Economics of Production and Marketing of Chrysanthemum Flowers in Krishnagiri district of Tamil Nadu
Authors: Kaviarasan, K1, D.R. Singh2, Prawin Arya3, Anil kumar3
1Assistant Director, Department of Consumer Affairs, GOI, Krishi Bhawan, New Delhi
2Senior Scientist, Division of Agricultural Economics, IARI, New Delhi and
3Senior Scientist, IASRI, New Delhi.


Introduction

The flower production in India has undergone dramatic changes in the recent past. The most significant changes have been the growing of the flower crops as cash crops and the increasing export as well as domestic demand of flowers. A major initiative for floriculture development was taken during the VIII five year plan by launching a central sector scheme on development of floriculture. The sector also provides good employment opportunities to the farmers especially to small and marginal farmers and female labour (Sivaramane, et al. 2008 and Kaviarasan et al., 2015). Further, the export of flower also generates good export earnings to the country (APEDA, 2014). The diverse agro-climatic and socio-economic conditions in the country provides good opportunities for the production and export of high value horticultural products including flowers. In India, Tamil Nadu is the second largest producers of loose flowers and in the area under flower cultivation. Chrysanthemum flower cultivation is very popular in Tamil Nadu and occupied 9 per cent of total flower area in the state. There are many issues like growth and instability, productivity differences, costs and returns, efficiency, equity and employment in flower cultivation in Tamil Nadu. There are also many constraints to the flower production, marketing and export. Some of the issues related to rose and chrysanthemum cultivation and marketing were studied (Jyothi and Raju 2003; Sivaramane et al. 2008, Singh and Kaviarasan, 2010, Kaviarasan et al., 2015 and 2015b). The present study was undertaken to address the issues in chrysanthemum production in Tamil Nadu.

Data and methodology

The primary and secondary data were used in the study. Secondary data on area and production of flowers were collected from various published sources. On account of good area under chrysanthemum cultivation, Krishnagiri District of Tamil Nadu was selected for primary data collection. The primary data on costs and returns, employment and constraints to production and marketing of chrysanthemum flower were collected from randomly selected 50 chrysanthemum farmers for the agricultural year 2008-09. Tabular analysis was used to calculate the district-wise share of chrysanthemum in the total flower cultivation in Tamil Nadu and costs and returns, marketing cost and employment potential in chrysanthemum production. Profitability in chrysanthemum cultivation were computed using various cost and return concepts. Garrett's Ranking Technique was used to organize farmers' responses on constraints to chrysanthemum flower cultivation and marketing.

Results and discussion

Tamil Nadu state ranked second in the country in the area and production of loose flower in 2012-13. There was an impressive increase of around 39 per cent in the area under total flower cultivation in the state between 2001-02 and 2009-10 (Table 1). However, this increase was very high (80%) in case of chrysanthemum in the state during this period. As a result, the share of chrysanthemum in total flower area in the state has increased from around 7 per cent to 9 per cent during this period. The district-wise analysis of chrysanthemum area indicated that Salem district had the highest area (804 ha) during 2009-10 followed by 690 ha in Krishnagiri, 398 ha in Dharmpuri, 128 ha in Dindigal and 66 ha in Thiruvannamalai districts. The increase in chrysanthemum area during 2001-02 to 2009-10 was highest in Dindigal district (220 per cent) followed by 218 per cent in Krishnagiri and Dharmapuri, 175 per cent in Salem, and only 18 per cent in Thiruvannamalai districts.


Table 1: Area under chrysanthemum in major districts of Tamil Nadu
Districts Total flowers area (ha) Chrysanthemum area (ha) Chrysanthemum area in total flowers (%)
2001-02 2009-10 Change (%) 2001-02 2009-10 Change (%) 2001-02 2009-10
Salem 1023 2097 105.0 292 804 175.3 28.5 38.3
Krishnagiri - 2552 - - 690 - - 27.0
Dharmapuri 1613* 2133 190.5* 342* 398 218.1* 21.2* 18.7
Dindigal 2691 3499 30.0 40 128 220.0 1.5 3.7
Thiruvanamalai 1036 1620 56.4 56 66 17.9 5.4 4.1
State 18474 25610 38.6 1245 2240 79.9 6.7 8.7

* indicates total figures of Krishnagiri and Dharmpuri districts.
Source: Season and crop report, Tamil Nadu (Various issues)


Input and marketing costs of chrysanthemum cultivation

The average cost of inputs and marketing of chrysanthemum flower was around Rs. 164596 per ha in 2008-09 (Table 2). Among various items, the marketing cost (Rs. 64657 per ha) constituted the major item of the total operational cost (37%). Other major components of cost were family and hired labour (30%), planting material (17%), manures and fertilizers (9%) and plant protection chemicals & machine power (3%).

Table 2. Input and marketing costs in chrysanthemum cultivation
Items Cost (Rs/ha) Share in total (%)
Human labour 50182 30.49
Machine power 5044 3.06
Planting material 27424 16.66
Manure and fertilizers 14788 8.98
Plant protection chemicals 4988 3.03
Total marketing cost 61657 37.46
Other costs 513 0.31
Total input costs 164596 100.00

Source: Primary survey, 2008-09

In the marketing of chrysanthemum flowers, the farmers are mainly routed through the commission agents in the Bangalore market. The flower were transported to the market by the individual farmers. They harvest the crop in the bulk quantities and harvest is finished in the short period of time. The marketing cost of chrysanthemum flowers was Rs. 328 per quintal in Banglore market. The fee for commission agents constituted major share (54 per cent) followed by transport (22 per cent), spoilage (9 per cent) packing (9 per cent) and loading and unloading (5 per cent). The higher proportion of marketing costs (44 per cent) in total cost of cultivation of chrysanthemum was also found in Karnataka and suggested to regulate the trade in flowers to control the commission charges and to prevent cheating at the market (Subrahmanyam, 1986). The producer of chrysanthemum had the share to the extent of 23.40 percent in the consumer price, whereas the market middle-men received the remaining share of 56% in Maharashtra (Bhalsing, 2009).

Returns from chrysanthemum cultivation

Total cost of cultivation (Cost C3) of chrysanthemum was worked out to be Rs. 200894 per ha and cost of production of flower was Rs. 1072 per quintal in 2008-09 (Table 5). Flowers productivity was 187 qtl per ha and resulted gross return was Rs 281139 per ha. The farm business income and family labour income were worked out to be Rs. 129000 and Rs 111981 per ha, respectively. The farmers realized an impressive net return of Rs. 80245 per ha from chrysanthemum flowers production. Further, farmers fetched average net return of Rs. 428 from production of one quintal of chrysanthemum flowers. The per hectare cost C was worked out to be Rs 168366 and net returns Rs 79306 in chrysanthemum cultivation in Pune (Kadam, 2012).

Table: Costs of and returns from chrysanthemum cultivation
Cost items Rs. per ha Return items Rs. per ha
Cost A1 152139 Productivity (qtl per ha) 187.43
Cost B2 169158 Gross income 281139
Cost C1 173755 Farm business income 129000
Cost C2 187226 Family labour income 111981
Cost C3 (total cost of cultivation) 200894 Net income 80245
Cost of production (Rs per qtl) 1072 Net returns (Rs. per qtl) 428

Source: Primary survey, 2008-09

Employment in chrysanthemum cultivation

It is evident from Table 5 that chrysanthemum production generated an employment opportunity of 615 days per ha per annum. The gender-wise decomposition of total human labour showed that the female workers meet more than four-fifths of the total labour requirement of chrysanthemum cultivation. Of the total employment, overall share of hired and family labour was 66 and 34 per cent (409 and 206 days per ha), respectively. From the above discussion, it may be concluded that chrysanthemum flower production systems are generating good employment opportunities for farm family workers as well as agricultural labourers and provides livelihood to the marginal and small farmers as well as the weaker section of the society.

Table 5. Employment potential in chrysanthemum cultivation
Particulars Family labour Hired labour Total labour
No. Share (%) No. Share (%) No. Share (%)
Male 68 61.3 43 38.7 111 100
Female 138 27.4 366 72.6 504 100
Total labour 206 33.5 409 66.5 615 100

Source: Primary survey, 2008-09

Constraints to chrysanthemum cultivation and marketing

Non-availability of labour was reported to be the main constraint by chrysanthemum farmers. The climate was the important factor for higher yield of chrysanthemum that was ranked second by the farmers. Other major constraints were reported to be the problem of pest, non-availability of credit, high cost of fertilizers and lack of awareness. However, the marginal farmers' major problems was non-availability of credit and labour, lack of awareness and high irrigation costs. The marginal farmers mostly received advance money from the commission agents and pay high interest rates. The non-availability of credit and cost of high interest rates can be reduced by easy access of institutional credit. The purchase price for groundwater irrigation water was found to be lower than total cost of extraction in Western Uttar Pradesh (Singh and Singh, 2006). Therefore, high irrigation cost, a major constraint for marginal farmers, can be reduced by the development of efficient groundwater markets in the region. The State government has provided subsidy for chrysanthemum farmers to implement drip irrigation.
In case of chrysanthemum flowers marketing, the flowers are not directly sold to the traders, but it was channeled through the commission agents. The exorbitant rate of commission charge was the main constraint for the farmers followed by high prices fluctuation. Trader's collusion and malpractices adopted by the traders were the other major constraints. The traders join the hand and fix the low price. The other important constraints were high charges on transportation and spoilage.

Summary and conclusions

Tamil Nadu is a major flower growing state in India and ranked second area and production of loose flowers. There was also nearly two-fifths increase in the area under total flowers in the state from 2001-02 to 2009-10. This is important to note that this increase was very impressive (80%) in case of chrysanthemum in the state. Further, the share of chrysanthemum in total flower area in the state has increased from around 7 per cent to 9 per cent. District-wise analysis showed that there was an impressive increase in chrysanthemum cultivation in major chrysanthemum growing districts; namely, Salem, Krishnagiri, Dharmpuri, Dindigal and Thiruvannamalai. Although, the cost of cultivation and marketing chrysanthemum flower was found to be high on selected farms, the cultivation generated impressive returns and good employment for farm families. This crop also generates good employment for agricultural labourers especially for female workers. The farmers have faced many constraints in the cultivation and marketing of chrysanthemum. The non-availability of labour and credit, adverse climate, incidence of pest, high fertilizer costs, lack of awareness and high irrigation costs were major constraints faced by the farmers in chrysanthemum cultivation. Further, in the marketing of chrysanthemum flower, high commission charge and price fluctuations, trader's collusion and malpractice and high transportation cost and spoilage were the major constraints faced in the marketing of the chrysanthemum flowers. The income of chrysanthemum farmers could be increased by developing effective institutional credit delivery system and crop insurance, adoption of drip irrigation and efficient water markets, and cooperation among the farmers. Further, development of effective value chain in chrysanthemum production system is need of the hour which will stabilize the profitability of the farmers by minimizing the marketing constraints to a greater extent.

References:

1. Bhalsing, R.R. 2009. Marketing of Chrysanthemum in Maharashtra, Shodh, Samiksha aur Mulyankan, 2(6): 872-873. Accesssed on 09-04-2015 at
http://www.ssmrae.com/admin/images/0e69c1100e1afec154f4655af6f7f843.pdf

2. Jyothi, S.H. and Raju, V.T. 2003. Study on marketing of Crossandra, chrysanthemum and Rose flowers in East Godavari District of Andhra Pradesh, Agri. Marketing, 46(2): 2-4.

3. Kadam, P.H. (2012). "An Economic Study of Floriculture in Pune District" Ph.D. Thesis, Department of Economics, Tilak Maharashtra Vidyapeeth, Pune. Accessed on 09-04-2015 at http://shodhganga.inflibnet.ac.in:8080/jspui/bitstream/10603/5658/16/16_synopsis.pdf

4. Kaviarasan, K., Singh, D.R. and Arya, Prawin 2015. An Economic Analysis of Rose Production System in Tamil Nadu, biotech articles, accessed at
http://www.biotecharticles.com/Agriculture-Article/An-Economic-Analysis-of-Rose-Production-System-in-Tamil-Nadu-3311.html

5. Singh, D.R. and Kaviarasan K. 2010. Growth and Instability Analysis of flower Production in Tamil Nadu, Agricultural Situation in India, LXVI (12), 709-713.

6. Singh, D.R. and Singh, R.P. 2006. Structure, Determinants and Efficiency of Groundwater Markets in Western Uttar Pradesh, Agricultural Economics Research Review, 10(1): 129-144.

7. Sivaramane, N., Kumar, A., Singh, D.R. and Arya, P. 2008. An economic analysis of traditional and hi-tech Rose cultivation, Journal of Ornamental Horticulture, 11(1):21-26.

8. Subrahmanyam, K. V. 1986. Economics of Production and Marketing of Chrysanthemum Flowers in Karnataka, Ind. J. of Horticulture, 43(3&4):281-286. Accessed on 09-04-2015. http://www.indianjournals.com/ijor.aspx?target=ijor:ijh&volume=43&issue=3and4&article=027


About Author / Additional Info:
Sr. Scientist, Division of Forecasting and Agricultural Systems Modelling, IASRI, New Delhi.