This document analyzes the economics of chili production in India. It finds that the cost of production per acre was highest for large farmers, followed by medium and small farmers. Net returns over costs were highest for medium farmers, followed by small and large farmers. Yield and gross returns per acre increased with farm size. The cost of production per quintal was highest for large farmers at all cost levels. Returns per rupee invested were higher for medium and small farmers than large farmers. Overall, the study finds that chili production is most economically viable for medium-sized farms in India.

1. African Journal of Basic & Applied Sciences 4 (5): 161-164, 2012
ISSN 2079-2034
© IDOSI Publications, 2012
DOI: 10.5829/idosi.ajbas.2012.4.5.1110
Corresponding Author: P.P. Jagtap, Department of Agricultural Economics and Statistics,
K.K. Wagh College of Agriculture Business Management, Nashik. (M.S.) India.
161
Economics of Chilli Production in India
P.P. Jagtap, U.S. Shingane and K.P. Kulkarni1 2
Department of Agricultural Economics and Statistics,1
K.K. Wagh College of Agriculture Business Management, Nashik, India
Department of Agricultural Economics and Statistics,2
Shri Shivaji Agriculture College, Amravati, India
Abstract: Chilli (capscicum annuam L.) is most widely used and universal spice of India. The study was
conducted in Achalpur tahsil of Amravati district of Maharashtra in India.. Total four villages and twenty
farmers from each village i.e.total 80 farmers were selected randomly as sample size. Data used were pertaining
to the period 2009-10. Economic analysis of data indicated that Cost ‘C’ was found to Rs. 40541.72, Rs. 42811.07
and Rs. 53421.29 per acre for small, medium and large farmers respectively. Net returns over cost ‘C’ was
Rs. 19329.52, Rs. 24114.79 and Rs. 21400.51 per acre and input-output ratio at cost ‘C’ was 1:1.48, 1:1.56 and
1:1.40 for small, medium and large farmers respectively.
Key words: Spice Chilli Cost of cultivation Economics of Production
INTRODUCTION tonnes of chilli valued Rs.807.75 crore in the year 2006-07
Chilli (Capsicum annum L.) is most widely used and In Maharashtra state area, production and productivity
universal spice of India belongs to the "Solanaceae" of chilli was around 90 million ha., 44 million tonnes
family. The nutritive value of chilli is excellent, chillies and 489 kg/ha respectively during 2003-04 (Source:
are rich in vitamins, especially in vitamin A and C. [1]. Directorate of Arecanut And Spices Development).
Every 100 gms of dried pods yield about 160 calories of The present study was undertaken to analyse cost
energy through 36 gms carbhydrates, 18 gms proteins, 16 and returns of chilli production in Amravati district.
gms fat, 480 mg calcium, 3.1 mg. phosphorous, 31 mg iron, Achalpur tahsil in Amravati district have emerged as
2.5 mg niacin, 640 I.U. vitamin 'A' and 40 mg vitamin 'C' [2]. the most popular for chilli production because of
India has immense potential to grow and export different best suited climate, soil, irrigation facilities, skill and
types of chillies required to various markets around the intensive cultivation practices adopted by the farmers of
world. India has produced around 1014.60 million tonnes this area.
of chilli with area of 654 million ha. and productivity 1551
kg/ha during 2005-06 (Source: Directorate of Arecanut and Objective of the Study: The present study on Economics
Spices Development). The most important chilli growing of chilli production in India was undertaken to workout
states in India are Andhra Pradesh (49%), Karnataka the economics of production of chilli.
(15%) Maharashtra (6%) and Tamilnadu (3%) which
constitute nearly 75 per cent of the total area under chilli. Methodlogy: For present study Achalpur tahsil from
India's chilli exports are currently in bull stage and chillies Amravati district was purposively selected. Total four
exports from India are mostly to Srilanka, USA, Nepal, villages and twenty farmers from each village i.e.
Mexico and Bangladesh. Among these countries USA, 80 farmers were selected randomly as sample size.
Srilanka and Mexico are the major importers of India's Data collected for study pertaining to the period
chillies. China has emerged as the major exporter in the 2009-10.Data collected by interviewing selected farmers
world market and as a serious competitor in the by survey method with special designed schedule.
international market for India. India exported 1,48,500 Collected data then tabulated according to need and
(http:www.assocham.org/prels/shownews.php?id=1306).

2. African J. Basic & Appl. Sci., 4 (5): 161-164, 2012
162
purpose of study. Simple tabular analysis was made. irrigation (13.81%)and plant protection chemicals (6.28%).
To workout economics of chilli production, different cost In medium farmers, major cost consuming items were
concept such as cost 'A', cost 'B' and cost 'C' were used. rental value ofland(25.94%),hired female labour (18.72%),
RESULTS AND DISCUSSION and in large farmers, major cost consuming items were
The results obtained from the investigation are irrigation (13.90%)and plant protection chemicals (5.22%).
presented in Table 1 and 2. The share of machineries to cost 'C' was (2.05%), (2.17%)
To workout gross returns, input-output ratio, net and (2.02%) in case of small, medium and large farmers
returns over various costs it is necessary to workout cost respectively and the cost of family male labour to cost 'C'
of cultivation of chilli crop. From Table 1, it is revealed was (5.49%), (4.48%) and (2.67%) for small, medium and
that, per acre average cost 'A' of selected farmers was large farmer respectively and the cost of family female
Rs.25523.80,Rs.27203.56 andRs.34778.8 forsmall,medium labour to cost 'C' was (5.34%), (4.35%) and (2.78%) for
and large farmers respectively. It was seen higher in small, medium and large farmers respectively. In all
large farmers followed by medium and then small farmers. categories of farmer amoung variable cost, cost of human
Cost 'B'was Rs.36153.32,Rs.39029.97 and Rs.50510.19 for labour was seen as the major component of cost ‘A’ [3]
small, medium and large farmers respectively. It was and rental value of land was seen the major component of
higher in large farmers followed by medium and then small cost ‘C’ [4].
farmers.Cost'C'estimatededwasRs.40541.72,Rs.42811.07 From Table 2 it is revealed that the average yield of
and Rs.53421.29 for small, medium and large farmers chilli (wet) was 73.51 qtl., 80.97 qtl. and 83.73 qtl. per acre
respectively. It was higher in large farmers followed by in small, medium and large farmers respectively and the
medium and then small farmers. Cost 'A' was found to be chilli sold in the form of green and dry chilli. In case of
62.96 per cent, 63.54 per cent and 65.10 per cent to cost 'C' green chilli the average qty. sold was 41.83 qtl., 43.65 qtl.
for small, medium and large farmers respectively. In small and 43.81 qtl. per acre for the small, medium and large
farmers, major cost consuming items were rental farmers respectively and the average price received was
value of land (24.51%), hired female labour (18.71%), Rs.803.33, Rs.836 and Rs.874.22 per quintal for small,
irrigation (13.90%) and plant protection chemicals (5.22%)
rental valueofland(23.24%),hired female labour (18.72%),
Table 1: Per acre cost of cultivation of chilli for selected farmers of different size group.(Units/Acre)
Small Medium Large
------------------------------------------- -------------------------------------------- ---------------------------------------------------
S.N. Particulars Units Quantity Total Cost % of cost 'C' Quantity Total Cost % of cost 'C' Quantity Total Cost % of cost 'C'
1 Hired human labour
a) Male labour Days 10.4 1040 2.57 15.27 1527 3.57 20.92 2092.00 3.92
b) Female labour Days 108.37 7585.90 18.71 114.48 8013.60 18.72 126.29 8840.00 16.55
2 Bullock labour Pair days 3.46 1038 2.56 2.82 846.00 1.98 2.04 612.00 1.15
1 Seed Kg 0.60 1380 3.40 0.60 1380 3.22 0.70 1610.00 3.01
4 Manures Qtls 4.37 437.5 1.08 8.94 894.12 2.09 14.35 4305.00 8.06
5 Fertilizers
N Kg 81.92 996.97 2.46 93.14 1133.51 2.65 133.21 1621.16 3.03
P Kg 72.64 1725.20 4.25 70.58 1676.27 3.91 71.29 1693.14 3.17
K Kg 38.17 330.55 0.81 41.33 357.92 0.84 44.17 382.51 0.72
6 Irrigation No. 16 5600 13.81 17 5950.00 13.90 18 6300.00 11.79
7 Plant protection chemicals Rs. - 2544.58 6.28 - 2235.69 5.22 - 3372.29 6.31
8 Machineries and implements Rs. - 833.33 2.05 - 929.41 2.17 - 1081.32 2.02
9 Land revenue and other cesses Rs. - 42.52 0.11 - 49.97 0.11 - 56.66 0.11
10 Depreciation Rs. - 558.53 1.38 - 713.46 1.67 - 898.16 1.68
11 Interest on working capital @12% for 6 m. Rs. - 1410.72 3.48 - 1496.91 0.49 - 1914.56 3.58
Cost 'A' Rs. - 25523.80 62.95 - 27203.56 63.54 - 34778.80 65.10
12 Rental value of land (1/6 G.V.P. – L.R.) Rs. - 9936.02 24.51 - 11104.34 25.94 - 12413.64 23.24th
13 Interest on fixed capital @10% p.a. Rs. - 693.50 1.71 - 722.07 1.69 - 3317.75 6.21
Cost 'B' 36153.32 89.17 - 39029.97 91.17 - 50510.19 94.55
14 Family human labour
a) Male labour Days 22.24 2224 5.49 19.17 1917 4.48 14.25 1425 2.67
b) Female labour Days 30.92 2164.40 5.34 26.63 1864.10 4.35 21.23 1486.10 2.78
Cost 'C' Rs. 40541.72 100 42811.07 100 53421.29 100

3. African J. Basic & Appl. Sci., 4 (5): 161-164, 2012
163
Table 2: Economics of chilli production in different size group. (Units/Acre)
Size Group
----------------------------------------------------------------------------------------------------------
Sr. No. Particulars Small Medium Large
1 Average yield (qtl/acre) chilli (wet) 73.51 80.97 83.73
Quantity sold (qtl/acre)
1) Green chilli 41.83 43.65 43.81
2) Dry chilli 7.92 9.33 9.98
2 Average price received per quintal
1) Green chilli 803.33 836.00 874.22
2) Dry chilli 3316.66 3262.00 3656.63
3 Gross returns (Rs.) 59871.24 66925.86 74821.80
4 Cost of cultivations (Rs.)
Cost 'A' 25523.80 27203.56 34778.8
Cost 'B' 36153.32 39029.97 50510.19
Cost 'C' 40541.72 42811.07 53421.29
5 Net returns over cost (Rs.)
Cost 'A' 34347.44 39722.30 40043.00
Cost 'B' 23717.92 27895.89 24311.61
Cost 'C' 19329.52 24114.79 21400.51
6 Input-output ratio at
Cost 'A' 1:2.34 1:2.46 1:2.15
Cost 'B' 1:1.66 1:1.71 1:1.48
Cost 'C' 1:1.48 1:1.56 1:1.40
7 Cost of production Rs./Qtl
Cost 'A' 347.21 335.97 415.37
Cost 'B' 491.81 482.03 603.25
Cost 'C' 551.51 528.73 638.02
medium and large farmers respectively. In case of dry chilli medium and large farmers respectively. Returns per rupee
the average qty. sold 7.92 qtl., 9.33 qtl. and 9.98 qtl. per of investment were higher in medium and small size
acre for small, medium and large farmers respectively and farmers group than large farmers group [5].
the average price received was Rs.3316.66, Rs.3262 and
Rs.3656.63 per quintal for small, medium and large farmers CONCLUSIONS
respectively. The average gross returns were obtained
was Rs.59871.24, Rs.66925.86 and Rs.74821.80 for small, The area uner chilli crop increased with an increase in
medium and large farmers respectively. The average yield the size of holdings. Per acre Cost ‘C’ was higher in large
and gross returns per acre increased with the increase in farmers followed by medium and the small farmers group.
size of the farms, because the large sized farmers had The average yield and gross returns per acre increased
incurred more inputs in the production process of chilli with the increase in size of farms. There is need to develop
crop. (Deshmukh2001). The average net returns over cost the labour saving practices such as use of weedicides,
'A', cost 'B' and cost 'C' obtained was Rs.34347.44, improved tools for planting, harvesting etc. Appropriate
Rs.23717.92, Rs.19329.52 and Rs.39722.3, Rs.27895.89, extension method may be adopted to evaluate the farmers
Rs.24114.79 and Rs.40043, Rs.24311.61, Rs.21400.51 for on optimum use of inputs.
small, medium and large farmers respectively. The average
cost of production per quintal of chilli (wet) were worked REFERENCES
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cost 'C' were worked out to be 1:2.34, 1:1.66, 1:1.48 and S. Chelliah, 1999. Commerce and utility
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