Documente Academic
Documente Profesional
Documente Cultură
BY
K. SRIDEVI
B.Sc. (Horti)
2014
DECLARATION
Mrs. K. SRIDEVI has satisfactorily prosecuted the course of project and that the
report entitled “BUSINESS ANALYSIS OF GERBERA CULTIVATION UNDER
POLYHOUSE- A CASE STUDY IN RANGA REDDY DISTRICT OF ANDHRA
PRADESH” submitted is the result of original work and is of sufficiently high standard
to warrant its presentation to the examination. I also certify that neither the project
report nor its part thereof has been previously submitted by her for a degree of any
University.
Shri K. V. Ramanaiah (late) and Smt. K. Padma for their unbounding love,
unparallel affection and unstinted encouragement throughout my educational career
and without their moral support I could not have completed the project report.
Table Page
Title
No. No.
3.4 Source wise irrigated area of district Ranga Reddy during 2010-11
% : Per cent
@ : At the Rate
°C : Degree Celsius
°F : Degree Fahrenheit
ac : Acre
cm : Centimetre
Dept : Department
ha : Hectare
Kg : Kilogram
2
Km : Square Kilometre
MT : Metric Tonnes
No. : Number
Faculty : AGRICULTURE
ABSTRACT
Gerbera (Gerbera jamesonii) is a herb and its flowers are like Daisy. It can be
grown as a field crop in open air on raised beds, as a greenhouse plant under controlled
conditions (polyhouse ) and as a potted plant. Gerbera is the latest sensation to Indian
floriculture, commercially grown throughout the world in a wide range of climatic
conditions. Thumping success of Gerbera under protected conditions has extensively
discouraged growers to raise this crop under open field conditions, with the result, most
of the studies have accrued out under protected conditions. According to the global
trends in floriculture, gerbera occupies the 4th place among cut flowers. In India,
flowers are grown in around 233,000 ha land, with the production of loose flowers
around 1729,000 MT and that of cut flowers 76732 lakh numbers (2012-13), as per
NHB 2013 database. Andhra Pradesh contributes about 9 per cent to the cut flower
production and 12.98 per cent to the loose flower production. The study area Ranga
Reddy district was selected purposively because the gerbera cultivation in polyhouse is
developing as a new venture. It has got distinct advantage due to International airport,
Hyderabad market and good transport facility to the market area.The present study
“Business viability of gerbera cultivation in polyhouse a case study in Ranga Reddy
district of Andhra Pradesh is studied with the following objectives:
The cost of cultivation of gerbera is Rs. 3.64 lakhs per 0.1 ha and net return per
0.1 ha is 2.46 lakhs. The BC Ratio, NPV and IRR were 1.1, Rs.4.87 lakh and 28.8
per cent respectively. Two channels of marketing were identified for gerbera, which
are
INTRODUCTION
Floriculture is an age old farming activity in India having immense potential for
generating self-employment among small and marginal farmers but the social and
economic aspects of flower growing were, however, recognized much later. The
offering and exchange of flowers on all social occasions, in places of worship and their
use for adornment of hair by women and for home decoration have made them to
become an integral part of human living.
The important floricultural crops in the international cut flower trade are rose,
carnation, chrysanthemum, gerbera, gladiolus, gypsophila, liastris, nerine, orchids,
archilea, anthurius, tulip, lilies, etc. Floriculture crops like gerberas, carnation, etc. are
grown in green houses whereas the crops grown in open fields are chrysanthemum,
roses, gaillardia, lily marigold, aster, tuberose etc.
The area under floriculture in India is 232.65 thousand hectares with a production
of 1729.2 MT and 76731.9 MT of loose and cut flowers respectively (NHB database
book, 2013)
In 2013-14, the total value of exports of floriculture from India was Rs. 455.90
crores. The major importing countries were United States, Netherlands, Germany,
United Kingdom, United Arab Emirates, Japan and Canada. There are more than 300
export-oriented units in India. More than 50 per cent of the floriculture units are based
in Karnataka, Andhra Pradesh and Tamil Nadu.
The country has exported 22,485.21 MT of floriculture products worth of Rs. 455.90
crores in 2013-14.
Area under floriculture cultivation
West Bengal has largest area under floriculture while Tamil Nadu is largest
producer of loose flowers whereas Karnataka is largest producer of cut flowers.
Maharashtra, Karnataka, Andhra Pradesh, Haryana, Tamil Nadu, Rajasthan and West
Bengal have emerged as major floriculture centres in the country.
Table 1.3 State wise area and production of flowers in India (2012-2013)
Punjab 2 0 10.5
Flowers grown under greenhouses in different countries around the world are
around 46,008 ha (Sudhagar, 2013). Globally more than 145 countries are involved in
the cultivation of ornamental crops and the area under these crops is increasing steadily.
The production of flower crops has increased significantly and there is a huge demand
for floricultural products in the world, resulting in growing international flower trade.
The world consumption of cut flowers and plants is increasing and there is a steady
annual increase of 10 to 15 per cent in all importing countries.
India has a larger area under floriculture than many other countries, but the area
under protected cultivation is limited. The proportion of the area under protected
floriculture to the total floricultural area is 99 per cent in Colombia, 70 per cent in the
Netherlands and 58 per cent in Italy, whereas in India it is hardly 0.56 per cent.
Although the floriculture industry is growing at a faster rate compared to other
horticultural based industries, still there is a vast scope to bridge the gap of demand and
supply in domestic as well as world market in the field of floriculture.
The genus Gerbera was founded by the Pre-Lannean botanist, Gronovius and was
named in honour of German naturalist, Traugott Gerber, who travelled Russia in 1743.
In the family Asteraceae (Compositae), this group at present comprises 45 species,
native to tropical Asia and Africa. About 7 species were recorded in India, distributed in
the temperate Himalayas from Kashmir to Nepal at altitudes of 1,300 to 3,200 meters.
Gerbera (Gerbera jamesonii) is a herb and its flowers are like Daisy. Flower
stalks are long, thin and leaf-less. It flowers year-round in warm and humid conditions.
It can also be grown as a field crop in open air on raised beds, as a greenhouse plant
under controlled conditions (polyhouse) and as a potted plant. Plants are stem less and
tender perennial herbs. Leaves are radical, petiole, lanceolate, deeply-lobed, sometimes
leathery, narrower at the base and wider at top and are arranged in rosette at the base. A
well drained, rich, light, neutral or slightly alkaline (pH 5.5 to 6.5) soil is most suitable
for gerbera production. Gerberas are propagated by seeds, cuttings of clumps with buds,
and from tissue-cultured plants. Plants on raised beds are irrigated and fertigated
through drip. Gerbera plants produce flowers 7-8 weeks after planting. Plants have
productive life up to 24-36 months. Flowers are ready to harvest when 2-3 whorls of
stamens are developed. The flower is plucked at the heel with angular cut. Plucking
should be done in morning or evening. For long distance transport corrugated
box/cartons are used. Gerbera does not need cooling like rose or carnation and have
reasonably long shelf life.
There are several varieties in Gerbera. Many varieties are released by private
companies. Some of the varieties are Dalma (white), Dana Ellen (yellow), Rosalin
(pink), Savannah (red), Cream Clementine (cream white) and Maroon Clementine
(orange) etc. It is ideal garden plant for beautification on flower beds, borders and in
rock garden. The flowers are of various colours and suit very well in different floral
arrangements.
1.2 OBJECTIVES
1) To study the growth trend of polyhouse based farming in Andhra Pradesh.
2) To analyse the financial feasibility of gerbera cultivation under polyhouse
conditions in study area.
3) To identify the different marketing channels and price spread in gerbera.
A one man research is always confronted with various bottlenecks and the present
study is not an exception to these limitations. One of the most important limitations of
the study was that the study was confined to a particular agro-climatic and agro-
economic region and hence conclusions drawn are applicable to that area and areas with
similar conditions only. Therefore, the extent of generalization has to be cautiously
made. Secondly, the data was collected through survey method by interviewing farmers.
Therefore, the objective of the data is limited to the extent that the farmers are able to
sum up from their memory, as they do not maintain any records. However, all care has
been taken to get reliable data from informants. Due to fluctuation in the price of
gerbera, the average price during the study period has been taken for the computation of
the price spread. Hence, it could be considered as one of the limitations of the study.
The study is also confronted with the constraints of limitation of time, sample size and
resources at the disposal of investigator.
I. Introduction: The importance of the study, problem setting and objectives are
covered.
REVIEW OF LITERATURE
For any investigation, the findings of earlier studies may possibly give insight of
the problem and sets direction for the research. An extensive survey of literature was
undertaken in order to have an understanding of various concepts related to the problem
concerned, interpretation of findings of the study and the limitations. Careful study of
the earlier studies conducted in India and abroad on production and marketing provides
guidance and clarity while conducting the research study. In this chapter an attempt is
made to review the literature of the past research work relevant to the present study. The
review has been presented under the following subheads.
Jayale et al. (2012) studied the growth of banana exports in Tamilnadu compared
to the growth rate of banana and its relative share to total fruits exported from India.
CAGR and C.V. were positive in quantity and value of exports of banana. Banana
export in volume, Banana export in value, total fruit export in volume and total banana
production in term of CAGR was 27.81 per cent, 40.97 per cent, 10.76 per cent, and
7.67 per cent, respectively and co-efficient of variation was 116.40 per cent, 148.03 per
cent, 114.82 per cent and 31.85 per cent respectively.
Sharma and Gummagolmath (2012) examined the trend in the area, production
and productivity of guar in India as well as in Rajasthan state for the period of 1990-91
to 2007-08. They found in their study that there was a high year-to-year variation in the
both area and production in the country and in Rajasthan state. Fluctuation in production
of guar was the major problem in having sustained supply. The major problem of
farmers was non-availability of certified seed at the time of sowing. They suggested the
need to establish a Research and Development Centre as the centre of excellence and
promoting the improved cultivation practices of guar among the farmers.
Panwar and Kumar (2008) have noted that floriculture in India is being viewed as
a high growth industry. Commercial floriculture is becoming important from the export
angle. The liberalization of industrial and trade policies have paved the way for
development of export oriented production of cut flowers. The total business of
floriculture products in India during 2005 was Rs. 8174 lakhs while it increased to
Rs.10117 lakhs by April 2006. In India, flower production of West Bengal registered
the highest compound growth rate of 16.61 per cent followed by Andhra Pradesh (13.74
per cent) and Maharashtra (9.11 per cent). The growing demands of flowers in the
domestic as well as the export market will require a concerted effort on the part of the
government as well as the private entrepreneurs to develop floriculture on scientific
lines.
Ashalatha (2000) analysed the growth rate of Indian cashew industry in two
periods, Period-I, covering 1956-57 to 1970-71 and period-II, covering 1971-72 to
1998-99. It was observed that the growth rate of area, production, productivity, kernel
export, raw cashew import, cashew nut shell liquid – unit value of export showed
positive trend but the cashew nut shell liquid quantity exported showed negative and
non-significant growth due to the fact of reduction in the import of raw nuts (-0.75 per
cent) and also decrease in prices for Indian cashew in the world market during 1980-
1990.
Mazumdar and Lahiri (2012) studied the cost-benefit and sensitivity analysis of
cut flower roses in comparison with other floricultural crops. They found that the area
of roses has been higher than other floricultural crops and its production and net income
are also higher than others. Whereas the benefit cost ratio of hibiscus has been found to
be higher than rose and jasmine, indicating higher profitability than rose and jasmine.
Break-even quantity and sensitivity analysis of cost, yield (production) and price have
been positive for all crops.
Mou (2012) examined the production and profitability of some selected flowers in
comparison with their competing crops and identified the value chains and channels of
flower marketing in Bangladesh. Stratified random sampling method was used to collect
primary data and samples were collected from the 32 farmers of Guptergaon under
Phulpur Upazila in Mymensingh district and from the 21 flower traders, retailers and
wholesalers of different flower trading zones in Dhaka city. The study reveals that gross
margins of flower and vegetables per hectare were Tk.1, 359,824.20 and Tk.46,362.14,
respectively. The average marketing margin of three intermediaries i.e., BRAC,
wholesaler-cum-retailer and retailer in Dhaka city, were Tk. 187.56, Tk. 638.39 and
Tk.689.72 per 100 flowers, respectively. Lack of mother stock and their high price,
price of fertilizer and insecticides, lack of scientific knowledge & training, attack by
pest & disease, lack of extension work came out as major financial and technical
problems of the flower farmers while inadequate and underdeveloped transportation
and communication system, low market price, lack of market information, unstructured
market are among major market related problems. On the other hand, marketing
intermediaries specified price instability, lack of adequate market information, lack of
storage facilities, unsold flower, inadequate shop-space, demand fluctuation, strikes as
their problems and constraints.
Sengar and Kothari (2008) studied the economic evaluation of greenhouse for
cultivation of rose nursery and observed that the total construction cost of 80 m2 arch
shape greenhouse was Rs.100000/-. Out of total 80 m2 floor area, 55 m2 area is used for
plant seedling and 25 m2 areas is left for movement in the greenhouse carrying out
agricultural operations. In 55 m2 area of greenhouse, 9700 seedlings could be raised
with 0.075 x 0.075 m spacing in 20 pits. Suitability of the economics of greenhouse
were done by four economic indicators such as net present worth (Rs 453221/-), internal
rate of return (53 per cent), benefit cost ratio (4.5) and payback period (2.2 years) for
rose nursery.
Ali and Banerjee (2006) in their study conducted to examine the economics of
marketing of tagar [Valeriana officinalis] flower in Bagnan, West Bengal, India
showed that packing, loading, and hiring of assistants contributed to the major costs
incurred in marketing of tagar flowers. All costs at maximum and minimum prices were
higher in marketing channel I than in marketing channel II. The traders' profit in both
channels was higher at maximum prices than at minimum prices. At maximum price
level, traders had a marketing margin of 84-86 per cent, while producer-sellers' share
was 64 per cent. The traders' share was reduced to less than 40 per cent at minimum
price level. It is concluded that the marketing system for this flower is imperfect and
inefficient. This highlights the need for establishing agro-processing industries in the
surrounding area.
Guledagudda et al. (1997) studied the cost and returns in commercial Jasmine
production .The results revealed that, per acre establishment costs of jasmine garden
was Rs. 8346, of which a major proportion was spent on labour, followed by plant
cuttings. The total cost per acre (Rs. 47,370) constituted variable cost (Rs. 30,792),
fixed cost (Rs. 4,579) and marketing cost (Rs. 11,998). Average net returns over
variable, fixed and marketing costs worked out to Rs. 52 303, Rs. 47 724 and Rs. 35
726, respectively. Financial tests (@ 14 per cent discount rate) revealed that, jasmine
enterprise had maximum net present value (Rs. 182 741), Benefit cost ratio (1.73),
Payback period (1.9 years) and Internal rate of return (> 50 per cent), which justified the
investment. Supply of quality plants and reduction in commission charges were the
areas of immediate concern.
Khan and Bashir (2013) analysed the structure and operation of the flower
marketing system in Punjab, Pakistan. In the first channel the main players were
producers, wholesalers-cum-commission agents, retailers and consumers. In the second
channel producers were directly linked with retailers. In Channel-I the highest
consumer's price of Rs. 444.78 per 100 pieces of cut roses indicated that consumers
have to pay more there. The price spread was greater in Channel-I which was Rs.
243.36 per 100 pieces of cut roses. In Channel-II where producers were directly linked
with retailers, producer's share was maximized up to 46.86 per cent which increased the
marketing efficiency of Channel-II as compared to Channel-I. The study revealed that
as the number of marketing intermediaries in the marketing channel increases, the
producers and consumers are least benefitted. Therefore, there is need for more vertical
integration in the cut roses market.
Kumar et al. (2013) conducted a study during the season 2009-10 to estimate the
cost of cultivation of marigold flower and returns and marketing margins of different
middleman involved in marigold flower trade in Kannauj district of Uttar Pradesh. The
study was based on information collected from randomly 60 marigold flower growing
farmers, commission agent cum wholesaler and retailers. The overall cost of cultivation
of marigold flower was estimated as Rs. 7,365 per hectare. The overall gross income
and average net income from marigold crop was estimated to be Rs. 121792 and
Rs. 48,141 per hectare, respectively. The average return per rupee investment was
estimated as Rs. 1.66, which shows that marigold cultivation was highly profitable in
the selected area. Out of two marketing channels, Channel-I (producer-commission-
retailer-consumer) was the important channel from producers’ point of view, where
producers received more percentage share (35.68 per cent) in consumer's rupee than the
channel-II (31.95 per cent). The total marketing cost was Rs. 6.90 and Rs. 8.63 per
kilogram of marigold flower for channel-I and channel-II, respectively. The major item
of marketing cost was the value of quantity loss and labour charges. In channel-I
retailers earned a margin of 10.35 and 34.69 per cent of the price paid by the consumers.
Bahirat and Jadhav (2012) identified channels of marketing and price spread for
rose in the Satara district. Three marketing channels were observed during the survey
viz., channel I - producer to consumer, II - producer to florist to consumer and IIIrd
channel producer to wholesaler cum commission agent to florist to consumer. Out of the
total quantity of flowers marketed, maximum quantity of flowers were sold through
channel II. The marketing efficiency index was found maximum in the channel I
followed by channel II and III. Cultivation of rose was profitable at all the levels of cost.
Per hectare yield of rose was 2,24,166. The gross value received was Rs. 380242.
Benefit cost ratio was 1:1.29.
Maske et al. (2012) undertaken the study to analyze marketable surplus and price
spread of papaya in Raipur district of Chhattisgarh. On an average, producers'
marketable surplus has been found more than 99.76 per cent of the total production of
selected papaya grower's area. The price spread of papaya with respect to various
marketing channels has indicated that the producers' share has an inverse relationship
with the number of intermediaries. The net price received by the producers is relatively
higher in the channels in which the produce had directly sold to the consumers or
retailers. The study has also highlighted the needed for effective measures to reduce
marketing losses at various stages. Study has emphasized on the strengthening of
institutions, establishment of processing units and development of market infrastructure
in the area.
Jagtap et al. (2009) made an attempt to study the economic efficiency of marigold
marketing in Pune (Maharashtra). It was observed that on an average, marigold flower
production was 2850 kg on 0.40 ha. of a farm. The marketed surplus of marigold was
disposed through three different channels. The highest net margin of retailer was
Rs.4.54 in channel-I followed by that of Rs.3.05 and Rs.3.00 in channel-III and channel-
II, respectively. Channels-I was found to be the most efficient in regard to producer,
intermediaries and consumer's point of view. Similarly, producer's share in consumer's
rupee was also high in channel-I.
Dhillon et al. (2005) conducted the study to estimate the marketing cost and price
spread for marigold [Tagetes sp.] in three major growing regions of marigold in
Haryana, viz., Gurgaon, Sonepat and Faridabad. The study revealed that production of
marigold was higher (14.55 q) on medium farms followed by large farms (13.85 q). The
average area and production of marigold were 1.00 hectare and 12.95 qtl. per hectare on
the sample farmers. The study revealed that the marigold was considerably more
profitable than rose, chrysanthemum, gladiolus and tuberose. However, to popularize
marigold flower, liberal credit facilities, new production technology, storage facilities,
efficient marketing system, etc. need to be developed in the study areas.
Jahan (2009) made an attempt to examine the production and marketing cost
structure and profitability of some selected flowers such as tuberose, rose, gladiolus and
marigold. The study covered primary market (Jessore), wholesale market (Dhaka city)
and retail market (Dhaka city) for flower business. The highest net return was earned
from rose (Tk. 3,53,927) followed by tuberose (Tk. 1,76,941), gladiolus (Tk. 1,33,069)
and marigold (Tk. 84,643). Total marketing cost per hundred flower was highest for
retailer (Tk 41.14) because of their diverse activities and lowest for wholesaler cum
retailer (Tk 5.66) due to their limited functions. On an average, the net marketing
margin was highest for retailers (Tk. 28.10) and lowest for wholesaler (Tk. 9.03). The
flower-farmers and intermediaries faced various production and marketing problems in
the study areas. Based on the findings, some recommendations were made to overcome
the problems that include development of storage facility, provision for scientific
knowledge and training facility, and establishment of permanent flower wholesale and
local markets, etc.
Bagade et al. (2008) examined cut flower production, disposal and marketing in
Ratnagiri district, Maharashtra, India. The volumes of production and disposal of
gerbera were 1,34,763 and 132 904 flowers for a cooperative unit and 1,28,557 and
1,26,069 flowers for a private unit, respectively. As regards the production and disposal
for both co-operative and private units, the month of May had the highest quantity. The
total marketed surplus of gerbera was 132 904 and 126 070 flowers, giving a value of
Rs. 388 993 for a cooperative unit and Rs. 366 936 for a private unit. The maximum
share of quantity disposed was through commission agents. The total cost of marketing
of gerbera for cooperative and private units was Rs. 84 666 and Rs. 77 529,
respectively, and 44.37 per cent and 45.47 per cent of those amounts were commissions
paid to commission agents respectively. Input- output ratios indicated the profitability
of gerbera production. The main factors influencing the prices of gerbera include
seasonality of supply, place and distance of market, high cost of transportation, and
availability of technical advice. Major marketing constraints include the high cost of
packing material and problems with storage, market functionaries, and market
infrastructure.
Gowda et al. (2006) conducted the study to determine the adoption, marketing
pattern and constraints in cultivation and marketing of cut flowers in Belgaum District
of Karnataka. Results showed that 40 per cent of the gerbera growers and 47.50 per cent
of carnation growers belonged to medium adoption category. 100 per cent of gerbera
and carnation growers adopted soil sterilization, digging of trench, use of suitable soil,
type of bed preparation, use of planting material, spacing between rows and plants,
special cultural practices, harvesting of flowers and treatment of flowers. With respect
to application of FYM and chemical fertilizers, farmers had less knowledge. 70 per cent
of the respondents sold their produce through commission agents and 30 per cent of the
respondents sold their flowers through retail outlets. The major problems in production
and marketing of cut flowers were pests and diseases, high investment, exploitation by
the middlemen, fluctuation in prices and low price of the flowers.
Ozkan et al. (1999) conducted a study to investigate the production structure and
main marketing problems of the export-oriented Turkish cut flower industry. The results
indicate that cut flower companies were not highly mechanized, but did use computer
accounting systems. Transportation of cut flowers to foreign markets was the largest
expense item in the cut flower industry. Cut flower companies face difficulties in
obtaining and keeping qualified human resources, even with a high rate of
unemployment. It was also observed that managers do not use specific performance
indicators relevant to the cut flower industry. The most common method for being
aware of cut flower export was by personal contact with the importers. It was concluded
that main concerns raised by managers were increased competition, price cutting,
transportation expenses for export, and training and labour supply.
Chapter III
The design of the study is a prerequisite for any scientific investigation. So, this
chapter deals with the material and methods adopted for conducting the present study.
The present research has been taken up in Ranga Reddy district of Andhra Pradesh
(presently in Telangana state). The details regarding methodology adopted in selection
of location, methods of data collection and analytical tools employed in achieving the
objectives of the study has been discussed under the following sub-headings
From each selected village, gerbera growing farmers were interviewed randomly
for collecting the data. Similarly 5 intermediaries were interviewed under each
identifiedchannel.
Table 3.1. Particulars of the selected mandals, villages and farmers in Rangareddy
District
Ikkareddy guda 3
1 Chevella
Pamena 3
Urella 3
Chenevelly 3
Jukal 2
2 Shamshabad
Shamshabad 2
Kavaguda 2
Mudichintapalli 3
3 Shamirpet
Ponnal 2
M.C.Palli 1
Potharam 1
Total 25
Selection of the Market
The gerbera growers of the selected villages sell their flowers at the
Gudimalkapur flower market. Therefore, this market was considered for the present
enquiry.
Collection of data and method of enquiry
Primary data
Both primary and secondary data were used in the study. The primary data from
the sample owners (farmers) of the unit on the cost and returns and investment pattern,
production and marketing constraints etc. were collected with the help of pre tested
questionnaire . Another set of questionnaire was designed to access the information, on
the margins on spoilages, marketing costs etc. from the intermediaries involved in the
marketing
Secondary data
The secondary data on area and production of gerbera and the number of
polyhouses over a period of time was collected from the published sources such as
Government departments, APEDA, journals, websites, periodicals, past records etc.
Keeping in view the objective of the study, growth rates of area of polyhouse in
Ranga Reddy district of Telangana state were calculated by fitting exponential function
of the form Y=ABt (or)
n
NPV = ∑Yi (1 + r)-i – I
i=1
Where,
Yi = Net cash inflows in the year
n r = Discount factor
I = Initial investment
i = Year of life period 1, 2……….n.
2. Benefit Cost Ratio
Where,
Yi = r =
i=
3. Internal Rate of Return (IRR)
The rate at which the Net Present Value of the project is equal to zero is called
Internal Rate of Return (IRR) to the project. The net cash inflows were discounted to
determine the present worth by the following interpolation technique
The total cost incurred on marketing, in cash or in kind, by the producer-seller and
by various intermediaries involved in the sale and purchase of the commodity till the
commodity reaches the ultimate consumer was computed as follows.
Ps = (PF/PC) x 100
3.4.5 Analysis of price spread under different channels
It is the difference between the price paid by the consumer and the price received
by the producer. The price spread was worked out by using the following method
Price Spread = Pp - Pf
Where,
Pp = Price paid by the consumer
Pf = Price received by the farmer
Concepts, definitions and procedures adopted in this study are presented below.
Operational costs include human labour, machine labour, seed, fertilizer and manures,
insecticides, interest on working capital and miscellaneous expenditure.
Fixed costs include rental value of owned land, land revenue, depreciation on
machinery, implements and poly house and interest on fixed capital etc.
Variable costs include cost on seeds, manure, fertilizer and wages of human and
bullock labour, plant protection chemicals, irrigation, interest on operational capital and
repairs and maintenance charges.
When the commission agent performs the duties of wholesaler in buying and
selling of the commodities in bulk at wholesale market, he is called commission agent-
cum-wholesaler.
3.5.9 Retailer
The retailer is a person who purchases produce directly from producers or village
merchants in the retail market or purchases the produce through commission agent-cum-
wholesaler in the wholesale market and sells them to consumer in the retail market.
3.5.10 Depreciation
The depreciation was worked out for the items like farm machinery and
implements, farm buildings and wells. Depreciation was calculated by using straight
line method. 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 respondents was considered for calculation of junk value. The depreciation
cost of equipment was apportioned to the crop based on its percentage use.
3.5.11 Interest on fixed capital
Interest on fixed capital excluding land is charged at the rate of 10 per cent, as the
fixed deposits in commercial banks would fetch this rate of interest. The items
considered under fixed capital were polyhouse, implements and machinery. Interest was
considered on the average value of these assets over its life time i.e cost and salvage
value are divided by two,as the assets decreases its value over time. No interest was
charged on the land value since the rental value of owned land was considered.
These are the profits left after deducting the total cost of production from the gross
returns.
3.4.1 Location
District – Ranga Reddy
District Rangareddy District was formed on 15th August, 1978 by carving out
some portion of Hyderabad urban Taluk and& the merger of the entire rural and urban
areas of the remaining Taluks of erstwhile Hyderabad district.
The district is located in the central part of the deccan plateau and lies between
160 30’ and 180 20’ of North Latitude and 77030’ and 79030’ of East Longitudes. The
district is bounded on the North by Medak District, East by Nalgonda District, South by
Mahaboobnagar District, West by Gulbarga District & North West of Bidar District of
Karnataka State. It covers an area of 7493 Sq. Kms.
3.4.5 Soils
Red soils predominate in the District followed by black soils. More than 50 per
cent per cent of the villages have red-chalka soils as the predominate soils and dubba
soils are found besides red chalka soils.
Figure 3.1. Map of Ranga Reddy district
3.4.6 Climate
The climate of the district is characterized by hot summer and is generally dry
except during the south west monsoon season. The year may be divided into four
seasons. March to May is the summer season, June to September constitutes the South
West monsoon season, October to December forms the North East monsoon season and
January to February is the winter season. The maximum and minimum temperatures
recorded so far 44.40 oC (111.90F) and 28.60 oC (83.80F).
Storms and depressions which originate in the Bay of Bengal during September
and the post-monsoon months move in Westernly and North Westernly direction across
the peninsula. Some of these depressions effect the weather over the District causing
widespread to heavy rains and gustly winds. Thunder storms occur during summer
season and towards the end of the South West monsoon and early part of the post-
monsoon seasons.
3.4.7 Rainfall
The district has a normal rainfall of 781.2 mm,the bulk of which is received
through the South West Monsoon during the period from June to September. The actual
rainfall received during the year 2010-11 is 1055.5 mm.
3.4.8 Population
Table 3.1 Demographic details of Rangareddy district
2 Males 2,701,008
3 Females 2,595,733
3.4.10 Irrigation
Gross irrigated area in 2009-10 is 78782 hectares which constituted 34.3 per cent
of the gross cropped area. Though, two good rivers traverse the district there are no
irrigation projects. River Musi that rounds through the district is untapped for irrigation
until it feeds the Himayatsagar and Osmansagar tanks mainly for drinking water
purpose. However, the waters of Kagna have been utilised by a medium project known
as Kotpally project which has an ayacut of 3,723 ha . In Vikarabad, Marpally and
Dharur Mandals, 455 ha has been irrigated during the year 2009-10. The Navandgi
irrigation scheme is also on the river Kanga (Tandur area). Inderched and Gangavarm
lift irrigation schemes also irrigate some area in this part. Through there are other
medium projects like Juntupally (Tandur area) Kotpally (Marpally, Vikarabad and
Tandur) which has an ayacut of 843 hectares and Laknapur (Pargi and Dharur mandals)
which has an ayacut of 1071 hectares, irrigate only a limited area and as such, wells
form the principal source of irrigation in the district. An estimated number of (40,847)
wells and tube wells with pump sets exist at present in the district with scope for many
more. Out of the 4.87 lakh hectares of available cultivable land only 0.56 lakh hectares
of land was cultivated under irrigation.
Table 3.3 Source wise irrigated area of Ranga Reddy district during 2010-11
per cent of
Source of Irrigation Area in ha. Total Irrigated
S. No.
Area
Table 4.1. Trends in area of polyhouse based farming in Telangana and Andhra
Pradesh.
S. No. Year Total Area Per cent Change over
(Acres) previous year
1 2007-08 0.14
2 2008-09 1.14 714.3
3 2009-10 2.77 142.9
4 2010-11 6.37 129.9
5 2011-12 25.07 293.6
6 2012-13 42.48 69.44
7 2013-14 41.93 -1.29
8 Per cent change in 29850
2013-14 over 2007-
08
(Source: State Horticulture Mission, Government of Andhra Pradesh of 2013-14)
In this section an attempt has been made to analyze the per cent change in area
over the previous years. The data pertaining to it was collected from the secondary
source for a period of seven years (2007-08 to 2013-2014).
The area under polyhouse based farming in Andhra Pradesh and Telangana from
2007-08 to 2013-2014 has been presented in the Table 4.1. The area under polyhouse in
2007-08 is seen as 0.14 acres. In 2008-09 the area increased to 1.14 acres i.e. 714.3 per
cent increase over the previous year and it further increased to 2.77 acres (142.9 per
cent) in the subsequent year. Similarly, in the year 2010-11, the area increased to 6.37
acres (129.9 per cent) and again it further increased to 25.07 acres (293.6 per cent
increase) in the year 2011-12, 42.48 acres (69.44 per cent) in the year 2012-13 whereas
in 2013-14 the area decreased to 41.93 acres i.e., -1.29 per cent over the previous year
which may be due to high initial investment, low remunerative price, high pest and
disease attack etc. If we analyse the change in year 2013-2014 over the year 2007-08, it
showed a positive trend.
Table 4.2. Trends in area of polyhouse based farming in Ranga Reddy district of
Telangana State
S. No. Year Total Polyhouse Per cent Change over
(Acres) previous year
1 2008-09 0.64
2 2009-10 0.63 -1.56
3 2010-11 1.53 142.8
4 2011-12 8.08 428.1
5 2012-13 12.42 54.05
6 2013-14 15.17 22.14
7 Per cent change in 2270.3
2013-14 over 2008-09
(Source: State Horticulture Mission, Government of Andhra Pradesh of 2013-14)
In this section an attempt has been made to analyze the per cent change in area
under polyhouse in Ranga Reddy district of Telangana State and the data pertaining to it
was accessed from the secondary source for a period of six years (2008-09 to 2013-
2014).
The area under polyhouse based farming in Ranga Reddy district of Telangana
state from 2008-09 to 2013-2014 has been presented in the Table 4.2. The area under
polyhouse in 2008-09 is seen as 0.64 acres. In 2009-10 the area decreased to 0.63 acres
i.e. -1.56 per cent decrease over the previous year and it further increased to 1.53 acres
(142.8 per cent) in the subsequent year. Similarly, in the year 2011-12, the area
increased to 8.08 acres (428.1 per cent) and again it further increased to 12.42 acres
(54.05 per cent increase) in the year 2012-13 where as in the year 2013-14 the area
increased to 15.17 acres i.e. 22.14 per cent over the previous year which may be due to
better returns over the traditional open cultivation.
If we analyse, the results revealed that there is a huge increment of 2270.3 per
cent change in year 2013-2014 over the year 2008-09.The drastic increase in the area
may be due to schemes of State Horticulture Mission and the growth rate of area is
significant. It revealed positive trend.
Further during 2012-13 NHM gave assistance of 50 percent of the total cost
subject to a maximum of Rs.467/- sq.m limited to 4000 sq.m per beneficiary i.e
maximum of Rs. 18.68 lakhs and also 50 percent of the total cost of planting material
and inputs subject to a maximum of Rs.250/- sq.m limited to 4000 sq.m per
beneficiary(i.e Rs 10 lakhs)
S. No. of
Particulars Percentage (%)
No respondents
1 Illiterate 1 4
st th
2 Primary school (1 to 5 ) 2 8
th th
3 High school (6 to 10 ) 16 64
th th
4 Inter (11 to 12 ) 5 20
th
5 Degree (above 12 ) 1 4
Total 25 100.00
(Source: Estimates from the survey data of the study, 2014)
4.2.4 Family size of the respondents
Particulars regarding the family size are presented in the table 4.7. It is observed
that the majority of the respondents had a family size between 4 to 6 members (48 per
cent) and 40 per cent of them were having a family size between 6 & above members
and only 12 per cent of families had less than 4 members.
Table 4.5: Family size of respondents
S.
Family size Number of respondents Percentage (%)
No
1 Less than 4 3 12
2 4 to 6 12 48
3 6 & above 10 40
Total 25 100.00
(Source: Estimates from the survey data of the study, 2014)
4.2.5. Land holding particulars of the respondents
The total sample of 25 farmers and was categorized into 3 categories namely;
small (<2 ha), medium (2-5 ha) and large (>5 ha) in the proportionate manner. It can be
clearly observed from the table 4.8 that 64 per cent farmers had medium land holding
whereas 24 per cent had small land holding. Farmers having large land holding were 12
per cent of the total sample farmers.
Table 4.6: Land holdings of respondents
S.No Category Number of respondents Percentage (%)
1 Small 6 24
2 Medium 16 64
3 Large 3 12
Total 25 100.00
(Source: Estimates from the survey data of the study, 2014)
i) Establishment cost of gerbera under polyhouse
The establishment cost components of gerbera cultivation under polyhouse has
been presented in the Table 4.3.It has seen from the Table that the establishment cost of
gerbera under 1000 square metres greenhouse condition worked out to be Rs.9.80 lakh.
The highest proportion of this cost was incurred on polyhouse structure, which accounts
for 69.39 per cent (Rs. 6.80 lakh) of the total establishment cost. While the planting
materials constitute about 19.39 per cent (Rs. 1.9 lakh).Other costs like land and land
development constitutes 9.18 per cent and 2.04 per cent of the total establishment cost
respectively.
Table 4.7. Establishment cost of gerbera under polyhouse.
Amount (Rs. In Percentage of
S.No Particulars
lakhs) total cost
1 Land (0.1 ha) 0.2 2.04
2 Land development 0.9 9.18
3 Green house with drip and farm equipment 6.8 69.39
4 Planting Materials 1.9 19.39
Total 9.80 100
Assumptions were made for carrying out business analysis of polyhouse unit.
The life of greenhouse structure is 15 years, 5 years for its polycover and 3 years for the
planting material. The techniques of project evaluation such as Net Present Value,
Benefit-Cost Ratio and Internal Rate of Return were employed to assess the financial
feasibility of investment on gerbera cultivation. In analyzing the investment feasibility,
the establishment costs, working costs and gross returns from the gerbera polyhouse
units were discounted at 14 percent discount rate, since it represents the opportunity cost
of the capital.
The Net Present Value (NPV) criterion helps to evaluate the benefits accrued and
costs incurred during the project life. The advantage of NPV is that it gives an idea
about surplus and varies with level of investment and discount rates. In this study, NPV
was calculated to indicate the money that would be generated by a project at a given
discount rate.The cost of polycover (Rs.0.5 lakh) and cost of the plant material (Rs. 1.90
lakh) was considered after every 5 and 3 years respectively in the calculations . It is an
absolute measure by discounting the net cash inflows. The NPV of 0.1 Ha poly house at
14 per cent discount rate was Rs 4.87 lakh (The formal selection criterion of NPV is to
accept all the projects with positive values. Applying this principle, the Net Present
Value of gerbera farming in polyhouse units clearly indicated financial feasibility of
investment. (Table 4.10)
per cent of
S.No. Particulars Rs. per box consumer
price
The producer sold directly to the commission agent at Rs.702 per box. The total
costs incurred by the producers was Rs. 157 per box, which accounted for 19.63 per cent
of consumer’s price and it was the highest among all the marketing margins incurred in
between producer and consumer.The net price received by the farmer (producer’s share
in the consumer’s rupee) was Rs. 545 per box, which constituted 68.13 per cent of the
consumer’s price. The cost incurred by commission agent were the market fee @ 1per
cent, labour cost, damage and miscellaneous charges etc. which was Rs.18 per box i.e.
2.25 per cent of consumer’s rupee. Thus, the margin retained by the commission agent
amounted to Rs.80 per box which is 10 per cent of the consumer’s rupee. Among the
other costs, market fee was high which shared 1 per cent of the consumer’s rupee. The
price spread which shows the difference between price paid by the consumer and price
received by the producer is Rs. 255 per box.
Here, total costs incurred by the commission agent was only Rs. 72 and margin
was Rs. 226, which accounted for 3.6 per cent 11.3 per cent of the consumer’s price
respectively. Further it can be observed from the Table that commission agent’s selling
price of retailer’s purchase price was Rs. 1000 per box which was 50 per cent of the
consumer’s price. Total costs incurred by the retailer was Rs. 72 and margin was Rs. 928
which account for 3.6 per cent and 46.4 per cent of the consumer’s price respectively.
Whereas, retailer’s purchase price was Rs. 2000 per box and the price spread was Rs.
1455.
Table 4.12. Price spread in gerbera marketing through channel-II (Producer-
Commission Agent – Retailer - Consumer)
per cent of
S.No. Particulars Rs per. Box
consumer price
In this section an attempt has been made to analyze the problems faced by
producers, wholesalers and retailers in the production and marketing of gerbera in the
study area. The producers, commission agents and retailers were asked to indicate the
problems faced by them and the results are presented below
(n=10)
No. of Percentage (
S. No. Particulars
respondents per cent)
1 High price fluctuation 8 80
2 Lack of storage facility 7 70
3 Lack of proper transportation facility 7 70
4 Delay in payments 5 50
5 High market fee 4 40
(Source: Estimates from the survey data of the study.2014)
To fulfil the objectives of the study, the data was collected through personal
interviews from the selected gerbera growers, commission agents cum wholesaler and
retailers with the help of pretested scheduled designed for the purpose. Besides data on
quantity purchased, price paid/received, costs incurred were collected from the market
functionaries. Data on establishment of polyhouse, production and marketing was
collected from farmers. The data collected was subjected to various analytical tools. The
various problems associated with production and marketing were also analyzed.
The per cent change in area under polyhouse based farming in Telangana and
Andhra Pradesh during the period of 2013-2014 over 2007-2008 was 29850 per cent
which is mainly due to the huge financial assistance from State Horticulture Mission and
the increase in demand of flowers in the State
The per cent change in area under polyhouse based farming in Ranga Reddy
district during the period of 2013-2014 over 2007-2008 was 2270.3 per cent which is
mainly due to the huge financial assistance from State Horticulture Mission and the
increase in demand of flowers in the State
Socio-economic profile
It is observed that only 4 per cent of the total respondents were illiterate. About 80
per cent of the farmers were in the age group of 35 and 50. The average family size of
the farmers was six. About 64 per cent of farmers were having medium size land
holdings.
The marketing constants faced by the gerbera growers were lack of market
information, fluctuation in price / seasonal demand, low price for the flowers, high
package costs, exploitation by middle men and high transportation costs.
Lack of market information and new market ,high price fluctuation and lack of
storage facility was the major problem expressed by commission-agent-cum-wholesaler
followed by lack of proper transportation facilities and delay in payments. Other
problems expressed by intermediaries in marketing of gerbera is high market fees.
The major problems faced by the retailers were lack of regular customers, price
fluctuations, wastage of flowers, lack of awareness and quick deterioration of quality of
the flower.
CONCLUSIONS
It may be concluded from the study that there is an immense scope for
expansion of area and production of gerbera in Ranga Reddy as well as in other suitable
parts of Andhra Pradesh and Telangana. The cost of cultivation for gerbera is somewhat
higher but due to good demand in market, the returns are also very good. Producers can
get a net profit of Rs.2.46 lakhs per 1000 square meters by gerbera cultivation in case of
good price in the market.
There is a huge demand for gerbera in the international market, showing the
great scope in the future. The USA is the largest importer followed by Netherlands and
Germany. The gerbera cultivation is a profitable business for the investors and it can be
seen by good Benefit Cost Ratio (1.1). The investment is also financially feasible as
represented by NPV and IRR of the investment in the findings of the study.
The system of marketing reveals that the gerbera growers considered quick,
daily and easy payment as the main reason to sell flowers through commission agent –
cum- wholesaler (Channel – I) and also that farmer was getting good price and can
create demand in the market. Out of the two channels of gerbera marketing, first channel
i.e. producer-commission agent-cum-wholesaler-consumer was the more efficient from
producer as well as consumer point of view as the producer could get as high as 68.13
per cent of the consumers rupee.
The major problem identified in production of gerbera was high initial
investment and major problem faced by intermediaries was high price fluctuation and
lack of storage facilities in the market premises. The major problem of the retailer in the
market was lack of regular customers.
SUGGESTIONS AND POLICY IMPLICATIONS
1. There may be encouragement and good support from research centres and the
government bodies regarding development of new varieties suitable for exports and to
explore new market avenues respectively. The centre/state can promote commercial
floriculture activity with adequate financial subsidies and extension support.
2. The farmers take up indiscriminate sprays as per the schedule given by the consultant
not only leading to high cost of production but also pollute the soil and environ .The
farmers may be encouraged to take up IPM and INM practices
3. The price of gerbera in the market is mostly dependent on season for marriage
functions. In the off season, the farmers should follow leaf pruning, pinching, and
flower regulation so that time of flowering, duration of flush and subsequent flower
production may be controlled by the growers.
4. The farmers are entirely dependent on the consultant for the technical know-how
.Hence, farmers need to be trained in the scientific production practices and post harvest
management of gerbera.
5. With regards to the commercial electricity connection, the State electricity board and
Central government may pay attention to resolve this issue or may provide subsidy as in
the case of tissue culture labs. Solar power may also be encouraged to make the units
independent and self sustaining.
6. Most of the times, producers are not aware of the prices existing in the market and
dispose off the produce to commission agent –cum-wholesaler. Adequate and timely
information about the market arrivals, existing prices etc will help in forecasting the
demand and plan accordingly.
7. The farmers may also be provided with space/stalls in the market to sell their produce
to the consumer/ retailer directly.
8. Marketing infrastructure such as better access to market yards, better roads, good
transport facilities, timely payment, provision of storage facilities, credit provision etc.
will improve the socio-economic conditions of the producer.
10. There is an immense potential for export of gerbera cut flowers. Therefore, lot of
focus may be paid towards improving the quality of the produce in order to receive good
price and widen the market.
11. The Gudimalkapur market does not have cold storage facilities. If there is huge dip
in the price, farmers can store up to 10 days and can market them when there is
reasonable price . Therefore, cold storages should be constructed in order to strengthen
the storage facilities.
13. The organized wholesale market should have proper post harvest and marketing
infrastructure facilities like auction platform, pack house, cold storage, Market
information system etc.
14. Private sector should be encouraged to develop modern markets under public private
partnership mode.
15. The possibilities of alternative marketing system like contract farming, direct
marketing, group marketing etc. should be explored to bring economies of scale.
Steps initiated by the government through its various policies and development
plans
National Horticulture Board provides credit linked back ended subsidy @ 20 per
cent of the project cost limited to Rs.25 lakh per project in general area and Rs.30 lakh
in North eastern region, hilly and scheduled areas.
Ghule, T. and Menon, S. 2013. Scope and Future of Floriculture Industry in India.
Global Research Analysis. 2 (2): 28-29.
Gowda, B. T. Angadi, J. G. Hirevenkangoudar, L. V. 2006. Adoption and marketing
pattern of cut flowers in Belgaum District. Karnataka Journal of Agricultural
Sciences. 19 (3): 603-608.
Guledagudda, S. S. Hosamani, S. B. Nalawadi, U. G. Hiremath, G. K. Basavaraj,
H.1997. An appraisal of financial feasibility of investment in jasmine.
Karnataka Journal of Agricultural Sciences. 10 (4): 1117-1122.
Jagtap, M. D. Patil, S. N. Nichit, M. B and Shelke, R. D. 2009. Economic efficiency of
marigold marketing in Pune district of Maharashtra. Agriculture Update. 4
(3/4): 432- 435
I. GENERAL PROFILE :
1) Name of the owner:
2) Age:
3) Address/village/town:
4) Mandal:
5) District:
6) Education: a) illiterate b) primary c) middle school d) high school e)
matriculation
f) Intermediate g) degree and above
8) Family structure:
7) Land holdings: a) small(<3 acres) b) medium (3-10 acres) c) large (>10 acres)
8) Primary occupation: Agriculture / Service / Business / Others
9) Secondary occupation: Agriculture / Service / Business / Others
Amount (Rs. In
S.No Particulars
lakhs)
1 Land (0.1 ha)
2 Land development
3 Green house structures
4 Grading house/packaging unit
5 Sprayers
6 Drip Irrigation
7 Planting Materials
8 Total
2. Cost of production of gerbera under poly house
S.No Particulars
1 Total yield/year (No’s)
2 Sale price per flower (Rs.)
3 Gross returns (Rs. in lakhs)
4 Cost of cultivation (Rs. in lakhs)
5 Net returns (Rs. in lakhs)
IV. MARKETING CHANNELS AND PRICE SPREAD