AN ECONOMIC ANALYSIS OF TOMATO HYBRID SEED … · 2018-12-29 · an economic analysis of tomato hybrid seed production under contract farming in haveri district nagaraj m. sannamani

AN ECONOMIC ANALYSIS OF TOMATO HYBRID SEED PRODUCTION UNDER CONTRACT FARMING IN

HAVERI DISTRICT

NAGARAJ M. SANNAMANI

DEPARTMENT OF AGRICULTURAL ECONOMICS COLLEGE OF AGRICULTURE, DHARWAD

UNIVERSITY OF AGRICULTURAL SCIENCES, DHARWAD – 580 005

JUNE, 2014

ii

AN ECONOMIC ANALYSIS OF TOMATO HYBRID SEED PRODUCTION UNDER CONTRACT FARMING IN

HAVERI 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

NAGARAJ M. SANNAMANI


UNIVERSITY OF AGRICULTURAL SCIENCES, DHARWAD – 580 005

JUNE, 2014

iii


UNIVERSITY OF AGRICULTURAL SCIENCES, DHARWAD

CERTIFICATE

This is to certify that the thesis entitled "AN ECONOMIC ANALYSIS OF

TOMATO HYBRID SEED PRODUCTION UNDER CONTRACT FARMING IN HAVERI

DISTRICT" submitted by Mr. NAGARAJ M. SANNAMANI, for the degree of MASTER OF

SCIENCE (AGRICULTURE) in AGRICULTURAL ECONOMICS, to the University of

Agricultural Sciences, Dharwad is a record of research work done by him during the

period of his study in this University under my guidance and supervision and the

thesis has not previously formed the basis for the award of any degree, diploma,

associateship, fellowship or other similar titles.

DHARWAD

JUNE, 2014 (S. M. MUNDINAMANI) CHAIRMAN Approved by :

Chairman :

Members : 1.

2.

3.

4.

(JAGADEESH G. ANGADI)

(V. K. DESHPANDE)

(H. BASAVARAJA)

(S. M. MUNDINAMANI)

(R. M. HOSAMANI)

iv

Acknowledgement

“Gratitude takes three forms, A feeling from the heart, an expression in words and a

giving in return……..”

At last the moment has come to look in to deeper layer of my heart which is filled with

the feeling of togetherness and loveliness; consolation and satisfaction. Some are permanent

and some are momentary but both involve a member of the persons to whom I acknowledge

my warm regards.

I have no words to express my heartfelt love and affection for persistent

encouragement and blessing of my parents Shri. Malleshappa, Smt. Mallamma and my dear

sister Mamatha, for their never ending support, affection, love and sacrifice that forms the

soul for this body and responsible for what I am Today. I am eternally grateful to them for all

that they have done for me.

It is always immense and immeasurable pleasure to applaud the auspicious person,

who has the character of kind benevolence, consummate and care taking affair in other

welfare. Here I am in hunt to express my pleasurable feelings and thankfulness to my well

wisher cum chairman of advisory committee, Dr. S. M. MUNDINAMANI, Professor,

Department of Agricultural Economics, Univ. Agric. Sci., Dharwad, for his thought provoking ,

inspiring and valuable guidance in planning and execution of my research work.

My diction is too poor to translate my gratitude to Dr. H. BASAVARAJA, Professor

and University Head, Dept. of Agricultural Economics, Dr. JAGADEESH G. ANGADI,

Professor and Head, Department of Agricultural Extension Education, Dr. V. K.

DESHPANDE, Associate Professor, Dept. of Seed Science and Technology and Dr. R. M.

HOSAMANI, Associate Professor, Dept. of Horticulture who served as members of my

Advisory committee for their sagacious suggestion and constructive criticisms during the

period of study and in improving the manuscript

I am highly indebted to Dr. L. B. Kunnal, Professor, Dr. S. B. Hosamani, Professor

and Head, Department of Agricultural Economics, Dr. S. S. Guledagudda, ADR, Bijapur, Dr.

G. N. Kulkarni, Dr. (Smt.) Jayashri A. Handigol Smt. R. l. Bilagi, Associate Professors,

Department of Agricultural Economics, and Dr. P. A. Kataraki, Professor, College of

Agriculture, Dharwad, for their help and encouragement during the study and research work.

This thesis has come to reality because of the wonderful friends of my life thanks

from the core of my heart, to all of them and would like to register for their wonderful

guidance, extreme patience, sound and faithful advice, constant encouragement, care, love

and kindness and for all the trouble they took for my sake.

v

I am very glad to mention sincerely the support from my senior friends Shreeshail,

Aravind Kammar, Vinod, Savitha, Netrayani, Pavitra, Vijay, Sachin and Ramachandra,

Pavankumar, Kusuma, and my dear friends Vijay, Vittal, Siddu, Rohit, Sharat, Rudragouda,

Samuel, Basavaraj, Virupaksh, Lakkappa, Mahadev, junior friends Siddu, Praveen, Vinayak,

Shashi, Kadli, and all my UG friends who encouraged me during my post graduation

I convey my whole hearted thanks to Mr. Arjun, Mr. Kalmesh (M/s Arjun Computers)

and Kumbar Binders for his meticulous typing of the manuscript neatly, timely and more vitally

his co-operation and affection towards

………….omission of any names doesn’t the lack of gratitude. Ending inevitable for all good

work it is time to end the acknowledgement.

DHARWAD

JUNE, 2014 (NAGARAJ M. SANNAMANI)

vi

Affectionately Dedicated to

My Beloved Parents,

Sanju, Manju &

Dear Mamatha

vii

CONTENTS

Sl.

No. Chapter Particulars

CERTIFICATE

ACKNOWLEDGEMENT

LIST OF TABLES

LIST OF FIGURES

LIST OF PLATES

LIST OF APPENDICES

1. INTRODUCTION

2. REVIEW OF LITERATURE

2.1 Cost and returns in seed production

2.2 Resource use efficiency in seed production

2.3 Income and employment generation through contract

farming

2.4 Problems in contract farming

3. METHODOLOGY

3.1 Description of the study area

3.2 Sampling procedure

3.3 Nature and sources of data

3.4 Analytical tools and techniques

3.5 Definition of the terms and concepts

4. RESULTS

4.1 Socio-economic characteristics of the farmers

4.2 Input use pattern in tomato hybrid seed production

4.3 Cost and returns in tomato hybrid seed production

4.4 Resource use efficiency in tomato hybrid seed production

4.5 Pattern of income and employment in tomato hybrid seed

production

4.6 Problems faced by the contract farmers and the contract

firms

viii

5. DISCUSSION





5.5 Pattern of income and employment in tomato hybrid seed

production

5.6 Problems faced by the contract farmers and the contract

firms.

6. SUMMARY AND POLICY IMPLICATIONS

REFERENCES

APPENDICES

ix

LIST OF TABLES

Table No.

Title

3.1 Demographic profile of study area

3.2 Land use pattern in the study area

3.3 Sources and pattern of irrigation

3.4 Cropping pattern followed in Haveri district

3.5 Selection of villages and sample farmers

4.1 General features of sample respondents

4.2 Average land holding pattern of sample farmers

4.3 Cropping pattern of the sample farmers in the study area


4.5 Cost incurred in tomato hybrid seed production

4.6 Returns realised in tomato hybrid seed production

4.7 Production function estimates in tomato hybrid seed production

4.8 Allocative efficiency of resources in tomato hybrid seed production

4.9 Pattern of employment in tomato hybrid seed production

4.10 Problems faced by contract farmers in Production, Processing and Marketing of tomato hybrid seeds

4.11 Problems faced by contracting firms

x

LIST OF FIGURES

Figure

No. Title

3.1 Map showing the taluks selected for the study

3.2 Schematic representation of Sampling Plan for the study

4.1 Average land holding pattern of sample farmers

4.2 Cropping pattern of the sample farmers in the study area

4.3 Cost incurred in tomato hybrid seed production

xi

LIST OF PLATES

Figure

No. Title

1. Tomato hybrid seed production under open field

2. Labours engaged in tomato hybrid seed production

3. Tomato hybrid seed production under shade net

4. Tomato hybrid seed production under polyhouse

xii

LIST OF APPENDICES

Appendix No.

Title

I. Interview schedule for contract farmers

II. Interview schedule for contracting firms

III. Factors influencing selection of seed growers

IV. Factors considered by the firms for selection of the farmers in tomato hybrid seed production

1. INTRODUCTION

Around 70 per cent of India’s poor live in rural areas; and tackling poverty

implies addressing the problems faced by the rural poor. The majority of these

people are farmers who depend on agriculture and the related activities for their

sustenance. In many situations, small farmers are able to make efficient production

choices, if they are not constrained in choosing optimal input and output levels.

Increased production does not necessarily lead to higher incomes, particularly

where prices fluctuate widely, markets are unorganized and inefficient, market

access is limited, or bargaining power is weak. There is an intense feeling that in

the era of liberalization and globalization, small farmers are being completely

neglected and marginalized from high value agribusiness activities and hence are

unable to derive maximum benefits due to their fragmented and uneconomic size of

holdings and inadequate access to external inputs and services. Against this

backdrop, vertical coordination through contractual arrangements is necessary to

link product characteristics and production processes to consumer preferences.

This has given rise to the concept of ‘Contract Farming’.

Contract farming can be defined as an agreement between farmers and

processing or marketing firms for the production and supply of agricultural products

under forward agreements, frequently at predetermined prices.

It is a form of vertical integration within agricultural commodity chains, such

that the firm has greater control over the production process, as well as the

quantity, quality, characteristics and the timing of what is produced. The

conventional approach to vertical integration has been for firms to invest directly in

production through large-scale estates or plantations (especially for traditional

tropical commodities such as tea, banana and sugarcane). Contract farming, in its

various forms, allows a degree of control over the production process and the

product without the firm directly entering into production.

Contract farming is the contractual arrangement between farmers and a

company, whether oral or written, specifying one or more conditions of production

and or marketing (Roy, 1963). The new agricultural policy of the Government of

India is aimed at promoting growth of private sector participation in agribusiness

2

through contract farming, which accelerates technology transfer and capital flow

and thus, provides assured markets for crops. Contracting leads to environmental

equity, food security and sustainability. It provides better income to farmers and

generates more employment for labour through introduction of new crop

technologies and by providing markets and inputs. In fact, contract farming as a

system would affect the producers positively or negatively depending on the context

of the economy (Singh, 2000).

Karnataka is emerging as one of the leading states in contract farming in

vegetables with around 22 companies (both domestic and multinational) offering

contract farming for a variety of vegetables. Contract farming of fresh vegetables is

concentrated in south Karnataka. Baby corn is the new crop introduced in 1999 by

contract farming firms. Similarly, green chilli production under contract farming

started in 2002. High-value agriculture is associated with vertically coordinated

marketing channels, super markets and export-oriented agribusiness. However,

impact of vertical coordination on small farmers has not been adequately studied in

India.

Increasing production is the talk of the day which is one of the ways and

means for the economic development of the country. The significant increase in

agricultural production depends largely upon employment of new technology. The

process of modernizing Indian agriculture primarily involves the intensive use of

non-conventional inputs such as quality seeds, chemical fertilizers, pesticides,

herbicides, irrigation, farm machinery and a network of research and extension

infrastructure. These factors enable the country to make its agriculture more

productive and cost competitive especially in the scenario of world agricultural trade

under WTO.

Historical background of contract farming

Contract farming first began in Taiwan in 1895 by the Japanese government

for sugar production. US company used contracts in banana plantation in Central

America, whereas in India it is gaining importance in recent times Indian Tobacco

Company (ITC) by introducing Virginia tobacco in coastal Andhra Pradesh in

3

1920’s, made an entry into contract farming for the first time in the country. Since

then, contract farming is expanding steadily in India. More prominent examples with

respect to contract farming in India are tomato cultivation in Punjab, Haryana and

Rajasthan; Sunflower Vegetable seed production and gherkin production in

Karnataka. The intensity of contractual arrangement varies according to depth and

complexity of the provisions such as market provision, resource provision and

management specifications. Contract farming has existed in Karnataka for decades

mainly in sugar mills where farmers have been growing sugarcane at the pre-

guarantee of a specified price. In the same manner, corporate sector has

introduced varieties of horticultural produce such as potato, chilli, tomato and

gherkin and seed production of different crops.

Benefits of contract farming

Contracts are generally signed at the time of planting and specify how much

produce the company will buy at what price. Often the firm provides credit, inputs,

farm machinery rentals, technical advice and retains the rights to reject the

substandard produce (Glover, 1990).

i) To farmers

There is an assured market of their produce, which will eliminate the risk of

price fall during glut. Information on market price is made available ex-ante. This

instills confidence among the contract farmers. It saves the difficulties involved in

timely transportation and eradicates the exploitation by the middlemen. Farmer can

receive assistance from the processor in the form of technical service and input

supply on credit with or without interest cost. Companies often provide credit to the

farmers, which reduce the burden of self expenses to the farmer. This enables the

farmers to escape from the evils of private moneylenders. Farmer is assured of

better returns compared to other field crops as the companies offer relatively better

prices.

ii) To firm

The companies know the acreage planted and is assured of the grower’s

output thus reducing its supply risk. The company is in control of the contract

4

provision and stipulations that can encourage quality and production through the

terms of agreement. The companies know their approximate cost of raw product in

advance. As better growers tend to contract with the same company over several

years, some stability in company-grower relationship is attained. Since, some of the

crops have no/less domestic market (at present), the farmers have no option to sell

their produce outside and the company is assured to get regular supply of the

produce.

Importance of seed production

Seed is a vital input and dynamic instrument for increasing agricultural

production. It has been one of the miraculous inputs responsible for green

revolution in India as well as elsewhere. The green revolution has brought

prosperity, stability and confidence not only in agriculture, but also in the economic

well being of the country. The seed acted as a catalyst to trigger off changes in

several sectors.

It has been reported that genetically good quality seed alone can increase

crop production by 20 per cent. Farmers in India knew the value of good seed from

time immemorial and have contributed for improvement of seeds through selection

and cultivation. Seed is a basic input and forms only a small part of the total

cultivation expenses. Yet, without good seed the investment on fertilizer, pesticides

and other inputs will not pay the required dividend. In fact, seed is the real vehicle

of production and other inputs like water and fertilizers can be regarded as fuel.

Quality seed production is a specialized activity and a portion of crop produce

retained by the farmer as seed cannot substitute for quality seed since such seed is

likely to be of genetic purity and may suffer from lack of desired qualities.

Tomato

Tomato (Lycopersicon esculentum) is a solanaceous self-pollinated

vegetable crop. It occupies the largest area among the vegetable crops in the world

after potato. Tomato fruit can be consumed either fresh, cooked or in the form of

processed products such as jam, jelly, juice, ketchup, sauce etc. It is considered as

‘poor man’s apple’ because of its attractive appearance and very high nutritive

value, containing vitamin A, vitamin C and minerals like calcium, potassium etc.

5

Apart from these, it also contains organic acids like citric, malic and acidic acids

which found in fresh tomato fruit, promotes gastric secretion, acts as a blood purifier

and works as intestinal anti-septic. Tomato is a native to Peruvian and Mexican

region. It was introduced by Portuguese to India.

Method of tomato hybrid seed production

Hybrid tomato varieties have many advantages compared to open-pollinated

varieties. Hybrids usually produce higher yields. Many hybrids have better fruit

quality and disease resistance. With all of these advantages, many farmers prefer

to grow hybrid seeds inspite of the higher input costs. The demand for hybrid

tomato seeds can open a new market for growers interest in seed production.

Tomatoes grow best in the dry season under day temperatures of 21-25°C

and night temperatures of 15- 20°C. Humidity levels higher than 60per cent at the

time of fruit maturity will increase disease problems and reduce seed yields.

Optimum soil pH for tomato hybrid is 6.0 to 7.0. The female flower must be

pollinated by the pollen from the male line. To prevent self-pollination, remove the

stamens from the flower buds of the female line before they shed their pollen. This

process is called emasculation. The best time for pollen collection is during the

early morning before the pollen has been shed. Pollination is usually done three

times weekly over a three to five week period.

Hybrid fruits are easily recognized by their cut sepals. Remove the naturally-

pollinated (non-hybrid) fruits, if any, from the female plants. Harvest the ripe fruits

and keep them in nylon bags. Crush the fruits by trampling with feet. Put the bags

of crushed fruits into big plastic containers and ferment to separate the gel mass

embedding the seeds. If temperature is above 25°C, one day of fermentation may

be sufficient. If cooler, two days of fermentation may be needed.

After two days of fermentation, wash the seeds by putting them in an open

plastic container. Then fill the container with water and stir the seeds to allow the

pieces of flesh and skin sticking on the seeds to float. Repeat the washing several

times, adding fresh water to the container every time until all the flesh and gel are

completely removed, leaving clean seeds at the bottom. Drying can be done for

three to four days in shade, maintaining a temperature of 28-30°C.

6

Importance of the present study

The private seed companies in seed production resort to contract farming

mainly to have assured supply of genuine seed material in required quantity at the

right time, which has been produced under their supervision. On the other hand, the

farmers are interested to enter into contract mainly to minimize the price risk and

also to reap higher profits out of this seed production activity over commercial

production of crops

Tomato hybrid seed production under contract farming is highly profitable,

even small farmers can practice it. Risk involved due to fluctuation in market price is

minimized through contract farming. As tomato hybrid is a highly valuable crop, it

helps the farmers to get the loan from the commercial banks. Farmer is assured of

better returns compared to other field crops as the companies offer relatively better

prices. The farmers will get all required things for cultivation of tomato such as

inputs, technology and extension services in one roof. Keeping in view the

importance of tomato hybrid seed production under contact farming and its

influence on socio economic status of farm households, the present study was

taken up with the following specific objectives.

Objectives of the Study

1. To estimate cost and returns in tomato hybrid seed production;

2. To analyse the resource use efficiency in tomato hybrid seed production;

3. To estimate the extent of income and employment generation through

contract farming in tomato hybrid seed production; and

4. To analyse the problems faced by the farmers and firms in production,

processing and marketing of tomato hybrid seeds.

Hypotheses

1. Tomato hybrid seed production is profitable under contract farming.

2. Resources are used optimally in tomato hybrid seed production.

7

3. Tomato hybrid seed production and processing generates substantial

employment opportunities and income.

4. Farmers and firms are facing many constraints in production, processing and

marketing of tomato hybrid seeds under contract farming.

Limitations of the Study

Despite the advantages, contract farming has many constraints. Though

contract farming is basically a way of allocating risk between the firm and its

farmers, the distribution of risk depends largely on factors such as bargaining

power, availability of alternatives or access to information. In short term crops such

as vegetables, farmers tend to divert their produce to the open market rather than

supply to the contracting firm when the prices are high. The cost calculations of the

firm crumble, as they are forced to arrange supply of raw materials from alternative

sources with attendant uncertainties. Similarly, in long-duration crops such as

plantation crops, the firms often fail to honour the contract, as they know that

farmers have no alternative but to sell the products to them at lower prices.

The area, production and marketing of tomato hybrid seed production have

not been documented by any institution or government. Thus, the production and

requirement estimates are made to suffer from lack of statistics. The existing

marketing network for tomato hybrid seeds produced is generally more confined

and restricted.

2. REVIEW OF LITERATURE

In this chapter, with a view to evaluate the objectives of the study, findings

of some of the earlier research studies have been reviewed. This would enable the

researcher to collect information and subject them to sound reasoning and

meaningful interpretation. It was hoped that such a review of literature would

provide a basis for either conforming the earlier results or contradicting them and

there by suggesting the points for further improvement.

Keeping in view the objectives of the study, the reviews are presented under

the following headings:



2.3 Income and employment generation through contract farming



Madalia and Charan (1974) studied costs and returns in H-4 cotton seed

production in Gujarat and reported that the average cost of seed production was

Rs. 44,688.80 per hectare. The labour charges for crossing operation and cost of

crossing material accounted for 45.26 and 12.73 per cent of the total cost,

respectively. The total quantity of certified seeds produced per hectare was

1225.05 kg. The average net returns from seed production amounted to Rs.

42,549.77 per hectare. Thus, per kg cost and net profit were estimated to be Rs.

35.61 and Rs. 33.90, respectively.

Mallikarjunaiah et al. (1974) studied the economics of hybrid jowar seed

production and estimated the average cost of hybrid jowar seed production at Rs.

1,722.5 per acre with an average yield of 7.74 quintals of quality seeds. The net

returns were Rs. 3,686.58 per acre, while net return per rupee of investment was

Rs. 2.14. The average cost of production per kg of seeds was Rs. 1.53.

Rakhunde (1974) studied the economics of the hybrid cotton seed

production in Parbhani district of Maharashtra. He worked out the input: output

ratio of H-4 cotton seed production to be 1:1.71. The average yield was 1330.22 kg

9

per hectare which was obtained by using 522.95 kg nitrogen, 194.00 kg of

phosphorus and 153.42 kg of potash. The per kg cost of seed was calculated to be

Rs 34.96 while net return of Rs. 24.04 per kg which was obtained by selling the

certified seed at the rate of Rs. 60.00 per kg.

Srinivasan and Gururajan (1974) studied the cost of production of hybrid

cotton seed where male sterile line was used and they found that the actual cost of

a kg of hybrid cotton seed worked out to be Rs. 22.00 only.

Arunkumar (1976) studied the economics of hybrid jowar seed and potato

production (a major competitive crop) in Devanahally taluk of Bangalore district

and indicated that the total cost of hybrid jowar seed production was Rs. 6,242.75

per hectare, while it was Rs. 10,354.99 for potato. Seed was a major item of cost in

potato cultivation (26per cent). Manures and fertilizers together accounted for

nearly 33 per cent of the total cost of production of both jowar and potato. The

gross return from jowar was Rs. 7,997.40 and the net return was Rs. 1,981.53. In

potato, these figures were Rs. 7,997.40 and Rs. 1,754.65 per hectare,

respectively.

Rajmane (1979) worked out the economics of seed production of Varalaxmi,

Godavari and H-4 cotton in Parbhani district of Maharashtra. The cost per quintal

of seed in Varalaxmi, Godavari and H-4 were Rs. 5,970.35, Rs. 6,116.81 and Rs.

6,625.49, respectively and corresponding figures of physical yield per hectare were

835 kg, 777 kg and 515 kg, respectively. The net profit at cost C from the seed

production of Varalaxmi, Godavari and H-4 were Rs. 12,772.39, Rs 10,747.35 and

Rs. 7,078.73 in that order.

Patel and Dholaria (1981) analysed economics of hybrid cotton seed

production in Gujarat. It was revealed that the average cost of a kg of seed worked

out to be Rs. 53.60, Rs. 36.90 and Rs. 30.97 in the year 1971-72, 1972-73 and

1973-74, respectively. The labour together with processing costs alone formed

about two-third of the total cost (cost C) for the three year average. The physical

output were 521.66, 1183.70 and 947.74 kg per hectare for the years 1971-72,

1972-73, 1973-74 and the corresponding figures of gross returns were Rs.

66,780.01, Rs. 82,813.46 and Rs. 80,876.64.

Madalia and Patel (1984) compared the economic performance of seed

production of two important hybrid cotton varieties viz., Hybrid-4 and Varalaxmi

10

grown in Gujarat. They found that the per acre total cost of seed production of H-4

and Varalaxmi cotton during 1978- 79 came to Rs. 23,234 and Rs. 23,101,

respectively and where it was Rs. 24,338 (H4) and Rs. 21,445 (Varalaxmi) during

1979-80. The cost on hired labour in H-4 cotton seed production during 1978-79

was constituted about 46 per cent of the total cost and that for Varalaxmi it was

47.04 per cent. The yields were 842 and 938 kg for H-4 and Varalaxmi during the

year 1978-79 and 828 kg and 872 kg during 1979-80 in that order. They estimated

the ratios of gross return to the total cost and found them to be 1:1.34 and 1:1.29

during the year 1978- 79 for H-4 and Varalaxmi, respectively and corresponding

figures of 1978-80 year were 1:1.27 and 1:1.30.

Anonymous (1990) estimated the cost of hybrid cotton seed production at

research farm of Central Institute for Cotton Research (CICR) Nagpur. It was

reported that the total cost per hectare was around Rs. 60,000. The seed output

under optimum conditions would be 600 to 700 kg per hectare. The cost of

production per kg of seed thus was from Rs. 90 to 130. The market price per kg of

seed realized by the farmer for hybrid cotton seed was around Rs. 150 in public

sector and up to Rs. 300 in private companies.

Mane (1991) examined the economics of production of hybrid cotton seeds

(NHH-44 and PKV Hy-2) in Parbhani district of Maharashtra state and reported that

the total cost of hybrid seed production was Rs. 67,061.62 and Rs. 62,629.44 per

hectare for NHH-44 and PKV Hy-2 cotton hybrids, respectively with an average

yield of 8.78 quintals and 6.62 quintals per hectare of certified seeds of NHH-44

and PKV Hy-2 hybrids, respectively. The net returns at cost D was Rs. 30,458.38

and Rs. 28,148.21 per hectare for NHH-44 and PKV Hy-2 hybrids, respectively.

The per hectare net income realized at cost D was Rs. 30,458 in NHH-44 and Rs.

28,148 in PKV Hy-2 hybrid.

Ramamoorthy (1996) studied the economics of hybrid cotton seed

production in Coimbatore. The study revealed that the hybrid seed producer of

Savitha variety received a net profit of Rs. 2.37 per rupee invested, whereas the

variety LRA 5166 seed producing farmers received a net profit of Rs. 0.63 per

rupee invested.

Naik et al. (1996) studied economics of tomato seed production in Dharwad

district. The study revealed that the total cost of production per acre of tomato seed

11

production increased with an increase in the size of holding. The total returns from

per acre of tomato seed production was Rs. 45,800 for medium farmers, Rs.

44,150 for small farmers and Rs. 43,485 for large farmers. Net profits were the

highest in the case of medium category (Rs. 33,215) farmers, followed by small

(Rs. 32,465) and large (Rs. 30,779) category farmers. This was due to lower cost

of production and higher productivity in smaller sized farms compared to the larger

ones.

Anonymous (1997) studied the cost and returns in summer cotton in Tamil

Nadu and reported that there was a decline in yield and increase in cost of

cultivation. The decline in hybrid yield was alarming at 16 per cent. The farmers

price and costs showed that the increase in farm price hectares been

compensated by an equal increase in cost of cultivation between 1976 and 1996.

Narayanakutty et al. (1998) studied the economics of vegetable seed

production at Agricultural Research Station, Mannuthy of the Kerala Agricultural

University during the period 1994-95 to 1996-97. The cost of cultivation of

vegetable seeds showed a wide variation from Rs. 3,09,218 in the case of okra to

Rs. 86,416 per hectare in melon. Bulk of the cost in all the crops was accounted by

the labour charges. The net returns for okra were Rs. 3,03,282 and Rs. 23,588 for

melon. The per kg cost of seed production was Rs. 252.42 and Rs. 392.79 for okra

and melon, respectively. The benefit cost ratio, which was 1.98 and 1.27 for okra

and melon, respectively indicated that seed production of okra is more profitable

than melon.

Ramamoorthy (1999) studied the cost of seed production for summer

cotton. He observed that for every one rupee invested, the farmer, seed company

and retailers realized a profit of 71 paise, Rs. 1.76 and 11 paise respectively.

Kannababu and Rana (2003) studied the costs and net returns of sorghum

hybrid (CSH 15R, CSH 16, CSH 18 and CSH 19R) seed production in an

experimental station in India during the rabi season of 2000-01. The estimated

variable cost and fixed cost of sorghum hybrid seed production per hectare were

Rs. 29,280 and Rs. 7,020, which were 81 and 19 per cent, respectively, of the total

cost of seed production per hectare (Rs. 36,300). Human labour and material

constituted about 57 per cent of the variable cost. The total value of the produce

12

was estimated to be Rs. 52,750. The net benefit/cost ratio was 0.45, with net

income of Rs. 16,450 per hectare for sorghum hybrid seed production.

Gnanakumar (2007) studied the financial feasibility of investments in

contract poultry farming in Tamil Nadu region. Fifty integrated poultry were

selected randomly in Coimbatore district. He concluded that on an average,

farmers received a growing cost Rs. 2.36 per Kg of bird. The study also calculated

the profitability per chick, which was found to be Rs 1.50 in the beginning. The

study also estimated the returns on investment that was found to be 11.5 per cent

in the beginning and increased up to 20 per cent.

Naduvinmani (2007) studied the economics of red banana production under

contract farming in Karnataka found that the total cost of red banana production

per hectare was Rs. 1,30,991 while the gross and net returns were Rs. 4,28,630

and Rs. 2, 97,639 respectively. The benefit cost ratio for red banana was 3.28.

Zakir Siraz (2008) presented a detailed structure on management of

contract farming in livestock: a case of poultry industry. Primary data were

collected from the selected 30 poultry farmers in each category, spread across two

districts i.e., Bangalore rural and Dharwad in Karnataka state. Under cost

comparison in case of contract farming, the total cost incurred was Rs. 3.75 per

bird. In case of non-contract, the total cost incurred per bird was Rs. 58.31. The net

return obtained per bird was Rs. 1.94 in case of contract farmers and it was Rs.

1.23 in case of non-contract farmers. The meat feed price ratio was 1.74 in

contract arrangements and it was 1.56 in case of non-contract. Similarly, the

Benefit: Cost ratio in case of contract poultry farming was 1.52 and it was 1.02 in

case of non-contract farming.

Mundinamani et al. (2009) reported the cost and returns of major crops

under contract farming in Northern Karnataka. The productivity of tomato was

found to be 84 quintals per hectare, which resulted in a gross return of Rs. 1,

32,266 with net return of Rs. 92,419 per hectare. The average yield of hybrid bendi

was 6.4 quintal per hectare and net returns realized was Rs. 37,329 per hectare

and the net return of cotton was. Rs 68,125 per hectare with yield of 4.21 quintal

per hectare. The benefit: cost ratio of tomato, bendi and cotton were 3.29, 2.4 and

2.83, respectively.

13

Sridhara and Hosamani (2010) Economics of contract farming –a case

study of chilli in Bagalkot district of Karnataka. The results revealed that per acre

cost of chilli cultivation estimated to be Rs. 38721.36, Rs. 41238.37 and Rs.

39882.74 in Bilagi, Mudhol and overall study area respectively. The per acre yield

of chilli produce obtained were 1122.98, 1088.67 and 1096.49 Kgs in Bilagi,

Mudhol and overall study area respectively by the chilli farmers. The marginal

productivity analysis indicated that there is a scope for reorganizing the resources

like seeds, bullock labour and plant protection chemicals. Climatic factor, improper

identification of pest and disease, electricity problem and non- existence of crop

insurance were the problems confronting the chilli farmers.

Patil (2011) conducted the study to examine the cost and returns of

production of pigeon pea under transplanted and conventional methods. The study

revealed that the cultivation of pigeon pea in transplanted method was found to be

more profitable compared to conventional method. Total cost of cultivation in

transplanted method and conventional method were Rs. 39,382.31 per hectare

and Rs. 30,819.53 per hectare respectively. Net returns were found to be higher in

the case of Transplanted system (Rs. 54,103.25/ha) than in conventional method

(Rs. 25,562.78/ha).

Rithesh (2013) conducted a study to compare the cost and returns of

sugarcane processed for Sugar and Jaggery. The study revealed that the cost

incurred by the sample farmers in cultivating sugarcane for sugar and jaggery

preparation was Rs. 56,723.60 per acre and Rs. 55,942.26 per acre respectively. It

was also noticed that the expenditure on variable cost was higher (Rs. 46,058.72

per acre) for farmers growing sugarcane for sugar production and also for farmers

growing sugarcane for jaggery preparation (Rs. 45,277.38 per acre). The share of

the fixed cost in total cost of cultivation was Rs. 10,664.88 per acre accounting for

18.80 per cent for farmers growing sugarcane for sugar production where as the

share of the fixed cost in total cost of cultivation was Rs. 10,554.44 per acre

accounting 18.90 per cent for farmers growing sugarcane for jaggery preparation.

In case of sugarcane grown for sugar purpose, the gross returns and net returns

were found to be Rs. 1,18,750.00 per acre and Rs. 62,026.44, respectively where

as in case of sugarcane grown for purpose of jaggery, the gross returns and net

returns were found to be Rs. 2,92,980.00 and Rs. 1,42,095.30, respectively.


14

Srikanthamurthy (1986) studied the productivity of resource use in two

major food crops (Ragi and Paddy) in Bangalore district. Cobb-Douglas production

function was fitted and results indicated that marginal farmers used nutrients in

excess.

Muralidharan (1987) studied the resource use efficiency in rice production in

Kerala, employing the Cobb-Douglas production function. The adjusted R² was

0.84 indicating that 84 per cent of the variation in yield of paddy is explained by the

estimated production function. The coefficient of land and human labour were

positive and significant at one per cent probability level.

Deshmukh et al. (1991) used Cobb-Douglas production function to study

resource use efficiency under different farming systems. Production elasticities of

gross cropped area and expenditure on manures and fertilizers were relatively

higher on irrigated farms as compared to rainfed farms under the bajra-based

farming system.

Balappa Shivaraya et al. (1998) fitted a modified Cobb-Douglas type of

production function to determine the resource use efficiency in the production of

red gram, in Gulbarga district. The study stated that land and fertilizers were found

to influence the production significantly for both types of farmers, effect of plant

protection chemicals was negative and statistically significant in non-IPM farmers

resulting in negative returns. In IPM farmer’s effect of plant protection chemicals

was positive and the ratio (1.023) of marginal value product to marginal factor cost

was nearer to one clearly indicating its optimal use in red gram production.

Naik et al. (1998) analyzed the resource use efficiency and productivity of

various factors involved in onion production using Cobb-Douglas production

function. They observed that regression coefficient for land and farmyard manure

was positive and highly significant.

Dyammannavar (2000) in his study on economics of gherkin production and

trade in Haveri district employed Cobb-Douglas production function. The

regression co-efficient of bullock labour (0.2338) and FYM (0.4805) were found to

be statistically significant indicating their crucial role in gherkin production. The

MVP to MFC ratio was more in case of bullock labour, FYM, staking material and

seeds. This indicated that there is an opportunity to maximize returns by using

more of these resources.

15

Dileep et al. (2002) examined resource use efficiency of contract farms and

non-contract farms in tomato of Haryana state, India. Data was collected from total

sample size of 100 farmers of different size groups of Ellenabad block of Sira

district during 1999-2000. They fitted Cobb-Douglas production function model and

obtained allocative efficiency based on marginal value productivity. The results

showed that there existed a scope to increase the production of tomato by

increasing the use of critical inputs particularly fertilizer, irrigation and plant

protection chemicals in the case of non-contract farms whereas the contract

farmers made excessive use of plant protection chemicals.

Sunanda and Narendra (2003) studied the resource productivity of mesta

farms in Srikakulam district of Andhra Pradesh and observed that mesta fiber

accounts for 70 per cent of raw jute. The cultivation involves intensive human

labour in addition to manures and fertilizers, seed and cattle labour. The Cobb-

Douglas production function analysis for these variables indicated constant returns

to scale on all farm size groups. The marginal value product to opportunity cost

ratios for all farm size groups indicated resource use efficiency and revealed the

scope of adjustments and reorganization of resources, so as to obtain higher

returns in mesta cultivation.

Mohan (2009) examined that the production function estimates of IPM

farmers indicated that output elasticities of seed (0.138), human labour (0.148) and

IPM component (0.279) had significant influence on the cotton yield in IPM

farmers. Whereas in non-IPM farmers, chemical fertilizer (0.087) and plant

protection chemicals (-0.047) found to have significant influence positively and

negatively on cotton production in non-IPM farmers.

Jalihal (2009) studied the resource use efficiency in coleus production using

Cobb-Douglas production function. Five variables were used in production function

and these variables explained 82 per cent of variation in the production of coleus

with respect to Semi-lab Pvt. Ltd. contract farmers, the coefficient of labour cost

0.8569 was positive significant at five per cent level, the coefficient of planting

material (1.140) and FYM (1.240) was found to be positive and significant at one

per cent level. In Natural Remedies Pvt. Ltd. the variables explained 89 per cent of

total production, the coefficient of labour cost 0.1875 was positive and significant at

five per cent level, the coefficient of planting material (1240) and FYM (1.310) were

found to be positive and significant at one per cent level.

16

Nethrayini and Kunnal (2010) estimated contract farming of gherkin under

agri export zone in Karnataka- an economic analysis. The results revealed that the

agreement between the farmers and the company was oral and informal for 77.7

per cent of the farmers and for the rest 22.2 per cent, it was written and formal

agreement. The Marginal Value Product (MVP) to Marginal Factor Cost (MFC)

ratio showed that human labour (1.79), plant protection chemicals (3.18) and

staking materials (2.66) were under utilized in gherkin cultivation. The MVP to MFC

ratio for seeds and FYM and fertilizers was negative which indicated the over

utilization of these resources. In gherkin cultivation under contract farming on

sample farms women labour employment (57.24%) was more than men labour use

(42.75%).

Vincent et al. (2010) conducted a study to determine resource use

efficiency, optimal production levels, production systems of small-scale poultry

farmers in Bureti district, Kenya. Primary data were obtained using a set of

structured questionnaires from 300 representative farmers drawn from the study

area using cross-sectional sampling techniques. Data were analyzed by Cobb-

Douglas production function. The results showed that the resources used in poultry

production were underutilized while others were over utilized. The efficiency

indicators for poultry feeds (0.0603) showed that poultry feeds were inefficiently

used. Labour efficiency indicator (-0.091) showed that farmers were not only

grossly inefficient in the use of the resource but also over utilized it while the

efficiency indicator (60.86) for poultry equipment implied the resource was

inefficiently utilized.

David and Shabu (2011) conducted a study to examine the resource use

efficiency in rice production in Kwande Local Government Area of Benue State

Nigeria. The data for the study was collected from 100 rice farmers in the four

districts of the study area using a simple random sampling technique. Cobb

Douglas production function and technical efficiency techniques were used as

analytical tools. The study revealed coefficient of elasticity of Cobb Douglas

production function of 1.3 which implies that rice farmers in the area are producing

in the first stage of production. The technical efficiency estimates reveal that all the

Marginal Physical Productivity (MPPs) were higher than the Average Physical

Product (APPs) which also suggest that, the farmers were producing in the first

stage of production. The study concluded that rice farmers in kwande local

government were technically inefficient in rice production.

17

Rama Rao (2012) in his study entitled that Efficiency, yield gap and

constraints analysis in irrigated vis-à-vis rain fed sugarcane in north coastal zone

of Andhra Pradesh. The economics of yield gap in irrigated and rain fed sugarcane

cultivation have been studied in North Coastal Zone of Andhra Pradesh for the

period 2008–09 by collecting data on various aspects of costs and returns.

Budgeting techniques, cost concepts, benefit cost ratio (BCR), yield gap analysis

and response priority index have been used for the analysis. The study has shown

that the value of BCR is higher for plant crop in irrigated (1.49) than in rain fed

(1.43) regions. The yield gap between irrigated and rain fed regions has been

found to be 67.00 per cent, in which input usage had a higher (41.86%) effect than

cultural practices (25.93%).

Karthick et al. (2013) conducted a study on resource use efficiency and

technical efficiency of turmeric production in Tamil Nadu. The resource-use

efficiency and technical efficiency of turmeric production have been computed

using primary data collected from 90 turmeric growers spread over three blocks in

Dharmapuri district of Tamil Nadu. The study has revealed that planting material,

nitrogen, potash, harvesting and curing cost, machine hours and irrigation have a

positive and significant influence on turmeric yield. Economic efficiency of these

variables, except harvesting and curing cost, is more than one, indicating that

these resources are being used at sub-optimum levels and there exists the

possibility of enhancing the yield of turmeric by increasing their use. The technical

efficiency of about 69 per cent of sample farmers has been found more than 80 per

cent, which indicates the possibility of increasing the yield of turmeric by adopting

better technology.

2.3 Income and employment generation through contract farming

Birari et al. (1991) in their study have examined the pattern of employment

and participation of women in agriculture activities in Maharashtra.The proportion

of family women labour was the highest (14.2%) in western Maharashtra, while the

proportion of hired women labour was the maximum of 65 per cent in Vidarbha

region. Women accounted for 18 per cent of the total labour employment under

special activities such as incidental farm work. Nearly 50 per cent of the labour

requirement for agricultural activities was contributed by woman in the study area.

18

Ponghal et al. (1999) in their study studied the efficiency of men and women

labour in performing different crop production operations in major crops of

Haryana. The study revealed that women labour participation was quite high in

operations like transplanting, weeding and picking.There was no participation of

women labour in irrigation and ploughing operations in all zones of Haryana and

almost in all the crops.

Singh (2000) conducted a study on contract farming of tomato, potato and

chilli revealed that contract farming has led to more employment opportunities.The

labour intensity was much higher than the traditional crops. It varies from 38 labour

days in potato to 67 labour days in other kharif crops.

Singh (2001) examined the supply chain management and role of contract

farming. The researcher highlighted that the services of contract farming system

were advantageous to both the farmers and the company. The impact was clearly

brought out by contract farming. Tomato yields increased three fold (from 16 mt/ha

to 52 mt. /ha), chilli yields increased from 6mt./ha to18 mt./ha, farm incomes

increased by more than 2.5 times, processing season linked to fruit increased from

28 to more than 55days and there was an improvement in the quality of produce.

Tatlidal and Akturk (2004) made a study on comparative analysis of the

contract and non-contract farming models of tomato production in Biga district of

Canakkale province, Turkey. Data for 2002-03 production period was obtained

from a sample of 57 contract farms and 45 non -contract farms. Input use level,

gross-margin and net profit in tomato-growing farms were examined. Farms

operating by the contract farming model utilized more input per unit area, adopt

technological innovations and obtain greater yields of tomato per unit area. The

gross margin of contract farms was 13 per cent while net profit was19 per cent

higher when compared to non-contract farmers.

Vinayaka (2005) reported in maize cultivation about 6.32 man days of

human labour used for land preparation, for FYM and compost transportation and

application 5.96 man days were employed. About 7.96 man days were employed

for sowing. For weeding about 8.92 man days, for harvesting 10.6 man days and

for threshing 13.6 man days were used. Total of 53.36 man days were employed

for different activities of maize cultivation by contract farming.

19

A study by Ramsundharam et al. (2005) on contract farming of cotton in

Coimbatore district of Tamil Nadu revealed that the income obtained by contract

farming was 75 per cent more than non-contract farming.

A study by Jagadish Kumar and Prakash Kumar (2008) in Tumkur district

revealed that the average gross farm income was higher on contract farms (Rs.

1,35,898) than non-contract farms (Rs. 69,498) by about 96 per cent. The per-

year income from crops was higher on contract (Rs 1,24,215) than non-contract

(Rs. 56,4180) farms, the farmer contributing 91.4 per cent and the latter 81.2 per

cent to the gross farm income. The family human labour employed in crop

production and livestock was also more on contract farms than non-contract farms.

It was due to higher cropping intensity and more labour- intensive crops.


Ramamoorthy (1995) studied the major socio-economic constraints in

cotton production and management. The constraints were identified and ranked

through rank analysis. The study identified the major production constraints as

poor quality input supply, inadequate credit supply and high production risk and the

marketing constraints as price fluctuation, storage problems, under weighment and

poor market development.

Naik (1998) identified the problems for operationalization of recommended

technologies in different farming systems in Uttara Kannada district. The problems

faced by the farmers were broadly classified into production, financial, marketing

and infrastructural/ extension problems. Among production problems, non-

availability of plant material and timely availability of fertilizers were common. Major

marketing problems were absence of procurement of food grains and surplus milk,

lack of market information and delay in obtaining sale proceeds. Financial

problems included non-availability of credit facilities while infrastructural or

extension problems were lack of training facilities and field demonstrations.

Key and Runsten (1999) examined the main disincentive for firms to

contract with small holders appeared to be the transaction costs associated with

providing inputs, credit, extension services and product collection and grading.

Many firms had found it easier and more profitable to deal with a few large

growers. The study suggested increasing small holders participation in contract

farming with a renewed effort on the part of growers to organize themselves or to

20

organize with the help of government agencies, non-profit organizations, or the

agro-processors.

Chulaki (2001) identified the problems faced by seed growers in production

and marketing of hybrid cotton seeds in Northern Karnataka. The problems faced

by the farmers were classified into production and marketing problems. Among

production problems, non availability of skilled labour and non-availability of

financial assistance were common.

Arunkumar (2002) opined that major problems faced by the contract farmers

were low contract price and irregular payments. The other problems faced were

unawareness of potentiality of crops, poor technical assistance, manipulation of

norms by firms and higher rejection rate. He also opined that major problems faced

by contract firms were land constraints and fixing of contract price. The other

problems were farmer’s discontent and holding up of vehicles. The contract

farmers try to put lower grade into higher grade and it was difficult to check and

make sure of the grade. Farmers held up vehicles in the villages demanding that

they should be paid higher prices even though agreement does not say so.

Kumar and Singh (2005) studied success and failure of contract farming in

Himachal Pradesh for cauliflower seed production in the agricultural year 2002-

2003. The problems faced were absence of written legal agreement, lack of prior

price information, near monopoly of big firms, deductions made on account of the

moisture content and foreign material in the seed.

Gnanakumar (2007) studied the financial feasibility of investments in

contract poultry farming in Tamil Nadu region. Fifty integrated poultry were

selected randomly in Coimbatore district. The study found out the problems of

poultry farmers that compelled them to enter a contract. Poor income from

traditional agriculture, water scarcity, high market risk in traditional agriculture,

labour crunch and need for more substantial working capital were the primary

reasons that were evolved from the study.

Jagadish Kumar and Prakash Kumar (2008) study revealed that delayed

payment for crop produce, lack of credit for crop production, scarcity of water for

irrigation, erratic power supply and difficulty in meeting quality requirements have

been found to be the major constraints faced by contract farmers. The scarcity of

water for irrigation, erratic power supply, lack of credit for crop production and

21

lower price for crop produce have been identified as major constraints of non-

contract famers. The major constraints expressed by the contracting agencies in

expanding contract farming include violation of terms and conditions by farmers,

lack of proper management by the company, frequent price fluctuations in

international markets and scarcity of transport vehicles during peak periods.

Kanchana et al. (2009) studied the problems faced by contract poultry

farming in Coimbatore district. They found that out of 350 respondents, 169 of the

respondents had ranked low growing charges as first rank, 126 of them had ranked

high electricity charges as second, third rank was given to deduction of tax at

source by 113 respondents and 74 of the respondents had ranked non-availability

of labour as fifth rank.

Jalihal (2009) reported the major problems faced by coleus contract farmer

with respect to contracting companies in Belgaum and Bagalkot. The problems

faced by coleus farmers were delay in payment (75%), breach of contract by

company (55%) and manipulation of norms (50%).

Vijay Kumar and Sonnad (2010) revealed that the major problems faced by

the ashwagandha contract farmers viz. were lack of proper yard stick to measure

quality of the produce which was about 73.33 per cent followed by manipulation by

norms (60.00%), lack of technical assistance (60.00%) and rejection rate (46.00%)

by firms.

Jagadeesh (2011) conducted a study on economic efficiency of contract

farming models in medicinal plants and reported that major problems faced by the

ashwagandha growing contract farmers in case of centralised model were high

rejection rate (80%), followed by lack of credit facility (70%), irregular payment

(60%), low contract price (40%), manipulation of norms by contract farming firm

(30%), non availability of package of practice (25%), lack of technical assistance

(15%) and high cost of planting material (15%).

Kalamkar (2012) conducted a study on Inputs and Services Delivery System

under Contract Farming: a case of broiler farming in districts of Barabanki, Sitapur

and Raebaerli in Uttar Pradesh. He revealed that contract farmers face problems

like delay in supply of inputs, high feed prices, delay in lifting the produce, delay in

payment, low price and sometime even rejection of output. Beside these problems,

low growing charges, delay in providing chicks, delay in providing veterinary

22

services, high visiting charges and deduction of tax at source are some other

problems being faced by the contract farmers.

Prasad et al. (2013) estimated performance and constraints of Gherkin

contract farming in two randomly selected talukas ‘Kunigal’ and ‘Sira’ in Tumkur

district of Karnataka. Karnataka accounts for almost 90 per cent of export of

preserved gherkins. Gherkin cultivation is largely driven through contract farming.

Performance of farmers was measured using structured interview schedule on Five

dimensions such as contract farming, extension, market, economics and social

dimensions. Constraints of gherkin contract farming was measured using principal

component matrix on Six dimensions such as soil and environmental management,

lack of government support in contract management, disease pest complex

management, difficulty in management, timely input and technical know-how

support and high input cost.

3. METHODOLOGY

This chapter outlines brief description of the study area, sampling

procedure, nature and sources of data collected and the various statistical tools

and techniques employed in analysis of data under the following headings.


3.2 Sampling procedure

3.3 Nature and sources of data

3.4 Analytical tools and techniques

3.5 Definition of the terms and concepts


3.1.1 Location of the study area

The study was undertaken in Ranebennur, Hirekerur and Byadagi taluks of

Haveri district. It falls under the Northern Transitional Zone (Zone-8) of Karnataka

state. Geographically it lies within the interior of Deccan Peninsular between 14°19'

and 14°48' North latitude and between 70°15' and 75°50' East longitude. The area

of the district is 4,85,156 hectares and bounded on the North by Dharwad and

Gadag districts, on the south by Shimoga and Davanagere districts, on the East by

Bellary district and on the West by Uttar Kannada district.Dharma, Kumadwati,

Varada and Tunga- Bhadra are the four rivers flowing in the district.

3.1.2 Population and demography

The geographical area of Haveri district is 4, 85,156 hectares spread over in

seven taluks, the district has 691 inhabited villages and 7 uninhabited villages. The

district has seven taluks viz., Haveri, Byadagi, Savanur, Ranebennur, Hirekerur,

Hangal and Shiggaon. The population of district according to the year 2011-12 was

15,98,506 with 1000:957 male to female ratio. Out of this 12,42,442 were in rural

areas and rest were in urban and semi-urban areas. The population density of the

24

25

Table 3.1: Demographic profile of study area

Sl. No.

Particulars

Study taluks Total study area

Haveri district

Ranebennur Hirekerur Byadagi

1. Geographical area (ha) 90475 80694 43656 214825 485156

2. Population (numbers) 335084 231005 141040 707129 1598506

Rural 215393 211819 110977 538189 1242442

Urban 119691 19186 30063 168940 356064

3. Population density (per sq.km) 337 263 293 297 298

4. Literacy rate (%) 79.9 81.6 77.0 79.5 77.6

Male 85.8 88.6 84.6 86.33 84.2

Female 59.2 63.0 69.2 63.8 70.7

5. Net area irrigated (ha) 23891 11882 6380 14051 99028

6. Rain fall (mm) 670.3 925.7 700.0 765.23 791.6

Source: District Statistical office, Haveri (2011-12)

26

district was 298 per sq. km and the growth rate of population in the district was

11.08 per cent. (Table 3.1)

3.1.3 Climate, rainfall and soil type

There are three distinct agricultural seasons in the district viz., Kharif (June-

September), Rabi (October-January) and summer (February-May). The south-west

monsoon commences by the end of the May or early June and continues

intermittently till the end of September. The average annual rainfall in the district is

791.6 mm with average rainy days of 61 and major portion of which received from

southwest monsoon. The average temperature ranged from 16°C to 42°C.

3.1.4 Land use pattern

The total geographical area of the Haveri district is 4,85,156 ha, out of which

the net cultivable area is 3,63,207 ha. The area not available for cultivation is

around 33,096 ha. About 17,445 ha of land is fallow, 5793 ha is barren land and

47,454 ha is under forests (Table 3.2)

3.1.5 Pattern and Sources of Irrigation

The area under irrigation is 99,028 hectares. The major sources of irrigation

are canals (6168 ha), tanks (12,980 ha), wells (2105 ha), tube wells (48799 ha), lift

irrigation (785 ha) and others (19064 ha) (Table 3.3).

3.1.6 Cropping pattern

The cropping pattern in Haveri district during 2011-12 indicated that maize

occupied major area of 1,38,978 ha followed by cotton (ha), paddy (49,678 ha),

oilseeds (30,138 ha) and pulses (13,354 ha). (Table 3.4)

3.1.7 Area Potential for seed production

The distribution of tomato hybrid seed production in the state is limited to

some specific regions where the climate, weather and availability of potential

growers are the main deciding factors. Moderate temperature of around 18°-20°

with around 25°C in the day and 15°C at night is optimum for tomato hybrid seed

production. Too low temperature causes low seed set, low pollen production. Too

27

Table 3.2: Land use pattern in the study area

Area (ha)

Sl. No.

Classification of land (area in ha)


Haveri district

Perce ntage


1. Area under forest 10614 8876 4889 24379 47454 9.78

2. Non-agricultural area 6239 6794 2131 15164 33096 6.82

3. Barren land 834 712 501 2047 5793 1.19

4. Fallow land 5280 2663 2265 10208 17445 3.59

5. Net area sown 64478 58570 32551 155599 363207 74.86

6. Area sown more than once

8492 7954 5731 22177 47922 9.88

Total Geographical

area 90475 80694 43665 214834 485156 100


28

Table 3.3: Sources and Pattern of Irrigation

Area (ha)

Sl. No.

Sources (area in ha)


Haveri district


1. Canals 0 0 0 0 6168

2. Tanks 765 819 625 2209 12980

3. Wells 236 352 189 777 2105

4. Tube Wells 12592 8945 5818 27355 48799

5. Lift Irrigation 265 124 115 504 785

6. Others 9147 897 6426 16470 19064

Total 23005 11137 13173 47315 99028


29

Table 3.4: Cropping pattern followed in Haveri district

Area (ha)

Sl. No.

Crop (area in ha)


Haveri district

Perce ntage


1. Paddy 8670 3288 707 12665 49678 11.67

2. Ragi 8 138 40 186 604 0.14

3. Jowar 4683 2341 2446 9470 30254 7.10

4. Maize 26234 31399 18239 75872 138978 32.64

5. Wheat 17 0 1 18 471 0.11

6. Pulses 1024 3616 1020 5660 13354 3.14

7. Sugarcane 921 325 315 1561 5398 1.28

8. Fruits 372 420 240 1032 5629 1.32

9. Vegetables 4957 1649 1143 7749 9596 2.25

10. Oilseeds 1598 1654 838 4090 30138 7.08

Total 48484 44830 24989 118303 425815 100.00


30

high temperature causes flower abscission, low viability and high pest and disease

problem. Therefore tomato hybrid seed production can be carried out in the winter

season of a northern transitional zone of Haveri district and also availability of

skilled labour for the operations of emasculation, pollination, seed extraction and

grading is an another important factor for the contracting firms to concentrate on

tomato hybrid seed production towards Haveri district.

3.2 Selection of study area and sampling procedure

The selection of study area and the sampling procedure adopted has been

described below.

3.2.1 Selection of study area

Haveri district was purposively selected for the study, as it is one of the

important and major tomato hybrid seed growing district in Karnataka. Out of seven

taluks in the district, Ranebennur, Hirekerur and Byadagi taluks were selected for

the study because tomato hybrid seed producing companies are concentrated only

in these three taluks of the district.

3.2.2 Sampling procedure

To evaluate the objectives of the study, a multistage sampling procedure

was adopted. In the first stage, three taluks were selected, in the second stage four

villages were selected from each of these three taluks and in the third stage, ten

farmers were chosen from each village of selected taluks (Table 3.5).

3.2.3 Selection of taluks

In Haveri district, large scale cultivation of tomato hybrid seed has been

concentrated in Ranebennur, Hirekerur and Bydagi taluks. Therefore, these three

taluks were purposively selected for the study.

3.2.4 Selection of villages

From each of the three selected taluks, four villages were purposively

selected, where the maximum tomato hybrid seed growing area was concentrated.

Totally twelve villages were selected.

31

32

Table 3.5: Selection of Villages and Sample farmers

Sl. No. Taluks Village Sample size

1 Ranebennur

1. Nittur 10

2. Konanatale 10

3. Yalabadagi 10

4. Billahalli 10

Sub total 40

2 Hirekerur

1. Hiremattur 10

2. Hullatti 10

3. Lingadevarakoppa 10

4. Neshvi 10

Sub total 40

3 Byadagi

1. Masanagi 10

2. Ghalapooji 10

3. Chikkabasuru 10

4. Tadasa 10

Sub total 40

Total 120

33

3.2.5 Selection of farmers

Ten contract farmers from each of the selected villages were selected

randomly, in all 120 farmers were selected for the study.

3.2.6 Selection of firms

Ten leading contract firms involved in tomato hybrid seed production were

selected for the study.

3.3 Nature and source of data

3.3.1 Primary data

The study was based on both primary and secondary data. For evaluating

the objectives of the study, required primary data were collected from sample

farmers through personal interview method with the help of well-structured

schedule. The data covered general characteristics of farmers, land holding,

assets, costs, returns, yields, constrains etc.

3.3.2 Secondary data

The secondary data required for the study were collected from the

Department of Agriculture, Department of Horticulture, RSKs 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 availability of data, the following analytical tools and techniques have been

adopted.

3.4.1 Tabular presentation technique

Tabular analysis was adopted to compile the general characteristics of the

sample farmers, descriptive statistics like averages, percentages etc. are used to

obtain the meaningful results.

34

3.4.2 Budgeting technique

This technique was used to estimate the costs and returns in tomato hybrid

seed production.

3.4.3 Functional analysis

The Cobb-Douglas type of production function was used to study the effect

of various inputs on tomato hybrid seed production. It being a homogenous

function provided a scale factor enabling to measure the returns to scale. The

estimated regression coefficients represented the production elasticities.

The form of Cobb-Douglas production function used in the present study

was as follows.

Y = aX1b1X2

b2X3b3 X4

b4 X5b5X6

b6 aX7b7eu____________ (1)

Where,

Y = Gross returns in rupees per acre.

a = Intercept

X1 = Expenditure on seedlings (Rs/acre).

X2 = Expenditure on FYM (Rs/acre).

X3 = Human labour expenditure (Rs/acre).

X4 = Bullock labour & machine hour (Rs/acre).

X5 = Expenditure on Fertilizer (Rs/acre).

X6 = Expenditure on PPC (Rs/acre).

X7 = Expenditure on Stacking materials (Rs/acre).

eu = Error term

bi’s = Output elasticities of respective factor inputs, i = 1, 2….7 and

The Cobb-Douglas production function was converted into log linear form

and parameters (coefficients) were estimated by employing Ordinary Least Square

Technique (OLS). The logarithmic form of equation was

35

log Y = log a + b1 log X1 + b2 log X2 + b3 log X3 + b4 log X4 + b5 log X5 + b6 log X6+

b7 log X7 + u loge _____________ (2)

The regression coefficients (bi’s) were tested using‘t’ test at chosen level of

significance.

3.4.4 Allocative efficiency

Given the technology, allocative efficiency exists when resources are

allocated within the farm according to market prices. To decide whether a

particular input is used rationally or irrationally, its marginal value products were

computed. If the marginal value product of an input just covers its acquisition cost it

is said to be used efficiently.

The Marginal Value Products (MVP) was calculated at the geometric mean

levels of variables by using the formula.

Y

MVP ith resource = bi * ----------- __________________ (3)

X

Where,

Y = Geometric mean of the output

Xi = Geometric mean of ith independent variable

bi = The regression coefficient of the ith independent variable

In order to determine the efficiency of allocation of the resources or price

efficiency, the value of the marginal product obtained by multiplying the marginal

product (bi) by the price of the product and was compared with its marginal cost. A

ratio of the value of marginal product to the factor price more than unity implied

that the resources were advantageously employed. If the ratio was less than one, it

suggested that resource was over utilized.

The criterion for determining optimality of resource use was,

MVP/MFC > 1 under utilization of resource

36

MVP/MFC = 1 optimal use of resource

MVP/MFC < 1 excess use of resources.

3.4.5 Garrett’s ranking technique

Attributes for selection of sample respondents were prioritization by using

Garrett’s ranking technique in the following manner.

For this purpose seven attributes were identified for production problems,

five attributes for processing problems and six attributes for marketing problems.

Each of 120 respondents selected were asked to rank the above seven attributes

from rank 1 to 7, for five attributes from rank 1 to 5 and six attributes from rank 1 to

6. To know the problems of contracting firms taken seven attributes and asked to

give the rank from 1 to 7. In this analysis, high scored attribute get first rank and

low scored attribute get least rank. In the next stage rank assigned to each

problem by each individual was converted into per cent position using the following

formula.

Per cent position = 100 (Rij – 0.5) / Nj

Where,

Rij stands for rank given for the ith factor (i= 1, 2………N) by the jth individual

(j = 1, 2…….120)

Nj stands for number of factors ranked by jth individual.

Once the per cent positions were found, scores were determined for each

per cent position by referring Garrett’s table. Then, the scores for each attribute

were summed over the number of respondents who ranked that factor. In this way,

total scores were arrived at for each of the seven attributes of production, five

attributes of processing and six attributes of marketing and mean scores were

calculated by dividing the total score by the number of respondents who gave

ranks. Final overall ranking of the different attributes was done by assigning rank 1,

2, 3… etc in the descending order of the mean scores.

37

3.5 Concepts used in the study

In this section, different concepts of cost and returns used in the study are

presented. It is observed at the time of data collection that farmers of this region

are more familiar with acre as the unit of measuring the land area instead of

hectare. Hence, in this study, all calculations pertaining to the cost and returns of

tomato hybrid seed production were calculated on per acre basis (2.47106 acres =

1 hectare).

3.5.1 Costs

The total cost (TC) was divided into two broad categories of costs i.e.

variable costs and fixed costs.

A.1 Variable costs (VC)

These costs comprised of costs incurred on variable inputs such as

seedlingss, farmyard manure, fertilizers and plant protection chemicals, staking

materials, labour (human and bullock) and interest on working capital. The

computation of variable cost components is as follows.

1. Seedlings

It is a young plant sporophyte developing out of a plant embryo from a seed.

2. Farmyard manure (FYM)

The value of FYM was computed by considering the rates prevailing in the

local area at the time of application.

3. Fertilizers

The companies supply fertilizers. The cost of fertilizers was based on the

actual price paid by the sample farmers including the cost of transportation and

other incidental charges if any.

4. Plant protection chemicals (PPC’s)

Companies’ supply PPC’s, the actual price paid by the farmers towards

plant protection chemicals was used to compute the cost of plant protection

chemicals.

38

5. Staking materials

It includes the cost of stacking sticks, steel wire and jute thread which was

used for staking the plant. The actual price paid by the sample farmers was used

to compute the cost of staking materials.

6. Mulching sheet

It is a thin plastic sheet, used to control the weeds and protect soil moisture

in the seed production plot.

7. Hybrid

Is a plant resulting from a cross between two parents that are genetically

dissimilar.

8. Rouging

Is the operation of removal of off-type or any unwanted plants and disease

plants in female parent block and male parent block in hybrid seed production.

9. Emasculation

It is the technique of removing of anthers from the female plant in order to

make it sterile and to enhance the cross-pollination.

10. Pollination

It is the transfer of pollen from anther of male parent to the stigmatic surface

of female parent in hybrid crossing block.

11. Processing

Refers to all step involved in the preparation of handling, pre-conditioning,

drying, cleaning, size grading, upgrading, treating and packaging.

12. Field standards

Refers to the standards that are to be met with, for certification w.r.t. land

requirement, isolation, objectionable weed plants, plants affected with designated

diseases, off-types, planting ratio etc.

39

13. Human labour

Human labour was estimated in terms of eight hours of work per day. The

women labour days were converted into man days on the criteria that one woman

day is equal to 0.60 man days on the basis of wage rate equivalent.

14. Bullock labour

It was measured in pair days where, one pair day means eight hours of

work by a pair of bullock. Prevailing rate per day paid by farmers was used in the

calculation.

15. Machine labour

The costs of machine labour both for hired and owned on per hour basis

was calculated using differential rates for deferent type of operations that prevailed

in study area.

16. Interest on working capital

This was calculated on the entire working cost of the enterprise at the

prevailing rate of interest of 8 per cent per annum on short term loans for the

duration of crop from the financial institutes.

A.2. Fixed costs (FC)

1. Depreciation charges

Depreciation on each capital equipment and machinery owned by the

farmers and used for cultivation of land was calculated for individual farmer based

on the purchase value using the straight line method.

Purchase value – Junk value

Annual depreciation = ----------------------------------------

Economic life of the asset

The average life of the asset as indicated by each farmer was used in the

computation of the depreciation. The average value of the asset after its useful life

as estimated by the respondents was considered for calculation of junk value. The

40

depreciation cost of each equipment was apportioned to the crop based on its

percentage use.

2. Interest on fixed capital

Interest on fixed capital was calculated at 11 per cent per annum, which is

the prevailing rate of investment credit. The items considered under fixed capital

are implements and machinery. Interest was considered on the value of these

assets after deducting the depreciation for the year. No interest was charged on

the land value since the rental value of owned land was considered. Then the

amount so calculated was apportioned to the crop acreage for the duration of crop.

3. Gross return

The total value of produce for both main and byproduct together is referred

to as the gross return.

4. Net return

Return obtained by subtracting the total cost from gross return.

5. Land revenue

Actual land revenue paid by the farmers was considered.

6. Land rent

The prevailing land rent for agricultural enterprises were imputed for the

sample farmers, since all land holdings were observed to be owner operated.

41

Plate 1. Tomato hybrid seed production under open field

42

Plate 2. Labours engaged in tomato hybrid seed production

43

Plate 3. Tomato hybrid seed production under shade net

44

Plate 4. Tomato hybrid seed production under polyhouse

4. RESULTS

The findings of the study are presented in this chapter under the following

headings in consonance with the objectives of the study.





4.5 Pattern of income and employment in tomato hybrid seed production

4.6 Problems faced by the contract farmers and the contract firms


4.1.1 General features of sample respondents

General information about tomato hybrid seed growers which will assist to

analyze the results is presented in Table 4.1

The average age of contract farmers in the range of 20-30,30-40,40-50 and

above 50 was 34.71 per cent, 32.23 per cent, 17.35 per cent and 15.70 per cent

respectively, with an average family size of seven members. About 13.33 per cent of

the farmers were illiterate and remaining farmers were found to be literate. About

29.16 per cent, 34.16 per cent and 23.33 per cent of the farmers had studied up to

primary school, high school and college education respectively. Almost all farmers

growing tomato hybrid seeds took up agriculture as main occupation along with

subsidiary occupation.

4.1.2 Average land holding pattern of sample farmers

The pattern of land holdings of tomato hybrid seed growers is given in Table 4.2. The

average size of the land holding of the sample growers was 7.75 acres out of which

dry land was 3.35 acres (45.53%) and irrigated land was 4.44 acres (54.47%).

Tomato hybrid crop was cultivated in an minimum area of 0.5 acres and maximum

area of 1.0 acres and an average area of 0.75 acres.

46

Table 4.1: General features of sample respondents

Sl. No.

Particulars Average

(No.) Percentage

I. Average age of farmers

1. 20-30 42 34.71

2. 30-40 38 32.23

3. 40-50 21 17.35

4. Above 50 19 15.70

Total 120 100

II. Education Level

1. Illiterate 16 13.33

2. Primary (1-7) 35 29.16

3. High school (8-10) 41 34.16

4. College and above (>10) 28 23.33

Total 120 100

III. Occupation

1. Agriculture as main occupation 117 90.69

2. Agriculture as subsidiary occupation 12 9.30

IV. Family type

1. Nuclear 102 85

2. Joint 18 15

V. Average size of the Family

1. Adults: Male 3 42.86

Female 2 28.57

2. Children: Male 1 14.29

Female 1 14.29

Total 07 100

47

0

10

20

30

40

50

60

Owned Leased in Leased out Owned Leased in Leased out

Dryland Irrigated

Percen

tag

e

Land holdings

Fig. 4.1: Average Land holding pattern of sample farmers

48

Table 4.2: Average Land holding pattern of sample farmers

Sl. No.

Particulars Area

(acres) Percentage

I. Dry land

1. Owned 3.5 43.42

2. Leased in 0.17 2.11

3. Leased out 0 0

Sub total 3.35 45.53

II. Irrigated land

1. Owned 4.07 50.50

2. Leased in 0.32 3.97

3. Leased out 0 0

Sub total 4.4 54.47

Total size of Land holding 7.75 100

III. Average plot size of tomato hybrid seed production

1. Minimum 0.5 Acres --

2. Maximum 1.0 Acres --

3. Average 0.75 Acres --

49

4.1.3 Cropping pattern of the sample farmers

Cropping pattern of sample farmers is presented in Table 4.3. It was evident

from the table that in the study area 74.90 per cent of gross cropped area was

cultivated in the kharif and 25.11 per cent in the rabi seasons. Maize occupied major

portion of the area in kharif, which worked out to be 31.85 per cent of gross cropped

area, followed by cotton, onion and other crops, which occupied 23.00, 5.06 and

15.00 per cent of the gross cropped area in that order.

In the rabi season, sunflower occupied a major portion of the gross cropped

area, which worked out to be 8.42 per cent, followed by chilli, tomato hybrid seed

production and other crops, which occupied 3.03 and 5.05 per cent and 8.59 per cent

of gross cropped area, respectively. The cropping intensity of sample farmers was

133.52 per cent


In contract farming of tomato hybrid seed production (Table 4.4) on an

average the farmer used 2,419 of male and 4,394 female seedlings per acre. The

quantity of FYM applied per acre was 12.05 tonnes. Where as, the chemical fertilizer

application was 1,065.5 kg per acre, which includes 588.5 kg per acre of urea, 287.5

kg per acre of DAP and 189.5 kg per acre of MOP. The most commonly used plant

protection chemicals by the sample seed growers were Corozene, Cabrotop, Okeo,

Selvo-303 and MX-60. The average quantity of these plant protection chemicals used

was 8.0 litres by the tomato seed growers. On an average, the human labour

employed per acre for tomato seed production was around 1,259.17 man days

(includes men and women man days), 4.8 pair days of bullock labour and 3.33

machine hours utilized by each contract seed growers.

The tomato hybrid seed growers used on an average 4,394 number of staking sticks

for supporting the plant stem and 90 kg of steel wire, 55.72 kg of jute thread and

92.62 kg of mulching sheet were used for one acre seed production of tomato hybrid

seeds.

50

Table 4.3: Cropping pattern of the sample farmers in the study area

Sl. No.

Particulars Area (acre) Average area

(acre) Percentage

I. Kharif

1 Cotton 273 2.27 23.00

2 Maize 378 3.15 31.85

3 Onion 60 0.5 5.06

4 Others 178 0.83 15.00

Total 889 6.75 74.90

II. Rabi

1 Sunflower 100 0.83 8.42

2 Chilli 36 0.30 3.03

3 Tomato seed production 60 0.50 5.05

4 Others 102 0.85 8.59

Total 298 2.48 25.11

III. Gross cropped area 1187 -- 100

IV. Net cropped area 889 --

V. Cropping intensity (%) -- 133.52

51

0

5

10

15

20

25

30

35

Cotton Maize Onion Others Sunflower Chilli Tomato

seed production

Others

Kharif Rabi

Percen

tag

e

Crops

Fig. 4.2: Cropping Pattern of the Sample Farmers in the Study Area

52

Table 4.4: Input use pattern in tomato hybrid seed production.

Quantity/acre

Sl. No. Particulars Units Quantity

Inputs

1 FYM Tonnes 12.05

2. Seedlings No.

a. Male seedlings 2419.00

b. Female seedlings 4394.00

Sub total 6814.00

3. Fertilizer Kg

a. Urea 11.77

b. DAP 287.5

c. MOP 189.5

Sub total 1065.5

4. PPC Liters

a. Corozene 2.5

b. Cabrotop 1.0

c. Okeo 750 ml

d. Selvo-303 250 ml

e. MX-60 2.0

f. Others 1.5

Sub total 8.00

5. Labour Man days

a. Men Labour 212.31

b. Women Labour 1046.86

c. Bullock labour Pair days 4.8

d. Machine hours Hours 3.3

6. Staking sticks No. 4394.00

7. Steel wires Kg 90

8. Jute thread Kg 55.72

9. Mulching sheet Kg 92.62

53


4.3.1 Cost structure in tomato hybrid seed production

Among the variable cost, expenditure on human labour was the major cost, in

that men labour cost was Rs. 45,638.75 (11.77% of the total cost), women labour

cost was Rs. 1,76,648.8 (45.96% of the total cost), bullock labour cost was Rs.

1,212.5 (0.31% of the total cost), machine hour cost was Rs. 6275 (1.62% of the total

cost). The amount spent on seedlings was Rs. 13,625 (3.52% of the total cost). The

expenditure on staking sticks, steel wire, jute thread, mulching sheet and others was

Rs. 36,931.25 (9.53% of the total cost) Rs. 5,483.62 (1.41% of the total cost) Rs.

3,987.52 (1.03% of the total cost) Rs. 12,849.3 (3.31% of the total cost) and Rs.

3,291.66 (0.85% of the total cost) respectively. The amount spent on fertilizers was

Rs. 14,226.74 (5.1% of the total cost), FYM was Rs. 10,625 (2.74% of the total cost)

and cost involved in use of plant protection chemicals was Rs. 23,400 (6.02% of the

total cost).

The total cost of tomato hybrid seed production was Rs. 3,82,530.75 per acre,

out of which variable cost was Rs. 3,82,530.75, which was 97.64 per cent of the total

cost and interest on working capital was Rs. 28,335.61 (7.31% of the total cost).

Among fixed cost, rental value of land was major cost, which was Rs. 4,333.45

(1.12% of the total cost) and other fixed cost items were depreciation Rs. 282.27

(0.07% of the total cost). The interest on fixed capital was Rs. 556.99 (2.36% of the

total cost).

4.3.2 Returns realized in tomato hybrid seed production

The details of returns structure per acre of tomato hybrid seed production was

presented in Table 4.6

The total cost incurred for tomato hybrid seed production was Rs. 3,87,708.34 per

acre, out of which Rs. 3,82,530.75 was variable cost and fixed cost was Rs. 5,177.59.

The total quantity of seed yield obtained per acre was 73.57 kg. The price per kg of

graded seeds was Rs. 12,200. The average gross returns realized per acre were Rs.

8,97,554. Net returns over variable cost from an acre were Rs. 5,15,023.25 and net

returns over total cost were Rs. 5,09,845.66. The cost of production per kg incurred

was Rs. 5,269.92. The benefit cost ratio was Rs. 2.31 in tomato hybrid seed

production.

54

Table 4.5: Cost incurred in tomato hybrid seed production

Rs/acre

Sl. No

Particulars Units Cost in (Rs) Percentage

A. Variable cost

1 FYM Tonnes 10625 2.74

2. Seedlings: No.

a. Male seedlings 4837.5 1.25

b. Female seedlings 8787.5 2.27

Sub total 13625 3.52

3. Fertilizer Kg

a. Urea 3768 0.97

b. DAP 7197.91 1.86

c. MOP 3260.83 2.27

Sub total 14226.74 5.1

4. PPC Liter (ml)

a. Corozene 5430 1.40

b. Cabrotop 4320 1.11

c. Okeo 2300 0.59

d. Selvo-303 5250 1.35

e. MX-60 2600 0.67

f. Others 3500 0.90

Sub total 23400 6.02

5. Labour Man days

a. Men Labour 45638.75 11.77

b. Women Labour 176648.8 45.56

c. Bullock Labour Pair days 1212.5 0.31

d. Machine hour Hours 6275 1.62

6. Staking sticks No. 36931.25 9.53

7. Steel wires Kg 5483.62 1.41

8. Jute thread Kg 3987.52 1.03

9. Mulching sheet Kg 12849.3 3.31

10. Others -- 3291.66 0.85

11. Interest on working capital (8%) 28335.61 7.31

Total Variable cost 382530.75 97.64

B. Fixed cost

1 Depreciation (11%) 282.27 0.07

2 Rental value of land 4333.45 1.12

3 Interest on fixed capital 556.99 0.14

Total fixed cost 5177.59 2.36

Total cost (A+B) 387708.34 100

55

0

10

20

30

40

50

60

FY

M

Seed

lin

gs

Ferti

lizer

PP

C

Lab

ou

r

Sta

ck

ing m

ate

ria

ls

Dep

recia

tion

Ren

tal v

alu

e o

f land

In

terest o

n f

ixed c

apit

al

Variable cost Fixed cost

Percen

ta

ge

Cost

Fig. 4.3: Cost incurred in tomato hybrid seed production

56

Table 4.6: Returns realised in tomato hybrid seed production

Rs/acre

Sl. No Particulars Unit Amount

I. Costs

a) Variable cost Rs 382530.75

b) Fixed cost Rs 5177.59

Total cost Rs 387708.34

II. Returns

1 Graded seeds Kg 73.57

2 Price Rs/kg 12200

3 Gross returns Rs 897554

4 Net returns over variable cost Rs 515023.25

5 Net returns over total cost Rs 509845.66

6 Cost of production per Kg Rs/kg 5269.92

7 BC Ratio -- 2.31

57

4.4 Resource use efficiency and allocative efficiency in tomato hybrid seed

production

4.4.1 Resource use efficiency in tomato hybrid seed production

In a production unit, one of the major objective is to co-ordinate and utilise

resources in such a manner that they together yield the highest net returns. In this

section an attempt is made to analyse the productivity of resources involved in the

production of tomato hybrid seeds.

In order to study the resource use efficiency of inputs in tomato hybrid seed

production, a modified Cobb-Douglas type production function was fitted to the data.

The efficiency of allocation of resources was studied by comparing the marginal value

product with the marginal factor cost of each factors of production included in the

analysis.

The estimated coefficients of Cobb-Douglas production function are presented

in Table 4.7. The output elasticities of seedlings (0.540) and FYM (0.305) were

significant at one per cent, the output elasticities of PPC (0.197) was significant at ten

per cent. The output elasticities of human labour (0.312), bullock labour and machine

hour (0.102) was positive, but found to be non-significant. While stacking materials (-

0.065) and fertilizer (-0.085) had non-significant negative elasticities.

The coefficient of multiple determination (R2) for tomato hybrid seed was 0.94.

This indicates that the variables included in the function explained 94 per cent of the

variation in the production of tomato hybrid seeds.

The sum of elasticities (Σbi) was 1.30 which indicated increasing returns to

scale. One per cent increase in all the inputs used in the production simultaneously

would increase output by 1.30 per cent.

4.4.2 Allocative efficiency in tomato hybrid seed production

The allocative efficiency of resources in the production of tomato hybrid seeds

has been explained as under (Table 4.8).

The ratio of Marginal Value Product (MVP) to Marginal Factor cost (MFC) in

the case of seedlings, FYM, human labour, bullock labour and machine hour, PPC

58

Table 4.7: Production function estimates in tomato hybrid seed production

Sl. No. Particulars Parameter Co-efficients

1 Intercept a 11.401

(2.419)

2 Seedlings X1 0.540***

(0.185)

3 FYM X2 0.305***

(0.020)

4 Human labour X3 0.312

(0.115)

5 Bullock labour & Machine hour X4 0.102

(0.014)

6 Fertilizer X5 -0.085

(0.061)

7 PPC X6 0.197*

(0.061)

8 Stacking materials X7 -0.065

(0.102)

9 R2 value -- 0.94

10 Returns to scale (Σbi) -- 1.30

11 F value -- 56

Note: *** Significant at 1% level *Significant at 10% level Figures in parentheses indicate standard errors.

59

Table 4.8: Allocative efficiency of resources in tomato hybrid seed production

Sl. No. Particulars MVP MFC MVP/MFC

1 Seedlings 0.588 1 0.588

2 FYM 15.895 1 15.895

3 Human labour -0.005 1 0.069

4 Bullock labour & machine hour 3.192 1 3.192

5 Fertilizer -0.033 1 -0.033

6 PPC 0.126 1 0.126

7 Stacking materials 0.069 1 -0.005

60

were 0.540, 0.305, 0.312 and 0.102, indicating returns of Rs. 0.540, 0.305,

0.102 and0.312 for every additional unit of inputs used in that order.

The negative ratio of MVP to MFC for stacking materials (-0.005) and fertilizer

(-0.033) indicated that the factors were used at higher level than necessary, resulting

in a loss due to excess use.

4.5 Income and employment generation through tomato hybrid seed production

4.5.1 Income generation through tomato hybrid seed production

The total cost incurred for tomato hybrid seed production was Rs. 3,87,708.34

per acre, out of which Rs. 3,82,530.75 was variable cost and fixed cost was Rs.

5,177.59. The total quantity of seed yield obtained per acre was 73.57 kg. The price

per kg of graded seeds was Rs. 12,200. The average gross returns realized per acre

were Rs. 8,97,554. Net returns over variable cost from an acre were Rs. 5,15,023.25

and net returns over total cost were Rs. 5,09,845.66. The returns per kg incurred

were Rs. 12,200. The benefit cost ratio was found to be Rs. 2.31 per kg. Hence, the

results of the tables revealed that, tomato hybrid seed production is an income

generating enterprise to the farmers.

4.5.2 Pattern of employment in tomato hybrid seed production

The pattern of labour use in tomato hybrid seed production (Table 4.9)

indicated that human labour was used pre-dominantly for most of the operations.

Bullock labour was used for land preparation and transportation of FYM. The

machine power in the form of tractor owned by the farmers themselves was used in

land preparation and transportation of FYM.

In tomato hybrid seed production around 4.80 man days of human labour used

for ploughing, 3.42 man days for harrowing and 8.32 man days for transportation of

FYM, 12.97 man days for spreading of FYM were employed. For seed bed

preparation 27.75 man days were employed. About 18.55 man days for transplanting

of seedlings, 85.92 man days for weeding and 65.82 man days for application of

fertilizers were employed. 9 man days were employed for irrigation. For roughing,

emasculation and pollination about 22.39 man days, 86.30 and 765.75 man days

were employed respectively. For plant protection chemicals spraying 20.27 man

61

Table 4.9: Pattern of employment in tomato hybrid seed production

Sl. No.

Type of operation

Family labour Hired labour Total human labour

(man days)

Male (man days)

Female (man days)

Male (man days)

Female (man days)

A. Production

1. Ploughing 2.45 ---- 2.35 ---- 4.80 2. Harrowing 2.10 ---- 1.32 ---- 3.42 3. Transportation of FYM 3.76 ---- 4.56 ---- 8.32 4. Spreading of FYM 3.47 ---- 9.50 ---- 12.97 5. Seed bed preparation ---- ---- 27.75 ---- 27.75 6. Transplanting of

seedlings 4.17 9.20 4.12 1.05 18.55

7. Fertilizer application ---- 32.30 ---- 33.45 65.82 8. Irrigation charges 9.00 ---- ---- ---- 9.00 9. Weeding 8.15 23.77 ---- 54.00 85.92

10. Rouging 3.62 5.50 ---- 13.27 22.39 11. Emasculation 4.40 13.12 18.45 50.32 86.30 12. Pollination ---- 183.45 ---- 582.30 765.75 13. PPC spraying 15.4 2.50 ---- 2.30 20.27 14. Harvesting of fruits 13.12 8.77 16.27 21.52 59.70

Sub total 69.74 278.69 84.35 758.22 1160

B. Processing and marketing

1. Crushing and extraction of seeds

12.52 ---- 20.02 ---- 32.55

2. Acid seed treatment 9.30 ---- 9.52 ---- 18.87 3. Cleaning and drying ---- 4.25 ---- 3.15 7.4 4. Grading of seeds 4.17 ---- ---- 2.55 6.72 5. Packing and

transportation 2.70 ---- ---- ---- 2.70

Sub total 28.69 4.25 29.54 5.7 68.24

Total (A+B) 98.43 282.94 113.88 763.92 1228.24

62

days, picking of fruits 59.70 man days, crushing and extraction of seeds 32.55 man

days were employed. And about 18.87 man days for acid seed treatment, 7.4 man

days for drying and cleaning, 6.72 man days for grading of seeds and 2.7 man days

for packing and transportation were employed in tomato hybrid seed production.

Total of 1228.24 man days were employed for different activities in tomato

hybrid seed production, in that 98.43 (male) man days and 282.94 (female) man days

of family labour were employed for different activities. Hired labour to the extent of

113.88 (male) man days and 763.92 (female) man days were used in tomato hybrid

seed production.

Among the various cost items, nearly 57.33 per cent of the cost was found in

human labour. This was one of the important aspects of tomato hybrid seed

production, which incurs maximum cost on labour and provides employment to the

human labour. The tomato hybrid seed production involves technically trained labour,

whose wage rate is higher as compared to other labour, the cost on these items was

found to be higher.

4.6 Problems faced by the contract farmers and contract firms

4.6.1 Problems faced by the contract farmers.

In the present study, opinion survey was conducted regarding the production,

processing and marketing of tomato hybrid seed growers and the results are

presented in Table 4.10. The opinions of the seed growers on the problem of growing

tomato hybrid seed crop were gathered right from the procurement of inputs in seed

production process till the crop was marketed. The respondents were asked to rank

the attributes in a scale of one to seven for the production problems, the least rank

being seven and rank one represent highest score. The methodology used for this is

given in the section three. The ranks indicate farmer’s preference for different

production problems.

In the ranking method non-availability of skilled labour was given utmost

priority by the farmers (78.83). The second importance was given to high wage rate

(78.10).

63

Table 4.10: Problems faced by contract farmers in Production, Processing and Marketing of tomato hybrid seeds.

n=120

Sl. No. Problems Sum Average Rank

Production Problems

1 Non-availability of skilled labour 9460.00 78.83 I

2 High wage rate 9372.00 78.10 II

3 High pest and disease attack 8893.00 74.10 III

4 Lack of technical guidance 8264.00 68.87 IV

5 Non-availability of high yielding hybrids 7767.00 64.73 V

6 Climatic factors 6576.00 54.80 VI

7 Non-availability of seedlings on time 4278.00 35.65 VII

Processing Problems

1 Lack of technical guidance about seed extraction method

9156.00 76.30 I

2 Non-availability of mechanical seed extraction facility

8696.00 72.47 II

3 Non-availability of acid (HCl) for seed extraction and cleaning

6324.00 52.70 III

4 Problem of bad odour (Smell) during fermentation 5346.00 44.55 IV

5 Non-availability of skilled labour for processing and seed extraction

3896.00 32.47 V

Marketing Problems

1 Higher rejection rate 8854.00 73.78 I

2 Irregular payment 8258.00 68.62 II

3 Low contract price 7256.00 60.47 III

4 Delay in purchasing of seeds 7100.00 59.17 IV

5 Manipulation of norms by the firms 5769.00 48.08 V

6 Grading of seeds 3569.00 29.74 VI

.

64

The third and fourth ranks were high pest and disease attack (74.10) and lack

of technical guidance (68.87). Non availability of high yielding varieties, climatic

factors and non-availability of seedlings on time occupied next three positions with

score of 64.73, 54.80 and 35.65 respectively. In this ranking method, non-availability

of skilled labour has got first rank (78.83) and non availability of seedlings on time

(35.65) got the least rank among the different attributes

So for as the processing problems were concerned, non-availability of

technical guidance about seed extraction method (76.30) was considered as first

rank, non-availability of mechanical seed extraction method (72.47) was taken as

second rank. Non availability of acid for seed extraction and cleaning (52.70),

problem of bad odour or smell during fermentation (44.55) and non-availability of

skilled labour for processing and seed extraction (32.47) were occupied third, fourth

and fifth ranks respectively.

The major marketing problems faced by the tomato hybrid seed growers with

contract firm were higher rejection rate was given first priority by the farmers (73.78).

The second importance was given to irregular payment (68.62). The third and fourth

ranks were low contract price (60.47) and delay in purchasing of seeds (59.17).

Manipulation norms by the firms and grading of seeds occupied next two positions

with score of 48.08 and 29.47 respectively.

4.6.2 Problems faced by the contracting firms

The opinion survey conducted regarding problems of contract firms and results

are presented in Table 4.11.

The firms expressed the problem of mixing of low grade with high grade by the

farmers was taken as a first rank (8.80). Fixing of contract price was taken as a

second rank (8.30). Lower productivity, inability of farmers to take farm operations,

land constraints, government regulations and selection of farmers occupied next five

positions with score of 7.60, 6.70, 6.50, 5.80 and 5.20 respectively.

65

Table 4.11: Problems faced by contracting firms n=10

Sl. No.

Problems Sum Average Rank

1 Mixing of low grade with high grade seeds 88.00 8.80 I

2 Fixing of contract price 83.00 8.30 II

3 Lower productivity 76.00 7.60 III

4 Inability of farmers to take up farm operations 67.00 6.70 IV

5 Land constraints 65.00 6.50 V

6 Government regulations 58.00 5.80 VI

7 Selection of the farmers 52.00 5.20 VII

5. DISCUSSION

The results of the investigation presented in the preceding chapter are

discussed in detail in this chapter. The main focus here is to throw a light on some

of the causes responsible for the major trends observed in the findings. Keeping

the objectives of the study in view the results are discussed under the following

heads.





5.5 Pattern of income and employment in tomato hybrid seed production

5.6 Problems faced by the contract farmers and the contract firms.


The socio-economic characteristics of the respondents include general

features, details of land holdings and cropping pattern of the sample farmers.

5.1.1 General features of contract farmers

The results revealed that nearly 87 per cent of contract farmers were

educated. As most of the farmers were educated they were able to find the source

where the required information was available. It was also interesting to note that

most of the farmers were young aged indicating better awareness regarding

modern farm concepts, when youth are included in farm activities. Young age

coupled with better education has mostly made the farmers to increase their farm

income by adopting hybrid seed production. Hence, they might have gone for

contract farming by joining hands with the several private seed companies

involved in cultivation of tomato hybrid seeds. All the sample farmers practiced

agriculture as their main occupation. The average size of the family was seven.

67

5.1.2 Average land holding pattern of sample farmers

The average size of land holdings in the study area was 7.75 acres. The

proportion of land having the irrigation facility was 54.47 per cent of the total land

holding and remaining 45.53 per cent was under rainfed. Area under tomato

hybrid seed cultivation in sample farms constitutes only around 5.05 per cent of

the total size of land holdings. This indicates that there is much scope for bringing

some additional area under tomato hybrid seed cultivation to augment farm

income. However, the private companies give permission and supply inputs to the

farmers only for one or two plots of 0.5 to 1 acre only. This practice may be mainly

to protect the quality of the produce. But, if the farmers become strong and vigilant

enough to convince the companies regarding maintenance of the quality, they can

get permission and inputs to grow tomato hybrid seeds in large areas.

5.1.3 Cropping pattern of sample farmers

Cropping pattern followed by farmers in a particular area depends upon

rainfall condition, irrigation facilities and commercial importance of crops, food

habit and climatic conditions of the area.

About 31.85 per cent of the gross cropped area was occupied by maize

crop alone in kharif season. And onion occupied only 5.06 per cent of the total

gross cropped area. About 23.00 per cent of the gross cropped area was

occupied by cotton crop alone. In the rabi season nearly 8.42 per cent of the

gross cropped area was occupied by sunflower crop, chilli occupied 3.03 per cent

and tomato hybrid seed production was 5.05 per cent of the gross cropped area. It

was found from the table that farmers were found to diversify their cropping

pattern mainly because of minimizing the risk of crop failures, since major

proportion of their operational holdings was under dry land conditions. As they

have taken up labour intensive and highly risk oriented seed production activity on

their farm, they were not in a position to include other crop enterprises, which

require higher investment. As a result, the cropping pattern was mainly dominated

by cereals, followed by commercial crops like cotton and sunflower.


68

The results of the study (Table 4.4) indicated that, contracting companies

provided seedlings as planting material to farmers, to maintain quality and purity

of the hybrid seeds. On an average, the farmers used 4,394 female seedlings and

2,419 male seedlings per acre. This had helped in establishing optimum plant

population per unit area to get desired yield level of tomato hybrid seeds. Pest

and diseases in tomato crop is very much hence, for the effective management,

farmers used nearly 8.0 liters of plant protection chemicals per acre. Some pf the

important plant protection chemicals are, Corozene, Cabrotop, Okeo, Selvo-303,

MX-60. The FYM were used at the rate of 12.05 tonnes per acre, by the sample

farmers for improving soil physical and structural properties. On the other hand,

the fertilizers like nitrogen, phosphorus and potassium used at the rate of 588.5,

287.5 and 189.5 kg per acre respectively.

The total human labour used was 1259.17 man days/acre (includes men

and woman man days) formed the major component of the input used in tomato

hybrid seed production and it clearly indicated that the seed production is a labour

intensive activity. Further, crossing (pollination) operation is specialized operation

which involves greater care and patience and hence more number of skilled

human labour was employed. The total bullock pair used was (4.8/pairdays) and

machine hour used was (3.3 hours).

Further, the seed growers using of staking sticks of 4394 numbers as for

the plant population and jute thread used depending upon the intensity of

flowering and plant population that is 55.72 kg per acre, steel wire at the rate of 90

kg per acre and the mulching sheet used at the rate of 92.62 kg per acre. It was

observed from the findings that there is a scope to increase the use of inorganic

fertilizers to enhance the yield of seed production. This would result in higher

income to the seed growers.


5.3.1 Cost structure in tomato hybrid seed production

It was observed from the table 4.5 that the total cost of tomato hybrid seed

production per acre was Rs. 3,82,530.75. The average total variable cost incurred

in tomato hybrid seed production was Rs. 3,82,530.75. Among the various cost

69

items, maximum cost Rs. 2,22,287.55 (includes men and women man days) was

found on human labour (including men and woman labour) i.e., 50.30 per cent of

the total cost. This was one of the important aspects of tomato hybrid seed

production, which incurs maximum cost on labour and provides employment to

the human labour. The tomato hybrid seed production involves technically trained

labour, whose wage rate is higher as compared to other labour, the cost on these

items was found to be higher. There is a need to improve the efficiency of labour

by imparting further training and also offering some incentives to the labours in

ordered to reduce the cost of labour. This was followed by cost on staking sticks,

steel wires, jute thread, mulching sheet and other costs of Rs. 3,69,931.25, Rs.

5,483.62, Rs. 3,987.52, Rs. 3,291.66 and Rs. 28,355.61 respectively. Cost on

fertilizer is Rs. 14,226.74 (5.01% of the total cost), cost on FYM is Rs. 10,625

(2.74%), cost on seedlings accounts is Rs. 13,625 (3.52% of the total cost) and

plant protection chemicals accounts is Rs. 23,400 (6.02% of the total cost). The

average total fixed cost incurred in tomato hybrid seed production was Rs.

5,177.59 (2.36% of the total cost).

5.3.2 Returns realised in tomato hybrid seed production

The returns structure in tomato hybrid seed production was found to be

profitable and beneficial to the farmers in relation to the total cost incurred by

them. The gross returns and net returns were found to be much higher than their

cost structure. The gross return was found to be Rs. 8,97,554 per acre. The net

returns over variable cost were worked out to be Rs. 5,15,023.25. The net returns

over total cost were worked out to be Rs. 5,09,845.66. The returns were worked

out per kg basis, farmers realized net returns of Rs. 12,200 per kg. Then the

returns were worked out per each rupee of expenditure, it was found that farmers

obtained Rs. 2.31 which was much higher than the expenditure. Further, if the

farmers increase the use of fertilizers and pesticides in higher level, the returns

would be obtained through increased yield. This would lead to a further increase

in the net returns and average returns per rupee of expenditure.

70

5.4 Resource use efficiency and allocative efficiency in tomato hybrid seed

production

5.4.1 Resource use efficiency in tomato hybrid seed production

Regression equations were estimated separately using total gross returns

as the dependent variable and the amount of seedlings, FYM, human labour,

bullock and machine hour, fertilizer, plant protection chemicals and staking

materials as independent variables for tomato hybrid seed production (Table 4.7).

The regression equation was estimated in order to capture the nature and

magnitude of the effects of the independent variables on the productivity of tomato

hybrid seeds. The coefficients were estimated by employing the Cobb-Douglas

production function.

The output elasticity coefficients for seedlings, FYM and PPC were positive

and found to be significant. This showed that increase in the use of these inputs

would result in increase in efficiency of tomato hybrid seed production,

contributing significantly towards gross returns. Elasticity coefficients for human

labour, bullock labour and machine hour were found to be positive but non-

significant. Hence, it would not be profitable to further increase in the expenses on

these resources. The elasticity coefficients for fertilizer and stacking materials

were negative and found to be non-significant indicating that the fertilizer and

stacking materials were over used.

The sum of elasticity coefficients was 1.30 which indicated increasing

returns to scale. A one per cent increase in all the factors of production

simultaneously would result in an average increase of gross returns by 1.30 per

cent. The value of coefficient of multiple determination (R2) was 0.94 which

implied that 94 per cent of total variation in gross returns was explained by the

variables included in the model.

5.4.2 Allocative efficiency in tomato hybrid seed production

The Marginal Value Product (MVP) to Marginal Factor Cost (MFC) ratios

for seedlings, FYM, human labour, bullock and machine hour and PPC were

positive indicating that still there is scope to use these inputs and increase the

gross returns of tomato hybrid seed production. The MVP to MFC ratio for

71

fertilizer and stacking materials were found to be negative, it indicated that

expenditure on these inputs were more than the optimum level. Hence, withdrawal

of some units of these resources is profitable in the short-run.

5.5 Pattern of income and employment in the cultivation of tomato hybrid seed

production

5.5.1 Income generation through tomato hybrid seed production

Results of Table 4.6 revealed that the average yield of tomato hybrid seeds

was 73.57 kg per acre. Yield varied depending upon the area, type of hybrids, the

climatic conditions prevailing during the crop season, incidence of pests and

diseases and the most importantly, the alertness of the farmer in managing the

crop. The total gross returns realized from tomato hybrid seed production was Rs.

8,97,554, by seeing the gross returns we conclude that, the tomato hybrid seed

production is an income generating enterprise.

The total cost incurred by the farmers in cultivation of tomato hybrid was

Rs. 3,87,708.34 per acre while the net returns over variable and total costs

realized was Rs. 5,15,023.25 per acre and Rs. 5,09,845.66 per acre. Net returns

per kg of tomato hybrid seeds worked out to be Rs. 12200. The benefit cost ratio

was found to be RS. 2.31 per kg. Hence, the results of the tables revealed that,

tomato hybrid seed production is an income generating enterprise to the farmers.

5.5.2 Pattern of employment in tomato hybrid seed production

It was found from the table 4.9 that the total labour employed in tomato

hybrid seed production was about 1,228.24 man days of human labour. Out of

which, the proportion of hired labour was more (877.80 man days) as compared to

family labour (381.37 man days). Among the various activities, higher number of

man days of labour was used for emasculation, pollination, weeding, transplanting

of seedlings and crushing of fruits and extraction of seeds. More or less similar

trend was observed in respect to family and hired labour employment. From the

foregoing discussion, it is clear that tomato seed production was a highly labour

intensive activity and among the activities, emasculation, pollination, weeding,

transplanting of seedlings and crushing of fruits and extraction of seeds were

72

found to be most important. The activities like emasculation and pollination

requires skilled as well as training, so that higher efficiency would be achieved in

labour utilization and also acid seed treatment and cleaning requires more labour

in tomato hybrid seed production. Therefore, the labour employed in seed

production activity to be trained initially to improve their skill of pollination. This

would enhance the efficiency of labour use in seed production and thereby

reduction in cost of production.

5.6 Problems faced by the contract farmers and the contract firms.

5.6.1 Problems faced by contract farmers

The results pertaining to problems faced by the seed growers are

discussed in the light of views expressed by the seed growers and some facts

observed by the researcher at the time of survey (Table 4.10).

The major production problems are concerned, majority of the seed

growers expressed the non-availability of skilled labour was given utmost priority,

prevalence of higher wage rate, high pest and disease attack, lack of technical

guidance, non-availability of high yielding hybrids, climatic factors and non

availability of seedlings on time are the major problems and which are ranked one

to seven based on the Garrett ranking technique. Tomato hybrid seed production

is a labour intensive enterprise which requires more number of labours during the

crossing and harvesting season. Many seed growers had to pay advance wages

to the labours especially during critical stages of operations like crossing and

harvesting.

While processing problems are concerned, most of the seed growers

complained lack of technical guidance about seed extraction method and non-

availability of mechanical seed extraction method were the major problems and

other problems were non-availability of acid (HCl) for seed extraction and

cleaning, problem of bad odour and non availability of skilled labour for processing

and seed extraction.

73

Some of the marketing problems in tomato hybrid seed production were

higher rejection rate, irregular payment, low contract price, delay in purchasing of

seeds, manipulation of norms by the firms and grading of seeds.

5.6.2 Problems faced by the contracting firms

The major problems of contracting firms were divided into seven attributes

and they were ranked based on the Garrett ranking technique. Some of the

problems were mixing of low grade with high grade, it is difficult check, as the

seed size is very small. Fixing of contract price, low productivity was the major

hindrance in the seed production activity, problem of inability of farmers to take

farm operations, land constraints, government regulations and selection of

farmers were the major problems (Table 4.11).

6. SUMMARY AND POLICY IMPLICATIONS

In principle, contract farming could be an institutional arrangement that

enables farmers to access markets. Contracting is a form of joint production where

the grower supplies tools, land, labour and management, while the processor

supplies technical assistance, some inputs such as planting materials, technical

guidance and undertakes to buy the grower’s output at a pre-determined price.

From the view point of the processor, this arrangement ensures raw material

supplies of the desired quality. From the view point of the grower, such an

arrangement provides an assured market and reliable income. Without a contract,

risks would be too much and few small growers would want to produce these

crops. For this reason, Glover (1990) described contract farming is described as an

institutional arrangement that combined the advantages of plantations (quality

control, coordination of production and marketing) and of small holder production.

Tomato (Lycopersicon esculentum), a solanaceous self-pollinated vegetable

crop. It occupies the largest area among the vegetable crops in the world after

potato. Tomato fruit can be consumed either fresh, cooked or in the form of

processed products such as jam, jelly, juice, ketchup, sauce etc. It is considered as

‘poor mans apple’ because of its attractive appearance and very high nutritive

value, containing vitamin A, vitamin C and minerals like calcium, potassium etc.

Apart from these, it also contains organic acids like citric, malic and acidic acids

which found in fresh tomato fruit, promotes gastric secretion, acts as a blood

purifier and works as intestinal antiseptic. Tomato is a native to Peruvian and

Mexican region. It is introduced by Portuguese to India.

It has been reported that genetically good quality seed alone can increase

crop production by 20 per cent. Farmers in India knew the value of good seed from

time immemorial and have contributed for improvement of seeds through selection

and cultivation. Seed is a basic input and forms only a small part of the total

cultivation expenses. Yet, without good seed the investment on fertilizer, pesticides

and other inputs will not pay the required dividend. The improved quality seed

production especially hybrids is cost intensive and hence many farmers hesitate to

75

take up the seed production activity. Therefore, an attempt is made in the present

study to examine the economics of tomato hybrid seed production.

Objectives of the study

1. To estimate the cost and returns in tomato hybrid seed production.

2. To analyse the resource use efficiency in tomato hybrid seed production.

3. To estimate the extent of income and employment generation through

contract farming in tomato hybrid seed production.

4. To analyse the problems faced by the farmers and firms in the production,

processing and marketing of tomato hybrid seeds.

Methodology

The predominant tomato hybrid seed producing district of Haveri in

Karnataka state has been chosen for the present study. Both secondary and

primary data were used. The relevant secondary data were collected from

agriculture, horticulture departments and seed companies. The primary data were

collected from the sample seed growers by adopting a multi-stage sampling

design. In all 120 seed growers growing tomato hybrid seeds were randomly

selected at the rate of ten seed growers from each of the four selected villages of

three taluks like Ranebennur, Hirekerur and Byadagi. In addition, the leading ten

contract firms were also interviewed for eliciting the required information.

Statistical tools employed

Tabular analysis was adopted to compile the general characteristics of the

sample farmers, descriptive statistics like averages, percentages etc. are used to

obtain the meaningful results. Budgeting technique was used to estimate the costs

and returns in tomato hybrid seed production. In order to study the resource use

efficiency in tomato hybrid seed cultivation, Cobb-Douglas production function was

used. The production elasticities were used to assess the optimal use of resources

76

in production activities. Garrett ranking technique was also employed for analysing

the problems of contract farmers and contracting firms.

The salient findings of the study

The average size of the land holding of the sample growers was 7.75 acres,

of which the average size of tomato hybrid seed production was 0.75 acres, there

is need to bring more area under tomato hybrid seed production.

All the inputs needed for tomato hybrid seed production were supplied

timely to the farmers by the company except expenses of implements and labour

wage were met by the farmers with their own money

The private seed companies selected only few farmers and supplied inputs

to them. This practice was mainly to protect the quality of the produce.

Socio-economic features of contract farmers

The average family size of contract farmers was around 7 members and

with respect to education level was concerned, literate and illiterate were 86.65

and 13.33 per cent respectively. Average age of the respondents was 34 years. As

most of the farmers were literate they were aware of using pesticides in proper

dozes and also potentiality of the crop. It was also interesting to note that most of

the farmers were young aged and were ready to take risk of new system of

production and market linkage. Hence, they might have gone for contract farming

by joining hands with the private seed company involved in cultivation.

Pattern of land holdings of sample farmers

The average size of the land holdings of the contract farmer was 7.75 acres.

The average area under tomato hybrid seed production accounted for about 0.75

acres, which worked out to be 5.05 per cent of total land holding. The companies

allotted very small sized land to cultivators mainly to maintain the quality of seeds.

Cropping pattern of sample farmers

Major proportion of the area in kharif was devoted for maize crop followed

by cotton and onion in the study area. In the rabi season, sunflower occupied a

77

major share followed by chilli. Over all, it was observed that farmers tried to

diversify their cropping pattern to minimize risks and seed production was taken up

on a plot of 0.5 acres only.

Input use pattern

It was found from the study that the contract seed growers used about 4,394

number female seedlings and 2,419 number of male seedlings, 1,259.17 man days

of human labour (including male and female), 12.05 tonnes of organic manure and

1065.5 kg of inorganic fertilizers. Around 8.00 liters of plant protection chemicals

were used in tomato hybrid seed production.

Cost incurred in tomato hybrid seed production

The results revealed that the total cost of tomato hybrid seed production per

acre was found Rs. 3,82,530.75. Among the various cost items, the maximum cost

Rs. 2,22,287.55 was found on human labour (including male and female). The

average total fixed cost incurred in contract farming was Rs. 5,177.59 of the total

cost.

Returns structure in tomato hybrid seed production

The tomato hybrid seed production was found to be profitable with Rs.

8,97,554.00 per acre as gross returns, Rs. 5,15,023.25 net returns over total cost

of cultivation. The seed growers would get Rs. 2.31 for every rupee investment in

seed production.

Resource use efficiency

The results of production function analysis indicated that with the coefficient

of multiple determination (R2) value of 0.94 for tomato hybrid seed production, the

inputs included in the model were able to explain 94 per cent of the variation in

tomato hybrid seed production of sampled seed growers.

The elasticity coefficients of regression estimates of seedlings and FYM

were significant at 1 per cent, the elasticity coefficients of regression estimates of

PPC was significant at ten per cent. The human labour, bullock labour and

78

machine hour and stacking materials had a positive significant influence on the

gross returns of tomato hybrid seed production. Whereas, fertilizer and stacking

materials were found to influence the gross returns negatively. The sum of

elasticities (∑bi) was found to be 1.30 implying increasing returns to scale.

The MVP to MFC ratio of FYM and bullock and machine hour was greater

than unity implying under utilization of resources. The MVP to MFC ratios of

seedlings, human labour, fertilizer, PPC and stacking materials were substantially

lesser than unity implying excess utilization of these resources.

Pattern of employment

In tomato hybrid seed production, it was found that the human labour

employed was about 1,228.24 man days per acre mainly due to higher use of

human labour for emasculation and pollination activities. Hence, tomato hybrid

seed production is a highly labour intensive activity. Emasculation, crossing,

picking of fruits, crushing of fruits and extraction of seeds require skilled personnel

to perform the operations to achieve higher labour efficiency.

Problems faced by the contract farmers

The major production problems in tomato hybrid seed production were non-

availability of skilled labours, high wage rate, high pest and disease attack, lack of

technical guidance, non-availability of high yielding hybrids and climatic factors.

The major processing problems were lack of technical guidance about seed

extraction method, non availability of mechanical seed extraction method, non

availability of acid for seed extraction and cleaning, problem of bad odour during

fermentation and non-availability of skilled labour for processing and seed

extraction.

The major marketing problems were higher rejection rate, irregular payment,

low contract price, delay in purchasing of seeds, manipulation of norms by the

firms and grading of seeds.

79

Problems faced by the contract firms

The major problems expressed by the firms were mixing of lower grade with

higher grades, fixing of contract price, land constraints, inability of the farmers to

take farm operations, lower productivity, government regulations and selection of

farmers.

Policy implications

Based on the findings of the study, the following policy implications are

worth considering for framing policy for promoting tomato hybrid seed production in

study area.

1. Results of the study relating to cost of production of tomato hybrid seeds

revealed that, it is a capital intensive activity, thus financial institutions have

to encourage the farmers by providing required credit as and when they

need as in case of crop loans., therefore there is a need to fix the scale of

finance for seed production to encourage the farmers to borrow loan from

commercial banks.

2. Tomato hybrid seed production is a highly risky activity inspite of taking all

operations in time, even a slight variation in climatic conditions such as

unexpected rains (cyclones) results in loss of crop or destroy seed quality

which may lead to rejection of seeds by the contracting firm, in such a

situation to protect the farmers, the scheme of crop insurance may be

introduce to cover the seed production activity which involves climatic risks.

3. The resource use efficiency analysis revealed that there is scope for

increasing the use of resources like seedlings, FYM, human labour and PPC

and reorganizing the expenditure on resources like fertilizer and stacking

materials because they are overused. Hence, there is need to educate the

farmers on the optimal use of these resources.

4. Seed extraction, processing and cleaning requires more skilled labour, in

order to save the cost on these activities, there is need to bring these

activities under mechanical seed extraction methods.

80

5. In few cases, the seeds are rejected by the contracting firms in view of not

meeting the quality standards by the farmers, these results in huge losses to

the seed growers. To overcome this problem, there is a need to create the

awareness about maintaining quality parameters in seed production.

6. Majority of the sample farmers expressed that the problem of delay in

paying sale proceeds up to 4-6 months, to overcome this problem, as and

when farmers carry their product the contracting firm may provide a part of

payment in order to protect the economic conditions of the seed growers.

REFERENCES

Anonymous, 1990, Technical Bulletin on Hybrid Cotton in India, Central Institute

for Cotton Research, Nagpur.

Anonymous, 1997, Annu. Rep. for 1996-97, Central Institute for Cotton Research,

Nagpur, p. 22.

Arunkumar, K. S., 1976, Economics of hybrid jowar seed production in

Devanahally taluk, Bangalore district. M. Sc. (Agri.) Thesis, Univ.

Agric. Sci., Bangalore, Karnataka (India).

Arunkumar, S., 2002, Economics of contract farming in vegetables - A case of

Belgaum district. M. Sc. (Agri.) Thesis, Univ. of Agric. Sci., Dharwad,

Karnataka (India).

Balappa Shivaraya., Hugar, L. B. and Gummagolmath, K. C., 1998, Economics of

integrated pest management in red gram production. The Bihar J.

Agril. Mktg., 4 (3): 455-459.

Birari, K. S., Nawadkar, D. S. and Mali, B. K., 1991, Employment pattern of

women with special reference to agriculture in Maharastra. Indian J.

Agric Econ., 54 (3): 314.

Chulaki, B. M., 2001, Production and marketing of hybrid cotton seeds in Northern

Karnataka - An economic analysis. M. Sc. (Agri.) Thesis, Univ. Agric

Sci., Dharwad, Karnataka (India).

David Terfa Akighir and Terwase Shabu, 2011, efficiency of resource use in rice

farming enterprise in Kwande local Government area of Benue State,

Nigeria. Intl. J. Human. Social Sci., 1(3): 215-220

Deshmukh, P. D., Harge, D. S. and Pawar, J. R., 1991, Resource use efficiency

under different farming systems in drought prone area of western

Maharashtra. Indian J. Agric. Econ., 46 (1): 473-474.

Dileep, B. K., Grover, R. K. and Rai, K. N., 2002, Contract farming in tomato: An

economic analysis. Indian J. Agric. Econ., 57 (2): 197-210

82

District Statistical Office, Haveri ,2011-12, pp. 1-227.

Dyammannavar, G. D., 2000, Economics of gherkin production and trade in

Haveri district, Karnataka. M. Sc. (Agri.) Thesis, Univ. Agric. Sci.,

Dharwad, Karnataka (India).

Glover, D. J., 1990, Contract farming and out grower schemes in East and

Southern Africa. Journal of Agricultural Economics, 41(3): 303-315.

Gnanakumar, P. B., 2007, Financial feasibility of investment in contract poultry

farming. Indian J. Mktg., 37(2): 12.

Jagadeesh, N. P., 2011, Economic efficiency of contract farming models in

medicinal plants – An economic analysis, M. Sc. (Agri.) Thesis, Univ.

Agric. Sci, Dharwad, Karnataka (India).

Jagadish Kumar and Prakash Kumar., 2008, contract farming: problems,

prospects and its effect on income and employment. Agric. Econ.

Res. Rev., 21: 243 250.

Jalihal, S., 2009, Contract farming in medicinal plants- A case of coleus in

Karnataka. MBA (Agri-Business) Thesis, Univ. Agric. Sci., Dharwad,

Karnataka (India).

Kalamkar, S. S, 2012, Inputs and services delivery system under contract farming:

A case of broiler farming. Agric. Econ. Res. Rev., 25: 49-57.

Kanchana, V. S., Yesodha, N. and Sujatha, S., 2009, Contract farming model in

poultry. Natl. Sem. on Emerging Issues in Contract Farming in India,

held at Institute of Developmental Studies, University of Mysore,

Mysore, 20-21 February, 2009, p. 5.

Kannababu, N. and Rana, B. S., 2003, The economics of sorghum hybrid seed

production. Seed Res., 31(1): 1-7.

Karthick, V., Alagumani, T. and Amarnath J. S., 2013, Resource use efficiency

and technical efficiency of turmeric production in Tamil Nadu - A

stochastic frontier approach. Agric. Econ. Res. Rev., 26(1): 109-114.

83

Key Neigel and Runsten, D., 1999, Contract farming of agro-processing firms and

the scale of out grower production. World Develop., 27(2) : 381-401.

Kumar, H, and Singh, R, 2005, Success and failure of contract farming in

Himachal Pradesh: A case study of Cauliflower seed production.

Indian J. Agric. Mktg., 19(2): 170.

Madalia, V. K. and Charan, A. S., 1974, a study of development of Hybrid-4 cotton

in Gujarat and its production economics. Indian J. Agric. Econ., 29:

154-162.

Madalia, V. K. and Patel, A. R., 1984, Economics of hybrid cotton seed

production. Seeds and Farms, 9(6): 15-19.

Mallikarjunaiah, K. G., Ramanna, R. and Shetty, M. V., 1974, Report on

Economics of Hybrid Seed Production of Cotton, Jowar and Maize in

Karnataka State, Division of Agricultural Economics, Univ. Agric. Sci.,

Bangalore, Karnataka (India).

Mane, A. B., 1991, Hybrid cotton seed production and marketing in Maharashtra :

An economic analysis. M. Sc. (Agri.) Thesis, Univ. Agric. Sci.,


Mohan, H. P., 2009, Impact of IPM technology on cotton and paddy production in

Haveri district- an economic analysis. M. Sc. (Agri.) Thesis, Univ.

Agric. Sci., Dharwad, Karnataka (India).

Mundinamani, S. M., Naik, B. K., Dolli, S. S. and Mahajanashetti, S. B., 2009, An

economic analysis of seed production under contract farming in North

Karnataka. Natl. Sem. on Emerging Issues in Contract Farming in

India, held at Institute of Development Studies, University of Mysore,

Mysore, 20-21 February, 2009, p. 58.

Muralidharan, P. K., 1987, Resource use efficiency in Kole lands in Trisshur

district, Kerala. Indian J. Agric. Econ., 42 (4): 578-586.

84

Naduvinamani, R., 2007, Economics of red banana production under contract

farming in Karnataka. M. Sc. (Agri.) Thesis, Univ. Agric. Sci.,


Naik, A. D., Shankramurthy, H. G., Teggi, M. Y. and Koppad, M. B., 1998,

Resource use efficiency in onion cultivation in Bijapur district,

Karnataka. Karnataka J. Agric. Sci., 11 (1): 277.

Naik, B. K., 1998, Farming systems in Uttar Kannada district- An econometric

analysis. Ph. D. Thesis, Univ. Agric. Sci., Dharwad, Karnataka (India).

Naik, B. K., Ranganathsastry and Hosamani, S. B., 1996, Generating better

income : Economics of tomato seed production in Dharwad district.

Karnataka J. Agric. Sci., 9(2): 369-371

Narayanakutty, C., Indira Devi, P. andJaikumaran, V., 1998, Economics of

vegetable seed production in Kerala state: A case study. Seed Res.,

26(1) : 47-52.

Nethrayini, K. R., Kunnal, L. B., 2010, Estimated contract farming of gherkin under

Agri. export zone in Karnataka- an economic analysis. M. Sc. (Agri.)

Thesis, Univ. Agric. Sci., Dharwad, Karnataka (India).

Patel, R. J. and Dholaria, M. G., 1981, Costs and returns of hybrid cotton seed

production in Gujarat. Seeds and Farms, 2(1): 59-64.

Patil, S. R., 2011, Comparative economics of pigeon pea production under

transplanted and conventional methods in selected districts of

northern Karnataka. M. Sc. (Agri.) Thesis, Univ. Agric. Sci., Dharwad,

Karnataka (India).

Ponghal, B. S., Singh, H. and Luhach, M. S., 1999, Comparative study on the

efficiency of women labour in agriculture in Haryana. Indian J. Agric.

Econ., 54 (3): 325.

85

Prasad Venu, H. D., Singh Premlata., Kumar, Shiv and Singh, B. K., 2013,

Performance and constraints in Gherkin contract farming. Indian Res.

J. Extn. Edu., 13(1) : 112-116.

Rajmane, K. D., 1979, Economic of seed production of Varalaxmi, Godawari and

H-4 cotton in Parbhani district. Agresco Rep., 1978-79.

Rakhunde, D. D., 1974, Economics of seed production in H-4 cotton in Parbhani

district. M. Sc. (Agri.) Thesis, Maharashtra Agric. Univ., Parbhani.

Rama Rao I. V. Y., 2012, Efficiency, yield gap and constraints analysis in irrigated

vis-à-vis rainfed sugarcane in north coastal zone of Andhra Pradesh.

Agric. Econ. Res. Rev., 25(1): 167-171.

Ramamoorthy, K., 1995, An integrated cotton production and marketing

management. Annu. Rep., 1994-95, Central Institute for Cotton

Research, Nagpur, p. 84.

Ramamoorthy, K., 1996, Economics of rainfed cotton production in Tamil Nadu.

Annu. Rep., 1995-96, Central Institute for Cotton Research, Nagpur,

pp. 79-80.

Ramamoorthy, K., 1999, An economic analysis of input and output management

in summer cotton for Tamil Nadu. Annu. Rep., 1998-99, Central

Institute for Cotton Research, Nagpur, p. 16.

Ramasundharam, P., Ingle Rajendra., DhoteSonali and Singh, M., 2005, Contract

farming in cotton. Financing Agriculture, pp. 49-53.

Rithesh, S., 2013, Comparative economics of Sugarcane processed for Sugar

and Jaggery, M. Sc. (Agri.) Thesis, Univ. Agric. Sci. Dharwad,

Karnataka (India).

Roy, E. P., 1963, Contract Farming – USA, The Interstate Printers and Publishers,

Inc.Danville Illinois.

Singh, S., 2000, Contract farming for agricultural diversification in Punjab: A study

on performance & problems. Indian J. Agric Econ., 35 (3): 241-261.

86

Singh. A, 2001, Supply chain management – Role of contract farming. Indian

Food Packer, 51(2): 81-85.

Sridhara, J. and Hosamani, S. B., 2010, Economics of contract farming –A case

study of chilli in Bagalkot district of Karnataka. M. Sc. (Agri.) Thesis,

Univ. Agric. Sci., Dharwad, Karnataka (India).

Srikanthmurthy, P. S., 1986, Resource productivity in agriculture of Bangalore

district, Karnataka. M. Sc. (Agri.) Thesis, Univ. Agric. Sci., Bangalore,

Karnataka (India).

Srinivasan, K. and Gururajan, K. N., 1974, Economics of production of hybrid

cotton seed utilizing male sterile line. Cotton Dev., 4(3): 5.

Sunanda, N. and Narendra, I., 2003, Resource productivity of mesta farms in

Srikakulam district of Andhra Pradesh. The Andhra Agric. J., 50 (3-4):

327-331.

Tatlidal, F. F. and Akturk, D., 2004, Comparative analysis of contract and non-

contract farming model in tomato production. J. Agron., 3 (4): 305-

310.

Vijaykumar, H. S. and Sonnad, J. S., 2010, Contract Farming – A Boon or Bane

for Community. Excel India Publishers, New Delhi, pp. 71-87.

Vinayaka, N. V., 2005, Contract farming in maize-An economic analysis. M. Sc.

(Agri.) Thesis, Univ. Agric. Sci., Dharwad, Karnataka (India).

Vincent Ng’eno, Lagat, B. K., Korir, M. K., Ngeno, E. K. and Kipsat, M. J., 2010,

Resource use efficiency in poultry production in Bureti district, Kenya.

African Association of Agricultural Economists (AAAE) and 48th

Agricultural Economists Association of South Africa (AEASA)

Conference, Cape Town, South Africa, September 19-23, 2010.

Zakir Siraz, 2008, Management of contract farming in livestock : A case of poultry

industry. MBA (Agri-business) Thesis, Univ. Agric. Sci., Dharwad,

Karnataka (India).

Appendix I: Interview schedule for contract farmers

UNIVERSITY OF AGRICULTURAL SCIENCES, DHARWAD DEPARTMENT OF AGRICULTURAL ECONOMICS

PART - A

Research Title: “AN ECONOMIC ANALYSIS OF TOMATO HYBRID SEED

PRODUCTION UNDER CONTRACT FARMING IN HAVERI DISTRICT.”

Schedule No: ___________ Date: ____________ I. General information of the respondents

1. Name:_________________________Age:__________Education:___________

2. Village :___________________ Taluk: _______________

District:_______________

3. Family type: Nuclear/ Joint __________________

4. Occupation: Main: __________________ Subsidiary:

________________

5. Association with social organization: ZP/TP/VP/NGO/SHG/Water use groups

6. Annual income: Main occupation: Subsidiary occupation: Total:

II. Family composition

Number of Family members: Male: Female: Children:

Sl. No.

Name Sex Age Education Occupation

1

2

3

4

5

6

7

8

III. Land Holdings: acre: Type of soil:

Sl. No. Particulars Survey No. Irrigated Dry land Total

1 Owned

2 Leased in

3 Leased Out

4 Fallow, if any

Total

88

IV. If Irrigated, Sources of Irrigation

Sl. No.

Sources

Availability of water

Adequacy Inadequacy Year

round Kharif Rabi Summer

1 Open well

2 Bore well

3 Canal

4 Tank

5 Farm pond

6 Others

V. Sources of Income

Sl. No. Sources Monthly Seasonal Annual income

(Rs)

1 Agriculture

2 Horticulture

3 Dairy

4 Wage earning

5 Salary

6 Others, if any

VI. Cropping pattern

Sl. No. Particulars Sole crop Mixed crop Intercropping

Total Crop Area Crop area Crop area

I Kharif

i

ii

iii

iv

II Rabi

i

ii

iii

iv

III Summer

i

ii

iii

iv

Total

89

VII. Input utilization pattern in tomato hybrid seed production:

1. Name of hybrid: ________________ 2.Season:__________________

3. Area (Acre): _______________ 4.Soil type: _______________

5. If irrigated, sources of irrigation: ___________ Method of irrigation: ___________

Sl. No Particulars Units Quantity

I. Inputs

1 FYM Tonnes

2. Seedlings No.

a.. Male seedlings

b. Female seedlings

Sub total

3. Fertilizer Kg

a. Urea

b. DAP

c. MOP

Sub total

4. PPC Liters

a. Corozene

b. Cabrotop

c. Okeo

d. Selvo-303

e. MX-60

f. Others

Sub total

5. Labour Man days

a. Men Labour

b. Women Labour

c. Bullock labour Pair days

d. Machine hours Hours

6. Staking sticks No.

7. Steel wires Kg

8. Jute thread Kg

9. Mulching sheet Kg

90

VIII. Labour utilization pattern in tomato hybrid seed production

Sl. No.

Name of the operation

No of times

Family labour Hired labour Machine labour

M W BP M W BP O H C

A. Production

1. Ploughing

2. Harrowing

3. Transportation of FYM

4. Spreading of FYM

5. Seed bed preparation

6. Transplanting of seedlings

7. Fertilizer application

8. Irrigation charges

9. Weeding

10. Rouging

11. Emasculation

12. Pollination

13. PPC spraying

14. Harvesting

Sub total

B. Processing and marketing

1. Crushing and extraction of seeds

2. Acid seed treatment

3. Cleaning and drying

4. Grading of seeds

5. Packing and transportation

Sub total

Total(A+B)

M: Men W: Women BP: Bullock pair ML: Machine Hour

91

IX. Cost incurred in tomato hybrid seed production

Rs/acre

Sl. No

Particulars Units Cost in (Rs)

Variable cost

1 FYM Tonnes

2. Seedlings: No.

a. Male seedlings

b. Female seedlings

Sub total

3. Fertilizer Kg

a. Urea

b. DAP

c. MOP

Sub total

4. PPC Liter (ml)

a. Corozene

b. Cabrotop

c. Okeo

d. Selvo-303

e. MX-60

f. Others

Sub total

5. Labour Man days

a. Men Labour

b. Women Labour

c. Bullock Labour Pair days

d. Machine hour Hours

6. Staking sticks No.

7. Steel wires Kg

8. Jute thread Kg

9. Mulching sheet Kg

10. Others --

11. Interest on working capital

(8%)

Total Variable cost

Wage rate of labour utilization

1. Men Labour Wage/Day =__________ 2.Women labour wage/day =_____________

3. Bullock Pair charges/day: =_______ 4. Tractor ploughing charges/ acre =________

5. Tractor harrowing charges/acre =__ 6. Tractor transportation charges/tonne =____

92

X. Gross returns

Rs. /acre

Sl. No Main product Quantity(Kg) Rs/Kg Total amount

(Rs)

Total:

XI. Problems faced by contract farmers in Production, Processing and Marketing of tomato hybrid seeds

n=120

Sl. No. Problems Rank

Production problems

1 Non availability of skilled labour

2 High wage rate

3 High pest and disease attack

4 Lack of technical guidance

5 Non availability of high yielding varieties

6 Climatic factors

7 Non availability of seedlings on time

Processing problems

1 Lack of technical guidance about seed extraction method

2 Non availability of mechanical seed extraction facility

3 Non availability of acid (HCl) for seed extraction and cleaning

4 Problem of bad odour (Smell) during fermentation

5 Non availability of skilled labour for processing and seed extraction

Marketing problems

1 Higher rejection rate

2 Irregular payment

3 Low contract price

4 Delay in Purchasing of seeds

5 Manipulation of norms by the firms

6 Grading of seeds

93

XII. Détails on institutionnel arrangements.

1. Does the company supply all the needed inputs? Yes/ No

2. Are you familiar with grading of produce? Yes/ No

3. Where does the grading take place? a) Farm level b)

Laboratory

4. From where you get all inputs? a) Farm delivery b) Company

shop

5. Is it the contract price paid by the company after delivery of produce? Yes/ No

6. Number of days of settlement of sale proceeds after delivery of seeds.

a) 1-2 months b) 2-3 months c) after 4 months

7. Did you sell all the produce to the same company as you entered into agreement? Yes/

No

If no, where do you sell/ to whom you sold that produce?

8. a) Are you satisfied with the present system of contract arrangements with the

companies?

Yes/ No

b) If no, please suggest the needed changes in the present system.

94

Appendix II: Interview schedule for contracting firms

UNIVERSITY OF AGRICULTURAL SCIENCES, DHARWAD

DEPARTMENT OF AGRICULTURAL ECONOMICS

(PART - B)

Research Title: “AN ECONOMIC ANALYSIS OF TOMATO HYBRID SEED PRODUCTION UNDER CONTRACT FARMING IN HAVERI DISTRICT.”

Schedule No: ___________ Date: ___________

I. General information:

a. Name of the company :

b. Address of the company :

c. Name of the respondent :

d. Designation :

II. Problems faced by contracting firms

Sl. No

Problems Rank

1 Mixing of low grade with high grade seeds

2 Fixing of contract price

3 Land constraint

4 Selection of farmers

5 Lower productivity

6 Government regulations

7 Inability of farmers to take farm operations

95

Appendix III: Factors influencing selection of seed growers by the firms

(n=120)

Sl. No.

Factors No. of

farmers Percentage

1 Adequate knowledge of seed production 42 35

2 No marketing risk 36 30

3 Supply of inputs 87 72.5

4 Profitability 90 75

5 Good opinion about the firm 63 52.5

6 The firm gives better contract terms 72 60

7 Others succeeded through contract seed production

33 27.5

8 Age and education of the farmers 45 37.5

96

Appendix IV: Factors considered by the firms for selection of the farmers in tomato hybrid seed production

(n=10)

Sl. No.

Factors No. of firms

Percentage

1 Availability of infrastructure 7 83.52

2 Distance from the village to the firm 4 51.43

3 Performance in the previous contract 6 78.57

4 Credibility of farmers 3 36.25

5 Location of seed production plot 5 62.54

6 Experience of the farmers in seed production 8 88.57

7 Involvement of farmers in seed production 3 42.36

8 Honesty and sincerity of the farmers 7 68.57

AN ECONOMIC ANALYSIS OF TOMATO HYBRID SEED PRODUCTION UNDER CONTRACT FARMING IN HAVERI DISTRICT

NAGARAJM. SANNAMANI 2014 Dr. S. M. MUNDINAMANI Major Advisor ABSTRACT

Tomato hybrid seed production under contract farming is highly profitable,

even small farmers can practice it. Farmer is assured of better returns compared to

other field crops as the companies offer relatively better prices. The farmers will get

all required things for cultivation of tomato such as inputs, technology and extension

services in one roof. The present study was conducted in Haveri district of

Karnataka. Both primary and secondary data were used in the study in order to

ascertain the cost and returns, resource use efficiency, extent of income and

employment and problems faced by the farmers and firms in production, processing

and marketing of tomato hybrid seeds. Tabular presentation method, Budgeting

technique, Cobb-Douglas production function and Garrett’s ranking techniques

were employed for the analysis of data.

The results revealed that the total cost of tomato hybrid seed production per

acre was found to be Rs. 3,87,708.34. Among the various costs, the maximum cost

Rs. 2,22,287.55 was found on human labour. The average total fixed cost incurred

was Rs. 5,177.59.The tomato hybrid seed production was found to be profitable

with Rs. 8,97,554.00 per acre as gross returns, Rs. 5,15,023.25 net returns over

total cost of cultivation. The seed growers would get Rs. 2.31 for every rupee

investment in seed production.

The MVP to MFC ratio of FYM and bullock and machine hour was greater

than unity implying under utilizations of resources. The MVP to MFC ratios of

seedlings, human labour, fertilizer, PPC and stacking materials were substantially

lesser than unity implying excess utilization of resources.

Non-availability of skilled labours, high wage rate, higher rejection rate,

irregular payments, and low contract price were the major problems expressed by

the farmers. Major problems expressed by the firms were mixing of lower grade with

higher grades, fixing of contract price and land constraints.

Documents

AN ECONOMIC ANALYSIS OF TOMATO HYBRID SEED … · 2018-12-29 · an economic analysis of tomato hybrid seed production under contract farming in haveri district nagaraj m. sannamani