Arecanut and Cocoa Production and Marketing Aspects

Custom Student Mr. Teacher ENG 1001-04 27 October 2016

Arecanut and Cocoa Production and Marketing Aspects

Arecanut is an important commercial crop in India which plays a prominent role in the religious, social and cultural functions and economic life of people in India. The present production of arecanut in the world is about 0.854 million tons from an area of 0.702 million hectares. India ranks first in both area and production of arecanut Arecanut industry forms the economic backbone of nearly six million people in India and for many of them it is the sole means of livelihood. Both area and production of arecanut in India have increased tremendously during the last three decades. The area under arecanut in India has increased from 0.167 million hectares during 1971 to 0.4 million hectares by the year 2010-11 with an overall growth rate of 2.2%. During the same period the production has increased more than 3 times from 0.141 million tons to 0.478 million tones with a growth rate of 3.2%.

As of now, cocoa is one of the important commercial plantation crops in India and it is mainly cultivated in four major southern States viz., Kerala, Karnataka, Tamil Nadu and Andhra Pradesh. India produces 12954 tonnes of cocoa from an area of 46318 ha (DCCD, 2010). The cocoa industry in the country had expanded to a considerable extent in recent years. At present, more than 15 industrial entrepreneurs and firms existing in the field demand nearly 30,000 tonnes of cocoa beans, of which the present domestic availability is only about 40 percent. Considering the market growth in the chocolate segment in India, which is about 20 percent per annum, cocoa, has a great potential to develop in future years. Recent area expansion in Andhra Pradesh (16969 ha) can be taken as a positive response to the demand-supply fissure. We can further, strengthen the Transfer of Technology (ToT) activities to encourage the cocoa cultivation as an intercrop in arecanut and coconut to meet the challenges regarding supply of cocoa in the future.

Economic impact analysis of arecanut based cropping system An impact analysis of arecanut based cropping systems in South Karnataka has been carried out. It was observed that, farmers are predominantly following three cropping systems which were, 1) arecanut + banana 2) arecanut + cocoa and 3) arecanut + banana + pepper. To estimate the economic impact of different cropping systems, we have calculated the average cost per hectare, average yield and the net returns of each system. The quantification of economic impact of each system has been worked out by combining the difference in net returns of each system from the arecanut monocrop, and percentage of adoption of each cropping system. The total economic impact due to adoption of cropping systems in the region was found to be Rs 680 million.

Economic impact analysis of improved arecanut varieties The analysis was based on a field survey of 120 arecanut farmers in South Karnataka. To estimate the economic impact of improved varieties we have calculated the weighed average cost per hectare, weighed yield and net returns of the released varieties. The weights are assigned according to the estimated percentage area of each variety in South Karnataka.

The total area of arecanut in the district was multiplied with the percentage adoption of improved varieties in the region to arrive at the total area under improved varieties. The difference in net returns will give the additional benefit we would have obtained, had the area been under released varieties. It was observed that 13.6% of total area in southern Karnataka is under released arecanut varieties. The economic impact of released arecanut varieties in monitory terms was found to be rupees 141 million per year. The presence of improved varieties was more prominent in the young plantations. The holding wise observations revealed that the presence of released varieties was more in small holding groups.

Cost of production of arecanut and cocoa According to the study conducted by the Institute, the cost of production of one kilogram of arecanut in a well-maintained garden was found to be Rs 104.20 Here we have considered the economic life span of the palm as 35 years and average annual production as 2700 kg/ha The average maintenance cost (from 8th year to 35th year) was calculated at Rs. 168765/ha. The cost of production of cocoa grown in arecanut garden was found to be Rs74.42/kg of dry beans and average annual maintenance cost recorded at Rs 55268/ha.

Marketing The chali and the red are the two main varieties of arecanut consumed by the people mostly as a habit. Chali or the white supari is used mainly in the pan or beedas and the red variety is used both in the preparation of pan and value added products like pan masala, ghutka, sweet supari etc. From production to consumption level both private traders and the co-operatives play an important role in India. Here, the share of the cooperative is around 15 per cent and remaining is under the control of the private traders. Among the cooperatives The CAMPCO, a nodal agency has its own purchasing and sales centres throughout the country

Disposal pattern: A study in Dakshina Karnataka showed that 80 percent of the farmers, who dispose the produce immediately after harvest, were small cultivators. Remaining 20 per cent who disposed the produce when the prices in the market are favorable, were large farmers. It was observed that indebtedness and lack of proper infrastructure facilities for storage compel the small farmer to dispose the produce at the earliest. The majority of the farmers (63%) sold chali supari to traders, who reportedly paid two rupees extra of the market rate per kg of chali sold.

Stagnating market prices and increasing cost of production, especially the skilled labour charges in the recent times have generated livelihood concerns of arecanut farmers in India. Surging imports, which is around 12 percent of the domestic production, certainly has a significant role in price stickiness. Market studies reveal that around 75 percent of the arecanut trade is in the hands of private trades, which has provided ample scope for hoarding and resulted in market imperfections and low price realization.

In the case of cocoa the current supply is only around fifty percent of the actual domestic demand and hence, there exist a huge scope for area expansion with the supply of elite seedlings/grafts. Effective dissemination of technologies through trainings, on-farm trials, demonstrations and seminars are being carried out by the Institute. Nevertheless, the price stagnation of the crop for a long period has caused disinterest among arecanut farmers. Therefore, in the case of arecanut a vicious cycle was formed in the pattern of ‘depressed prices + shortage of labour–crop negligence–diseases /pest attack–low yield/production’ and this in turn especially has adversely affected the small and marginal arecanut farmers who are solely dependent on the crop.


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  • University/College: University of Chicago

  • Type of paper: Thesis/Dissertation Chapter

  • Date: 27 October 2016

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