Production and Marketing of Chilli in Middle Gujarat

Vegetable scenario
 
Vegetable cultivation and production has shown increasing trend in India, the area under vegetables has increased from 7240.4 thousand hectors in 2005-06 to 10060.8 thousand hectors in 2017-18, while the production has increased from 113542.2 thousand tonnes to 184040.8 thousand tonnes over the years from 2005-06 to 2017-18 and the productivity also increased from 15681.8 kg/ha to 18292.8 kg/ha over the mentioned period (CMIE, 2022).

At Gujarat state level, vegetable production has increased from 6308.3 thousand tonnes to 12265.5 thousand tonnes from 2005-06 to 2017-18. The area under vegetables has also shown an increasing trend, while the productivity also increased from 16592.6 kg/ha to 20004 kg/ha over the period of time (CMIE, 2022).    
 
Chilli scenario
 
Chilli is one of the most valuable spice crops than other spices which cultivated largely for its fruit purpose all over India (Gade et al., 2020). Table 1 shows the area, production and productivity of chilli over the years. The table shows that, at national level, the area under chilli has increased from 140 thousand hectors from 2013-14 to 410.9 thousand hectors in 2020-21. The production also increased from 1687.30 thousand tonnes to 4363.20 thousand tonnes over the years. But the productivity of chilli at national level has decreased from 12048.60 kg/ha to 10618.50 kg/ha from 2013-14 to 2020-21. India ranks second among world chilli exporters and has showed a stedy decline in chilli trade due to domestic consumption (Jorwar et al., 2018).



Although, area and production under chilli has increased over the years then also productivity has shown declining trend over the years. This implies that, area and production both increased but not in same proportion and due to this reason productivity has decreased over the years. This signifies the importance to study the economics and marketing of chilli production. It could be benefit to farmers and encourage the cultivation of chilli in the study area.
 
Objectives of the study
 
To study cost and return of chilli cultivation in middle Gujarat.
To study marketing of chili in middle Gujarat. 

Area of survey
 
The study was conducted in Middle Gujarat which comprises of nine districts namely, Anand, Kheda, Vadodara, ChhotaUdepur, Ahmedabad, Botad, Dahod, Panchmahal and Mahisagar. For chilli, the data was collected from Anand and Vadodara district.
 
Source of data
 
Primary Data Primary data was collected through survey method with the help of well-structured pre-tested schedule. For chilli, marketing channels were found during the primary data collections. The secondary data in respect of area and production of chilli crop were collected from the records and reports of the Directorate of Horticulture and statistics, Government of Gujarat.
 
Period of study
 
Primary data was collected in the agricultural year 2016-17. The sampling method was Non-probability sampling under which random sampling technique was used. Farmers, commission agents, village-level traders, pre-harvest contractors, wholesalers, traders and retailers from Middle Gujarat was selected as sampling unit. Table 2 shows the numbers of farmers, traders, wholesalers and retailers, which was selected as sample from selected districts.


 
Analytical tools and techniques
 
Cost concepts
 
The cost concept (CACP approach) was used to calculate cost and return analysis. Here, Cost A is also referred as operating cost or paid-out cost and Cost C2 is also referred as the total cost.
Cost A= Value of hired human labour+ Value of bullock labour (owned/hired)+ Value of seeds (owned/ purchased)+ Value of manure (owned/ purchased) + Value of fertilizer+ Value of pesticides and insecticides + Irrigation charges+ Charges for machineries (owned/hired) + Other paid-out expenses if any + Depreciation on farm building and implements+ Interest on working capital.
Cost B= Cost A+ Rental value of owned land+ Interest on fixed capital assets (excluding land).
Cost C₁= Cost B+ Imputed value of family labour.
Cost C₂= Cost C₁+ 10 per cent of the Cost C₁ as a managerial charge.
 
Marketing efficiency
 
Marketing efficiency was calculated using Acharya’s Modified measure of Marketing Efficiency (MME) (Acharya and Agarwal, 2006), which states;
 

MME = [RP ÷ (MC+MM)]-1

 
Where,
MME= Index of marketing efficiency.
RP= Price paid by the consumer.
MC= Total marketing cost.
MM= Net marketing margin.
 
Producer share in consumer rupee (PS) was calculated as below
 

Where,
PF= Net price received by the producer.
PR= Retail price (price paid by the consumer).
 
Price spread
 
It is the difference between the two prices, i.e., the price paid by the consumer and the price received by the producer. e.g.
 

P₁-P₂
 

Where,
P₁= Price at one level or stage in the market.
P₂= Price at another level.
 
Garrett’s ranking technique
 
To find the most significant constraint influencing the stakeholders in the existing fruits commodity system, Garrett’s Ranking Technique was employed. It was calculated as percentage score and the scale value was obtained by employing Scale Conversion Table given by Henry Garrett and Woodworth (1971).
The Percentage Score is calculated as:
 

 

 
Where,
R_ij= Rank given for ith constraint by j^th individual.
N_j=Number of constraints ranked by j^th individual.

The percent position of each rank was converted into scores using Garrett’s Table. For each constraint, scores of individual respondents were added together and were divided by total number of respondents who responded. Thus, mean score for each constraint was ranked by arranging them in descending order.

The cost of cultivation presents the cost incurred by farmer while producing chilli in the study area. The average cost of cultivation in chilli was presented in Table 3. The table shows that, among all costs, cost of human was higher which was ₹ 66410.0 per ha which consists of cost of hired labour and family labour which was ₹ 35200 and ₹ 31210.20 pe ha. The study of Jorwar et al., (2018), also revealed that, for chilli cultivation, overall human labour cost was accounted 26.54 per cent of total cost of cultivation which was highest among all items included in the cost of cultivation. The cost of machine labour, cost of seeds, cost of fertilizer and manures, cost of pesticide, irrigation charges, depreciation and interest on working capital were ₹  5960, ₹ 5346.3, ₹ 37991.6, ₹ 11400, ₹ 5664.0, ₹ 1164.8 and ₹ 7966.3 per ha, respectively, in the study area. The cost of rental value of land was found to be at ₹ 43200 per ha while managerial charges was ₹ 18339.82 per ha in chilli production.



Table 4 presents the cost of cultivation of chilli farming. The table revealed that cost A was found to be at ₹ 106744.8 per ha in chilli cultivation, while cost B was ₹ 152188.0 per ha. The total cost or cost C₂ was found to be at ₹ 201738.0 per ha in chilli cultivation which was similar to the findings of Jorwar et al., (2018), they also revealed that cost C for chilli cultivation was ₹ 176254.60 per ha while Bhandekar et al., (2023) also found ₹ 112317.59 per ha cost for chilli cultivation.



Table 5 shows the yield in chilli cultivation. The results revealed that average yield in chilli cultivation was 534 quintal per ha in the study area. The average price received by farmers in the study area was ₹ 909 per quintal. The gross income was found to be at ₹ 485369.6 in chilli cultivation.



Table 6 revealed the net return received by farmers over the different costs in chilli cultivation. The net return over cost A was ₹ 378624.8 per ha, which represents the return over total working cost. The net return over cost B and cost C₂ was found to be at ₹ 333181.6 and 283631.6 per ha, respectively, in the chilli cultivation. The net return of ₹115893.1 per ha was found in the study of Bhandekar et al., (2023).  



The benefit-cost ratio over total cost or cost C₂ in chilli cultivation was found to be at 2.41 in study area. While benefit-cost ratio over cost A and cost B was found to be at 4.55 and 3.19, respectively in the study area (Table 7), these findings were similar to Jorwar et al., (2018) and Rajwadi and Pundir (2022). They also found the similar reults related to vegetable cultivation.
 


Marketing channels of chilli in middle Gujarat
 
The prevalent existing marketing channels in Middle Gujarat are shown in Table 8. There were three sells channels that delivered the chilli after harvest. About 52 per cent of chili peppers were supplied via Channel I, 33 producers via Channel II and the rest via Channel III. These channels were direct marketing channels and there were no middlemen.


 
Channel wise marketing cost of chilli in middle Gujarat (₹/q)
 
It was revealed from Table 9 that total marketing cost incurred by chilli producer amounted to ₹ 98.59, ₹ 114.84 and ₹ 114.84 per quintal in Channel-I, Channel-II and Channel-III, respectively. Among the various components of marketing cost incurred by chilli producer in Channel I, labour charges was the highest (₹ 45.75/q), accounting for 17.65 per cent to total cost incurred by producers, followed by packing charges (₹ 25.23/q), loading charges (₹ 4.77/q) and post-harvest loss (₹ 15.25/q). In case of Channel-II and III labour charges was the highest ` 45.75/q, followed by packing charges (₹ 25.23/q), transport charge (₹ 12.50/q) and loading charge (₹ 12.36/q).



It can be seen from the table that the marketing cost of chilli borne by commission agent was ₹ 90.98 per quintal. Among various components commission charges accounts 29.18 per cent of total cost incurred by commission agent, followed by transportation charges (4.82 %) and other charge (1.10 %).  The total marketing cost of chilli borne by wholesaler for Channel I and Channel II was ₹ 31.45 per quintal. Among the various cost components, spoilage accounted for ₹ 11.45/q of total cost incurred by wholesaler, followed by transport charge (₹ 11.25) and Loading and unloading charge (₹ 6.30/q). Further, it was observed that the total marketing cost of chilli incurred by retailer in Channel I and Channel II was ₹ 38.15 per quintal and in Channel III was ₹ 27.77 per quintal. Among the various component of marketing cost of spoilage were highest accountings in all three Channels.
 
Price spread in marketing of chilli in middle Gujarat
 
All the different marketing services and buying and selling activities increase the cost of the agricultural product when it reaches the end consumer. The price difference thus meant the difference between the price paid by end consumers and the price received by farmers for the equivalent amount. The price difference includes the costs of conducting various marketing activities and the margin of various agencies involved in the product distribution process.

Table 10 revealed the distribution of marketing costs and margins of all intermediaries and producers’ share in consumer rupees across all marketing channels for chillies in Middle Gujarat. The lowest price difference was 15.18 per cent on Channel III, when the chilli was distributed directly to the retailer. In this channel, producers receive most of the consumer price (84.82%). The difference in the price of chili sold through Channel I and Channel II was 21.41 per cent and 26.13 per cent. Channel I has 73.87 per cent of the producer’s share in the consumer price and channel II has 78.59 per cent, which was lower than channel III. This may be because the chillies were marketed in distant markets where marketing costs and margins for wholesalers, brokers and retailers were higher. Pandey et al., (2003) also found that in marketing of potato, producers share in consumers price was around 73 per cent. Jorwar et al. (2018) found the three-marketing channel for chilli and revealed that producers share in consumers rupee was higher in direct channel (92.31), while for remaining both channels it was 76.94 and 72.69 per cent. These reveals that in vegetable marketing producers share in consumers rupee was higher in direct channels.


 
Marketing channels of chilli in middle Gujarat
 
Table 11 shows marketing efficiency of chilli via all channels in Middle Gujarat. The table also revealed that the channel III was the most efficient marketing channel with marketing efficiency of 5.59, followed by channel II (3.67) and channel I (2.83). her the channel III was the most efficient channel than also only 16 per cent farmers sold through this channel. Pundir et al., (2024) also revealed that marketing efficiency of short-distance channel was highest in potato marketing. Naveen et al., (2015) also found the similar results.


 
Constraints in production of chilli
 
Table 12 shows the production constraint faced by farmers in chilli cultivation. The main limitations were labour shortage, followed by price, timely availability of inputs, quality of inputs, then poor advisory services, poor delivery and least disruption, i.e. inputs It was mentioned that the source was remote from the farm.


 
Constraints in marketing and selling of Chilli
 
As it can be seen from the Table 13 that in chilli marketing, the major constraint in chilli marketing was less price received followed by labour problem, commission problem, delayed in getting payment, spoilage of fruits, higher cost of transportation, large space required for post-harvest handling, distance market, lack of market information and infrastructure problem. These findings were similar with Talathi et al., (2016). 

Out of total cost of cultivation, cost of human labour was the highest followed by cost of manure and pesticide. The total cost of cultivation in chilli was ₹ 201738.0 per ha while the gross income from chilli production was ₹ 485369.6. Benefit-cost ratio over total cost was 2.41 indicating that if a farmer invests one rupee in chilli cultivation he would be able to get ₹ 2.41 in return. Among all the marketing channels found in study area, channel III was the most efficient marketing channel due to less numbers of intermediaries involved in it. The labour shortage was the major problem in both production and marketing of chilli.  
 
Suggestions
 
The benefit-cost ratio in chilli cultivation is more than one indicating that there is need to encourage the cultivation of this crop so the farmers can get higher returns from the crop. Channel III was the most efficient channel so it is suggested that there is need to focus on channel III, so that farmers can get more return from their produce.

Authors have no known competing financial interests OR non-financial interests OR personal relationships that could have appeared to influence the work reported in this paper.