An Economic Analysis of Medicinal Herb Colocasia for Leaf Production

Selection of Area

The present study was confined to middle Gujarat (Anand and Kheda) were selected purposively for detailed study on the basis of availability of colocasia farmers by covering two talukas namely Anand and Nadiad. The villages covered from Anand taluka were Boriavi, Lambhvel and Bakrol and from Nadiad taluka Kanjari, Fatehapura and Chaklasi.

Selection of Respondents

From each selected district, 50 respondents were selected purposively those who were engaged in colocasia cultivation. Thus, total 100 (2x50) respondents were selected to achieve the stipulated objectives of the study. To study marketing cost, margin and price spread, a sample of 5 intermediaries (middlemen) of each type associated in marketing of colocasia spread over Anand market of the study area was selected to achieve the specific objective. Primary data were collected from sample households on various parameters such as socio-economic profile, level of input use, cost and return, disposable pattern and marketing through well-structured and pre-tested interview schedules. The collected data were analyzed and presented in tabular form. The tabular analysis was employed to study the level of input used, cost and return and disposable pattern. Descriptive statistics such as mean, percentage, ratio, etc., was also used for achieving the specific objectives of the study.

The Cost Concept (CACP approach) was widely used by researchers in the field of farm management studies for computing cost of cultivation and cost of production such as Cost A, Cost B, Cost C1 and Cost C2 were used in the present study. Cost A includes, cost of hired human labour, tractor charges, cost of seeds/plantlets, cost of manure and bio fertilizers, cost of chemical fertilizers, cost of insecticides and pesticides, irrigation charges, other paid out expenses if any, depreciation on farm buildings and small farm tools, rental value of leased land, interest on working capital, miscellaneous expenses including land revenue, transport charges, etc. Cost B = Cost A + rental value of owned land + interest on fixed capital Cost C1 = Cost B + imputed value of family labour Cost C2 = Cost C1 + managerial charges Cost of production refers to cost incurred for per quintal production of crop, it was calculated as follows: Cost of production (per quintal) = Cost C2/ Yield of main product in quintal Gross Return = Quantity of produce x Price of produce Net Return = Gross Return – Total Cost The values of purchased inputs were taken into account as reported by the cultivators after due verification. Some of the inputs used in the production process came from family sources. The procedure adopted for deriving imputed value of such inputs was as under taken as per standared norms. Family labour cost was imputed at the wage rates prevailing for different agricultural operations per day in the selected villages. The cost of tractor charges was reckoned as per the prevailing market rate in the villages. The value of own farm produced inputs viz., manure, seeds/plantlets etc. were computed as the rates prevailing in the concerned villages. The cost of irrigation was considered at the prevailing market rates. The kind payments were evaluated at prices prevalent in the village. Interest on working capital was charged at the rate of 12% per annum, according to duration of the crop (6 months). Depreciation of owned farm buildings was calculated at the rate of 5% for kachcha and 2% for pucca buildings per annum. Rental value of owned land was charged at the rate prevailing in the concerned villages. Management charges were calculated at the rate of 10% of Cost $C_1$.

**Income Measures**

• Value of gross output (Gross income): The Value of gross output or Gross income was calculated by considering the total production in quintal and price prevailing of product per quintal (main product + by-product).
• Farm business income: Gross income – Cost A
• Family labour income: Gross income – Cost B
• Farm investment income: Net income + Rental value of owned land + Interest on owned fixed capital.
• Net income: Net income was calculated by considering the value of gross output minus Cost $C_2$.

**Disposable Pattern**

To study disposable pattern the marketable surplus of respondents was estimated and identified the major marketing channel used by producers to sale their produce. Marketable surplus is the quantity of the produce left with the farmer after meeting all the requirements. Marketable surplus was estimated by using the following formula; Marketable surplus = Total production-Total requirements (family, labour, relatives etc.)

**Marketing Costs, Margins and Price-Spread**

The marketing cost and margins including average gross margin, absolute margin, percentage margin, producer’s share in consumer’s rupee and total cost of marketing was calculated for the major channel found in study area by using following formulae [7].

$$\text{Average Gross Margin: } \text{Average gross margin at each successive level of marketing was calculated by dividing the differences of sale value and purchase value by the quantity of the produce handled.}$$

$$\text{AGM} = \frac{\text{Total sale value} - \text{Total purchase value}}{\text{Quantity of produce handled}}$$

Absolute Margin of the Middleman (Ami): Absolute margin of the middleman was calculated by deducting the purchase price and cost incurred by him from the sale price. Ami = $P_{RI} - (P_{PI} + C_{mi})$

Percentage Margin of the Middleman ($P_{mi}$): Percentage margin of the middleman was calculated by expressing the absolute margin as percentage of sale price.

$$P_{mi} = \frac{P_{RI} - (P_{PI} + C_{mi})}{P_{RI}}$$

Where,

$$P_{RI} = \text{Receipt per unit (sale price)}$$

$$P_{PI} = \text{Purchase price of goods per unit (Purchase price)}$$

$$C_{mi} = \text{Cost incurred on marketing per unit}$$

Producer’s Share in Consumer’s Rupee:

Producer Price ($P_F$) = $P_A - C_F$

Where,

$$P_A = \text{Wholesale price in the primary assembling market}$$

$$C_F = \text{Marketing cost incurred by farmer}$$

$$P_S = \frac{P_F}{P_r} \times 100$$

Where,

$$P_S = \text{Producer’s share}$$

$$P_F = \text{Producers price}$$

$$P_r = \text{Retail price (i.e. paid by the consumer)}$$

Price-Spread: Price-spread refers to the differences between the price paid by the ultimate consumer and the price received by the producer for an equivalent quantity of the farm produce.

$$\text{Price-spread} = P_r - P_F$$

Total Cost of Marketing: Total cost of marketing is the sum total of costs incurred by the farmer and different middlemen:

$$C = C_F + C_{m1} + C_{m2} + C_{m3} + \dots \dots \dots + C_{mn}$$

Where,

$$C = \text{Total cost of marketing}$$

$$C_F = \text{Cost of marketing incurred by the farmer and}$$

$$C_{m1} = C_{m2} = C_{m3} = C_{mn} = \text{Cost incurred by different middlemen.}$$

**Socio-Economic Profile of Respondents**

Socio-economic profile of respondents such as family size, age, education, occupation, association with organizations, size of land holding, source of irrigation etc., play an important role in managerial decision making for optimum use of resources, which also affect the economy of the farm and also the decision making about adoption of inventive techniques to a substantial extent. These aspects of sample respondents have been analyzed and presented as under:

**Average Family Status**

Family size makes available the labour force on the farm and affects the family consumption needs. It was observed that the average size of the family of the respondents was about 6.84 with 35.23, 34.21 and 30.56 male, female and children, respectively. Moreover, the average income earner members in the family were about 2.17 and the average age of respondents was found to be 52.36 years. About 93.00 per cent of the total sample farmers were literate and remaining 7.00 per cent farmers were illiterate. Among the literate respondents 53.00 per cent had education up to secondary level, 21.00 per cent up to primary level and 19.00 per cent up to college. Majority of the farmers (39.00 %) adopted farming with animal husbandry as their main occupation followed by farming (18.00 %), farming + animal husbandry + service (15.00 %), farming + service (12.00 %), farming + business (9.00 %) and farming + animal husbandry + business (7.00 %). Further, it was noticed that the farmers had on an average 19.27 years of experience of colocasia cultivation (Figure 1).

Click to enlarge

Overall average size of land holding possess by the farmers were about 3.76 hectare, out of which 100 per cent of land was irrigated and the average area allocated by farmers under colocasia cultivation was about 0.51 hectare (13.56 %). About 46.00 per cent farmers had tube well as a main source of irrigation followed by multisource of irrigation (23.00 %), canal (14.00 %), well (9.00 %) and pond (8.00 %). Multisource of irrigation includes tube well + well, tube well + canal + pond, well + canal etc.[8].

Cost and Return Structure

Profit maximization of a farm with respect to productivity, gross income and net income from a crop mainly depend upon the level of input use, resource optimization and managerial skill. Hence, the use of judicious inputs in production process is vital in any crop cultivation.

On an average per hectare use of total human labour in colocasia was about 141.79 man-days (Table 1). Colocasia is the annual crop and it required more labour (man-days) in their cultivation. Out of total human labour, contribution of hired labour and family labour was 114.67 and 27.22 man days, respectively. The per hectare machine hours used by the respondents were about 11.24 hrs. The use of plantlets/ sapling by the farmers was about 84,000 ha-1. Moreover, the results showed that farmers used huge quantity of manure (863.57 q/ha) and fertilizer which required for the vegetative growth of colocasia when it was used as leaf purpose. It can be seen from the table that on an average 52.23 irrigations were applied in colocasia production as it is water intensive crop and required frequent irrigations except in rainy season. It was observed that the frequency of irrigation was every 3-4 days in summer, 5-6 days in winter and only little irrigation were given in rainy season.

Cost and Return Analysis

The average cost of cultivation per hectare of colocasia for leaf purpose was worked out (Table 2). It was observed that per hectare total cost of cultivation (Cost C2) of colocasia was Rs. 193002.23. Among the items of total cost the share of planting material (plantlets) (17.41 %) was found highest, followed by chemical fertilizers (14.02 %), human labour (13.82 %), irrigation (12.52 %) rental value of owned land (9.87 %), management cost (9.09 %), interest on working capital (8.31 %), manure (6.54 %) etc. Colocasia is input intensive crop and also covered the field throughout the year. When it was produced for leaf purpose it required lot of inputs for their vegetative growth as compared to their recommended doses for root purpose. Therefore, the total cost of cultivation accounted much higher for leaf purpose as compared to root. The item-wise costs as mentioned above were further classified into four groups viz., Cost A, Cost B, Cost C1 and Cost C2 which amounted to be Rs. 149779.59, Rs. 169737.15, Rs. 175456.57 and Rs. 193002.23 per hectare, respectively. Out of total cost (Cost C2) the share of Cost A, Cost B and Cost C1 was about 77.61, 87.95 and 90.91 per cent, respectively.

Table 2: Details of cost of cultivation of colocasia (Rs. ha-1). (n=100) Source: Field survey Average annual herbage yield obtained from colcocasia cultivation was about 189.18 quintals per hectare (Table 3). Colocasia is the annual crop and its first cutting was started about three months of cultivation, after that every month on an average about 3-4 cuttings are obtained by the farmers for 6-7 months. Initially low yield of herbage was attributed and it was increased in every cutting. Average price received by farmers was Rs. 2309.20 q-1 for main production. In the form of by-product, farmers obtained income around Rs. 49600 ha-1 by selling the extra planlets / sapling produced in the side of main plant. Therefore, the average gross return per hectare was Rs. 486454.45. Net return earned by the farmers was about Rs. 293452.22 ha-1 with the input-output ratio of 2.52. Whereas, the cost of production in the tune of Rs. 1020.20 q-1. This indicated that the per quintal price received by producers was higher as compared to the cost incurred by them to produce one quintal of colocasia. Hence, colocasia is the remunerative crop for the farmers. Similarly, medicinal crop like shatavari for root production and jal Brahmi for dry herbage production were reported remunerative under Gujarat conditions [9, 10].

Table 3: Yield, price and return obtained from colocasia (Rs. ha-1). n=100 Source: Field survey The different income measures and returns per hectare over various costs of colocasia were worked out (Table 4). Income measures such as average gross income, farm business income, family labour income and farm investment income realized by farmers were about Rs. 486454.45, Rs. 336674.86, Rs. 316717.30 and Rs. 313409.78, respectively. Similarly, the return over Cost A, Cost B, Cost C1 and Cost C2 were accounted to the tune of Rs. 336674.86, Rs. 316717.30, Rs. 310997.88 and Rs. 293452.22, respectively. It indicated that the net return reap from colocasia cultivation was remunerative to the producers. Aromatic crops like lemon basil and clove basil cultivation realize income in same trend from dry herb as well as essential oil production [11, 12].

Table 5: Cost of production (Rs/q) and input-output ratio on various cost concepts. Source: Field survey Average cost of production per quintal over Cost A, Cost B, Cost C1 and Cost C2 was Rs. 791.73, Rs. 897.23, Rs. 927.46 and Rs. 1020.20, respectively. Moreover, the input-output ratio over Cost C2 was 2.52, indicated that if farmers invested one rupee on colocasia, and yielded 2.52 Rs. as an incentive (Table 5). Similarly the cost benefit ration was reported in jal brahmi for dry herbage production [10].

Disposal Pattern

It was observed that about 98.73% of produce was marketable surplus by the producers in market and rest was used for home consumption, labourers, relatives etc (Table 6).

Table 6: Disposal pattern of Colocasia. Source: Field survey Note: Figure in parenthesis indicates percentage to total production. Marketing is essential activity of agricultural commodities as the efficient marketing system will serve the best price to the producer. For the marketing of colocasia in study area only one marketing channel was dominant which was as follows: Channel I: Producer - Local Trader - Wholesaler–cum- Commission Agent – Retailer – Consumer

Marketing Cost, Margin and Price Spread

Identified marketing channel of colocasia, producer has not bear any cost except some miscellaneous charges (Rs. 17.06 per quintal), because in this channel village traders directly purchased the produce from the field of farmers (Table 7). However, the per quintal cost incurred by local merchant/village trader was about Rs. 325.78. Out of total cost, labour charges was highest (Rs. 142.06), followed by loading and unloading (Rs. 98.75), transportation (Rs. 57.51), packaging (Rs.18.12) and miscellaneous (Rs. 9.34). Further, it could be seen from the table that total marketing cost borne by wholesaler-cum-commission agent was Rs. 216.41 q-1. Among the various cost components damage/ spoilage accounted highest for about Rs. 118.72 followed by market fee (Rs. 48.67), labour cost (Rs. 28.11), packaging (Rs. 13.32) and miscellaneous cost (Rs. 7.59). Whereas, the total marketing cost incurred by retailer was Rs. 285.52 q-1 with the highest share of storage loss (Rs. 132.23) followed by market fee (Rs. 81.50), labour (Rs. 33.42), transportation (Rs. 28.34). Hence, the total marketing cost incurred by all the middlemen in the identified channel was about Rs. 844.77 q-1.

Similarly, the total margin earned by different functionaries was Rs. 3969.39 and the margin was higher at retailers’ level (Rs. 2182.50 q-1) as compared to village trader (Rs. 1245.23) and wholesaler-cum-commission agents (Rs 541.66 q-1), constituting 30.71, 17.52 and 7.62 per cent of consumer’s price, respectively. Further, it was observed that the producer’s share in consumer’s rupee was quite low (32.35 %) and the price spread was Rs. 4814.16 q-1 in the identified marketing channel of colocasia in study area.