether or not the investment on drip method of irrigation (DMI) was economically viable. Results of the study revealed that water saving due to DMI was about 47 per cent for sugarcane and 30 per cent for banana. Sugarcane and banana cultivated under DMI consumes 3.17 HP and HP hours of water to produce one quintal of sugarcane against the requirement of 3.17 HP and HP hours under flood method of irrigation, respectively. The productivity difference between drip and non drip irrigated crops comes to about q/ha for sugarcane and about q/ha for banana. NPW of drip investment is about Rs. 1,66,619 /ha with subsidy and Rs. 1,49,766 /ha without subsidy for sugarcane and for banana NPW of drip investment is about Rs. 2,57,635 /ha with subsidy and Rs. 2,47,753 /ha without subsidy. Anita Fanish (2011) conducted a study on drip irrigation in based intercropping system in Tamil Nadu. The experiment comprised nine fertigation levels and four inter crops in sub plots.s1-vegetable coriander, S2-Radish, S3-Beet root, S4-onion. The results of the study shown that crops responded to higher dose of fertigation in water soluble forms through fustigation under maize+ vegetable coriander intercropping system with yield of 6,522 kg/ha. Drip irrigation at 150 per cent of recommended dose of fertilizer (RDF) recorded higher water use efficiency. Maize based inter cropping system recorded higher net returns (Rs. 56,858/ha) and B:C ratio (3.24) under drip fertigation at 150 per cent RDF+ Radish as intercrop. 2.3 Economic appraisal of irrigation investment Sivanappan (1988) conducted a study on economics of trickle or drip irrigation for various crops in India. He reported that the farmers would be able to derive benefits from drip irrigation to an extent of Rs. 3,000 to Rs. 5,000 /ha due to improvement in productivity as well as efficient use of water. The benefit cost ratio at 12 per cent discount rate for established orchards of guava, sapota, coconut, sour lime and pomegranate were 1.71, 1.59, 1.44, 2.72 and 1.58, respectively. The respective IRR were 43 per cent, 48 per cent, 39 per cent and 50 per cent, respectively. For grapes the benefit cost ratio was 2.29 at 12 per cent discount rate and the IRR was 34 per cent.

16 Rao (1989) evaluated the schemes sanctioned by NABARD in three states of Maharashtra, Karnataka and Tamil Nadu and reported that the internal rate of return assumed before the implementation of the scheme for grapes in Maharashtra was 20 per cent but the actual internal rate of return after the implementation of the scheme was 45 per cent. Thapa and Banskota (1991) conducted a study on performance evaluation of selected farmer managed irrigation pattern in Nepal. They computed economic and financial rates of returns from irrigation by using discounted cash flow techniques. The BCR was 1.6 and IRR was 45.7 per cent. Assuming no subsidy for irrigation scheme, the BCR was 1.33 and IRR was 26.8 per cent under financial rate of return. With inclusion of subsidy for irrigation scheme, there was considerable improvement in BCR and IRR to 1.63 and 42 per cent, respectively. The payback period of investment of groundwater irrigation was over three years while the net present worth was found to be Rs. 44,218 per farm. The discounted benefit cost ratio was found to be 1.22 and IRR per cent implying that the investment in groundwater irrigation was economically feasible. Sivanappan (1991) conducted a study on drip irrigation for various row crops such as coconut, banana and orange. His study indicated that the benefit cost ratios were 1.41, 1.52 and 2.60 for coconut, banana and orange orchards, respectively. Sivanappan (1992) conducted extensive experiments in drip and surface method of irrigation in Jalgaon district of Maharashtra for banana. He concluded that drip method is feasible for banana crop as the benefit cost ratio was 3.02 in such cases. He also found that an incremental profit of Rs per acre could be obtained by cultivating banana drip system of irrigation. Mane (1993) worked out economics of traditional and drip irrigation methods for grapes in Marathwada region of Maharashtra. He found that the net benefits were more by Rs. 15,963 under drip method over traditional method of irrigation. The benefit cost ratio was 2.35 at 12 per cent discount rate and Internal Rate of Return was per cent. The Net Present Value was Rs. 51,821 and the capital cost of installation on drip could be earned within 2.4 years. Anand (1994) examined the economics of drip and flood irrigation methods for guava in Kolar district of Karnataka. He estimated that the net present value from drip irrigation was Rs. 5,80,007, the benefit cost ratio was 4.82 and Internal Rate of return to the investment worked out to per cent indicating that drip irrigation was economically sound and self supporting. Singh and Kaushal (1994) conducted a study on comparative economics of drip and furrow irrigation for potato. The yield in case of drip irrigation was 32.1 t/ha as compared to 25.4 t/ha in furrow irrigation. The net benefits realized in case of drip irrigation were Rs. 37,975/ha as compared to Rs. 28,425 /ha in case of furrow irrigation. Reddy and Thimmegouda (1997) conducted a study on economic analysis of different drip irrigation systems of main and ratoon hybrid cotton grown at Main Research Station (MRS), University of Agricultural Sciences, Bangalore. They estimated the Net Present Value from drip irrigation as Rs. 4022; benefit cost ratio was 1.04, Internal Rate of Return to the investment worked out to per cent and Pay Back period was 5 years. Narayanamoorthy (1997) conducted a study on economic viability of drip irrigation in Maharashtra. Results of the study showed that, there was a reduction in cost of cultivation by Rs. 1,300/ha in banana and Rs. 13,400/ha in grape. The productivity gain in banana was about 526 q/ha under flood method of irrigation (FMI) and 679 q/ha in drip method of irrigation in case of grape. B:C ratio for banana was 2.25 and 1.47 for grapes. Anand et al. (1998) conducted a study on comparative of economics of drip and surface irrigation system in grape in Bangalore. Results of the study revealed that cost of cultivation/acre of grape in drip irrigation worked out to Rs. 19,975, while it was Rs. 21,658 in case of surface irrigation. The benefit cost ratio of investments in drip and surface irrigation system were 3.44 and 2.94, respectively. Shiva Kumar et al. (2000) conducted a study on economic analysis of drip irrigation system in sunflower. A field experiment was conducted at the main research station, University of Agriculture science, Bangalore.

17 The results of the study revealed that the average establishment cost of drip layout under normal and paired row planting was Rs. 35,000/ha and Rs. 17,500/ha respectively. Under paired row method of planting a (45X cm) discounted B:C ratio (1.82) and positive net present value (Rs. 14,285) with shortest payback period of 0.49 years was noticed. Malik and Luhach (2002) conducted a study on economic dimensions of drip irrigation in context of fruit crops Haryana. Results of the study revealed that the net present value of drip set for grapes amounted to Rs. 18,108. The earning power of drip set as indicated by IRR which was 33 per cent, benefit cost ratio was 1:1.73 and Pay back period was estimated at five years for grape orchard. Thus, investment on drip irrigation was sound and economically viable. Narayanamoorthy (2005) conducted a study on economics of drip irrigation in sugarcane cultivation. For the study a farmer S. Ramanathan belonging to Okkur village of Sivaganga district with 40 acres of land holding was selected. Of the total land 22 acres was under cultivation and remaining 18 acres were barren and uncultivated. Though the water available from his two wells was enough to cultivate the desired crops, the farmer was not able to provide enough water during summer period, which significantly reduced the yield of sugarcane earlier. For this reason he adopted drip method of irrigation for cultivating sugarcane. Due to drip adoption electricity saving came to about Rs. 2520/acre. He could harvest 85 t/ha of sugarcane. NPW of drip investment was about Rs. 1,64,938/acre without subsidy and Rs. 1,72,247/acre with subsidy. Thus subsidy enabled the farmer to get additional benefit of Rs. 7,309/acre. B:C ratio varied between 1.97 to 2.02 at 15 per cent and 10 per cent discount rate, respectively. Singh and Singh (2005) reported that with drip irrigation it was possible to save about per cent of water and yield could be increased to per cent over conventional methods. There was about 89 per cent higher yield of grape per unit quantity of water than the conventional method of irrigation. Narayanamoorthy (2008) conducted a case study on drip irrigation and rain fed crop cultivation nexus in cotton crop. Results of the study revealed that drip irrigated crop used 228 HP hour/ acre where as in non drip irrigated crop it was 415 HP hour/ acre. The estimated profit per acre was Rs. 21,283 under drip irrigation system, but was only Rs. 682 for furrow method of irrigation. NPW at 10 per cent discount rate increased from Rs. 1,08,187/acre without subsidy to Rs. 1,17,852/acre with subsidy. Muraliraj (2008) conducted a study on micro irrigation in Andra Pradesh in Rayalseema and Telangana regions of Andhra Pradesh. Results of the study revealed that in case of drip farmers only acre out of 1097 acres of net irrigated was brought under irrigation. The cost of cultivation of orange worked out to Rs. 13,084/ha for drip farmers as against Rs. 13,484 for control farmers. Kaur et al. (2010) conducted a study on Economic evaluation of Investment in micro irrigation structures in Kandi area of Punjab. Results of the study showed that per hectare returns from irrigated and unirrigated land were Rs in small dams, Rs in lift irrigation structure and Rs in makowal type structures. The analysis showed that the returns to the public investment were as high as per cent, per cent and per cent in small dams, lift irrigation structure and makowal type structures, respectively. 2.4 Constraints in adoption of drip irrigation system Chandrashekarappa and Kumaraswami (1989) conducted a study on high yield under drip irrigation in coconut. The study reported that limited opportunity in getting good quality components of drip irrigation system in the open market at competitive prices, clogging of emitters and damaging by rodents as some of the constraints in adoption of drip irrigation system. Nagare (1989) conducted a study on evaluation of drip irrigation system under farmers condition in Nagar district of Maharashtra. He observed that the major problems faced by the drip farmers were lack of knowledge about relationship between rate of application, pressure and water discharge.lack of timely technical advice, clogging of emitters, breaking or cracking of laterals, delays in availability of loan and high initial cost of drip set.

18 Umarani (1989) conducted a study on agronomic aspects of drip irrigation. He found that in case of drip irrigation, considerable cost was involved in leveling and in the normal leveling operation. Surface soil was moved exposing the surface. Considerable area was being wasted for water channel which could be saved under drip system. Daftardar (1989) studied the possible hazards of applying fertilizers through drip irrigation system at Rahuri, Maharashtra. He found that the clogging of system, corrosive action of chemicals to metal parts and lack of proper device to prevent back flow of nutrients into the well were some of the major problems in fertigation through drip system. Kandaswamy (1990) reported that the high initial cost, inadequate subsidy, difficulty in getting subsidy, non uniformity of subsidy, lack of availability of technical inputs and after sales service, clogging of drippers and cracking of laterals, damage due to rats and squirrels, high cost of spares and components were the major problems and constraints experienced by farmers. Prichard (1991) conducted a study on how to keep drip lines and emitters clog free. The study reported that clogging was the most serious problem facing operation of drip irrigation system although drip tape has smaller orifice. Clogging may occur at any place in system due to presence of physical particulates, chemical precipitates or biological growth which causes reduction of water flow. Rangarajan (1992) conducted a study on better water management and reported that the major problem hindering water use of drip irrigation was the high cost of drip irrigation system. Jain (1992) conducted a study on constraints in adoption of drip irrigation and observed that though drip irrigation is beneficial and its usage was limited. This was primarily because of low awareness of its overall benefits at farmer as well as at government levels and high initial cost. Nikhade (1993) reported that the main constraint in adoption of drip irrigation system was its high initial cost. Though government provided subsidy, it was essential for farmer to recover the initial cost by handsome returns over long years. It was found that the farmer could get about Rs. 3,000 to Rs. 5,000 more income to recover the cost of drip system within two years. Narayanamoorthy (1997) conducted a study on prospects and potentials for drip irrigation in India. Results revealed that yield of banana and grape was higher by about 52 and 23 per cent in drip method of irrigation over traditional method. Despite many advantages the sluggish growth of drip irrigation was due to high initial investment, supply of poor quality components like drippers, filters etc, which ultimately affected the farmer s motivation on drip irrigation. Sheeba and Balraj (1998) conducted research study on drip irrigation in Killikulam in Tamil Nadu and reported that application of potassic and phosphatic fertilizers in system had led to clogging of emitters. Batta and Singh (2000) in a study on drip irrigation in Rahuri district of Maharashtra reported the socio economic constraints like high initial cost of system, procedural difficulty in availing subsidy by the government, clogging of micro tubes. They observed that farmers were dissatisfied due to clogging of drippers, leakage of drippers from lateral jointing, leakage from lateral sub main jointing, non uniform discharge from drippers, biting of laterals/micro tubes by rodents, and difficulty in inter cultural operations and taking out the drip system laterals during crop harvest. Uday et al. (2007) conducted an investigation of drip irrigation system installed for grape orchards in Nasik district of Maharashtra. Results of the study revealed that number of respondents faced many problems like of clogging of emitters (85%), irregular water supply (87.5%), and irregular electricity supply (91.66%) and high initial cost (75%). The other problems faced were material transport facilities (36.66%), lack of technical knowledge (39.17%) and high cost of spare parts (33.33%).

19 3. METHODOLOGY This chapter deals with characteristics of area selected for the study, the methods adopted in selection of samples, nature and sources of data, and various statistical tools and techniques employed in analyzing the data. The methodology is presented under the following headings: 3.1 Description of the study area 3.2 Sampling procedure 3.3 Nature and sources of data 3.4 Analysis of data 3.5 Definitions of terms and concepts used 3.1 Description of the study area Karnataka is the eighth largest state in India with an area of 190 lakh hectares. It is situated between 11.5 & 19.0 N latitude and between 74 and 78 E longitude in the southern plateau. The State receives an average annual rainfall of about 1139 mm both from southwest and north-east monsoons. Important crops grown in the state are jowar, ragi, maize, bajra and wheat among cereals; red gram, green gram, tur and Bengal gram among pulses; groundnut, sunflower and safflower among oilseed crops and cotton, sugarcane and tobacco among commercial crops. Karnataka comprises of 29 districts, of which 12 districts are located in Northern part of the state, Bijapur district in Northern Karnataka was chosen for the study purposively due to higher concentration of area under grapes. Bijapur district is situated in the interior of the Deccan peninsula and lies between north latitude 15 o 20 and It is bounded on the north by Solapur District of Maharashtra and on the north-east by Gulbarga district, on the east, south and west surrounded by Raichur, Dharwad and Belgaum districts, respectively (Fig. 3.1). Total geographical area of Bijapur district is lakh hectares comprising 1, 977 hectares under forest, akh hectares net area under cultivation and remaining is not available for cultivation. It could be noted that, 1.89 lakh hectares out of 8.39 lakh hectares of net cultivated area is utilized for cultivation more than once. Net area irrigated in the District accounts for 27% of net area under cultivation (District at glance 2009). Climate of the district is generally dry. Large variations in rainfall, from year to year, both in amount and in its distribution through the seasons make the district prone to drought and famines. Average annual rainfall of the district is 668.2mm and temperature ranges from c to 43 0 c. There are two main types of soils namely black and red soil. The average water holding capacity is medium to high. A major portion of the district is covered by deep black soil which has a greater moisture retention capacity. The soils are slightly alkaline and are poor in organic matter constituents. The main food crops are jawar, bajra, wheat and gram. Among the commercial crops ground nut, sesamum, linseed, cotton, safflower and sunflower are more popular. The medium rainfall, dry and healthy weather are considered to be the ideal conditions for growing horticulture crops. The district has all these ideal conditions for cultivation of horticulture crops. Major horticulture crops grown in Bijapur district are grapes, pomegranate and lemon. Bijapur is the leading district with respect to both area and production of grapes. The total area and production of grapes in Bijapur district is 6137 hectares and tonnes, respectively (Dep.of Horticulture 2011). Micro irrigation in Bijapur district promoted under the government sponsored scheme CSSIM (Centrally Sponsored Scheme-Micro Irrigation).

20 Fig 3.1.Map of Bijapur district showing the study area

21 Central and state governments were made huge investment in the form of subsidy for the drip irrigation system in order to encourage the formers to take up the drip irrigation system. Central government is giving 40 per cent subsidy and 35 per cent subsidy was given by state government and only 25 per cent cost was borne on beneficiaries. 3.2 Sampling procedure Selection of the study area Bijapur district was selected purposively for the study as large scale cultivation of grape is concentrated in Bijapur and Indi taluks in Bijapur district (Table 3.1). The taluk wise as well as village wise list of grape growers who had adopted drip irrigation and who had taken subsidy on drip irrigation system were obtained from the dealers of the drip irrigation equipment and the State Department of Horticulture (Table 3.2). The drip irrigated farms in each taluk and in each village were classified and arranged in descending order with respect to highest area under grape cultivation. Top two taluks and three villages from each of the taluks were selected for the study (Table 3.3) Selection of the sample respondents Grape growers were selected purposively spread over in the district. Further, among the selected villages, 20 drip irrigated farms were selected randomly from each village. Thus, total size of the sample selected for the study was Nature and sources of data Primary data Data needed for the study were collected from respondents by personal interview method using pre-tested schedule. Majority of the respondents did not maintain records of the expenditure and income from grape cultivation. Hence, data collected were based on memory of the respondents. At the time of interview, personal bias of the sample farmers was minimized by convincing them about the genuiness of the purpose for which the data were collected. Each one of them interviewed separately to collect necessary information. The data pertaining to (a) general characteristics of the farm family such as age, occupation, education qualification, size of the family, distribution of land holding and its utilization, age of orchard and source of irrigation (b) on-farm investment details for the installation and maintenance of drip irrigation system in grape cultivation, fixed costs and investment on drip irrigation equipments, wells or tube wells, pump sets and other implements (c) details on yield as well as returns from the grape and (d) constraints noticed while and after the adoption of drip irrigation system. In order to assess the additional benefits accrued from drip irrigation over furrow irrigation system, comprehensive estimates of cost of cultivation of grapes under furrow irrigation system were obtained, by computing with current factor prices, from past studies due to the non availability of area under furrow irrigation system for grapes in Bijapur district Secondary data Secondary data on area under grapes in Bijapur district and also data on extent and pattern of spread of drip irrigation such as number of farmers covered, area covered and quantum of investment made, year wise, land holding wise and taluk wise were collected from Department of Horticulture, Government of Karnataka and other published sources. 3.4 Analytical tools and techniques employed To fulfill the specific objectives of the study, based on the nature and extent of data, the following analytical tools and techniques were adopted. 1. Tabular presentation 2. Growth rate 3. Financial feasibility analysis

22 Table 3.1: Taluk wise area, productions and productivity of grapes in Bijapur district Taluks Area (ha) Production (t) Productivity (t/ha) Bijapur 5210 (84.97) (84.86) 21 Indi 641 (10.45) 7692 (10.43) 20 Sindgi 130 (2.12) 1560 (2.10) 19 Basavan Bagewadi 133 (2.16) 1596 (2.16) 18 Muddebihal 23 (0.37) 279 (0.36) 16 Total Note: Figures in parentheses indicate percentages to total. Source: Anon. (2010c)

23 Table 3.2: Disbursement of subsidy for drip irrigation under grape cultivation in Bijapur district Taluks Beneficiaries Area (ha) Subsidy (Lakh Rs.) Bijapur 1256 (43.72) (38.55) (41.90) Indi 1055 (36.70) (37.71) (35.05) Sindgi 306 (10.63) (18.25) (12.29) Basavan Bagewadi 202 (7.04) (7.20) (7.53) Muddebihal 54 (1.80) (2.26) (3.21) Total 2874 (100) (100) (100) Note: Figures in parentheses indicate percentages to total. Source: Anon. (2010c) Table 3.3: Selection of sample villages and sample orchards Taluk / Villages Drip irrigated orchards Number of orchards selected Bijapur taluk a) Tikota 20 b) Babanagar 20 c) Bijjaragi 20 Sub Total 60 Indi taluk a) Baradol 20 b) Horti 20 c) Halagunaki 20 Sub Total 60 Total 120

24 3.4.1 Tabular presentation The data collected were presented in tabular form to facilitate easy comparison. Tabular presentation was adopted to compile general characteristics of the sample farmers, determine resource structure, cost structure, returns, profits and opinion of farmers regarding problems in adoption of drip irrigation system. Data regarding arrangements for number of farmers covered, total area covered and quantum of investment made by the Government under grape cultivation were analyzed by tabular analysis. Tabular analysis was adopted also for analyzing the cost per hectare incurred on installation and maintenance of on-farm drip irrigation system. Simple statistical tools like averages and percentages were used to compare, contrast and interpret results properly Growth rate In order to analyse growth in investment, area and beneficiaries compound growth rate technique using the method of least squares of fitting the semi-logarithmic function was adopted. Where, Y = a b T e u. (1) Y = Dependent variable (subsidy/area / beneficiaries coverage) a = Intercept term b = (1+r) and r is the compound growth rate T = Time trend e u = error term In the logarithmic form the function could be expressed as, Log Y = log a + T log b + u... (2) Log a and Log b were obtained using the Ordinary Least Squares (OLS) procedure and (Antilog of log (b - 1)) *100 gives the per cent growth rate Financial feasibility analysis Financial feasibility analysis was carried out to evaluate feasibility of investment on drip irrigation system. The discounted cash flow techniques which have an advantage of reducing cash flow to a single point of time were used to facilitate the test of feasibility. The discounted procedure estimates the present value of the amount either received or paid out in the future. The discount factor permits the determination of the present value and has found application in evaluation of project. Four conventionally used project evaluation techniques were employed in the study to evaluate the feasibility of investments on drip irrigation system. The techniques used for the financial analysis were: 1. Net Present Value (NPV) 2. Benefit-Cost Ratio (B: C Ratio) 3. Internal Rate of Return (IRR) and 4. Pay Back Period (PBP) Net Present Value (NPV) It is believed to be a more meaningful measure of the long-term investment proposal and useful in comparing the other investment proposals. Net present value represents the discounted value of the net cash inflows to the project. In the present study, a discount factor of 14.5 per cent was used to discount the net cash inflows representing the opportunity cost of capital. It can be represented by,

25 Where, Yi = Net cash inflows in the n th year r = Discount rate I = Initial investment i = Years of life period 1, 2... n. n NPV = Y i (1 + r) -i - I i = 1 In order to consider the investment worthiness, the net present value should be positive and of higher magnitude before alternative opportunities considered Benefit Cost Ratio (BCR) Benefit Cost Ratio (BCR) refers to the ratio of discounted net cash flows (project benefits) to investments. The ratio must be more 1 for an enterprise to be considered worthwhile. This technique also ranks the project investment for selection. The minimum ratio required is 1 and indicates the coverage of investments without any surplus benefits. But, usually the ratio has to be more than unity in order to provide some additional return over the cost for clear decision. The Benefit Cost Ratio (BCR) was worked out by using the following formula Discounted net cash flows B:C ratio = Initial investment n Y i (1 + r) -i = i = 1 I Internal Rate of Return (IRR) The rate of discount at which the net present value of the project is equal to zero is Internal Rate of Return (IRR) to the project. The net cash inflows were discounted to determine the present worth following the interpolation technique. The method of interpolation is as under. IRR = Lower discount rate + Difference between the two discount rates Present worth of cash flows at lower discount rate Absolute difference between present worth of cash flows stream at the two discount rate If the project being analyzed has Internal Rate of Returns which is more than the ruling rate of interest, then the investment in the project could be feasible Pay Back Period (PBP) Payback period represents the length of time required for the stream of cash proceeds produced by the investment to be equal to the original cash outlay. i.e. the time required for the project to pay for itself. In the present study, payback period was calculated by successively deducting the initial investment from the net returns until the initial investment is fully recovered. 3.5 Definitions of terms and concepts used The terms and concepts used in the study and the procedure used to calculate the cost of different items are given below:

26 1. Planting material The planting material used (rooted cuttings) was valued at the current market rate. 2. Hired human labour Hired human labour was estimated in terms of eight hours of work per day. The women labour days were converted into man days in the ratio of 3:2. The prevailing wage rates were Rs. 200 per day for male labour and Rs. 120 per day for female labour. The estimated average wage rate per man day was used as the cost of human labour. 3. Cost on Bullocks labour It was measured in pair days. One pair day meant eight hours of work by pair of bullocks and a person needed to operate the bullock pair. It was valued at the rate of hire charges prevailing in the study area. 4. Electricity charges Electricity charges for the use of pump set were calculated at Karnataka State Electricity Board rates viz, Rs. 250 per HP motor per year. 5. Depreciation Depreciation on pump sets, drip irrigation components such as main pipes, submain pipes etc. was calculated using straight line method. The average life of pump set, main pipe, submain pipe, filters and valves along with labour for layout and miscellaneous expenditure during the installation of the drip irrigation system was assumed to be 20 years and the junk value was taken as 20 per cent of the initial cost. The average life of laterals, drippers/ micro tubes was assumed to be 10 years without any junk value. Original value Junk value Depreciation = Year of useful life 6. Machine power It is measured in hours. Here one hour means one hour of work by a tractor and a man required operating this tractor. It was valued at the rate of Rs. 750 per hour. 7. Farm Yard Manure (FYM) Farm yard manure was charged as per the prevailing market rates during the period of study in the study area. 8. Fertilizers 9. Irrigation The fertilizer cost was calculated at the actual price paid by farmers. The main source of irrigation in the study area is bore well. For study purpose apportioned establishment cost of irrigation structure was taken and included the cost of drilling the bore, cost of submersible pump set and cost of drip irrigation system. 10. Land revenue and other taxes These were charged according to the actual payments incurred by the cultivators. 11. Rental value of land Rental value of land was calculated as per the rate prevailing for irrigated land in the study area. 12. Interest on fixed capital Interest on fixed capital was calculated at the rate of 14.5 per cent on fixed capital at which the banks charge for the long-term loan. Rate of interest varied with the amount of capital requirement by the borrower. If farmers want to take the loan more than five lakh rupees bankers will charge higher interest rates as compared to regular interest rates.

27 Fig 3.2 Schematic diagramshowing the model of drip irrigation system