COSTS AND RETURNS STRUCTURE OF TURMERIC (CURCUMA LONGA LINN.) AND CONSTRAINTS FACED BY PRODUCERS IN JAINTIA HILLS DISTRICT OF MEGHALAYA, INDIA

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1 Indian J. Agric. Res.., 48 (3) , 2014 doi: /j x AGRICULTURAL RESEARCH COMMUNICATION CENTRE COSTS AND RETURNS STRUCTURE OF TURMERIC (CURCUMA LONGA LINN.) AND CONSTRAINTS FACED BY PRODUCERS IN JAINTIA HILLS DISTRICT OF MEGHALAYA, INDIA Janailin S. Papang* and A.K. Tripathi College of Post-Graduat Studies, Central Agricultural University, ICAR Research Complex for NER, Umiam , India Received: Accepted: ABSTRACT Cultivation of turmeric in Meghalaya provides supplementary income to the farmers. The average yield of fresh turmeric in the study area is 49q/ha which on drying gives an approximate yield of about 14.7q/ha of semi-processed (dried) turmeric. The share of variable cost is about 98 % of the total cost. The total costs of cultivation (cost C 2 ) for turmeric was estimated at `77,012/ha whereas the net income was worked out to be `6,475/ha for fresh turmeric and `28,109/ha for dried turmeric. About `12,719/ha of additional expenditure is incurred on post-harvest management of turmeric. It is observed that a higher net income is obtained when the farmers disposed off the product after drying which also gives the farmers the capacity to hold/store their product to avoid distress sale. The cost of production of turmeric is `15.68/kg, `60.93/kg and `/70.17/kg for fresh, semi-processed and processed (powdered) form, respectively. Lack of knowledge about pest management is the major constraint faced by farmers in production whereas the fluctuation in disposal price of turmeric ranks first among the marketing constraints faced by farmers. Key words: Constraints, Costs, Returns, Turmeric production. INTRODUCTION India is named as the Home of Spices. Spices play a key role in augmenting farm income and export market. Turmeric (C. longa Linn.) a member of the Zingiberaceae family and is a native to India and South East Asia. Turmeric is the 3 rd important commercial spice of India after chilli and black pepper and it is named as Indian saffron. India accounts for about 80 per cent of world turmeric production and 60 per cent of world exports; the country consumes most (80%) of its turmeric production and it exports the surplus ( 2013; Angles et al, 2011). The other leading countries producing turmeric are China, Myanmar, Nigeria, Bangladesh, Pakistan, Sri Lanka, Taiwan, and Indonesia (Angles et al., 2011). Turmeric is grown in as many as 25 states of India with Andhra Pradesh, Tamil Nadu, Karnataka and Orissa being the leading producers. Other main producers of turmeric are Gujarat, West Bengal, Assam, Meghalaya and Maharashtra. Indian turmeric is considered the best in the world due to presence of high curcumin content. Number of varieties is available in the country and is known mostly by name of locality where they are cultivated. Some of the popular cultivars are Duggirala, Tekkurpet, Sugandham, Amalapuram, Erode local, Alleppey, Muvattupuzha, and Lakadong. Turmeric is one of the major spices of North Eastern States of India and contributes 12 per cent area with 6 percent production to the country. Meghalaya ranks 2 nd in area and 1 st in production of turmeric in the North Eastern States (North Eastern Council, 2006). Turmeric in Meghalaya occupies 14 per cent of the total spice area of the state with 16 per cent share in production (Government of Meghalaya, 2009). Some of the varieties grown in this area are considered the best in the world as its curcumin content is as high as 7.5 per cent (Ghadge et al., 2001). Jaintia Hills is the highest * Corresponding author s janai4ndri@gmail.com.

2 producer in the state with 58 per cent share in area and 60 per cent share in production of the State (Government of Meghalaya, 2009). Against the given background, the present study was undertaken to understand the production pattern, costs and returns and constraints faced by turmeric growers. METERIALS AND METHODS The present study was conducted in Jaintia Hills district of Meghalaya. The State lies in the North Eastern part of India and shares borders with Assam in the north and east and with Bangladesh in the south and west. The geographical area of the State is 22,429 Sq.kms and it is divided into seven districts viz., Ri-Bhoi, East Khasi Hills, West Khasi Hills, Jaintia Hills, East Garo Hills, West Garo Hills and South Garo Hills. The State has a population of about 29,64,007 (Government of India, 2011) with aggregate literacy rate of per cent. Multistage sampling technique was used for the selection of samples in the present study. Out of the seven districts, Jaintia Hills district was selected for the present study purposively since it contributes maximum to the State total acreage and production of turmeric. Laskein and Thadlaskein Blocks contribute highest and second highest to the total acreage and production of Jaintia Hills district (Government of Meghalaya, 2009), and were selected for conducting the research work. Sixteen villages, belonging to Laskein and Thadlaskein Blocks were randomly selected and five farmers were selected randomly from each village. Thus, in total 80 farmers were interviewed. This study was based on primary as well as secondary data. The secondary data were collected from the National Horticultural Board, Spice Board of India, The Department of Agriculture, and Department of Horticulture, Meghalaya and the District Agricultural Office, Jowai. Primary data were collected with the help of a pre-tested interview schedule by face to face contact from the sample respondents. The farmers were interviewed personally to collect accurate and comprehensive information on turmeric cultivation. The information given was based on memory of the respondents. The data on total land holdings, operational land on turmeric, family size, educational level, cropping Vol. 48, No. 3, pattern, etc., were collected. The primary data from all the respondents was collected during the harvest and post-harvest period of the crop season For analysis of data the following analytical tools and techniques were adopted. The cost concepts (Commission on Agricultural Costs and Prices) viz.,, A 2, B 1, B 2, C 1 and C 2 were used to work out the cost of cultivation. Where, = Value of purchased material inputs (seed, insecticides and pesticides, manure, fertilizer) + hired human labour + animal labour (hired and owned) + hired farm machinery+ depreciation on farm implements and farm buildings + irrigation charges + land revenue cesses and other taxes + interest on working capital. = + rent paid for leased-in land. = + interest on value of owned capital assets (excluding land). = + imputed rental value of owned land (less land revenue). Cost C 1 = + imputed value of family labour. Cost C 2 = + imputed value of family labour. Returns For returns analyses following measures as suggested by Dhondyal (1973) were used: Gross returns = Value of the main product Farm business income = Gross income Cost A Family labour income = Gross income Cost B Net income = Gross income Cost C Farm investment income = Farm business income Wages of family labour For estimating the returns, is taken as Cost A, as Cost B and Cost C 2 as Cost C. Bullock and machine labour were taken zero as farmers did not use bullock and machinery. Also, interest on working capital, cesses and tax was taken zero as farmers did not incur these costs. Imputed value of owned land was taken at the rate of `500/ ha as there was no fixed rate for leasing upland areas, the farmers if leased-in land used to repay back the owner only in the form of gifts and kind. Land for cultivation in upland was given for free and the farmers can cultivate on that particular plot of land as long as they find it profitable. These lands were

3 194 INDIAN JOURNAL OF AGRICULTURAL RESEARCH given to the farmers either by ancestors or the clan or the community. Wage rate of human labour were consider `150 for male and `100 for female per day after taking the average cost of labour prevailing in the study area. Cost of production: The cost of production was worked out by dividing the net cost (gross cost minus value of by-product) by the output (Raju and Rao, 1990). Net cost (Gross cost-value of by product) Cost of production= Output Costs: Total Costs (TC) were categorized into Total Variable Costs (TVC) and Total Fixed Costs (TFC). i) Total variable costs (TVC) This cost represents the sum of expenditure in the short-run i.e., cost incurred in one cropping season on variable inputs for any level of output. Total variable costs (TVC) comprised of costs incurred on variable inputs such as planting material, farmyard manure (FYM), chemical fertilizers, plant protection chemicals, hired and family labour, transport and marketing expenses and interest on working capital. Seed: The actual cost incurred on the seed was computed by taking the actual price of turmeric seed prevailing during planting. Farm yard manure (FYM): The value of FYM used was calculated by considering the average rates prevailing in the area during planting. Chemical fertilizer: The actual cost incurred on chemical fertilizer along with transportation charges was taken for calculation. Plant protection chemicals: The actual expense incurred on plant protection chemicals (PPC) was considered. Hired human labour: The cost of hired human labour was computed by taking the wage rate paid by the sample farmers towards hired human labour worked eight hours per day. The same wage rates were used for computing the imputed value of family labour. Interest on working capital: This value was calculated at the rate of 12 per cent for the duration of crop, on the total value of the planting material, farm yard manure, chemical fertilizer, plant protection chemicals, and human labour. ii) Total fixed costs (TFC) Total fixed costs are long-run costs which are incurred over a period of time or years irrespective of output level. The fixed costs include depreciation on farm implement and machinery, interest rate on fixed capital, rent paid for leased-in land, land revenue and other taxes and imputed rental value of land. The measurement of fixed cost and depreciation charges were as follows: Land revenue: Land revenue was taken as zero, as no revenue was paid by the farmers. Depreciation charges: Depreciation falls in value of a given asset as a result of its use, wear and tear, accidental damage and time obsolescence. It involves prorating the original cost of an asset over its useful life (Johl and Kapur, 2001). Depreciation for each implement was calculated by straight line method. The average life and junk value of an asset was taken as expressed by each farmer. Depreciation on bullock carts and farm machineries were not taken since farmers did not have or use any. Imputed rental value of owned land: The rental value of land was calculated at the rate of ` 500/ha as per estimation. Interest on fixed capital: This was calculated at the rate of 10 per cent on the total value of the imputed rental value of owned land, rent paid for leased-in land and depreciation. RESULTS AND DISCUSSION The results of the study are discussed under the following sub-heads: i) Cost and returns of turmeric cultivation ii) Constraints in production and marketing of turmeric iii) Suggestions to overcome the problems i) Costs and returns of turmeric cultivation In Laskein and Thadlaskein Blocks turmeric is grown as a rain-fed crop. It is either grown as sole crop or grown mixed with maize or grown under mandarin orchards. For the present study only the sole crop was studied and majority of turmeric was grown in terrace or upland areas. Planting of turmeric in this area is usually done in the second week of April to second week of May. The crop is harvested in the second week of December to the third week of February.

4 Cost structure in turmeric cultivation: The various costs structure in the cultivation of turmeric based on Total Variable Costs (TVC) and Total Fixed Costs (TFC) is presented in Table 1. The cost of cultivation was worked out to be `77,012/ha. The share of the variable cost in total cost was per cent while the share of fixed cost was only 1.54 per cent. Seed was the most important item TABLE 1: Cost structure in turmeric cultivation based on TVC and TFC Costs( /ha) Variable costs Hired human labour 8,440(10.96) Family labour 14,539(18.88) Seed 36,048(46.81) FYM 8,524(11.07) Chemical fertilizers 33(0.04) Plant protection chemicals 116(0.15) Interest on working capital 8124(10.55) Total variable costs (TVC) 75,824(98.46) Fixed costs Imputed rental value of owned land 500(0.65) Rent paid for leased-in land 0(0) Depreciation 580(0.75) Land revenue and other taxes 0(0) Interest on fixed capital 108(0.14) Total fixed costs (TFC) 1,188(1.54) Total cost (TVC + TFC) 77,012 (100.00) Note: Figures in parentheses indicate percentage of total cost Vol. 48, No. 3, 2014 TABLE 2: Costs structure in turmeric cultivation based on cost concepts Cost Concepts Costs (Rs./ha) Hired human labour 8,440 Seeds 36,048 FYM 8,524 Fertilizer 33 Plant protection chemicals 116 Depreciation 580 Interest on working capital 8,124 Rent paid on leased in land 0 Imputed interest on owned fixed capital ,973 Cost B1 61,973 Rental value of owned land ,473 Cost C 1 61,973 Imputed value of family labour 14,539 Cost C 1 76,512 Cost C 2 62,473 Imputed value of family labour 14,539 Cost C 2 77, within the variable expenditure (46.81%); followed by family labour which accounted per cent of the total cost. The share of fixed cost was very less as the farmers did not use any bullock or machinery power. Also, the imputed rental value of owned land was taken only at the rate of 500/ ha due to the fact that land (except paddy fields and orchards) was given free of cost for cultivation. The costs incurred on farm yard manure (FYM), hired human labour, interest on working capital, plant protection chemicals (PCC) and chemical fertilizers were 11.07, 10.96, 10.55, 0.15 and 0.04 per cent of the total cost respectively. Depreciation, imputed rental value of owned land and interest on fixed capital constituted the fixed expenditure with 0.75, 0.65 and 0.14 per cent share in the total cost respectively. Costs and returns structure in turmeric cultivation based on cost concepts: Costs incurred on turmeric cultivation was calculated for sample farmers and presented in Table 2. The average yield of turmeric was found to be q/ha of fresh turmeric which yielded approximately q/ha of dried or semiprocessed turmeric. which includes the direct expenses incurred on crop production in cash and kind was found to be `/ha. was equal

5 196 INDIAN JOURNAL OF AGRICULTURAL RESEARCH TABLE 3: Returns from turmeric cultivation Fresh Turmeric Semi-Processed Turmeric (Dried) Total Costs * Yield (q/ha) Price of turmeric (`/q) Gross income (`/ha) Farm business income (`/ha) * Family labour income (`/ha) * Net income (`/ha) Additional income (`/ha) # * Including Post Harvest `259/q # By incurring additional cost on post harvest management to, since rent paid for leased-in land was zero. which includes and imputed interest on own fixed capital excluding land was worked out to be `61,973/ha. which includes and rental value of own land was equal to `62,473/ha. Cost C 1 was worked out to be `76,512/ha, which includes Cost B 1 and imputed value of family labour. Cost C 2 which is the total cost of cultivation was found to be `77,012/ha. Gross returns and net income per hectare: Returns from cultivation of turmeric were worked out for fresh and dried turmeric and are presented in Table 3. Gross returns were estimated based on the prevailing price of fresh and dried turmeric at the producer s level. The price of fresh turmeric was `1,700/q whereas that of dried turmeric was `8000/q. Gross income of `83,487/ha was obtained from cultivation of fresh turmeric. Since, turmeric in the study area was sold after slicing and drying it fetches higher price and also farmers were able to hold back their produce when there was fall in market price of dried turmeric. The gross income worked out for producing dried turmeric was `1,17,840/ha (the additional expenditure on post-harvest management is `259/q of fresh turmeric). The farm business income and family labour income for fresh turmeric was worked out to be `21,622/ha and `21,014/ha respectively and for dried turmeric farm business income and family labour income were `43,256 and `42,648/ ha respectively. The net income of turmeric culti vation was estimated at ` 6,475/ha for fresh turmeric and ` 28,109/ha wi th an additional expenditure of `12,719 on post-harvest management. Thus, it was observed that farmers obtained higher net income on selling of dried turmeric and the additional net income was worked out to be `21,634/ha. Costs of production of turmeric: The cost of production per quintal of fresh, semi-processed (dried) and processed (powdered) turmeric is given in Table 4, Table 5 and Table 6 respectively. The cost of production was worked out by dividing the net cost by the output (total production). TABLE 4: Costs of production of turmeric (fresh) Cost (`) Cost of cultivation (Cost C 2 ) ` /ha 76,905 Production (Output) fresh turmeric (Kg) 4,911 Cost of production per kg of fresh turmeric (`/Kg) TABLE 5: Costs of production of turmeric (semi-processed) Cost (`) Total costs * 89,748 Production (Output) semi-processed (kg) 1,473 Cost of production per kg of semi-processed turmeric (`/kg) * Total costs includes post-harvest costs TABLE 6: Costs of production of turmeric (processed) Cost (`) Total costs ** 97,113 Production (Output) processed (Kg) 1,384 Cost of production per Kg of processed turmeric (`/Kg) ** Total costs include post-harvest costs, processing charge and value of weight loss, Weight loss during 6% Processing Rs. 5/kg Since there is no by-product of turmeric the net cost was equal to the total cost of cultivation. The cost of production per quintal for fresh turmeric was estimated at `1,568/q, for dried turmeric and powdered turmeric it was worked out to be `6,093/ q and `7,017/q respectively. The net cost for production of dried turmeric included the post harvest cost whereas, for processed turmeric post-harvest cost, weight loss on processing and processing charge were taken into account.

6 ii) Constraints in production and marketing: An attempt was made to identify the problems faced by the farmers in the production and marketing of turmeric and the problems are presented in rank according to Garrett s ranking technique. The problems faced by the farmers were collected and were given the degree of severity as expressed by the respondents. The problems in production and marketing are presented in Table 7 and Table 8, respectively. Constraints in production of turmeric: There were six major problems in turmeric cultivation as stated by the sample farmers. Lack of knowledge about TABLE 7: Problems in the production of turmeric Items Per cent Rank position Lack of knowledge about pest control I Unavailability of farm power II Pest attack III High cost of labour IV Unavailability of financial support V Unavailability of labour in time VI TABLE 8: Problems faced by farmers in marketing of turmeric Items Per cent position Rank High price fluctuation I Lack of regulated market II Lack of approach road III Lack of grading facilities IV Non-availability of transport V pest management was the major problem which was ranked first. As per the information given by the respondents there was no attempt was made by any institution/source for control of pest in turmeric. The second important problem faced by sample farmers was the non-availability of small farm machineries that suit to the uneven topography of the study area. This problem has given rise to high consumption of labour per unit area. Besides this, high cost of labour was also a serious problem faced by the farmers. There was a shift of farm labor from farming to coal industry where wages were higher in comparison to wages in farming, which made the cost of human labour to rise to `200/day for male labour and `150/ day for female labour as compared to the year 2010 where cost of labour for male was `150/day and female for `100/per day. The farmers expressed that with the increase in wages of human labour the cultivation of turmeric will become an expensive Vol. 48, No. 3, business. Turmeric cultivation requires financial support from financial institutions and government agency for cultivation as it was found that farmers were using their own financial resources, since none of the respondent farmers took loans from bank and other organizations. Non-availability of labour in time at the time of sowing is another constraint that delays the date of sowing for turmeric. Constraints faced by producer in marketing of turmeric: The fluctuation in disposal price of turmeric was the major problem faced by the farmers in marketing. Farmers received very high price during lean period while during post harvest season the price received was very less. Farmer s financial requirements especially during post-harvest season is very high due to the fact that family expenditure especially for the children s school fees co-inside with the post-harvest period and also finance was needed during the same period for sowing the next crop. Thus, most of the poor farmers were selling their produce in lesser price. During the month of November and December which was the lean period (off-season i.e., just before harvest of the next crop) the price of dried turmeric rises to ` / kg, whereas in average the price of dried turmeric at farmer s level was only `70-90/kg. The price of turmeric fluctuates from season to season within a period of one month. The second problem identified was the lack of regulated market. The regulated market which is in Mawiong, could not cover a large area, and farmer could not sell their produce at their expected price. Another problem was lack of approach road due to which farmers were compelled to sell their produce to village traders that came to their doorstep at low price. The absence of grading facilities in the local market made it difficult for the farmers to sell the produce according to its quality aspect. Another problem was unavailability of transportation facility as a result farmers were compelled to dispose their produce to village traders and commission agents available in the local area. Public bus and light vehicles were mainly used to carry their produce to the main market. iii) Suggestion to overcome the problems: The followings suggestions were made taking into consideration the responses of the farmers and the findings of the present study. Setting up of branches of regulated market in the block level markets could

7 198 INDIAN JOURNAL OF AGRICULTURAL RESEARCH help to reduce the fluctuation in price of turmeric. Development of small farm machineries for land preparation, inter-cultural operations (weeding and earthing-up) and for harvesting is needed in order to solve the shortage of labour in turmeric cultivation and also the efficiency would be better if machine power could replace human labour to some extent. Training on pest control and market oriented production is required to help the farmers tackle their problem. CONCLUSIONS The findings obtained from the study of the costs and returns from turmeric production in Jaintia Hills District of Meghalaya can serve as a guideline for economic policy makers, researchers and academicians. The first priority needed to be looked into is the poor infrastructure development like road, storage, farm mechanization, and transportation facilities etc. The government should take initiation for improving the infrastructure facilities, which is a must for improving the production and marketing of agricultural produce. Market regulation, price policy and inspection on functioning of markets are also the need of the present hour. Co-operative marketing could solve the problems of marketing to some extent and they could also act as agents of regulated marked in different districts which does not have regulated market. Lastly, the extension services should be improved and the government should take an active role not only in disseminating farm technologies but also to impart knowledge of entrepreneurship to help the farmers fi nd out thei r way in difficult circumstances. REFERENCES Angles, S., Sundar, A. and Chinnadurai, M. (2011). Impact of globalization on production and export of turmeric in India An Economic Analysis. Agricultural Economics Research Review, 24: Ghadge, S.V., Agarwal, A.N., Singh, R.K. and Satapathy, K.K. (2001).Turmeric mechanization in Meghalaya - A case study of Shangpung Village Jaintia Hills.Indian Journal of Hill Farming, 14 (2): Government of India (2011).Census 2011.Available at on ). Government of Meghalaya (2009).Basic Statistic Meghalaya. Directorate of Economics and Statistics, Shillong, Meghalaya. Johl, S.S. and Kapur, T.R. (2001).Fundamentals of Farm Business Management.Kalyani Publishers. New Delhi. North Eastern Council (2006).Basic Statistics NER.Shillong. Raju, V.T. and Rao, D.V.S. (1990).Economics of Farm Production and Management.Oxford and IBH Publishing Co. Pvt. Ltd. N. Delhi.