ABSTRACT
Jasmine is one of the major commercial flower crops of south India. In Karnataka, jasmine
has been cultivated in all most all districts. Hence, the study have been taken up by to
Keywords examine the cost and returns structure of jasmine cultivation, identifying the marketing
channels, assessing the marketing cost and to document the problems of production and
Commission agent, marketing of jasmine in Koppal district. Thus, the data have been collected from 120
establishment cost, jasmine growers, 10 commission cum wholesale agent and 10 from retailers with the help
jasmine and of pretested well designed questionnaire. The collected data were subjected to various
marketing cost financial analysis viz., discounted and undiscounted techniques. The results revealed that
Article Info during 2011-12, Rs. 28,252.75 was required for establishment of jasmine garden in one
acre out of which labour was to the tune of 43.67per cent and material cost was accounted
Accepted: 56.33 per cent. The gross and net returns were increasing from initial year of
xx July 2017 establishment. The financial analysis viz., NPV, BCR, IRR and NPV revealed that
Available Online: establishment and maintenance of jasmine garden was economically viable. The flowers
xx September 2017 are marketed through farmers -commission cum wholesalers –retailers and consumers. The
high rate of commission charge, pest incidence and lack of producer organization were the
major problems of jasmine production and marketing.
Introduction
Jasmine is considered the queen of flowers well as in satisfying the aesthetic feelings.
and is called the “Belle of India” or the Several species of jasmine are grown in
"Queen of fragrance" as it is exquisitely Karnataka. The term jasmine is derived from
scented to soothe and refresh. Jasmine has an Arabic word “Jessamine” and in Persian
their own importance since ancient times and language it is called as “Yasmin” or yasmyn”
is being used for decoration worshiping as which means fragrance. As many as 90
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species of jasmine are grown in India, out of each villages. Thus, a total of 120 farmers
these 20 species are cultivated in south India. were selected and data collected with the help
The most commonly cultivated Jasmine of pre-tested questionnaire. To study the
species are Jasminum multiform (kakada), marketing cost, margin and channels of
Jasminum samabac (gundumallige) Jasminum marketing, 10 intermediaries were selected
grandiflorum (Jaji Mallige) and Jasminum each from commission agents, wholesalers
auriculatum (Soojimallige). and retailer. The technique of financial
analysis is the most important tool for
It is mainly used for extraction of scented oil. evaluating the economic performance of any
India exports thisoil mainly to England, crop. It brings out the efficiency of capital use
United States of America, Holland, Sweden, in production. The tabular representation and
Japan, Norway and European Union. Jasmine project analysis techniques used for financial
flowers are highly perishable and hence analysis were viz., Net Present Value (NPV),
require careful handling and speedy disposal Benefit Cost ratio (B: C Ratio), Internal Rate
and hence the market remains localized. of Return (IRR) and Pay Back Period (PBP).
Location apart, perishability makes the flower
trade complex and risky. In addition, the Net Present Value
demand for flowers is not uniform and steady.
Factors like location, season and socio- The Net Present Value represents the
religious festivals affect the demand – supply discounted value of the net cash inflows to the
relationship in the flower marketing. In project. In the present study, a discount factor
Karnataka the jasmine flower cultivation has of 12 per cent was used to discount the net
been taken up in almost all districts. Thus, a cash inflows representing the opportunity cost
study has been designed to assess the cost and of capital. It can be represented by
returns structure of jasmine cultivation,
identifying the marketing channel and to n
ascertain the problems in production and NPV = Σ Yi (1+r)-i - I
marketing of jasmine Koppal district. i=1
Koppal is one of the major jasmine growing Yi = Net cash at the end of the year „i‟
districts in Karnataka. The jasmine crop is r = discount rate
grown extensively by the farmers in the i = time period (i=1, 2, 3 … n years)
region. Therefore, Koppal district was I- Initial investment
purposively selected for the study. Based on
the highest area under the jasmine crop in the The project would be considered viable, if
year 2015-16, the villages were selected NPV is positive.
randomly for the study. The data on village-
wise information relating to area under Benefit Cost Ratio
jasmine was obtained from the office of the
Assistant Director of Horticulture of the It is the ratio between the discounted cash
Koppal taluk. The top four villages having the inflows and discounted cash outflows and the
highest area under jasmine were selected from ratio must be unity or more for an investment
Koppal taluk (i.e., Hiligi, Hitnal, Shivapura to be considered worthwhile. The benefit cost
and Kampasagara) for the purpose of the ratio (BCR) was worked out by using the
study. Thirty respondents were selected from following formula.
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total establishment cost which supported the in more than five years age group. However,
findings of the present study. This is due to fixed cost noticed nominal increase in
buying of planting material from far-away different age group gardens. The apportioned
places like Huvinahadagali and Vijayapura establishment cost Rs.1883.52 and land
led to high transportation cost. Further, the revenue Rs. 50.00 was the same for all age
cost of FYM and neem cake was the second group gardens.
important cost component and formed 13.44
per cent of the total cost since jasmine This increase in the total cost as the age of the
requires lot of neem cake and FYM during plants advanced was due to the combined
initial stage of establishment. The major item effect of increased use of labour and material
of labour cost was on weeding Rs. 2310.75 inputs. However, the fixed costs remained
(10.61%). This was mainly due to the fact that more or less the same among the different age
weeding operation was done more than five group of plants. For an average garden, the
times during the year of establishment. cost of harvesting was the major item of
variable cost which amounted to Rs. 75000.50
Cost of cultivation of jasmine in different per acre This was due to the fact that the wage
age group of gardens rate of labour for harvesting was relatively
high in the study area because of scarcity of
The cost of cultivation includes all the costs, labour and the harvesting charges were paid
which were included in the annual in relation to the quantity of flowers
maintenance costs and the interest on working harvested. The findings of the present study
capital and fixed costs as indicated in Table 2. which identified the harvesting activity as an
The average cost of cultivation per acre of important item of the labour cost were on line
jasmine flowers per acre was Rs.136365.10 with the findings of the study of Kumar
per year, which included variable cost and (2013). The rental value of land had the major
fixed costs. These costs amounted to Rs. share in the total fixed cost which amounted
108444.30 (79.52%), and Rs.27920.87 to Rs. 23800 per acre for an average garden.
(20.84) respectively. The variable cost This was mainly due to the higher rental value
included annual maintenance cost and interest of Thungabhadra command area and they
on working capital. The variable cost of were located very close to city.
cultivation of jasmine varied from
Rs.64982.71 per acre in second year age Costs and returns structure for jasmine in
group to Rs. 151163.54 in the case of more different age group plants
than five years age group. In the overall
average cost of cultivation of jasmine, the The costs, and returns structure of jasmine in
proportion of total variable and fixed costs different age plants have been presented in
were 79.52 percent and 20.84 percent Table 3. The total cost including variable cost
respectively. Further, the variable cost and fixed cost accounted to an average of Rs.
increased from 73.19 percent to 81.35 percent 136365.13 i.e., from second year onwards the
in second year age group to more than five total cost ranges from Rs. 88780.57 to Rs.
years age group of plants accordingly. The 185811.41 in more than five years age group
fixed cost includes rental value of land, of the plants The jasmine flower yields in
apportioned establishment cost, interest on second year was 2295.65 kg per acre and it
fixed capital, land revenue and depreciation. increased to 3956.23 kg per acre in more than
The fixed cost accounted for Rs. 23797.87 per five year age group plants. The average net
acre in two years age group to Rs. 34647.87 returns accounted to Rs. 80056.74 the same
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was ranges from Rs. 37480.18 to Rs. that the initial investment and maintenance
91124.69 from second year to more than five costs in jasmine garden have been lower in
years age group garden. The cost of relation to returns.
production ranged from Rs. 38.86 per kg in
3rd year age group plants to 46.06 in more Benefit cost ratio is the criterion indicates the
than five year age group of plants which rate of return per rupee invested in jasmine
accounted to an average of Rs. 40.55 per kg. enterprise. The benefit cost ratio at 12 per
The cost of production had an increasing cent discount rate was 3.09 which was more
trend from 2nd to more than five year age of than unity and indicated that investment in
the plant. jasmine enterprise was financially viable.
Thus, it could be concluded that investment in
It was interesting to note that the gross return jasmine garden was economically feasible and
over a period of time was found to be financially viable. Similar findings were
increasing from second year onwards till the reported by Kumar (2013) observed that the
end of fifth year. The similar phenomenon benefit – cost ratio for jasmine was 2. This
was observed in case of total returns also. The could be because of less initial investment for
study conducted by Shreedevi (2012) also establishment of jasmine orchard. Payback
revealed the similar pattern of behaviour of period is the period required to recover the
returns. This was mainly attributed to the fact initial investment incurred in establishing the
that the yield of flowers increased up to five garden and in the present study the payback
years due to the increased use of inputs. As period was found to be 2.06 years. This
far as cost incurred per kg of flower clearly indicated that it would take around
production was concerned, it was observed two years to recover the entire investment.
that the cost nominally increased up to the age However, this criterion neglects the net
of five years from the establishment. returns realized by the farmers in the
subsequent years which may be more
Financial feasibility of investment in significant in the case of long term enterprise
jasmine gardens like jasmine. This clearly indicated that a
shorter period of two years would be required
To evaluate the feasibility of investment in to get back the initial investment. This could
jasmine orchard, the criteria such as net be attributed to the fact that the initial
present value, benefit cost ratio, payback investment itself was lower, besides a higher
period and internal rate of return were rate of returns. The value of IRR generally
employed and the results were presented in depends on the magnitude of returns realized
Table 4. in each year over the economic life period and
more particularly in the initial years of
Net present worth is the difference between jasmine enterprise. It may be noted here that,
the present value of series of inflow (returns) the IRR was found to be very high, compared
and outflows (costs) over the economic life to the opportunity cost of capital or rate of
period of the jasmine enterprise. The net interest paid on borrowed capital. Indicating
present worth was Rs. 197359.59 per acre at that the investment in jasmine garden was
12 per cent discount rate. Thus it could be highly profitable, economically feasible and
concluded that investment in jasmine financially sound. Hence, it could be inferred
enterprise was economically feasible and that the investment in jasmine enterprise was
financially sound. The higher magnitude of found to be economically feasible, financially
net present value may be attributed to the fact sound and highly profitable.
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Sl. No. Particulars Man days No.) Bullock days (No.) Amount (Rs.) Per cent
A. Labour cost
1 Land preparation 8.56 3.23 2471 8.51
2 Trenching 18.92 - 1892 6.52
3 Manures &Fertilizers application 6.71 - 671 2.31
4 Irrigation and preparation of Water canal 19.57 - 1957 6.74
5 Filling pits and planting 14.52 - 1452 5.00
6 Weeding 30.81 - 2310.75 10.61
7 Spraying PPC 10.49 - 1049 3.61
Total Labour Cost (A) 109.58 3.23 11802.75 43.67
B. Material cost
1 Planting material 1400 Cuttings 7000 24.12
2 Fertilizer (NPK) 115 kg 2300 7.92
3 Neem cake and FYM 5.2 tons 3900 13.44
4 Plant Protection Chemicals 3250 11.20
Total Material Cost (B) 16450 56.68
Total Cost (A+B) 28252.75
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Table.3 Cost and returns structure of different age group of jasmine garden
Table.5 Marketing cost incurred by the farmer in the sample market (Rs./qtl)
Sl.
Particulars Hosapete market Gangavati market Koppal market
No.
1 Packing cost 5.62 5.62 5.62
2 Transportation cost 250 375 200
3 Commission charges 1000 1000 850
4 Spoilage losses 50 50 50
Total (Rs./qtl) 1305.62 1430.62 1105.62
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infrastructure facilities for transport of charge by commission agent were also major
flowers to distant places. marketing problem. Regarding transportation
problems, 38.33 per cent of farmers expressed
Problems in production and marketing of that they had to bear huge charges for
jasmine flowers transportation produce from production point
to commission agent. The other problems felt
Opinion survey was conducted about the by the farmers regarding connectivity to
production and marketing constraints of markets (17.50%), and lower frequency of
jasmine flower growers and the results were bus facilities (15%). The frequent and sudden
presented in Table 6. price fluctuation of jasmine was the major
marketing problems. This may be because of
Problems in production of jasmine flowers lack of flower grower association at the
production centre. Establishment of flower
From the table, it could be observed that all producers cooperative may reduce the
the jasmine farmers expressed severe pest and frequent fluctuation of the prices to the certain
disease problems in production of jasmine extent. High commission charge is also due to
flowers. Scarcity of labour during weeding the credit taken by the farmers for jasmine
and harvesting was also one of the major production and hence they bound to sell the
problems which were expressed by 76.67 per produce to the same commission agent.
cent of the farmers. The other problems were Hence, credit facility to jasmine growers may
lack of technical guidance to the tune of 37.50 be extended with liberalized documentation
per cent, lack of credit facility (33.33%), by organized financial institutions. These
water scarcity (20.83%) and shortage of plant problems are in coordination with results of
protection chemicals (19.17%). The incidence Shreedevi (2014).
of budworms, mites, thrips and leafy diseases
were very severe. As against this, the use of Investment in establishment and maintenance
plant protection chemicals was in excess of of jasmine garden in small scale in
requirements as it was seen from the costs Hyderabad-Karnataka region is found to be
incurred on plant protection chemicals. This economically feasible as average cost of
was due to the imperfect knowledge about cultivation and net returns per acre were Rs.
pest and diseases. Jasmine cultivation was 136365.13 and Rs. 80056.74 respectively.
labour intensive enterprise which required The financial analysis indicated that the
more number of labours during the weeding jasmine enterprise is profit generating
and peak harvesting seasons. As the jasmine activity. The commission agent charges,
cultivation has been a highly labour intensive fluctuation in price, lack of producer
enterprise, majority farmers were taken up cooperatives and scarcity of labour during
this enterprise on a small scale. weeding and harvesting season were the
major problems of production and marketing
Problems in marketing of jasmine flowers of jasmine.
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