an economic appraisal of mango processing plants of chittor district in andhra pradesh viswanatha

99 Pages·2017·1.28 MB·English

AN ECONOMIC APPRAISAL OF MANGO PROCESSING PLANTS
OF CHITTOR DISTRICT IN ANDHRA PRADESH

VISWANATHA REDDY. K

DIVISION OF AGRICULTURAL ECONOMICS
INDIAN AGRICULTURAL RESEARCH INSTITUTE
NEW DELHI-110012

2008
AN ECONOMIC APPRAISAL OF MANGO PROCESSING PLANTS
OF CHITTOOR DISTRICT IN ANDHRA PRADESH
By
VISWANATHA REDDY. K

A Thesis
Submitted to the Post Graduate School,
Indian Agricultural Research Institute, New Delhi
in partial fulfillment of the requirements
for the award of degree of

MASTER OF SCIENCE
IN
AGRICULTURAL ECONOMICS
2008

Approved by:
Chairman:
Dr. Pramod Kumar
Members:
Dr. N.P. Singh

Dr. V.C. Mathur

Dr. A.K. Vasisht
Dr. Pramod Kumar Division of Agricultural Economics,
Senior Scientist Indian Agricultural Research Institute,
New Delhi-110012

CERTIFICATE

This is to certify that the thesis entitled An Economic Appraisal of Mango Processing
Plants of Chittoor District in Andhra Pradesh submitted in partial fulfillment of the
requirements for the award of the degree of MASTER of SCIENCE in
AGRICULTURAL ECONOMICS, to the faculty of the Post Graduate School, Indian
Agricultural Research Institute, New Delhi, embodies the results of a piece of bona fide
research work carried out by Mr. VISWANATHA REDDY. K under my guidance and
supervision. No part of this thesis has been submitted for any other degree or diploma.
It is further certified that the assistance and help received during the course of
investigation has been duly acknowledged by him.

New Delhi (Pramod Kumar)
Date: Chairman,
Advisory Committee
ACNOWLEDGEMENTS
My sincere and heartfelt thanks go to Dr. Pramod Kumar, Chairman of advisory committee and
senior scientist, Division of agricultural economics for his constructive guidance and help offered
during the course of this work. He is a man of wisdom and I will always be indebted to him for
his constant encouragement and keen interest shown on me. It was my pleasure to work under his
supervision.
I would like to place on record my deep sense of gratitude to Dr. N.P. Singh, Scientist (Senior
Scale) Division of Agricultural Economics, Indian Agricultural Research Institute, New Delhi,
and Co-Chairman of my advisory committee for his help in problem selection, his constant
encouragement, constructive suggestions, invaluable guidance and assistance, and being a great
source of inspiration throughout the course of this investigation and preparation this manuscript.
I feel extremely grateful to Dr. V.C. Mathur, Head, Division of Agricultural Economics, Indian
Agricultural Research Institute, and member of my advisory committee for his constructive
criticism, encouragement and suggestion in improving the content an presentation of the thesis.
I am highly thankful to Dr. G.K. Jha, Senior Scientist, Division of Agricultural Economics, Indian
Agricultural Research Institute, and member of my advisory committee for his kind help and
guidance whenever required.
I am equally indebted to Dr. Puran Chand, Professor, Division of Agricultural Economics, Indian
Agricultural Research Institute, for his kind help and guidance whenever required.
My sincere thanks are also due to Dr. B.R. Atteri, Dr. V.P. Tyagi, Dr. Amit Kar, Dr Alka Singh,
Dr. Geeta Bisari, Dr. A.K. Vasisht, Dr. Shiv Kumar, Dr. I. Sekar, Dr. Dharamraj Singh for their
help and encouragement.
I sincerely acknowledge the unstinted help and cooperation received from Sh. Sahendra Pal,
Mrs. Ahluwalia and Sh. Harpal Singh Verma of the Division of Agricultural Economics.
My sincere thanks are due to my friends Vardrajan, Manjunath Chikkmat Ravi Dupdal and S.K.
Srivastava for their direct and indirect help and nice company.
No words can express my revered gratitude to my parents, my uncle Mr. M.V. Chandrashekhar
Reddy and brother Mr. Vijaya Kumar for their affection, sacrifice and moral support, which
made this endeavor possible.
Finally, I feel highly obliged to the Director, IARI, New Delhi for awarding me the Junior
Fellowship, which enabled me to undertake this study.

Place: IARI, New Delhi (VISWANATHA REDDY. K)
Date: , 2008
CONTENTS

S. No. Titles Page. No.
1 INTRODUCTION 1-3
2 REVIEW OF LITERATURE 4-11
3 DESCRIPTION OF THE STUDY AREA 12-19
4 METHODOLOGY 20-28
5 RESULTS AND DISCUSSION 29-54
6 SUMMARY AND CONCLUSIONS 55-59
ABSTRACT 60-61
SHARANSH 62-63
BIBLIOGRAPHY i-iv
APPENDICES
LIST OF TABLES
Table
TITLE Pages
No.
21
4.1.1 RAINFALL PATTREN IN CHITTOOR, 2005-06
DEMOGRAPHIC STATUS OF CHITTOOR DISTRICT, 2001 22
4.2.1
CENSUS
DISTRIBUTION OF TOTAL POPULATION BY MAIN
23
4.2.2 WORKERS, MARGINAL WORKERS AND NON
WORKERS, 2001 CENSUS
LAND UTILIZATION PATTERN IN CHITTOOR DISTRICT 24
4.3.1
AND ANDHRA PRADESH STATE, 2004-05
CROPPING PATTERN AND PRODUCTIVITY IN 25
4.3.2
CHITTOOR DISTRICT, 1999-2000
AREA AND PRODUCTION OF HORTICULTURAL CROPS 26
4.3.3
IN CHITTOOR DISTRICT, 2000-01
AREA, PRODUCTION AND PRODUCTIVITY OF MANGO 30
5.1.1
IN IMPORTANT STATES
AREA AND PRODUCTION OF MANGO IN ANDHRA 31
5.1.2
PRADESH
GROWTH OF MANGO PROCESSING UNITS IN ANDHRA 33
5.1.3
PRADESH
INVESTMENT RANGE OF MANGO PROCESSING UNITS 34
5.1.4
IN CHITTOOR DISTRICT
EXPORT OF MANGO AND MANGO PULP FROM 35
5.1.5
CHITTOOR DISTRICT
EXPORT OF PROCESSED HORTICULTURE 36
5.1.6
COMMODITIES FROM CHITTOOR DISTRICT
EXPORTS OF PROCESSED HORTICULTURE 37
5.1.7
COMMODITIES FROM CHITTOOR DISTRICT
PER FACTORY CAPACITY, INVESTMENT, AND
40
5.2.1 COMMODITIES PROCESSED BY DIFFERENT CATEGORY
OF FIRMS
41
5.2.2 FEASIBILITY OF PROCESSING FIRMS
41
5.2.3 INVESTMENT COST OF MANGO PROCESSING UNITS
PER FIRM VARIABLE COST OF PROCESSING IN 42
5.2.4
DIFFERENT CATEGORIES OF PLANTS
43
5.2.5 PER FIRM FIXED COST FOR PLANTS
45
5.2.6 COST AND RETURNS OF THE PROCESSING FIRMS
PRESENT VALUE OF COSTS AND RETURNS AT
46
5.2.7 DIFFERENT DISCOUNT RATES FOR LARGE SCALE
FIRMS
PRESENT VALUE OF COSTS AND RETURNS AT
47
5.2.8 DIFFERENT DISCOUNT RATES FOR MEDIUM SCALE
FIRMS
PRESENT VALUE OF COSTS AND RETURNS AT
48
5.2.9 DIFFERENT DISCOUNT RATES FOR SMALL SCALE
FIRMS
FEASIBILITY OF MANGO PROCESSING PLANTS UNDER
49
5.2.10 DIFFERENT SCENARIO USING THE NPV (RUPPES
LAKHS) AND BCR
FEASIBILITY OF MANGO PROCESSINGPLANTS AS PER 49
5.2.11
IRR AND PAY BACK PERIOD
BREAK EVEN ANALYSIS OF MANGO PROCESSING 50
5.2.12
PLANTS
51
5.2.13 RANKING OF PROJECTS
53
5.3.1 CONSTRAINTS FACED BY THE MANGO PROCESSORS
LIST OF FIGURES

Figure Title Pages
No.
5.1 BACKWARD AND FORWARD LINKAGES OF 38
MANGO PULP PROCESSING INDUSTRY
CHAPTER-I
INTRODUCTION
Mango (Mangifera indica L.) occupies a prominent place amongst the fruits
grown in India because of its great utility, and is acknowledged as the king of fruits.
Various types of products/processed food are prepared from mango like pickles,
chutneys, amchoor, squash, nectar, jam, cereal flakes, custard powder, baby foods,
mango leather and toffee. Mango fruits utilization begins in its raw stage when chutney,
pickles and drinks are prepared out of it. Ripe fruits are consumed in various forms like
squashes, syrups, nectar, jams, jellies and mango leather. It is an outstanding source of
Vitamin-A and good source of Vitamin-C besides it has many minerals and other
Vitamins.
In India Mango is available from March to mid August. South Indian cultivators
are generally regular bearers, whereas North Indian cultivators are alternate bearers.
About 20 varieties are being grown commercially. They are: Alphanso, Banganpalli,
Bombay Green, Chausa, Dashehari, Fazli, Gulab khas. Himasagar, Kesar, Kisenbhog,
Langra, Mankurad, Neelam, Pairi and Totapuri. Some cultivars of mango like
Alphonso, Dashehari and Langra are exported to other countries and thus are a source
of earning foreign exchange and provide employment to a number of people in the
process of its marketing.
India with a production of 125.4 lakh tonnes of mango accounts for 40 per cent
of total world production (312.5 lakh tonnes) (Appendix table 1). About 2 million
hectares of land in India is under this crop accounting for 46.2 per cent of world area
(4.37 million hectares) under mango.
Mango is being grown in almost all the States, important among them being
Andhra Pradesh, Uttar Pradesh, Bihar, Karnataka, Maharashtra, West Bengal and
Gujarat. These States together contributed for about 82 per cent of the total production
in India.
Among the various states of India, Andhra Pradesh ranks first both in area and
production and is followed by Uttar Pradesh. Mango is one of the important fruit crop
2
of Andhra Pradesh cultivated in an area of 3.99 lakh hectare and producing 3.19
million tones accounting for 19 per cent of total area in the country and 25 per cent of
total mango production in the country (GOI, 2005). The productivity of mango in
Andhra Pradesh is 8.1 tonnes per hectare and is higher than the country’s average
productivity of 6.1 tonnes per hectare.
In Andhra Pradesh, Krishna district ranks first in terms of area (72486 hectares)
and production (579888 tonnes) of mango. Chittoor is the next important district with
the area and production of 52721 hectares and 421768 tonnes respectively. Other
districts are of minor importance with regard to area and production.
Nine Agri Export Zones (AEZs) are functioning exclusively for promotion of
mango exports in the country. Two AEZs are operating in each of the states of Uttar
Pradesh, Maharashtra and Andhra Pradesh while one AEZ is operating in each of the
sates of West Bengal, Gujarat and Tamil Nadu. The mango promotional programmes
for expansion of area under mango and enhancing its production and exports form the
country.
The demand for mango fruits and its pulp in the country and abroad is increasing
over the years. The export earnings of mango fruits was Rs.869.55 crores in 2004-05
(Appendix Table 2). Major importers of Indian Mangoes were Bangladesh (33.76 per
cent), UAE (27.21 per cent), Saudi Arabia (6.83 per cent) and United Kingdom (4.95
per cent). The export earnings of mango pulp also increased from Rs.57.98 crores in
1993-94 to Rs.300.86 crores in 2004-05. Mango pulp is also exported to United
Kingdom, United States, Canada, Saudi Arabia and Middle East.
Mango is perishable in nature. Due to unavailability of storage and transportation
facilities, considerable amount of mango fruit goes waste every year. The extent of losses
in mango is estimated to be 15 per cent (Atteri, 1994). One of the methods to avoid such
losses of mango fruits is to process the fresh mangoes into different products. A number
of processing firms operate in Andhra Pradesh, with Chittoor district accounting for
largest share of the mango processing in the state. Most of the produce enters into the
international market. Mango processing thus generates lot of income and employment
opportunities in the region. However, low capacity utilization, fluctuation in profitability